Document:

Exhibit 4.1

 

YOUR COMMUNITY BANK

 

THIS SECURITY IS A GLOBAL SECURITY AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS OF THE NOTE PURCHASE AGREEMENT AND THE TERMS OF THE SECURITIES, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO YOUR COMMUNITY BANK, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE EXEMPT FROM REGISTRATION PURSUANT TO SECTION 3(a)(2) OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

THIS SECURITY IS NOT A DEPOSIT OR BANK ACCOUNT. THIS SECURITY IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER AGENCY, AND IS SUBJECT TO INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.  THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF DEPOSITORS, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE BANK, AND IS NOT SECURED.

 

 

YOUR COMMUNITY BANK

 

FIXED/FLOATING RATE SUBORDINATED NOTE DUE 2025

 

	
 
    	
CUSIP No.: 98779P AH0
    
	
 
    	
 
    
	
U.S.   $25,000,000
    	
Dated: December 10, 2015
    

 

FOR VALUE RECEIVED, the undersigned, Your Community Bank, an Indiana State chartered state bank (the “Company”), promises to pay to the order of Cede & Co., or registered assigns (collectively, the “Holder”), the principal amount of $25,000,000, in the lawful currency of the United States of America, or such lesser or greater amount as shall then remain outstanding under this Note, at the times and in the manner provided herein, but no later than December 15, 2025 (the “Maturity Date”), or such other date upon which this Note shall become due and payable, whether by reason of extension, acceleration or otherwise.

 

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

 

[Signatures follow on the next page.]

 

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
 
    	
 
    	
YOUR   COMMUNITY BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/Kevin   J. Cecil
    
	
 
    	
 
    	
 
    	
Name:
    	
Kevin   J. Cecil
    
	
 
    	
 
    	
 
    	
Title:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ATTEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/Matthew   Muller
    	
 
    	
 
    
	
Matthew   Muller
    	
 
    	
 
    
	
Corporate   Secretary
    	
 
    	
 
    

 

 

[REVERSE SIDE OF NOTE]

 

YOUR COMMUNITY BANK

 

Fixed/Floating Rate Subordinated Note due 2025

 

The Company promises to pay interest on the outstanding principal amount of this Subordinated Note (the “Note”), commencing on December 10, 2015 to but not including December 15, 2025 (the “Maturity Date”), or such earlier date as this Note is paid in full, at the interest rate set forth below.  The unpaid principal balance of this Note plus all accrued but unpaid interest thereon shall be due and payable on the Maturity Date, or such earlier date on which such amount shall become due and payable.  This Note is one of the Subordinated Notes referred to in that certain Note Purchase Agreement, dated December 10, 2015, among the Company, the Holder and the other Purchasers and is entitled to the benefits thereof (the “Purchase Agreement”).  Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

 

1.                                      Computation and Payment of Interest.  From and including the date on which the Subordinated Notes are issued to, but excluding, December 15, 2020 the rate at which the Subordinated Notes including this Note shall bear interest shall be a rate of 6.25% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months, and payable semi-annually in arrears; from and including December 15, 2020 to but excluding the Maturity Date, the rate at which the Subordinated Notes shall bear interest shall be a floating rate equal to Three-Month LIBOR determined by Paying Agent on the determination date of the applicable Interest Period plus 459 basis points, computed on the basis of a 360-day year and the actual number of days elapsed, and payable quarterly in arrears. The date from which interest shall accrue on the Subordinated Notes shall be December 10, 2015 or the most recent Interest Payment Date to which interest has been paid or duly provided for; the “Interest Payment Dates” for the Subordinated Notes shall be June 15 and December 15 of each year beginning on June 15, 2016 through December 15, 2020  and March 15, June 15, September 15, and December 15 of each year, beginning on March 15, 2021 through the Maturity Date or earlier date of redemption of all of the Subordinated Notes.  In the event that any scheduled Interest Payment Date for the Notes falls on a day that is not a business day, then payment of interest payable on such Interest Payment Date will be postponed to the next succeeding day which is a business day (and no interest on such payment will accrue for the period from and after such scheduled Interest Payment Date).  “Interest Period” means each six month period beginning on a scheduled Interest Payment Date commencing on December 10, 2015 through December 15, 2020 and each three-month period beginning on a scheduled Interest Payment Date commencing on March 15, 2021 through the Maturity Date or earlier date of redemption of all of the Subordinated Notes. Interest on this Note shall be paid in arrears on each Interest Payment Date to holders of record (each a “Holder”) on the Applicable Record Date.  The initial Interest Payment Date shall be June 15, 2016.  “Applicable Record Date” shall mean March 1 with respect to any Interest Payment Date on March 15, June 1 with respect to any Interest Payment Date on June 15, September 1 with respect to any Interest Payment Date on September 15, and December 1 with respect to any Interest Payment Date on December 15. For purposes of this Subordinated Note, the “Three-Month LIBOR” shall mean that rate for deposits in United States dollars for a three-month period as published by Reuters on Reuters Screen LIBOR03 (or such other page that may

 

 

replace that page on that service or a successor service) as of 11:00 a.m., London, England, time on the day that is two LIBOR Business Days preceding the first day of such Interest Period (or if not so reported, then as determined by the Company from another recognized source or interbank quotation, and disclosed to the Holders of the Subordinated Notes).  If such rate cannot be so determined for any reason, the Company will request the principal London offices of at least two banks to provide a quotation of their rates for deposits in United States dollars for a period comparable to the applicable Interest Period and the Three-Month LIBOR for such Interest Period shall be the arithmetic mean of such quotations as determined by the Company.  A “LIBOR Business Day”  shall mean a day on which dealings in United States dollar deposits are carried out on the London interbank market.

