-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F1kaUTRpLzxWmvs0zSuHPHIwGlUXBjVo29GT224oNcoIx1ExopiRTIWTIv98EzBY IThv3ZZxWEB0eVdKuA0k7w== 0000898430-97-003812.txt : 19970912 0000898430-97-003812.hdr.sgml : 19970912 ACCESSION NUMBER: 0000898430-97-003812 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19970904 EFFECTIVENESS DATE: 19970904 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANK PLUS CORP CENTRAL INDEX KEY: 0001012616 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 951782887 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-34965 FILM NUMBER: 97675527 BUSINESS ADDRESS: STREET 1: 4565 COLORADO BLVD CITY: LOS ANGELES STATE: CA ZIP: 90039 BUSINESS PHONE: 8185493330 MAIL ADDRESS: STREET 1: 4565 COLORADO BLVD CITY: LOS ANGELES STATE: CA ZIP: 90039 S-8 1 STOCK OPTION AND EQUITY INCENTIVE PLAN As filed with the Securities and Exchange Commission on September 4, 1997. Registration No. 333-________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 BANK PLUS CORPORATION -------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) DELAWARE 95-4571410 ------------------------------------------------------------------------ (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 4565 Colorado Boulevard, Los Angeles, California 90039 ------------------------------------------------------------ (Address of Principal Executive Offices, Zip Code) STOCK OPTION AND EQUITY INCENTIVE PLAN ------------------------------------------------------------ (Full title of the Plan) Godfrey B. Evans Esq. Executive Vice President, General Counsel and Corporate Secretary Bank Plus Corporation 4565 Colorado Boulevard Los Angeles, California 90039 ------------------------------------------------------------ (Name and Address of Agent for Service) (818) 549-3330 ------------------------------------------------------------- (Telephone Number, Including Area Code, of Agent for Service) CALCULATION OF REGISTRATION FEE
===================================================================================== PROPOSED PROPOSED TITLE OF SECURITIES AMOUNT MAXIMUM MAXIMUM AMOUNT OF TO BE TO BE OFFERING AGGREGATE REGISTRATION REGISTERED REGISTERED(1) PRICE PER OFFERING FEE SHARE PRICE - ------------------------------------------------------------------------------------- Common Stock, $0.01 750,000 $10.875 (4) $8,156,250 (4) $2,471.60 par value shares (2)(3) =====================================================================================
(1) Pursuant to Rule 429 under the Securities Act of 1933, this Registration Statement also relates to 1,375,000 shares of Registrant's Common Stock, $0.01 par value per share (the "Common Stock"), registered on Registration Statement No. 333-16649 for which a Filing Fee of $3,550.89 was previously paid. (2) This Registration Statement also covers such indeterminable number of additional shares of Common Stock as may become issuable to prevent dilution in the event of stock splits, stock dividends or similar transactions pursuant to the terms of the Plan. (3) Represents shares of Common Stock to be issued by the Registrant upon exercise of options available for grant under the Plan. (4) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) based upon the prices of the Common Stock on the NASDAQ National Market as reported on August 29, 1997. EXPLANATORY NOTE Under cover of this Form S-8 is a reoffer prospectus prepared in accordance with Part I of Form S-3 under the Act (the "Reoffer Prospectus"). The Reoffer Prospectus may be used in connection with resales of securities acquired under the Plan by persons who may be considered affiliates of the Registrant, as defined in Rule 405 under the Securities Act of 1933, as amended (the "Securities Act"). PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The documents containing the information specified in Part I of the instructions to the Registration Statement on Form S-8 will be sent or given to officers, employees and non-employee directors of the Registrant and its subsidiaries selected to participate in the Plan as required by Rule 428(b)(1) promulgated under the Securities Act. 2 REOFFER PROSPECTUS BANK PLUS CORPORATION COMMON STOCK ($0.01 PAR VALUE) 2,125,000 SHARES This Prospectus relates to 2,125,000 shares of Common Stock, par value $0.01 per share ("Common Stock"), of Bank Plus Corporation ("Bank Plus") which have previously been issued or may in the future be issued pursuant to awards granted under Bank Plus' Stock Option and Equity Incentive Plan (the "Plan") to, and which may be offered for resale from time to time by, certain directors and officers of Bank Plus and its affiliates named in the table under the heading "Selling Stockholders" (the "Selling Stockholders"). Bank Plus will not receive any of the proceeds from the sale of the Common Stock offered hereby (hereinafter, the "Securities"). Bank Plus will pay all of the expenses associated with the registration of the Securities and this Prospectus. The Selling Stockholders will pay the other costs, if any, associated with any sale of the Securities. Sale of the Securities offered hereby may be made on the NASDAQ National Market System or the over-the-counter market or otherwise at prices and on terms then prevailing or at prices related to the then current market price, or in negotiated transactions. See "Risk Factors" beginning on page 5 hereof for certain considerations relevant to an investment in the Securities. The Common Stock is quoted on the NASDAQ National Market System under the symbol "BPLS." On August 29, 1997 the last reported sale price per share of the Common Stock, as quoted on the NASDAQ National Market System, was $10.875. ------------------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------------------ The date of this Prospectus is September 4, 1997. ------------------------------------ AVAILABLE INFORMATION Concurrently herewith, Bank Plus is filing a Registration Statement on Form S-8 (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), pertaining to the Securities covered by this Prospectus. This Prospectus omits certain information and exhibits included in the Registration Statement, copies of which may be obtained upon payment of a fee prescribed by the Commission or may be examined free of charge at the principal office of the Commission in Washington, D.C. Bank Plus is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Commission. Such reports, proxy statements and other information filed with the Commission by Bank Plus can be inspected and copied at the public reference facilities maintained by the Commission at Room 2014, 450 Fifth Street, N.W., Washington, D.C. 20549, and will also be available for inspection and copying at the regional offices of the Commission located at 7 World Trade Center (13th Floor), New York, New York 10048 and at Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, Illinois 60661-2511. