Exhibit 10.H

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE
STATE OR OTHER JURISDICTION’S SECURITIES OR BLUE SKY LAWS, AND NO SUCH
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED OR DISPOSED OF ABSENT AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR SUCH OTHER APPLICABLE SECURITIES OR BLUE SKY LAWS
COVERING SUCH SECURITIES OR SUCH TRANSFER IS MADE IN ACCORDANCE WITH AN
AVAILABLE EXEMPTION UNDER THE SECURITIES ACT, WHICH MAY INCLUDE EXEMPTIONS UNDER
REGULATION S, RULE 144A, RULE 144 OR ANY OTHER AVAILABLE EXEMPTION UNDER THE
SECURITIES ACT, AND ANY OTHER APPLICABLE SECURITIES OR BLUE SKY LAWS, AND THE
COMPANY RECEIVES AN OPINION OF COUNSEL FROM THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH OFFER, SALE, TRANSFER,
ASSIGNMENT, PLEDGE, HYPOTHECATION, OR DISPOSITION IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SUCH SECURITIES ACT AND ANY OTHER APPLICABLE
SECURITIES OR BLUE SKY LAWS.

 

THIS SECURITY IS NOT A DEPOSIT OR AN OBLIGATION OF ANY DEPOSITORY INSTITUTION,
IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
GOVERNMENT AGENCY, AND IS NOT SECURED.

 

 

AUBURN NATIONAL BANCORPORATION, INC.

 

FLOATING RATE

JUNIOR SUBORDINATED DEBENTURES

 

DUE DECEMBER 31, 2033

 

    Aggregate Principal Amount

Certificate No. -001-

  $7,217,000    

 

AUBURN NATIONAL BANCORPORATION, INC., a Delaware corporation (the “Company,”
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Wilmington Trust
Company, not in its individual capacity, but solely as Property Trustee for
AUBURN NATIONAL BANCORPORATION CAPITAL TRUST I, a statutory trust created under
the laws of the State of Delaware, or registered assigns, the principal sum of
SEVEN MILLION TWO HUNDRED SEVENTEEN THOUSAND AND NO/100 DOLLARS ($7,217,000) on
December 31, 2033; provided that the Company may shorten the Stated

 

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Maturity of the principal of this Security to a date not earlier than December
31, 2008, subject to certain conditions specified in Section 3.15 of the
Indenture, and to redemption by the Company as provided in Section 11.7 of the
Indenture, but in no event shall the Stated Maturity be a date later than
December 31, 2033. The Company further promises to pay interest on said
principal from the date of issuance, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, quarterly (subject to
deferral as set forth herein) in arrears on March 31, June 30, September 30, and
December 31 of each year (each, a “Distribution Date”), commencing December 31,
2003 at the floating rate per annum, reset quarterly on each Distribution Date
for the next succeeding quarter, equal to the prime rate of interest so
published in the “Money Rates” table in the Eastern Edition of The Wall Street
Journal for the last business day of each of March, June, September and
December, as applicable (or if more than one rate is so indicated in The Wall
Street Journal, the prime rate shall equal the highest rate provided), plus 12.5
basis points (the “Floating Rate”) on the principal amount outstanding
hereunder, together with Additional Sums, if any, as provided in Section 10.6 of
the Indenture, until the principal hereof is paid or duly provided for or made
available for payment. Any principal, premium or Additional Sums and any overdue
installment of interest not paid when due shall bear Additional Interest at the
Floating Rate (to the extent that the payment of such interest shall be legally
enforceable), compounded quarterly, from the dates such amounts are due until
they are paid or made available for payment. The amount of interest payable for
any full quarterly period shall be computed on the basis of a 360-day year
consisting of twelve 30-day months. The amount of interest payable for any
period less than a full quarter shall be computed on the basis of a 360-day year
and the actual number of days elapsed during that period. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture, be paid to the Holder at the close of
business on the Regular Record Date for such interest installment. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Holder registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee (notice whereof
shall be given to Holders of Securities of this series not less than 10 days
prior to such Special Record Date) or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange, if
any, on which the Securities of this series may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.