 

2.                                      Payment Procedures. The Company shall pay principal of and interest on this Subordinated Note at the office or agency of the Paying Agent located in the United States of America (the “Payment Office”). Payments of interest (other than interest payable on the Maturity Date) shall be made by wire transfer in immediately available funds or check mailed to the registered Holder, as such person’s address appears on the Security Register. Interest payable on any Interest Payment Date shall be payable to the Holder in whose name this Note is registered at the close of business on the Applicable Record Date, next preceding such Interest Payment Date for such Interest Payment Date, except that interest not paid on the Interest Payment Date, if any, will be paid to the Holder in whose name this Note is registered at the close of business on a Special Record Date fixed by the Company (a “Special Record Date”) notice of which shall be given to the Holder not less than ten (10) calendar days prior to such Special Record Date. (The Applicable Record Date and Special Record Date are referred to herein collectively as the “Record Dates”). To the extent permitted by applicable law, interest shall accrue, at the rate at which interest accrues on the principal of this Note, on any amount of principal or interest on this Note not paid when due. All payments on this Note shall be applied first to accrued interest and then the balance, if any, to principal.

 

3.                                      Late Payments.  If any payment of interest or principal is not paid in full when the same becomes due and payable and such default continues for a period of fifteen (15) or more business days, the Company shall pay an additional amount equal to four percent (4%) of such late payment to the Holder.

 

4.                                      Non-Business Days.  Whenever any payment to be made by the Company hereunder shall be stated to be due on a day which is not a business day where the Payment Office is located, such payment shall be made on the next succeeding business day where the Payment Office is located without change in any computation of interest with respect to such payment (or any succeeding payment).

 

5.                                      Subordinated Notes.  This Note is one of a duly authorized issue of Subordinated Notes of the Company designated as Fixed/Floating Rate Subordinated Notes due 2025 (the “Subordinated Notes”), to be issued from time to time by the Company.  This Note is entitled to the benefits and subject to the terms of the Purchase Agreement.

 

6.                                      Subordination.  The indebtedness of Company evidenced by the Subordinated Notes, including the principal and interest on this Note, shall be subordinate and junior in right of payment to the following, whether now outstanding or subsequently created, assumed or incurred

 

 

(collectively, “Senior Indebtedness”): (a) all indebtedness of the Company for money borrowed (including deposits), whether or not evidenced by bonds, debentures, securities, notes or other written instruments; (b) any deferred obligations of the Company for the payment of the purchase price of property or assets acquired other than in the ordinary course of business; (c) all obligations, contingent or otherwise, of the Company in respect of any letters of credit, bankers’ acceptances, security purchase facilities and similar credit transactions; (d) any capital lease obligations of the Company; (e) all obligations of the Company in respect of interest rate swap, cap or other agreements, interest rate future or option contracts, currency swap agreements, currency future or option contacts, commodity contracts and other similar arrangements; (f) all obligations of the Company to its depositors, its obligations under bankers’ acceptances and letters of credit, and its obligations to its other creditors, including its obligations to the Federal Deposit Insurance Corporation (the “FDIC”), and any rights acquired by the FDIC as a result of loans made by the FDIC to the Company or the purchase or guarantee of any of its assets by the FDIC pursuant to 12 USC 1823(c),(d) or (e), whether now outstanding or hereafter incurred, (g) all obligations of the type referred to in clauses (a) through (f) of other persons, including any Subsidiary of the Company for the payment of which the Company is responsible or liable as obligor, guarantor or otherwise; and (h) all obligations of the types referred to in clauses (a) through (g) of other persons secured by a lien on any property or asset of the Company; provided, that Senior Indebtedness does not include (i) the Subordinated Notes, (ii) any obligation that by its terms is on parity with the Subordinated Notes, (iii) any indebtedness between Company and any of its Subsidiaries or affiliates, or (iv) the Junior Subordinated Indebtedness (as defined below).

 

In the event of any insolvency, dissolution, assignment for the benefit of creditors, reorganization, restructuring of debt, marshaling of assets and liabilities or similar proceedings or any liquidation or winding up of or relating to the Company, whether voluntary or involuntary, holders of Senior Indebtedness shall be entitled to be paid in full before any payment shall be made on account of the principal of or interest on the Subordinated Notes, including this Note.  In the event of any such proceeding, after payment in full of all sums owing with respect to the Senior Indebtedness, the registered holders of the Subordinated Notes from time to time, together with the holders of any obligations of the Company ranking on a parity with the Subordinated Notes, shall be entitled to be paid from the remaining assets of the Company the unpaid principal thereof, and the unpaid interest thereon before any payment or other distribution, whether in cash, property or otherwise, shall be made on account of any capital stock or any present or future obligations of the Company ranking junior to the Subordinated Notes (collectively, “Junior Subordinated Indebtedness”), which includes any obligation that by its terms is subordinated to the Subordinated Notes.

 

If there shall have occurred and be continuing (a) a default in any payment with respect to any Senior Indebtedness or (b) an event of default with respect to any Senior Indebtedness as a result of which the maturity thereof is accelerated, unless and until such payment default or event of default shall have been cured or waived or shall have ceased to exist, no payments shall be made by the Company with respect to the Subordinated Notes.  The provisions of this paragraph shall not apply to any payment with respect to which the immediately preceding paragraph of this Section 6 would be applicable.

 

 

Nothing herein shall impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note in accordance with its terms.  Nothing herein shall act to prohibit, limit or impede the Company from issuing additional debt of the Company having the same rank as the Subordinated Notes or which may be junior or senior in rank to the Subordinated Notes.