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a World Wide Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The address of the site is http://www.sec.gov. Bank Plus' Common Stock is quoted on the NASDAQ National Market System under the symbol "BPLS." 2 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents heretofore filed by Bank Plus with the Commission are by this reference incorporated in and made a part of this Prospectus: (i) the Company's (as defined below) Annual Report on Form 10-K for the fiscal year ended December 31, 1996, (ii) Amendment No. 1 on Form 10-K/A, filed June 13, 1997, to the Company's Annual Report for the fiscal year ended December 31, 1996; (iii) the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1997; (iv) the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1997; (v) the Company's Current Report on Form 8-K filed July 3, 1997; (vi) the Company's Current Report on Form 8-K filed August 13, 1997; (vii) the description of Bank Plus' Common Stock contained in Bank Plus' Registration Statement on Form 8-B filed on April 22, 1996; and (viii) all documents filed by Bank Plus pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the filing of a post-effective amendment which indicates that all Securities offered hereby have been sold or which deregisters all Securities then remaining unsold. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Copies of all documents which are incorporated herein by reference (not including the exhibits to such documents, unless such exhibits are specifically incorporated by reference into such documents or into this Prospectus) will be provided without charge to each person, including any beneficial owner, to whom this Prospectus is delivered, upon a written or oral request to Bank Plus Corporation, Attention: General Counsel, 4565 Colorado Boulevard, Los Angeles, 90039, telephone number (818) 549-3330. THE COMPANY Bank Plus, through its wholly-owned subsidiary, Fidelity Federal Bank, A Federal Savings Bank, and its subsidiaries ("Fidelity" or the "Bank"), offers a broad range of consumer financial services, including demand and term deposits, and loans to consumers, through 38 full-service branches, all of which are located in Southern California, principally in Los Angeles and Orange counties. At this time, the Bank makes available to its customers residential mortgages and consumer loans, which the Bank does not underwrite or fund, by referral to certain established providers of mortgage and consumer loan products with which the Bank has negotiated strategic alliances. In addition, through Bank Plus' subsidiary Gateway Investment Services, Inc. ("Gateway"), a National Association of Securities Dealers, Inc. ("NASD") registered broker/dealer, the Bank provides customers with uninsured investment products, including a number of mutual funds, annuities and unit investment trusts. In the fourth quarter of 1995, Fidelity completed a plan of recapitalization (the "1995 Recapitalization"), pursuant to which Fidelity raised approximately $134.4 million in net new equity 3 through the sale of 2,070,000 shares of 12% Noncumulative Exchangeable Perpetual Preferred Stock, Series A ("Series A Preferred Stock"), and 47,000,000 shares of Fidelity Class A Common Stock. As part of the 1995 Recapitalization, Fidelity adopted the accelerated asset resolution plan (the "Accelerated Asset Resolution Plan"), which was designed to aggressively dispose of, resolve, or otherwise manage a pool of primarily multifamily mortgage loans and real estate owned ("REO"). As a result, Fidelity recorded a $45.0 million loan portfolio charge in the allowance for estimated loan losses which represented the estimated additional losses expected to be incurred in connection with the implementation of the Accelerated Asset Resolution Plan. See Item 7: "Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")--Asset Quality--Accelerated Asset Resolution Plan" in the Company's Annual Report on Form 10-K for the fiscal year ended December 1996, as amended by the Amendment No. 1 thereto on Form 10-K/A filed June 13, 1997 (the "1996 10-K"). On February 9, 1996, the Bank's stockholders approved a one-for-four reverse stock split of the issued and outstanding shares of the Bank's Class A Common Stock. Upon effectiveness of the reverse stock split, each stockholder became the owner of one share of Common Stock for each four shares of Common Stock held at the time of the reverse stock split and became entitled to receive cash in lieu of any fractional shares. All per share data and weighted average common shares outstanding have been retroactively adjusted to reflect the reverse stock split. In May 1996, Fidelity completed a reorganization pursuant to which all of the outstanding common stock of Fidelity was converted on a one-for-one basis into all of the outstanding common stock of Bank Plus, and Bank Plus became the holding company for Fidelity (the "Reorganization"). Effective May 17, 1996, Bank Plus Common Stock was listed on the NASDAQ National Market System under the symbol "BPLS". Bank Plus' principal operating subsidiaries are Fidelity and Gateway, which prior to the Reorganization was a subsidiary of the Bank. Bank Plus currently has no significant business or operations other than serving as the holding company for Fidelity and Gateway. Fidelity's deposits are highly concentrated in Los Angeles and Orange counties. The 38 branches held average deposit balances of $71.1 million and total balances of approximately $2.7 billion at June 30, 1997. At June 30, 1997, the Bank's gross mortgage loan portfolio aggregated approximately $2.8 billion, 61% of which was secured by residential properties containing 5 or more units, 31% of which was secured by single family and multifamily residential properties containing 2 to 4 units and 8% of which was secured by commercial and other property. At that same date, 96% of the Bank's loans consisted of adjustable-rate mortgages. The Bank's deposit accounts are insured by the Federal Deposit Insurance Corporation (the "FDIC") through the Savings Association Insurance Fund (the "SAIF") to the maximum extent permitted by law. The Bank is subject to the examination, supervision and reporting requirements of the Office of Thrift Supervision (the "OTS"), which is the Bank's primary federal banking regulator, and is also subject to examination and supervision by the FDIC. As a wholly-owned subsidiary of Bank Plus, Gateway is subject to limited examination and supervision 4 by the OTS and is also subject to regulation as a registered broker/dealer by the Securities and Exchange Commission (the "SEC"). On September 30, 1996 legislation was enacted that required member institutions to recapitalize the SAIF by paying a one-time special assessment of approximately 65.7 basis points on all assessable deposits as of March 31, 1995. The one-time special assessment resulted in the Bank recording an $18.0 million charge in additional SAIF premiums. See Item 1: "Business-Regulation and Supervision--Fidelity--Deposit Insurance," in the 1996 10-K. Unless the context otherwise requires, all references to the "Company" in this reoffer prospectus include Bank Plus and its subsidiaries on a consolidated basis. All references to Fidelity or the Bank with respect to the period after August 3, 1994 and before the Reorganization include Gateway, which was a wholly-owned subsidiary of the Bank's former holding company, Citadel Holding Corporation ("Citadel"), during a portion of the periods covered hereby, and on August 3, 1994, became a wholly-owned subsidiary of Fidelity. The principal executive offices of Bank Plus and Fidelity are located at 4565 Colorado