exv10w5



 






Exhibit 10.5


FLOATING RATE JUNIOR SUBORDINATED NOTE DUE 2035





THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND SUCH SECURITIES, AND ANY INTEREST THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF ANY SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAY BE
RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES
ACT.




THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO
THE COMPANY, OR (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED
PURCHASER” (AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED), AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY SECURITIES FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.




THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE
PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
ATTEMPTED TRANSFER OF SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE
PRINCIPAL AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR
ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST ON SUCH
SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE
NO INTEREST WHATSOEVER IN SUCH SECURITIES.




THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY,
AND NO PERSON



 









 






INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY
INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE
DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE
BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR
PLAN TO FINANCE SUCH PURCHASE.”



PMC COMMERCIAL TRUST




Floating Rate Junior Subordinated Note due 2035




			
	No. 1
	 	$27,070,000






     PMC Commercial Trust, a real estate investment trust organized and existing under the laws of
Texas (hereinafter called the “Company,” which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay to JPMorgan Chase
Bank, National Association not in its individual capacity, but solely as Property Trustee of PMC
Preferred Capital Trust-A, or registered assigns, the principal sum of to Twenty Seven Million
Seventy Thousand Dollars ($27,070,000) on March 30, 2035. The Company further promises to pay
interest on said principal sum from March 15, 2005, 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 30, June 30, September 30, and December 30 of each year, commencing
June 30, 2005, or if any such day is not a Business Day, on the next succeeding Business Day (and
no interest shall accrue in respect of the amounts whose payment is so delayed for the period from
and after such Interest Payment Date until such next succeeding Business Day), except that, if such
Business Day falls in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case, with the same force and effect as if made on the
Interest Payment Date, at a variable rate equal to LIBOR plus 3.25% per annum, together with
Additional Tax Sums, if any, as provided in Section 10.5 of the Indenture, until the
principal hereof is paid or duly provided for or made available for payment; provided, further,
that any overdue principal, premium, if any, or Additional Tax Sums and any overdue installment of
interest shall bear Additional Interest at a variable rate equal to LIBOR plus 3.25% per annum (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, and such
interest shall be payable on demand.



     The amount of interest payable shall be computed on the basis of a 360-day year and the actual
number of days elapsed in the relevant interest period. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date shall, as provided in the Indenture, be
paid to the Person in whose name this Security (or one or more Predecessor Securities) is
registered 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



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to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is 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 not less than ten (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 on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the Indenture.




     So long as no Event of Default has occurred and is continuing, the Company shall have the
right, at any time and from time to time during the term of this Security, to defer the payment of
interest on this Security for a period of up to twenty (20) consecutive quarterly interest payment
periods (each such period, an “Extension Period”), during which Extension Period(s), no interest
shall be due and payable (except any Additional Tax Sums that may be due and
payable). No Extension Period shall end on a date other than an Interest Payment Date, and no
Extension Period shall extend beyond the Stated Maturity of the principal of this Security. No
interest shall be due and payable during an Extension Period (except any Additional Tax Sums that
may be due and payable), 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 payment of such interest would be legally enforceable) at a variable rate equal to LIBOR
plus 3.25% per annum, compounded quarterly, from the dates on which amounts would have otherwise
been due and payable until paid or made available for payment. At the end of any such Extension
Period, the Company shall pay all interest then accrued and unpaid on this Security, together with
such Additional Interest. Prior to the termination of any such Extension Period, the Company may
further defer the payment of interest; provided, that (i) all such previous and further extensions
comprising such Extension Period do not exceed twenty (20) quarterly interest payment periods, (ii)
no Extension Period shall end on a date other than an Interest Payment Date and (iii) no Extension
Period shall extend beyond the Stated Maturity of the principal of this Security. 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; provided, that (i) such Extension Period does not exceed twenty (20)
quarterly interest payment periods, (ii) no Extension Period shall end on a date other than an
Interest Payment Date and (iii) no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security. The Company shall give the Holder of this Security and the Trustee
written notice of its election to begin any such 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 this Security is held by the Trust, at least one Business Day
prior to the earlier of (i) the next succeeding date on which Distributions on the Preferred
Securities of PMC Preferred Capital Trust-A would be payable but for such deferral and (ii) the
date on which the Property Trustee of such Trust is required to give notice to any securities
exchange or other applicable self-regulatory organization or to holders of such Preferred
Securities of the record date for the payment of such Distributions.



     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 of or any interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the



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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 (1)
any employment contract, benefit plan or other similar arrangement with or for the benefit of any
one or more employees, officers, directors or consultants, (2) a dividend reinvestment or
stockholder stock purchase plan and (3) 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, the issuance of
rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto or (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).