 

7.                                      Transfer. Except as otherwise provided herein, this Note is transferable in whole or in part, and may be exchanged for a like aggregate principal amount of Subordinated Notes of other authorized denominations, by the Holder in person, or by his attorney duly authorized in writing, at the Payment Office. The Registrar shall maintain a register providing for the registration of the Subordinated Notes and any exchange or transfer thereof (the “Security Register”). Upon surrender or presentation of this Note for exchange or registration of transfer, the Company shall execute and deliver in exchange therefor a Subordinated Note or Subordinated Notes of like aggregate principal amount, each in a minimum denomination of $1,000 or any amount in excess thereof which is an integral multiple of $1,000 (and, in the absence of an opinion of counsel satisfactory to the Company to the contrary, bearing the restrictive legend(s) set forth hereinabove) and that is or are registered in such name or names requested by the Holder. Any Note presented or surrendered for registration of transfer or for exchange shall be duly endorsed and accompanied by a written instrument of transfer in such form as is attached hereto and incorporated herein, duly executed by the Holder or his attorney duly authorized in writing, with such tax identification number or other information for each person in whose name a Subordinated Note is to be issued. No exchange or registration of transfer of this Note shall be made on or after the fifteenth day immediately preceding the Maturity Date.

 

NOTWITHSTANDING ANY PROVISIONS CONTAINED HEREIN TO THE CONTRARY, THIS NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $1,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS NOTE IN A DENOMINATION OF LESS THAN $1,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS NOTE FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PAYMENTS ON THIS NOTE, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS NOTE.

 

8.                                      Global Subordinated Notes.

 

(a)                                 This Subordinated Note is in the form of a Global Subordinated Note registered in the name of The Depository Trust Company or its designee, and designated as Depositary by the Company or any successor thereto (the “Depositary”) or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor.

 

(b)                                 Notwithstanding any other provision herein, no Global Subordinated Note may be exchanged in whole or in part for Subordinated Notes registered, and no transfer of a Global Subordinated Note in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Subordinated Note or a nominee thereof unless (i) such Depositary advises the Company in writing that such Depositary is no longer willing or able to

 

 

properly discharge its responsibilities as Depositary with respect to such Global Subordinated Note, and no qualified successor is appointed by the Company within ninety (90) days of receipt by the Company of such notice, (ii) such Depositary ceases to be a clearing agency registered under the Exchange Act and no successor is appointed by the Company within ninety (90) days after obtaining knowledge of such event, or (iii) an Event of Default shall have occurred and be continuing.  Upon the occurrence of any event specified in clauses (i), (ii), or (iii) above, the Company or its agent shall notify the Depositary and instruct the Depositary to notify all owners of beneficial interests in such Global Subordinated Note of the occurrence of such event and of the availability of Subordinated Notes to such owners of beneficial interests requesting the same.

 

(c)                                  If any Global Subordinated Note is to be exchanged for other Subordinated Notes or canceled in part, or if another Subordinated Note is to be exchanged in whole or in part for a beneficial interest in any Global Subordinated Note, then either (i) such Global Subordinated Note shall be so surrendered for exchange or cancellation as provided in this Section 9 or (ii) the principal amount thereof shall be reduced or increased by an amount equal to the portion thereof to be so exchanged or canceled, or equal to the principal amount of such other Subordinated Note to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records of the Registrar, whereupon the Registrar, in accordance with the applicable rules and procedures of the Depositary (“Applicable Depositary Procedures”), shall instruct the Depositary or its authorized representative to make a corresponding adjustment to its records.  Upon any such surrender or adjustment of a Global Subordinated Note by the Depositary, accompanied by registration instructions, the Company shall execute and deliver any Subordinated Notes issuable in exchange for such Global Subordinated Note (or any portion thereof) in accordance with the instructions of the Depositary.

 

(d)                                 Every Subordinated Note executed and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Subordinated Note or any portion thereof shall be executed and delivered in the form of, and shall be, a Global Subordinated Note, unless such Subordinated Note is registered in the name of a Person other than the Depositary for such Global Subordinated Note or a nominee thereof.

 

(e)                                  The Depositary or its nominee, as the registered owner of a Global Subordinated Note, shall be the Holder of such Global Subordinated Note for all purposes under this Subordinated Note, and owners of beneficial interests in a Global Subordinated Note shall hold such interests pursuant to Applicable Depositary Procedures.  Accordingly, any such owner’s beneficial interest in a Global Subordinated Note shall be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its Depositary participants.  The Registrar and Paying Agent shall be entitled to deal with the Depositary for all purposes relating to a Global Subordinated Note (including the payment of principal and interest thereon and the giving of instructions or directions by owners of beneficial interests therein and the giving of notices) as the sole holder of the Subordinated Note and shall have no obligations to the owners of beneficial interests therein.  The Registrar and Paying Agent shall have no liability in respect of any transfers effected by the Depositary.

 

 

(f)                                   The rights of owners of beneficial interests in a Global Subordinated Note shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such owners and the Depositary and/or its participants.

 

(g)                                  No holder of any beneficial interest in any Global Subordinated Note held on its behalf by a Depositary shall have any rights with respect to such Global Subordinated Note, and such Depositary may be treated by the Company and any agent of the Company (including the Registrar and Paying Agent) as the owner of such Global Subordinated Note for all purposes whatsoever.  Neither the Company nor any agent of the Company will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Subordinated Note or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.  Notwithstanding the foregoing, nothing herein shall prevent the Company or any agent of the Company from giving effect to any written certification, proxy or other authorization furnished by a Depositary or impair, as between a Depositary and such holders of beneficial interests, the operation of customary practices governing the exercise of the rights of the Depositary (or its nominee) as Holder of any Subordinated Note.