Boulevard, Los Angeles, California 90039, telephone number (818) 241- 6215. RISK FACTORS The purchase of the Securities involves a high degree of risk. In determining whether or not to make an investment in the Securities, potential investors are urged to read and carefully consider the matters set forth below, as well as the other information contained herein. RISK OF CONTINUING LOSSES Beginning in late 1991, the impact of the economic recession and substantial declines in real estate values in Southern California began to adversely affect collateral values and the ability of certain borrowers to repay their obligations to the Bank. This led to high levels of nonperforming assets ("NPAs") and net chargeoffs in 1991, which adversely affected the Bank's asset quality and results of operations. The foregoing factors contributed to a net loss of $65.9 million ($62.72 per share), a net loss of $128.4 million ($39.08 per share) and a net loss of $69.0 million ($8.84 per share) for the years ended December 31, 1993, 1994 and 1995, respectively. The Bank's losses during these periods were primarily due to significant increases in the provision for loan and real estate losses, lower net interest income due primarily to high levels of NPAs, decreased fee income due primarily to shrinkage of the Bank's deposit base, and increased operating and other expenses relating to managing the Bank's problem asset portfolio and the write-off of certain intangible assets. For the year ended December 31, 1996, the Company reported a net loss before minority interest in subsidiary of $9.4 million (after giving effect to the SAIF special assessment of $18.0 million). Earnings during 1996 (before the SAIF special assessment) were positively affected 5 by, among other things, a reduced provision for estimated loan losses of $15.6 million compared to provisions of $69.7 million (including the effect of a $45.0 million loan portfolio charge taken in connection with the Bank's adoption of the Accelerated Asset Resolution Plan), $65.6 million and $65.1 million during 1995, 1994 and 1993, respectively. The lower provision during 1996 is attributable to, among other things, lower levels of NPAs in 1996 compared to other years and the effect of the Accelerated Asset Resolution Plan and the $45.0 million reserve taken in connection therewith in 1995. No assurance can be given that economic conditions that may affect the Bank's market area or other circumstances will not require an increased provision which could have an adverse effect on the Company's financial condition and results of operations. See "--Adequacy of Allowance for Loan and Real Estate Losses." HIGH LEVELS OF NONPERFORMING ASSETS AND OTHER ASSETS WITH INCREASED RISK Due to significant decreases in rental rates and property values, loans originated during the years 1987 through 1991 (which included the peak years of Southern California real estate values in recent periods) are characterized by generally higher loan to value ratios and lower debt coverage ratios. The levels of the Bank's NPAs between 1989 and 1994 increased as economic conditions worsened and contributed to substantial declines in real estate values. Subsequent to the 1994 Recapitalization and Restructuring, the levels of NPAs decreased substantially and remained at such lower levels during 1995 and 1996. As of June 30, 1997, 60% of the outstanding gross loan portfolio was originated between 1987 and 1991. High levels of NPAs were exacerbated as a result of the Bank's concentration of loans secured by multifamily properties in geographic areas that suffered particularly significant declines in rental rates and real estate values and the impact of the Northridge earthquake. See "-- Dependence on Real Estate and High Concentration of Multifamily Residential Loans." Levels of NPAs may remain at current levels or may increase in the future as problem loans are worked out and in some instances properties are taken into REO. The real estate market in Southern California and the overall economy in the areas where the Bank operates are likely to continue to have a significant effect on the quality of the Company's assets in the future. ADEQUACY OF ALLOWANCE FOR LOAN AND REAL ESTATE LOSSES The Company's results of operations have been adversely affected in recent years by significant loan and real estate loss provisions taken in light of significant charge-offs against the Bank's allowance for estimated loan and REO losses and high levels of NPAs and increased levels of REO, particularly with respect to the Bank's loans on multifamily properties of 5 units or more. The amount of the Bank's allowance for loan losses represents management's estimate of the amount of loan losses likely to be incurred by the Bank, based upon various assumptions as to economic and other conditions. As such, the allowance for loan losses does not represent the amount of such losses that could be incurred under adverse conditions that management does not consider to be the most 6 likely to arise. In addition, management's classification of assets and evaluation of the adequacy of the allowance for loan losses is an ongoing process. Consequently, there can be no assurance that material additions to the Bank's allowance for loan losses will not be required in the future, thereby adversely affecting earnings and the Bank's ability to maintain or build capital. While management believes that the current allowance is adequate to absorb the known and inherent risks in the loan portfolio, no assurances can be given that the allowance is adequate or that economic conditions which may adversely affect the Bank's market area or other circumstances will not result in future loan or REO losses, which may not be covered completely by the current allowance or may require an increased provision which could have a significant adverse effect on the Bank's financial condition, results of operations and levels of regulatory capital. ECONOMIC CONDITIONS IN FIDELITY'S MARKET AREA The performance of the Bank's loans secured by multifamily and commercial properties has been adversely affected by Southern California economic conditions. These portfolios are particularly susceptible to the potential for further declines in the Southern California economy, such as increasing vacancy rates, declining rents, increasing interest rates, declining debt coverage ratios and declining market values for multifamily and commercial properties. In addition, the possibility that investors may abandon properties or seek bankruptcy protection with respect to properties experiencing negative cash flow, particularly where such properties are not cross-collateralized by other performing assets, can also adversely affect the multifamily loan portfolio. California has been hit particularly hard by adverse economic conditions and Southern California has experienced the brunt of the economic downturn in the state. Although certain economic indicators suggest that the Southern California economy is beginning to improve, many factors key to recovery may be impacted adversely by the Federal Reserve Board's interest rate policy as well as other factors. Consequently, rents and real estate values may not stabilize, which may affect future delinquency and foreclosure levels and may adversely