     Payment of principal of, premium, if any, and interest on this Security shall be made 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. Payments of principal, premium, if any, and interest due at
the Maturity of this Security shall be made at the Place of Payment upon surrender of such
Securities to the Paying Agent, and payments of interest shall be made, subject to such surrender
where applicable, by wire transfer at such place and to such account at a banking institution in
the United States as may be designated in writing to the Paying Agent at least ten (10) Business
Days prior to the date for payment by the Person entitled thereto unless proper written transfer
instructions have not been received by the relevant record date, in which case such payments shall
be made by check mailed to the address of such Person as such address shall appear in the Security
Register. Notwithstanding the foregoing, so long as the Holder of this Security is the Property
Trustee, the payment of the principal of (and premium, if any) and interest (including any overdue
installment of interest and Additional Tax Sums, if any) on this Security will be made at such
place and to such account as may be designated by the Property Trustee.



     The indebtedness evidenced by this Security is, to the extent provided in the Indenture,
subordinate and junior in right of payment to the prior payment in full of all Senior Debt, 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 Debt, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said provisions.



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     Unless the certificate of authentication hereon has been executed by the Trustee 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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[REVERSE OF SECURITY]




     This Security is one of a duly authorized issue of securities of the Company (the
“Securities”) issued under the Junior Subordinated Indenture, dated as of March 15, 2005 (the
“Indenture”), between the Company and JPMorgan Chase Bank, National Association, as Trustee (in
such capacity, 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 Debt, the Holders of the Securities and the holders of the Preferred
Securities, and of the terms upon which the Securities are, and are to be, authenticated and
delivered.



     All terms used in this Security that are defined in the Indenture or in the Amended and
Restated Trust Agreement, dated as of March 15, 2005 (as modified, amended or supplemented from
time to time, the “Trust Agreement”), relating to the PMC Preferred Capital Trust-A (the “Trust”)
among the Company, as Depositor, the Trustees named therein and the Holders from time to time of
the Trust Securities issued pursuant thereto, shall have the meanings assigned to them in the
Indenture or the Trust Agreement, as the case may be.



     The Company may, on any Interest Payment Date, at its option, upon not less than thirty (30)
days’ nor more than sixty (60) days’ written notice to the Holders of the Securities (unless a
shorter notice period shall be satisfactory to the Trustee) on or after March 30, 2010 and subject
to the terms and conditions of Article XI of the Indenture, redeem this Security in whole
at any time or in part from time to time at a Redemption Price equal to one hundred percent (100%)
of the principal amount hereof, together, in the case of any such redemption, with accrued
interest, including any Additional Interest, through but excluding the date fixed as the Redemption
Date.



     In addition, upon the occurrence and during the continuation of a Special Event, the Company
may, at its option, upon not less than thirty (30) days’ nor more than sixty (60) days’ written
notice to the Holders of the Securities (unless a shorter notice period shall be satisfactory to
the Trustee), redeem this Security, in whole but not in part, subject to the terms and conditions
of Article XI of the Indenture at a Redemption Price equal to one hundred seven and one
half percent (107.5%) of the principal amount hereof, together, in the case of any such redemption,
with accrued interest, including any Additional Interest, through but excluding the date fixed as
the Redemption Date.



     In the event of redemption of this Security in part only, a new Security or Securities for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation
hereof. If less than all the Securities are to be redeemed, the particular Securities to be
redeemed shall be selected not more than sixty (60) days prior to the Redemption Date by the
Trustee from the Outstanding Securities not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security.



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



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Outstanding Securities. The Indenture also contains provisions permitting Holders of specified
percentages in principal amount of the Securities, on behalf of the Holders of all Securities,
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.




     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 any premium, if any, and interest, including any Additional Interest (to the
extent legally enforceable), 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 therein set forth, the
transfer of this Security is restricted to transfers to “Qualified Purchasers” (as such term is
defined in the Investment Company of 1940, as amended), and registrable in the Securities Register,
upon surrender of this Security for registration of transfer at the office or agency of the Company
maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Securities Registrar and duly executed by, the Holder
hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new
Securities, of like tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.



     The Securities are issuable only in registered form without coupons in minimum denominations
of $100,000 and any integral multiple of $1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate
principal amount of Securities and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.



     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.



     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 herein, the
Holder of, and any Person that acquires a beneficial interest in, this Security agree that, for
United States federal, state and local tax purposes, it is intended that this Security constitute
indebtedness.



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     This Security shall be construed and enforced in accordance with and governed by the laws of
the State of New York, without reference to its conflict of laws provisions (other than Section
5-1401 of the General Obligations Law).



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     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed on this 15th
day of March, 2005.



	 	 	 	 	 	 
	 	 	PMC COMMERCIAL TRUST
	 
	 	 	 	 
	

	 	By:
	 	/s/ Jan F. Salit
	

	 	 	 	 
	

	 	 
	 	Name: Jan F. Salit
	

	 	 
	 	Title: Executive Vice President






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



     Dated:



	 	 	 	 	 	 
	

	 	JPMORGAN CHASE BANK, National
Association, not in its individual capacity, but solely as Trustee
	 
	 	 	 	 
	

	 	By:
	 	/s/ Maria D. Calzado
	

	 	 	 	 
	

	 	 	 	Vice President






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