 

9.                                      Optional Redemption. The Company, in its discretion, shall have the right to redeem or prepay any or all of the Subordinated Notes, including this Note, without premium or penalty prior to the Maturity Date: (a) in whole or in part, at any time on or after December 15, 2020 and prior to the Maturity Date, but in all cases in a principal amount with integral multiples of $1,000, on any Interest Payment Date; or (b) in whole, at any time, or in part from time to time, upon the occurrence of a Tier 2 Capital Event or a Tax Event, or if the Company is required to register as an investment company pursuant to the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) (an “Investment Company Event”). Any such redemption will be at a price equal to 100% of the principal amount of the Note to be redeemed or prepaid on such date, plus interest accrued and unpaid to, but excluding, the date of redemption or prepayment. Any such redemption or prepayment shall be subject to receipt of any and all required regulatory approvals and in compliance with all applicable laws, rules and regulations.

 

In the case of any redemption or prepayment of this Note, the Company will give the Holders of the Subordinated Notes to be redeemed or prepaid notice not less than 30 nor more than 45 calendar days prior to the redemption or prepayment date as to the aggregate principal amount to be redeemed or prepaid. In a case where the Company is making a redemption or prepayment with respect to the Subordinated Notes in an amount less than the aggregate principal amount of all of the Subordinated Notes then outstanding, the Company shall make such redemption or prepayment on a pro rata basis, by lot, or in accordance with the Depositary procedures among all outstanding Subordinated Notes based on the relative outstanding principal amounts of each such Subordinated Note; provided, that the authorized denomination amounts of $1,000 are preserved and provided, however that the Company may elect to redeem in full any Subordinated Note with an outstanding principal amount less than $1,000.

 

“Tax Event” shall mean the receipt by the Company of an opinion of independent tax counsel experienced in such matters to the effect that, as a result of any amendment to, or change (including any announced prospective change) in, the laws or any regulations thereunder of the United States or any political subdivision or taxing authority thereof or therein, or as a result of

 

 

any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after the date of original issuance of the Notes, there is a substantial risk that the interest payable by the Company on the Subordinated Notes is not, or within 90 days of the date of such opinion will not be, deductible by the Company, in whole or in part, for United States federal income tax purposes.

 

“Tier 2 Capital Event” shall mean the receipt by the Company of an opinion of independent bank regulatory counsel experienced in such matters to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws or any regulations thereunder of the United States or any rules, guidelines or policies of an applicable regulatory authority for the Company or (b) any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after the date of original issuance of the Subordinated Notes, the Subordinated Notes do not constitute, or within 90 days of the date of such opinion will not constitute, Tier 2 Capital (or its then equivalent if the Company were subject to such capital requirement) for purposes of capital adequacy guidelines of the FDIC (or any successor regulatory authority with jurisdiction over bank holding companies), as then in effect and applicable to the Company. “Tier 2 Capital” has the meaning set forth in 12 C.F.R. § 324.20(d), as amended, modified and supplemented and in effect from time to time or any replacement thereof.

 

The Company shall have the right to purchase any of the Subordinated Notes at any time in the open market, private transactions or otherwise. If the Company purchases any Subordinated Notes, it may, in its discretion, hold, resell or cancel any of the purchased Subordinated Notes.

 

10.                               [Intentionally Omitted]

 

11.                               Affirmative Covenants of the Company.  During the time that any portion of the principal balance of this Note is unpaid and outstanding, the Company shall take or cause to be taken the actions set forth below.

 

(a)                                 Notice of Certain Events.  The Company shall provide written notice to the Holder of the occurrence of the following events as soon as practicable but in no event later than fifteen (15) business days following the Company’s becoming aware of the occurrence of such event:

 

(i)                                     the ratio of Tier I capital to average assets (the “Leverage Ratio”) of the Company becomes less than six percent (6.0%);

 

(ii)                                  the Company become less than “well capitalized” under the then-current regulations of the appropriate federal banking agency;

 

(iii)                               the Company or any officer of the Company or the Company’s banking subsidiaries becomes subject to a formal, written regulatory enforcement action from the appropriate federal banking agency; or

 

 

(iv)                              the ratio of (A) non-accrual loans and any other loans that are 90 days or more past due plus other real estate owned (excluding any such loans that are guaranteed or covered by any governmental agency or government-sponsored entity) to (B) total assets of the Company becomes greater than two and one-half percent (2.5%).

 

(b)                                 Compliance with Laws.  The Company and each of its subsidiaries shall comply with the requirements of all laws, regulations, orders, and decrees applicable to it or its properties, except for such noncompliance which would not reasonably be expected to result in a material adverse effect (i) in the condition (financial or otherwise), or in the earnings of the Company and its subsidiaries considered as one enterprise, without or not arising in the ordinary course of business or (ii) on the ability of the Company to perform its obligations under this Note.

 

(c)                                  Taxes and Assessments.  The Company and each of its subsidiaries shall punctually pay and discharge all taxes, assessments, and other governmental charges or levies imposed upon it or upon its income or upon any of its properties; provided, that no such taxes, assessments or other governmental charges need be paid if they are being contested in good faith by the Company.

 

(d)                                 Compliance Certificate.  Not later than forty-five (45) days following the end of each fiscal quarter (or, in the case of any fiscal quarter ending on December 31, not later than ninety (90) days from the end of such quarter), the Company shall provide the Holder with a certificate (the “Compliance Certificate”), executed by the principal executive officer and principal financial officer of the Company in their capacities as such, stating whether (i) the Company has complied with all notice provisions and covenants contained in this Note; (ii) whether an Event of Default has occurred or not; (iii) whether an event of default has occurred or not under any other indebtedness of the Company; and (iv) whether an event or events have occurred or not that in the reasonable judgment of the management of the Company would have a material adverse effect on the ability of the Company to perform its obligations under this Note.