impact the Company's asset quality, earning performance and capital levels. DEPENDENCE ON REAL ESTATE AND HIGH CONCENTRATION OF MULTIFAMILY RESIDENTIAL LOANS At June 30, 1997, substantially all of the Bank's loan portfolio was secured by real estate, and the Company had $23.6 million of net REO. In light of the economic recession in Southern California and the impact it has had and may have on the Southern California real estate market, the Bank's real estate dependence and high concentration of multifamily loans on properties of 5 or more units (approximately 60% of the Bank's mortgage loan portfolio) increases the risk of loss in the Bank's loan portfolio. Prior to the 1994 Restructuring and Recapitalization, the Bank experienced high delinquency rates in its multifamily portfolio of 5 or more units reflecting, among other things, (i) high vacancy rates, (ii) low apartment rental rates, (iii) a greater willingness of borrowers to abandon 7 such properties or seek bankruptcy protection, particularly where such properties are experiencing negative cash flow and the loans are not cross- collateralized by other performing properties, and (iv) the substantial decreases in the market value of multifamily properties experienced in recent periods (resulting, in many cases, in appraised values less than the outstanding loan balances). Multifamily lending on properties of 5 or more units typically involves larger loans to a single obligor and is generally viewed as exposing the lender to a greater risk of loss than single family and multifamily (2 to 4 units) lending. The liquidation value of multifamily properties may be adversely affected by risks generally incident to interests in real property, which include: changes or continued weakness in general or local economic conditions and/or specific industry segments, declines in real estate values, declines in rental, room or occupancy rates, increases in interest rates, real estate and personal property tax rates and other operating expenses (including energy costs), the availability of refinancing, changes in governmental rules, regulations and fiscal policies, including rent control ordinances and environmental legislation, and other factors beyond the control of the borrower or the lender. CAPITAL REQUIREMENTS The minimum capital requirements applicable to savings associations, such as the Bank, were significantly increased by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). Under FIRREA, as implemented to date by the OTS, thrifts are required to maintain ratios of tangible capital to adjusted total assets (as defined in the regulations) of at least 1.5%, core capital to adjusted total assets (as defined in the regulations) of at least 3% and total capital to risk-weighted assets (as defined in the regulations) of at least 8%. The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), among other things, required the OTS to implement a system providing for regulatory sanctions against institutions that are not adequately capitalized. The severity of the sanctions increases to the extent that an institution's capital continues to decline. Under the prompt corrective action ("PCA") provisions, an institution is adequately capitalized (and, therefore, not undercapitalized) if (1) its ratio of core capital to adjusted total assets (as defined in the regulations) is at least 4%, (2) its ratio of core capital to risk-weighted assets (as defined in the regulations) is at least 4% and (3) its ratio of total capital to risk-weighted assets (as defined in the regulations) is at least 8%. An institution is treated as well capitalized if its core capital to adjusted total assets ratio is at least 5%, its core capital to risk- weighted assets ratio is at least 6%, and its total capital to risk-weighted assets is at least 10% and no OTS order or directive requiring higher capital ratios is then in effect. At June 30, 1997, the Bank met the requirements to be deemed well capitalized for regulatory purposes. However, there can be no assurance that the Bank will remain well capitalized in the future. 8 The OTS also has the authority to establish, for individual thrifts, an individual minimum capital requirement ("IMCR") in excess of the standard requirement upon a determination by the OTS that such an IMCR is necessary or appropriate in light of such thrift's particular circumstances. For example, the OTS may determine that an IMCR is appropriate if, among other things, the OTS believes that an institution (i) has a high degree of exposure to interest rate risk or credit risk, (ii) has a high degree of exposure to concentration of credit risk or risks arising from nontraditional activities or fails to adequately monitor and control the risks presented by concentration of credit and nontraditional activities, (iii) may be adversely affected by the operation or condition of its holding company, (iv) has a portfolio reflecting weak credit quality or a significant likelihood of financial loss or (v) has inadequate underwriting standards or procedures. If the OTS determines that an IMCR should be imposed on an institution, the institution has an opportunity to submit a response to the OTS, but may have no opportunity for judicial review of an IMCR. If an institution fails to meet either the standard minimum capital requirements or any IMCR that may be imposed on it, it will become subject to a number of regulatory sanctions. Although the Bank is not currently subject to an IMCR, there can be no assurance that the Bank will not be subject to an IMCR in the future. The Bank's failure to meet its regulatory capital requirements would provide grounds for one or more of the following actions, depending on the severity of the violation: a requirement that the Bank file a capital restoration plan, a requirement that the Bank take additional actions to comply with the capital restoration plan, the issuance of a cease and desist order, the issuance of a capital directive, the imposition of civil money penalties on the Bank and certain affiliated parties, the imposition of such operating restrictions as the OTS deems appropriate at the time, such other actions by the OTS as it may be authorized or required to take under applicable statutes and regulations and, under certain circumstances, the appointment of a conservator or receiver for the Bank. FLUCTUATIONS IN INTEREST RATES Prevailing economic conditions, particularly changes in market interest rates, as well as governmental policies and regulations concerning, among other things, monetary and fiscal affairs, significantly affect interest rates and a savings institution's net interest income. The results of operations of the Company depend to a large extent on net interest income, which is the difference between interest the Company receives from its loans, securities and other interest-earning assets and the interest expense the Company pays on its deposits and other interest-bearing liabilities. The Company is subject to risk from fluctuations in interest rates to the extent its interest-bearing liabilities mature or reprice at different times or on a different basis than its interest-earning assets. Generally speaking, maturing liabilities, such as deposits, may be replaced only with new liabilities paying interest rates