 

So long as no Event of Default has occurred and is continuing, the Company shall
have the right as provided in Section 3.12 of the Indenture, at any time during
the term of this Security, from time to time to defer the payment of interest on
this Security for up to 20 consecutive quarterly interest payment periods with
respect to each deferral period (each, an “Extension Period”), during which
Extension Periods the Company shall have the right to make no payments or
partial payments of interest on any Interest Payment Date, and at the end of
which the Company shall pay all interest then accrued and unpaid including
Additional Interest, as provided below; provided, however, that no Extension
Period shall extend beyond the Stated Maturity of the principal of this Security
and no such Extension Period may end on a date other than an Interest Payment
Date; and

 

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provided, further, however, during any such Extension Period, the Company shall
not (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company’s
capital stock, or (ii) make any payment of principal or interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company that
rank pari passu in all respects with or junior in interest to this Security
(other than (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company in connection with any employment contract, benefit
or incentive plan or other similar arrangement with or for the benefit of any
one or more employees, officers, directors or consultants of the Company or any
of its subsidiaries, in connection with a dividend reinvestment or stock
purchase plan or in connection with the issuance of capital stock of the Company
(or securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the applicable
Extension Period, (b) as a result of an exchange or conversion of any class or
series of the Company’s capital stock (or any capital stock of a Subsidiary of
the Company) for any class or series of the Company’s capital stock or of any
class or series of the Company’s indebtedness for any class or series of the
Company’s capital stock, (c) the purchase of fractional interests in shares of
the Company’s capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any Rights Plan, or the issuance of
rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto, (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior to
such stock, or (f) payments by the Company under the Guarantee). Prior to the
termination of any such Extension Period, the Company may further defer the
payment of interest, provided that no Event of Default has occurred and is
continuing and, provided further, no Extension Period shall exceed 20
consecutive quarterly interest payment periods, extend beyond the Stated
Maturity of the principal of this Security or end on a date other than an
Interest Payment Date. Upon the termination of any such Extension Period and
upon the payment of all accrued and unpaid interest and any Additional Interest
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period, subject to the above conditions. No interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest (to the extent that the
payment of such interest shall be legally permissible) at the Floating Rate per
annum, compounded quarterly and calculated as set forth in the first paragraph
of this Security, from the date on which such amounts would otherwise have been
due and payable until paid or made available for payment. The Company shall give
the Holders of this Security and the Trustee notice of its election to begin any
Extension Period at least one Business Day prior to the next succeeding Interest
Payment Date on which interest on this Security would be payable but for such
deferral, or so long as such securities are held by the Issuer Trust, at least
one Business Day prior to the earlier of (i) the next succeeding date on which
Distributions on the Capital Securities of such Issuer Trust would be payable
but for such deferral, and (ii)

 

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the record date for determining the holders of such Capital Securities entitled
to such Distributions on the Capital Securities.

 

Payment of the principal of (and premium, if any) and interest on this Security
will be made at the office or agency of the Company maintained for that purpose
in the United States, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts, which unless otherwise changed by the Company shall be the Corporate
Trust Office.

 

The indebtedness evidenced by this Security is, to the extent provided in the
Indenture, subordinate and subject in right of payments to the prior payment in
full of all Senior Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such actions as
may be necessary or appropriate to effectuate the subordination so provided, and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.

 

Reference is hereby made to the further provisions of this Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its corporate seal.

 

AUBURN NATIONAL BANCORPORATION, INC. By:   /s/ E.L. Spencer, Jr.  

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Name: E.L. Spencer, Jr.

Title: Chief Executive Officer and Chairman

 

 

Attest:

 

/s/ C. Wayne Alderman

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    Secretary

 

 

[CORPORATE SEAL]

 

This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.

 

Dated:

  November 4, 2003  

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WILMINGTON TRUST COMPANY

not in its individual capacity, but solely as Trustee

By:   /s/ Chris Slaybaugh  

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Authorized Signatory

 

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Reverse of Security

 

This Security is one of a duly authorized issue of securities of the Company
(herein called the “Securities”), issued and to be issued in one or more series
under the Junior Subordinated Indenture, dated as of November 4, 2003 (herein
called the “Indenture”), between the Company and Wilmington Trust Company, as
Trustee (herein called the “Trustee,” which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Indebtedness and the Holders of the Securities, and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof, and is limited
to the aggregate principal amount of $7,217,000.