 

12.                               Events of Default.  Each of the following events shall constitute an “Event of Default”:

 

(a)                                 the entry of a decree or order for relief in respect of the Company by a court having jurisdiction in the premises in an involuntary case or proceeding under any applicable bankruptcy, insolvency, or reorganization law, now or hereafter in effect of the United States or any political subdivision thereof, and such decree or order will have continued unstayed and in effect for a period of 60 consecutive days;

 

(b)                                 the Company (i) commences a voluntary case under any applicable bankruptcy, insolvency or reorganization law, now or hereafter in effect of the United States or any political subdivision thereof or (ii) consents to the entry of a decree or order for relief in an involuntary case or proceeding under any such law;

 

(c)                                  the Company (i) becomes insolvent or is unable to pay its debts as they mature, (ii) makes an assignment for the benefit of creditors, (iii) admits in writing its inability to pay its debts as they mature, or (iv) ceases to be a bank holding company or financial holding company under the Bank Holding Company Act of 1956, as amended;

 

 

(d)                                 the failure of the Company to pay any installment of interest on any of the Subordinated Notes as and when the same will become due and payable, and the continuation of such failure for a period of 15 days;

 

(e)                                  the failure of the Company to pay all or any part of the principal of any of the Subordinated Notes as and when the same will become due and payable;

 

(f)                                   the liquidation of the Company (for avoidance of doubt, “liquidation” does not include any merger, consolidation, sale of equity or assets or reorganization (exclusive of a reorganization in bankruptcy) of the Company or any of its subsidiaries);

 

(g)                                  the failure of the Company to perform any other covenant or agreement on the part of the Company contained in the Subordinated Notes, and the continuation of such failure for a period of 30 days after the date on which notice specifying such failure, stating that such notice is a “Notice of Default” hereunder and demanding that the Company remedy the same, will have been given, in the manner set forth in Section 22, to the Company by a Noteholder; or

 

(h)                                 the default by the Company under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company having an aggregate principal amount outstanding of at least $25,000,000, whether such indebtedness now exists or is created or incurred in the future, which default (i) constitutes a failure to pay any portion of the principal of such indebtedness when due and payable after the expiration of any applicable grace period or (ii) results in such indebtedness becoming due or being declared due and payable prior to the date on which it otherwise would have become due and payable without, in the case of clause (i), such indebtedness having been discharged or, in the case of clause (ii), without such indebtedness having been discharged or such acceleration having been rescinded or annulled..

 

13.                               General Remedies of Holders.  Upon the occurrence of an Event of Default, the Holders of this Note may at any time thereafter, at the Holder’s option, by written notice delivered to the Company, declare the principal of this Note to be immediately due and payable, whereupon all such amounts shall immediately become absolute and due and payable, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, anything in this Note to the contrary notwithstanding.  The Company, within 30 calendar days after the receipt of written notice from any Holder of the occurrence of an Event of Default with respect to this Note, shall mail to all Holders of Subordinated Notes, at their addresses shown on the security register, such written notice of Event of Default, unless such Event of Default shall have been cured or waived before the giving of such notice as certified by the Company in writing.

 

14.                               Failure to Make Payment.  In the event of failure by the Company to make any required payment of principal or interest when due on this Note (and, in the case of payment of interest, such failure to pay shall have continued for 30 calendar days), the Company will, upon demand of the Holder, pay to the Holder the whole amount then due and payable on this Note for principal and interest (without acceleration), with interest on the overdue principal and interest at the rate borne by this Note, to the extent permitted by applicable law.  If the Company fails to pay such amount upon such demand, the Holder may, among other things, institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company and collect the amounts

 

 

adjudged or decreed to be payable in the manner provided by law out of the property of the Company.

 

Upon the occurrence of an Event of Default, the Company shall not (a) 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, (b) 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 equal with or junior to the Subordinated Notes, or (c) make any payments under any guarantee that ranks equal with or junior to the Subordinated Notes, other than: (i) any dividends or distributions in shares of, or options, warrants or rights to subscribe for or purchase shares of, any class of Company’s common stock; (ii) any declaration of a dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto; (iii) as a result of a reclassification of Company’s capital stock or the exchange or conversion of one class or series of Company’s capital stock for another class or series of Company’s capital stock; (iv) the purchase of fractional interests in shares of Company’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged; or (v) purchases of any class of Company’s common stock related to the issuance of common stock or rights under any of benefit plans for Company’s directors, officers or employees or any of Company’s dividend reinvestment plans.

 

15.                               Successors to the Company.

 

(a)                                 Conditions Applicable to Successors.  The Company shall not merge with or into, nor sell all or substantially all of its assets to, any Person unless:

 

(i)                                     such person executes, and delivers to the Holder, a copy of an instrument pursuant to which such person assumes the due and punctual payment of the principal of and interest on this Note and the performance and observance of all the obligations of the Company under this Note, and

 

(ii)                                  immediately after giving effect to the transaction, no Event of Default and no event which after notice or lapse of time or both would become an Event of Default shall have occurred.

 

(b)                                 Successor As Company.  Upon compliance with this Section 15, the Successor shall succeed to and be substituted for the Company under this Note with the same effect as if the Successor had been named as the Company herein, and the Company shall be released from the obligation to pay the principal of and interest accrued on the Note.

 

16.                               Amendments and Waivers.

 

(a)                                 Amendment of Notes.  Except as otherwise provided in Section 16 hereof, and subject to any necessary regulatory approval, the Subordinated Notes may, with the consent of the Company and the Holders of at least 51% of the aggregate outstanding principal amount of the Subordinated Notes then outstanding, be amended or any provision, past default, or non-compliance thereof waived; provided, however, that, without the consent of each Holder of an affected Note, no such amendment or waiver may:

 

 

(i)                                     reduce the principal amount of any Note;

 

(ii)                                  reduce the rate of or change the time for payment of interest on any Note;

 

(iii)                               reduce the amount of principal or extend the maturity of any Note;

 

(iv)                              make any change in this Section 16 or in Sections 9 through 14 hereof;

 

(v)                                 make any change in Section 6 hereof that adversely affects the rights of any Holder of a Note; or

 

(vi)                              disproportionately affect any of the Holders of the then outstanding Notes.