prevailing at the time of maturity, which may possibly be higher than the rates applicable to the liabilities they replaced. Similarly, rates paid on liabilities which reprice or adjust are adjusted based on interest rates prevailing at the time of the repricing or adjustment. "Gap," generally speaking, represents the estimated difference between the amount of interest- earning assets 9 and interest-bearing liabilities repricing during future periods as adjusted for interest-rate swaps and other financial instruments as applicable, and based on certain assumptions. One method the Company uses to measure its exposure to interest rate fluctuations is by calculating its one-year Gap, which is the ratio of (i) the difference between interest-sensitive assets and those liabilities that mature or reprice within 12 months to (ii) total assets. Analysis of the Gap provides only a static view of the Bank's interest rate sensitivity at a specific point in time. The actual impact of interest rate movements on the Company's net interest income may differ from that implied by any Gap measurement. The Company's maturity and repricing mismatch between interest rate sensitive assets and liabilities due within one year was a positive 34.49% at June 30, 1997, compared to a negative one-year Gap of 2.84% at December 31, 1996 and a positive one-year Gap of 7.06% at December 31, 1995. With a positive one-year Gap, the Company would anticipate a rising net interest rate margin over the near term in a rising rate environment. Conversely, in a falling interest rate environment, the Company would anticipate that net interest margin would be adversely affected. At June 30, 1997, approximately 90.3% of the Company's total loan portfolio consisted of loans which mature or reprice in accordance with the Federal Home Loan Bank Eleventh District Cost of Funds Index within one year, compared with approximately 92.6% at December 31, 1996, approximately 92.4% at December 31, 1995 and approximately 90.6% at December 31, 1994. During the latter part of 1995 and early 1996, the Company benefited from the fact that decreases in the interest rates accruing on the Company's adjustable rate mortgage ("ARM") loans lagged the decreases in interest rates accruing on its deposits. During the rising interest rate environment experienced in early 1995 and the latter part of 1996 through early 1997, however, the Company's net interest margin was reduced. If interest rates were to increase again, the Company's net interest income may suffer further as a result. SIGNIFICANT REGULATION The financial institutions industry is subject to significant regulation, which has materially affected the industry in the past and will likely do so in the future. Such regulations, which affect Fidelity and Bank Plus on a daily basis, may be changed at any time, and the interpretation of the relevant law and regulations is also subject to change by the authorities who examine the Bank and interpret those laws and regulations. There can be no assurance that any present or future changes in the laws or regulations or in their interpretation will not materially and adversely affect the Company. LEGAL PROCEEDINGS The Bank was named as a defendant in a purported class action lawsuit alleging violations of federal securities laws in connection with the offering of common stock by the Bank in 1994 as part of the Bank's 1994 Restructuring and Recapitalization. The suit was filed by Harbor Finance Partners ("Harbor") in an alleged class action complaint in the United States District Court-Central District of California on July 28, 1995 and originally named as defendants the Bank, Citadel, 10 Richard M. Greenwood (the Bank's chief executive officer and Citadel's former chief executive officer), J.P. Morgan Securities, Inc. and Deloitte & Touche LLP. The suit alleged that false or misleading information was provided by the defendants in connection with the Bank's 1994 Restructuring and Recapitalization and stock offering and that the defendants knew and failed to disclose negative information concerning the Bank. A motion to dismiss the original complaint was filed by the Bank, and was granted without opposition. Thereafter, Harbor filed an amended complaint that did not include J.P. Morgan Securities, Inc. and Deloitte & Touche LLP as defendants and that contained some factual and legal contentions which were different from those set forth originally. On May 21, 1996, the court granted the Bank's and Greenwood's motion to dismiss the first amended complaint, but granted leave to amend. Following the filing of a second amended complaint, the Bank and Greenwood filed a motion to dismiss. At a hearing on July 22, 1996, the court ruled that the case should be dismissed with prejudice and a formal order to that effect was submitted to the court for execution. Harbor lodged certain objections to the proposed order, including objections that the state law claims in the second amended complaint should not be dismissed with prejudice. The court's order of dismissal was entered on August 5, 1996 and provided that all claims asserted in the second amended complaint under federal law were dismissed with prejudice and those under state law were dismissed without prejudice to their renewal in state court pursuant to 28 U.S.C. (S) 1367(b)(3). Harbor has filed a notice of appeal to the order of dismissal. The Briefing in the appeal is now concluded and the appeal awaits hearing and disposition. On August 30, 1996, Harbor filed an alleged class action complaint in state court containing allegations similar to those raised in the federal court action as well as claims for unfair business practices to which the Bank and Greenwood filed demurrers seeking to have the case dismissed for failure to state a legally sufficient claim. These demurrers were sustained without leave to amend on March 13, 1997. On May 5, 1997, an order of dismissal was entered in the trial court in response to which Harbor has filed a notice of appeal. The Bank filed a motion to recover its attorney fees in obtaining the order of dismissal, which was heard on August 4, 1997. The court continued the motion to August 29, 1997 in order to receive further evidence as to the attorney fees claim filed by the Bank. In addition, the Bank is a defendant in several individual and purported class actions brought by several borrowers which raise claims with respect to the manner in which the Bank serviced certain adjustable rate mortgages which were originated during the period 1983 through 1988. The actions have been filed between July 1, 1992 and February of 1995. In one case the Bank won a summary judgment in Federal District Court. This judgment was appealed. On July 25, 1996, the Ninth Circuit Court of Appeals filed its opinion which affirmed in part, reversed in part and remanded back to the Federal District Court for further proceedings. The Federal District Court recently ruled in favor of certifying a class in that action. In three Los Angeles Superior Court cases, judgments in favor of the Bank were recently entered. The plaintiff has appealed the judgments in all three cases. Two appeals, one decided on June 26, 1997, and one decided on July 30, 1997, affirmed the judgment of the Superior Court in favor of the Bank, and one appeal