 

All terms used but not defined in this Security, shall have the respective
meanings provided in the Indenture or in the Amended and Restated Trust
Agreement, dated as of November 4, 2003 (as modified, amended or supplemented
from time to time the “Trust Agreement”), relating to Auburn National
Bancorporation Capital Trust I (“Issuer Trust”), among the Company, as
Depositor, the Issuer Trustees named therein, the Administrators named therein,
and the Holders from time to time of the Trust Securities issued pursuant
thereto.

 

The Company has the right to redeem this Security (i) on or after December 31,
2008, in whole at any time or in part from time to time, or (ii) in whole (but
not in part), at any time within 90 days following the occurrence and during the
continuation of a Tax Event, Investment Company Event, or Capital Treatment
Event, in each case at the Redemption Price described below. The redemption of
Securities of any series as permitted or required by the terms of this
Certificate or the Indenture shall be made in accordance with the terms of this
Certificate and Article 11 of the Indenture; provided, however, if any provision
of this Certificate shall conflict with any provision of such Article 11, the
provision of this Certificate shall govern. Any redemption of any Security prior
to its Stated Maturity shall also be subject to prior notice, and approval of
(or notice of intent not to disapprove) the redemption, if then required by the
capital adequacy rules or otherwise by the Federal Reserve.

 

The Redemption Price in the case of a redemption under clauses (i) or (ii) in
the preceding paragraph shall equal the principal amount hereof (or portion
thereof to be redeemed in a partial redemption), together with accrued interest
(including Additional Interest, if any) up to but excluding the date fixed for
redemption.

 

In the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.

 

The Indenture permits, with certain exceptions as provided therein, the Company
and the Trustee at any time to enter into a supplemental indenture or indentures
for the

 

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purpose of modifying in any manner the rights and obligations of the Company and
of the Holders of the Securities, with the consent of the Holders of not less
than a majority in aggregate principal amount of the Outstanding Securities of
each series to be affected by such supplemental indenture. The Indenture also
contains provisions permitting Holders of specified percentages in aggregate
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, if an Event of
Default with respect to the Securities of this series at the time Outstanding
occurs and is continuing, then and in every such case the Trustee or the Holders
of not less than 25% in aggregate principal amount of the Outstanding Securities
of this series may declare the principal amount of all the Securities of this
series to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Holders), provided that, if the Outstanding
Securities have been issued to and are held by an Issuer Trust, if upon an Event
of Default, the Trustee or such Holders fail to declare the principal of all the
Outstanding Securities of this series to be immediately due and payable, the
Holders of at least 25% in aggregate Liquidation Amount of the related series of
Capital Securities issued by the Issuer Trust then outstanding shall have the
right to make such declaration by a notice in writing to the Company and the
Trustee; and upon any such declaration, the principal amount of and the accrued
interest (including Additional Interest, if any) on all the Securities of this
series shall become immediately due and payable, provided that the payment of
principal and interest (including any Additional Interest) on such Securities
shall remain subordinated to the extent provided in Article 13 of the Indenture.

 

No reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium, if any) and interest
(including Additional Interest) on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
for such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or such Holder’s attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

 

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The Securities of this series are issuable only in registered form without
coupons in minimum denominations of $1,000.00 and integral multiples of
$1,000.00 in excess thereof. To the fullest extent permitted by applicable law,
any transfer, exchange or other disposition of Securities in contravention of
Section 3.6(b)(v) of the Indenture shall be deemed to be void and of no legal
effect whatsoever, any such transferee shall be deemed not to be the Holder or
owner of any beneficial interest in such Securities for any purpose, including
but not limited to the receipt of interest payable on such Securities, and such
transferee shall be deemed to have no interest whatsoever in such Securities. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

 

In the event of a distribution of the Securities to holders of the Trust
Securities, as provided in Section 9.4 of the Trust Agreement, the Securities
will be issued in minimum denominations of $1,000 and integral multiples of
$1,000 in excess thereof to holders of the Common Securities issued by the
Issuer Trust, and in minimum denominations of $50,000 and integral multiples of
$50,000 in excess thereof to holders of the Capital Securities issued by the
Issuer Trust.

 

No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

 

The Company and, by its acceptance of this Security or a beneficial interest
therein, the Holder of, and any Person that acquires a beneficial interest in,
this Security, each agrees that for United States Federal, state and local tax
purposes it is intended that this Security constitute indebtedness and shall be
treated as such.

 

THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.

 

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