 

(b)                                 Effectiveness of Amendments.  An amendment or waiver becomes effective in accordance with its terms and thereafter binds every Holder of the Subordinated Notes, unless otherwise provided by Section 16(a) above.  After an amendment or waiver becomes effective, the Company shall mail to each Holder a copy of such amendment or waiver.  The Company may require each Holder to surrender this Note so that an appropriate notation concerning the amendment or waiver may be placed thereon or a new Note, reflecting the amendment or waiver, exchanged therefor.  Even if such a notation is not made or such a new Note is not issued, such amendment or waiver and any consent given thereto by a Holder of this Note shall be binding according to its terms on any subsequent Holder of this Note.

 

(c)                                  Amendments Without Consent of Holders.  Notwithstanding Section 16(a) hereof, the Company may amend or supplement this Note without the consent of the Holders of the Subordinated Notes to cure any ambiguity, defect or inconsistency or to provide for uncertificated Notes in addition to or in place of certificated Notes, or to make any change that does not adversely affect the rights of any Holder of one of the Subordinated Notes.

 

17.                               Order of Payments.  Any payments made hereunder shall be applied first against costs and expenses of each Holder hereunder; then against interest due hereunder; and then against principal due hereunder.

 

18.                               Notices.  All notices and other communications hereunder shall be in writing and, for purposes of this Note, shall be delivered in accordance with, and effective as provided in, the Purchase Agreement.

 

19.                               Conflicts; Governing Law; Venue.  In the case of any conflict between the provisions of this Note and the Purchase Agreement, the provisions of this Note shall control.  This Note shall be construed in accordance with, and be governed by the laws of, the State of New York without giving effect to any conflicts of law provisions of such laws.  The jurisdiction and venue with respect to any disputes related to this Note shall be as set forth in the Purchase Agreement.

 

20.                               Successors and Assigns.  This Note shall be binding upon the Company and inure to the benefit of the Holder and its respective successors and permitted assigns.  The Holder may

 

 

assign all, or any part of, or any interest in, the Holder’s rights and benefits hereunder only to the extent and in the manner permitted in the Purchase Agreement.  To the extent of any such assignment, such assignee shall have the same rights and benefits against the Company and shall agree to be bound by and to comply with the terms and conditions of the Purchase Agreement as it would have had if it were the Holder hereunder.

 

21.                               Waivers.  Neither any failure nor any delay on the part of the Holder in exercising any right, power or privilege under this Note shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any other right, power or privilege.

 

22.                               Priority. The Subordinated Notes rank pari passu among themselves and pari passu, in the event of any insolvency proceeding, dissolution, assignment for the benefit of creditors, reorganization, restructuring of debt, marshaling of assets and liabilities or similar proceeding or any liquidation or winding up of the Company, with all other present or future unsecured subordinated debt obligations of the Company, except any unsecured subordinated debt that may be expressly stated to be senior to or subordinate to the Subordinated Notes.

 

23.                               Registrar and Paying Agent. The Company shall maintain in the United States of America an office or agency where the Subordinated Notes may be surrendered for registration of transfer or exchange (“Registrar”) and an office or agency where Subordinated Notes may be presented for payment or for exchange (“Paying Agent”). The Company has initially appointed Wilmington Trust, National Association to act as its Registrar and Paying Agent with respect to the Subordinated Notes and the initial address of the Payment Office is Wilmington’s offices located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890. The Company may vary or terminate the appointment of any of its paying or transfer agencies, and may appoint additional paying or transfer agencies.

 

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to:

 

(Print or type assignee’s name, address and zip code)

 

(Insert assignee’s social security or tax I.D. No.)

 

and irrevocably appoint                 agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.

 

	
Date:
    	
Your   Signature:
    	
 
    
	
 
    
	
Signature   Guarantee:
    	
 
    
	
 
    	
(Signature must be guaranteed)
    
				

 

Sign exactly as your name appears on the other side of this Note.

 

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

The undersigned hereby certifies that it o is / o is not an Affiliate of the Company and that, to its knowledge, the proposed transferee o is / o is not an Affiliate of the Company.

 

	
 
    	
 
    
	
 
    	
Signature
    

 

Signature Guarantee:

 

	
 
    	
 
    	
 
    
	
(Signature   must be guaranteed)
    	
 
    	
Signature
    

 

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15.

 

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and it is aware that the sale to it is being made in reliance on Rule 144A, and it acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

	
 
    	
 
    
	
 
    	
Signature
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DateExhibit 4.3

 

Registration Rights Provisions

 

1.1                             Filing of Registration Statement.  Subject to the terms and conditions of this Agreement, the Company shall prepare a Registration Statement on Form S-3, or other applicable form if Form S-3 is not available or has been rescinded or replaced (the “Registration Statement”), solely with respect to the 160,536 common shares, par value 0.10 per share, of the Company issued pursuant to this Agreement (“Registrable Securities”) and shall file the Registration Statement with the Securities and Exchange Commission (the “SEC”) as soon as reasonably practical but in any event within 30 days following the date hereof.  The Registration Statement shall not be filed as a confidential filing and the Company shall file a responsive amendment to any SEC comments received regarding the Registration Statement as soon as reasonably practical after receipt of such comments.  The Company represents and warrants that, as of the date hereof, the Company meets the qualifications to file a Registration Statement on Form S-3 and that there are no matters known to the Company that would cause the Company to delay filing the Registration Statement in accordance with this Section 1.1.  All expenses relating to the registration of the Registrable Securities, including (without limitation) all registration, filing, qualification, printers, accounting and legal fees and disbursements shall be borne by the Company; provided that each Party shall be responsible for its fees (including legal fees) and expenses incurred in connection with the preparation and negotiation of this Agreement.  The Company shall (i) cause all Registrable Securities registered hereunder to be listed on each securities exchange on which the Registrable Securities are listed by the Company, (ii) maintain a transfer agent and registrar for all Registrable Securities registered hereunder and a CUSIP number for all such Registrable Securities and (iii) make any Blue Sky filings to the extent required to register or qualify Registrable Securities under state Blue Sky laws, provided that the Company shall not be required in connection therewith or as a condition thereof to qualify to do business, where not otherwise required, or to file a general consent to service of process in any state or jurisdiction.