has been dismissed. Two other cases are pending in the Los Angeles Superior Court. In these actions, the plaintiffs' principal claim is that the Bank selected an inappropriate review date to consult the index upon which the rate adjustment is based that was one or two months earlier than what was required 11 under the terms of the notes. In a declining interest rate environment, the lag effect of an earlier review period defers the benefit to the borrower of such decline, and the reverse would be true in a rising interest rate environment. The Bank strongly disputes these contentions and is vigorously defending these suits. The legal responsibility and financial exposure of these claims presently cannot be reasonably ascertained and, accordingly, there is a risk that the final outcome of one or more of these actions could result in the payment of monetary damages that could be material in relation to the financial condition or results of operations of the Bank. The Bank does not believe the likelihood of such a result is probable and has not established any specific litigation reserves with respect to such lawsuits. In the normal course of business, the Company and certain of its subsidiaries have a number of other lawsuits and claims pending. Although there can be no assurance, the Company's management and its counsel believe that none of the foregoing lawsuits or claims will have a material adverse effect on the financial condition or business of the Company. COMPETITION The Company faces substantial competition for loans and deposits throughout its market areas. The Company competes on a daily basis with commercial banks, other savings institutions, thrift and loans, credit unions, finance companies, retail investment brokerage houses, mortgage banks, money market and mutual funds and other investment alternatives and other financial intermediaries, many of which have substantially greater resources, experience and capital than the Company. The Company faces competition throughout its market area from local institutions, which have a large presence in the Company's market areas, as well as from out-of-state financial institutions which have offices in the Company's market areas. Many of these other institutions offer services which the Company does not offer, including trust services. Furthermore, banks with a larger capital base and financial firms not subject to the restrictions imposed by banking regulation have larger lending limits and can therefore serve the needs of larger customers. SELLING STOCKHOLDERS The table below sets forth, as of the date of this Prospectus or a subsequent date if amended or supplemented, (a) the name of each Selling Stockholder and his or her relationship to the Company during the last three years; (b) the number of shares of Common Stock each Selling Stockholder owned beneficially as of the date of this Prospectus (assuming that all options to acquire shares are exercisable within 60 days, although options actually vest over four years), (c) the number of Securities offered pursuant to this Prospectus by each Selling Stockholder; and (d) the amount and the percentage of Common Stock that will be owned by each Selling Stockholder after completion of this offering. The inclusion in the table of the individuals named therein shall not be deemed to be an admission that any such individuals are "affiliates" of the Company. 12
- -------------------------------------------------------------------------------------------------------------------- SHARES TO BE SHARES OF BENEFICIALLY OWNED COMMON STOCK UPON COMPLETION OF RELATIONSHIP TO BENEFICIALLY SHARES OFFERING (1)(3) COMPANY DURING LAST OWNED AS OF JUNE OFFERED ----------------------- SELLING STOCKHOLDER THREE YEARS 30, 1997 (1) HEREBY (2) NUMBER PERCENT - -------------------------------------------------------------------------------------------------------------------- Richard M. Greenwood President and CEO of Bank Plus; Chairman and CEO of Fidelity 312,500 300,000 12,500 * - -------------------------------------------------------------------------------------------------------------------- Norman Barker, Jr. Director of Bank Plus 26,750 25,500 1,250 * - -------------------------------------------------------------------------------------------------------------------- Waldo H. Burnside Director of Bank Plus 26,125 25,500 625 * - -------------------------------------------------------------------------------------------------------------------- George Gibbs, Jr. Director of Bank Plus and Fidelity 26,125 25,500 625 * - -------------------------------------------------------------------------------------------------------------------- Lilly V. Lee Director of Bank Plus and Fidelity 26,750 25,500 1,250 * - -------------------------------------------------------------------------------------------------------------------- Mark K. Mason Director of Fidelity 25,600 25,500 100 * - -------------------------------------------------------------------------------------------------------------------- Ralph B. Perry Director of Fidelity 27,000 25,500 1,500 * - -------------------------------------------------------------------------------------------------------------------- Gordon V. Smith Chairman of Bank Plus 102,612 2,500 100,112 * - -------------------------------------------------------------------------------------------------------------------- Mark Sullivan III Director of Bank Plus 5,250 2,500 2,750 * - -------------------------------------------------------------------------------------------------------------------- W. Pendleton Tudor Director of Fidelity 25,500 25,500 0 * - -------------------------------------------------------------------------------------------------------------------- Stephen J. Austin Executive Vice President and Director, Risk Evaluation Group, of Fidelity 12,500 12,500 0 * - -------------------------------------------------------------------------------------------------------------------- Robert P. Condon Executive Vice President of Fidelity; CEO of Gateway 181,250 168,750 12,500 * - -------------------------------------------------------------------------------------------------------------------- Godfrey B. Evans Executive Vice President & General Counsel of Fidelity and of Bank Plus 149,000 143,750 5,250 * - -------------------------------------------------------------------------------------------------------------------- James E. Stutz President and COO of Fidelity 175,000 168,750 6,250 * - -------------------------------------------------------------------------------------------------------------------- W.C. Taylor III Executive Vice President and Chief Lending Officer of Fidelity 112,500 100,000 12,500 * - --------------------------------------------------------------------------------------------------------------------