 

1.2                             Effectiveness of Registration Statement.  The Company shall use commercially reasonable efforts to:  (a) have the Registration Statement declared effective by the SEC as soon as reasonably practical following the receipt of notice from the SEC of either no comments or the clearance of comments but in any event within 90 days following the date hereof; (b) subject to Section 1.3, prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective with respect to any Registrable Securities, until the earlier of (i) the date on which such Registrable Securities covered by the Registration Statement have been sold by the holder of the Registrable Securities, (ii) the date on which either such Registrable Securities are distributed to the public pursuant to Rule 144 promulgated by the SEC pursuant to the Securities Act (or any similar provision then in effect), (iii) the second anniversary of the date hereof (provided, however, that such two-year period will be extended for a period of time equal to the period such holder is required to suspend sales of such Registrable Securities pursuant to the terms of this Agreement), or (iv)  the date on which such Registrable Securities are sold to the Company (but not before the expiration of the applicable prospectus delivery requirements); and (c) comply with the provisions of the Securities Act of 1933, as amended (the “Securities Act”) with respect to the disposition of all securities covered by the Registration Statement during such period in accordance with the intended methods of disposition by the holder of the Registrable Securities set forth in the Registration Statement.

 

1.3                             Information and Copies.

 

(a)                               The Company shall furnish to the holder of the Registrable Securities such number of copies of the Registration Statement, each amendment and supplement thereto, the prospectus included in the Registration Statement (including each preliminary prospectus), and such other documents as Rubin may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such holder.

 

 

(b)                               The Company shall notify the holder of the Registrable Securities of the happening of any event as a result of which the prospectus included in the Registration Statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing and shall use commercially reasonable efforts to prepare and file with the SEC, and promptly notify each holder of Registrable Securities of the filing of, a supplement to such prospectus or an amendment to the Registration Statement so that, as thereafter delivered to the purchasers of Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made and in the case of an amendment to the Registration Statement, use reasonable best efforts to cause it to become effective as soon as possible.  Upon receipt of any notice from the Company of the happening of any event of the kind described above, the holder of the Registrable Securities will forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement until such holder’s receipt of the copies of the supplemented or amended prospectus, or until it is advised in writing by the Company that the use of the prospectus may be resumed.

 

(c)                                In the event of the issuance of any stop order suspending the effectiveness of the Registration Statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Registrable Securities included in the Registration Statement for sale in any jurisdiction, the Company will promptly notify the holder of the Registrable Securities of such and will use reasonable efforts to obtain the withdrawal of such order.

 

(d)                               The Company reserves the right to postpone for a reasonable period of time, not to exceed in the aggregate 90 days from the date notification of such delay is sent to the holders of Registrable Securities during any 365 day period, the filing or the effectiveness of the Registration Statement if the Company in the good faith judgment of the Board of Directors determines that (i) such registration might have a material adverse effect on any of the Company’s plans or proposals with respect to any financing, acquisition, recapitalization, reorganization, or other material transaction, or (ii) the Company is in possession of material non-public information that, if publicly disclosed, could result in a material disruption of a major corporate development or transaction then pending or in progress or in other material adverse consequences to the Company.

 

1.4                             Nature of Sale.  Notwithstanding any other provision of this Agreement, Registrable Securities shall be treated as Registrable Securities only if and so long as they have not been (a) sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, or (b) sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof so that all transfer restrictions, and restrictive legends with respect thereto, if any, are removed upon the consummation of such sale.

 

1.5                             Suspension of Sales.  If any Registrable Securities are included in a Registration Statement pursuant to the terms of this Agreement, the holder thereof will not (until further notice) effect sales thereof after receipt of written notice from the Company of the occurrence of an event specified in order to permit the Company to correct or update the Registration Statement or prospectus.  Following the end of the period during which the Company is obligated to keep the Registration Statement current and effective as described herein, each holder of Registrable Securities included in the Registration Statement shall discontinue sales thereof pursuant to such Registration Statement, unless such holder has received written notice from the Company of its intention to continue the effectiveness of such Registration Statement with respect to any of such securities which remain unsold.

 

 

1.6                             Furnish Information.  It shall be a condition precedent to the Company’s obligations to take any action pursuant to this Agreement with respect to the Registrable Securities of any selling holder that such holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such holder’s Registrable Securities or as the Company shall otherwise reasonably request.  The obligations of the Company under this Agreement shall be suspended as to any holder of Registrable Securities unless and until such holder complies with the preceding sentence.

 

1.7                             Indemnification.

 

(a)                               The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, each holder of the Registrable Securities and each person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such holder of Registrable Securities, from and against any and all losses, claims, damages, liabilities, and expenses joint or several (including reasonable fees of counsel in connection with investigating or defending any claim) (collectively, “Losses”) to which any of the foregoing may become subject insofar as such Loss arises out of or is based upon:  (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, related preliminary prospectus or prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (ii) any violation or alleged violation by the Company of Section 5 of the Securities Act or any rule or regulation thereunder or any similar state law relating to the Registration Statement, except insofar as such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission that is based upon or made in conformity with information relating to any holder of Registrable Securities furnished in writing to the Company by or on behalf of any holder of Registrable Securities. To the extent that a court of competent jurisdiction determines that the indemnification rights of a holder of Registrable Securities under this Section 1.7(a) are not enforceable, then the Company shall contribute to the Losses of such holder of Registrable Securities in such proportion as is appropriate to reflect the relative fault of such holder of Registrable Securities and the Company in connection with the statements, omissions or other actions that resulted in the Loss as well as other relevant equitable considerations.

 

(b)                                Each holder of Registrable Securities agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, and agents, and each person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company from and against any and all Losses to which any such persons may become subject insofar as such Loss arises out of or is based upon:  (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, related preliminary prospectus or prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but only to the extent, that such untrue statement, alleged untrue statement, omission or alleged omission is contained in any information furnished in writing by such holder of Registrable Securities relating to such holder for use in the preparation of the documents described in this Section 1.7(b); or (ii) any violation or alleged violation by the such holder of Section 5 of the Securities Act or any rule or regulation thereunder or any similar state law relating to the Registration Statement.  To the extent that a court of competent jurisdiction determines that the indemnification rights of the Company under this Section 1.7(b) are not enforceable, then such holder of Registrable Securities shall contribute to the Losses of the Company in such proportion as is appropriate to reflect the relative fault of such holder of Registrable Securities and the Company in connection with the statements, omissions or other actions that resulted in the Loss as well as other relevant equitable considerations.

 

 

(c)                                 Promptly after receipt by an indemnified party hereunder of written notice of the commencement of any action, suit, proceeding, investigation, or threat thereof with respect to which a claim for indemnification may be made pursuant hereto, such indemnified party shall, if a claim in respect thereto is to be made against an indemnifying party, give written notice to the indemnifying party of the threat or commencement thereof; provided, however, that the failure to so notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party except to the extent that the indemnifying party is actually prejudiced by such failure to give notice.  If any such claim or action referred to hereunder is brought against any indemnified party and it then notifies the indemnifying party of the threat or commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other indemnifying party similarly notified, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party (which counsel shall not, except with the consent of the indemnified party, be counsel to the indemnifying party).  The indemnifying party shall not be liable to an indemnified party hereunder for any legal expenses of counsel or any other expenses incurred by such indemnified party in connection with the defense thereof, unless the indemnifying party has failed to assume the defense of such claim or action or to employ counsel reasonably satisfactory to such indemnified party.  Notwithstanding the foregoing, the indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnified party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual conflicting interests between such indemnified party and any indemnifying party.  The indemnifying party shall not be required to indemnify the indemnified party with respect to any amounts paid in settlement of any action, proceeding, or investigation entered into without the written consent of the indemnifying party, which consent shall not be unreasonably withheld.  No indemnifying party shall consent to the entry of any judgment or enter into any settlement without the consent of the indemnified party, which consent shall not be unreasonably withheld.

 

1.8                             Termination.  The obligations of the Company under this Agreement shall terminate on the date on which is the earlier of (a) the date on which the Company’s obligations under Section 1.2 terminate or (b) the date on which all Registrable Securities covered by the Registration Statement have been sold.

 

1.9                              Reports Under the Exchange Act.  With a view to making available to the holder of the Registrable Securities the benefits of Rule 144 promulgated under the Securities Act, and any other rule or regulation of the SEC that may at any time permit a holder to sell securities of the Company to the public without registration, the Company agrees to make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times until the termination of the obligations of the Company under this Agreement.  The Company shall take all commercially reasonable actions as may be necessary so that, subject to the compliance by the holder of Registrable Securities with all applicable securities laws, such holder may freely sell the Registrable Shares pursuant to a Registration Statement in accordance with the provisions of the Securities Act, including, but not limited to, preparing and filing with the SEC all amendments and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement (including, if necessary, filing a new Registration Statement on Form S-1 or otherwise).

 

1.10                      Investment Representations.

 

(a)                               Rubin understands and acknowledges that the Registrable Securities are characterized as “restricted securities” under the federal securities laws of the United States inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and

 

 

applicable regulations such securities may not be resold without registration or an applicable exemption under the Securities Act and applicable state securities laws, except in certain limited circumstances.  Rubin represents that he is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

 

(b)                               Rubin understands that the Registrable Securities will be imprinted with a legend in accordance with the customary practice of the transfer agent of the Company, which prohibits the transfer of the shares unless such transfer will not be in violation of the Securities Act of 1933, as amended, and/or applicable state securities laws and/or any rule or regulation promulgated thereunder.  The Company will cooperate with any reasonable request of the holder of the Registrable Securities in removing any such legend (i) with respect to such Registrable Securities that are registered for resale under the Securities Act and are being sold by such holder or (ii) if such holder of Registrable Securities provides the Company with reasonable assurance that such Registrable Securities can be sold, assigned or transferred pursuant to Rule 144 promulgated under the Securities Act.

 

1.11                       Successors and Assigns.  Except as otherwise provided in this Agreement, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors, assigns and legal representatives of the Parties.  Notwithstanding the foregoing, Rubin shall not assign any rights or obligations set forth in this Agreement other than in connection with an assignment or transfer of Registrable Securities to a Family Transferee.  For the purpose of this Agreement, “Family Transferee” shall mean any family members of Rubin, any estate or legal representative of Rubin or a family member, or any trust for the benefit of any family member.

 

For purposes of this Agreement, the “Company” shall mean Helen of Troy Limited, “Rubin” shall mean Gerald J. Rubin, the “date hereof” shall mean November 12, 2015, and the “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00252-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00252-of-00352.parquet"}]]