* Less than one percent. (1) Assumes that all options to acquire shares are exercisable within 60 days, although options actually vest over four years. (2) Includes all shares of Common Stock issuable to the Selling Stockholder upon exercise of outstanding options granted under the Plan. (3) Assumes that all options are exercised and all shares offered hereby are sold, that no additional shares will be acquired and that no shares other than those offered hereby will be sold. 13 USE OF PROCEEDS The Company will not receive any of the proceeds from the sale of the Securities offered hereby. PLAN OF DISTRIBUTION Sale of the Securities offered hereby may be made on the NASDAQ National Market System or the over-the-counter market or otherwise at prices and on terms then prevailing or at prices related to the then current market price, or in negotiated transactions. The Securities may be sold in (a) a block trade in which the broker or dealer so engaged will attempt to sell the Securities as agent but may position and resell a portion of the block as principal to facilitate the transaction, (b) transactions in which a broker or dealer acts as principal and resells the securities for its account pursuant to this Prospectus, (c) an exchange distribution in accordance with the rules of such exchange, and (d) ordinary brokerage transactions and transactions in which the broker solicits purchases. In effecting sales, brokers or dealers engaged by the Selling Stockholders may arrange for other brokers or dealers to participate. Brokers or dealers will receive commissions or discounts from Selling Stockholders in amounts to be negotiated immediately prior to sale. Such brokers or dealers and any other participating brokers or dealers may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales and any discounts and commissions received by them and any profit realized by them on the resale of the Securities may be deemed to be underwriting discounts and commissions under the Securities Act. There is no assurance that any of the Selling Stockholders will offer for sale or sell any or all of the Securities covered by this Prospectus. VALIDITY OF SECURITIES The validity of the Securities offered hereby will be passed upon for the Company by Sullivan & Cromwell, Los Angeles, California. EXPERTS The financial statements and the related financial statement schedules incorporated in this Prospectus by reference from Bank Plus' Annual Report on Form 10-K, as amended by the Amendment No. 1 thereto on Form 10-K/A, have been audited by Deloitte & Touche LLP, independent auditors, as set forth in their report incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 14 OTHER MATTERS The certificate of incorporation of the Company limits the liability of directors for breach of their fiduciary duty as directors to the maximum extent permitted by the Delaware General Corporation Law (the "DGCL"). The DGCL authorized corporations to limit or eliminate the personal liability of directors to the corporation and its stockholders for monetary damages in connection with the breach of a director's fiduciary duty of care. The duty of care requires that, when acting on behalf of the corporation, directors must exercise an informed business judgment based on all material information reasonably available to them. Absent the limitation authorized by the DGCL, directors could be accountable to corporations and their stockholders for monetary damages for conduct that does not satisfy such duty of care. Although the DGCL does not change a director's duty of care, it enables corporations to limit available relief to equitable remedies such as injunction or rescission. The Company's certificate of incorporation limits the liability of directors to the Company or its stockholders to the fullest extent permitted by the DGCL as in effect from time to time. Specifically, directors of the Company will not be personally liable for monetary damages for breach of a director's fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. This provision does not affect a director's responsibilities under certain other laws such as the federal securities laws or state or federal environmental laws. The bylaws of the Company provide that the Company shall indemnify its officers, directors and employees to the fullest extent permitted by the DGCL. The Company believes that indemnification under its bylaws covers at least negligence and gross negligence on the part of the indemnified parties. The Company has entered into indemnification agreements with its directors and officers which provide for broad indemnification, except where the "reviewing party" has determined that the indemnitee would not be entitled to be indemnified under applicable law. The "reviewing party" is defined as the majority vote of the directors of the Company not subject to the particular claim or, if none, independent legal counsel selected by the indemnitee and approved by the Company. No payments may be made under these indemnification agreements in connection with claims made against a director or officer for which payment is made under an insurance policy or for which such person is otherwise indemnified. Under an insurance policy currently maintained by the Company, the directors and officers of the Company are insured, within the limits and subject to the limitations of the policy, against certain expenses in connection with the defense of certain claims, actions, suits 15 or proceedings, and certain liabilities which may be imposed as a result of such claims, actions, suits or proceedings which may be brought against them by reason of being or having been such directors or officers. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THE PROSPECTUS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO BUY, COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. 16 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. --------------------------------------- The following documents filed with the Securities and Exchange Commission (the "Commission") are incorporated herein by reference: (1) The Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1996; (2) Amendment No. 1 on Form 10-K/A, filed June 13, 1997, to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1996; (3) The Registrant's Quarterly Report on Form 10-Q for the period ended March 31, 1997; (4) The Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 1997; (5) The Registrant's Current Report on Form 8-K filed July 3, 1997; (6) The Registrant's Current Report on Form 8-K filed August 13, 1997; and (7) The description of the Registrant's Common Stock contained in the Registrant's Registration Statement on Form 8-B filed on April 22, 1996. All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment indicating that all securities offered hereby have been sold or that deregisters all such securities then remaining unsold, shall be deemed to be incorporated by reference in the registration statement and to be a part hereof from the date of filing of such documents. ITEM 4. DESCRIPTION OF SECURITIES. ------------------------- Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. -------------------------------------- Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. ----------------------------------------- The certificate of incorporation of the Registrant limits the liability of directors for breach of their fiduciary duty as directors to the maximum extent permitted by the Delaware General Corporation Law (the "DGCL"). The DGCL authorizes corporations to limit or eliminate the personal liability of directors to the corporation and its stockholders for monetary damages in II-1 connection with the breach of a director's fiduciary duty of care. The duty of care requires that, when acting on behalf of the corporation, directors must exercise an informed business judgment based on all material information reasonably available to them. Absent the limitation authorized by the DGCL, directors could be accountable to corporations and their stockholders for monetary damages for conduct that does not satisfy such duty of care. Although the DGCL does not change a director's duty of care, it enables corporations to limit available relief to equitable remedies such as injunction or rescission. The Registrant's certificate of incorporation limits the liability of directors to the Registrant or its stockholders to the fullest extent permitted by the DGCL as in effect from time to time. Specifically, directors of the Registrant will not be personally liable for monetary damages for breach of a director's fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. This provision does not affect a director's responsibilities under certain other laws such as the federal securities laws or state or federal environmental laws. The bylaws of the Registrant provide that the Registrant shall indemnify its officers, directors and employees to the fullest extent permitted by the DGCL. The Registrant believes that indemnification under its bylaws covers at least negligence and gross negligence on the part of the indemnified parties. The Registrant has entered into indemnification agreements with its directors and officers which provide for broad indemnification, except where the "reviewing party" has determined that the indemnitee would not be entitled to be indemnified under applicable law. The "reviewing party" is defined as the majority vote of the directors of Registrant not subject to the particular claim or, if none, independent legal counsel selected by the indemnitee and approved by the Registrant. No payments may be made under these indemnification agreements in connection with claims made against a director or officer for which payment is made under an insurance policy or for which such person is otherwise indemnified. Under an insurance policy currently maintained by the Registrant, the directors and officers of the Registrant are insured, within the limits and subject to the limitations of the policy, against certain expenses in connection with the defense of certain claims, actions, suits or proceedings, and certain liabilities which may be imposed as a result of such claims, actions, suits or proceedings which may be brought against them by reason of being or having been such directors or officers. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. ----------------------------------- Not applicable. ITEM 8. EXHIBITS -------- II-2 4.1 Bank Plus Corporation Stock Option and Equity Incentive Plan, as amended and restated as of February 26, 1997 4.2 Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Form 8-B filed by the Registrant on April 22, 1996 (the "Form 8-B")) 4.3 Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Form 8-B) 4.4 Indenture between Registrant and the Bank of New York, as Trustee, relating to the 12% Senior Notes due July 18, 2007 of Registrant 5.1 Opinion of Sullivan & Cromwell 23.1 Consent of Deloitte & Touche LLP with respect to the Annual Report, as amended, of the Registrant 23.2 Consent of Deloitte & Touche LLP with respect to the consolidated financial statements of Hancock Savings Bank 23.3 Consent of Sullivan & Cromwell (included in Exhibit 5.1) 24 Power of Attorney (included on page II-5 of this Registration Statement) ITEM 9. UNDERTAKINGS. ------------ (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a) (1) (i) and (a) (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports II-3 filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on this 2nd day of September, 1997. BANK PLUS CORPORATION By: /S/ RICHARD M. GREENWOOD ---------------------------------------- Richard M. Greenwood Vice Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Godfrey B. Evans as his true and lawful attorney-in-fact and agent with full powers of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the foregoing, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ---- /S/ GORDON V. SMITH Chairman of the Board August 29, 1997 - --------------------------- Gordon V. Smith /S/ RICHARD M. GREENWOOD Vice Chairman, President and August 31, 1997 - --------------------------- Chief Executive Officer Richard M. Greenwood
II-5 /S/ NORMAN BARKER, JR. Director August 29, 1997 - --------------------------- Norman Barker, Jr. /S/ WALDO H. BURNSIDE Director August 26, 1997 - --------------------------- Waldo H. Burnside /S/ GEORGE GIBBS, JR. Director August 29, 1997 - --------------------------- George Gibbs, Jr. /S/ LILLY V. LEE Director August 29, 1997 - --------------------------- Lilly V. Lee /S/ MARK SULLIVAN III Director September 3, 1997 - --------------------------- Mark Sullivan III
II-6 EXHIBIT INDEX
Exhibit Number Description - ------- ----------- 4.1 Bank Plus Corporation Stock Option and Equity Incentive Plan, as amended and restated as of February 26, 1997 4.2 Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Form 8-B filed by the Registrant on April 22, 1996 (the "Form 8-B")) 4.3 Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Form 8-B) 4.4 Indenture between Registrant and the Bank of New York, as Trustee, relating to the 12% Senior Notes due July 18, 2007 of Registrant 5.1 Opinion of Sullivan & Cromwell 23.1 Consent of Deloitte & Touche LLP with respect to the Annual Report, as amended, of the Registrant 23.2 Consent of Deloitte & Touche LLP with respect to the consolidated financial statements of Hancock Savings Bank 23.3 Consent of Sullivan & Cromwell (included in Exhibit 5.1) 24 Power of Attorney (included on page II-5 of this Registration Statement)
II-7 EX-4.1 2 STOCK OPTION AND EQUITY INCENTIVE PLAN Exhibit 4.1 BANK PLUS CORPORATION STOCK OPTION AND EQUITY INCENTIVE PLAN 1. PURPOSE The Bank Plus Corporation Stock Option and Equity Incentive Plan (the "Plan") is intended to promote the success of Bank Plus Corporation, a Delaware corporation ("Bank Plus"), by providing its officers, employees and non-employee directors with incentives to create excellent performance and to continue their services with Bank Plus, its subsidiaries and affiliates. By encouraging Plan participants to become stockholders of Bank Plus and by providing actual ownership through Plan awards, it is also intended that participants will view Bank Plus from an ownership perspective. 2. TERM The Plan (originally known as the Fidelity Federal Bank 1996 Stock Option Plan) became effective on February 9, 1996 and shall terminate at the close of business on the tenth anniversary of such date unless terminated earlier by the Board (as defined in Section 3). These amendments to and restatement of the Plan are effective as of February 26, 1997. After termination of the Plan, no future awards may be granted, but previously granted awards shall remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of the Plan. 3. PLAN ADMINISTRATION A committee (the "Committee") appointed by the Board of Directors of Bank Plus (the "Board") shall be responsible for administering the Plan. The Committee shall be comprised of two or more non-employee members of the Board who shall be "outside directors" as contemplated by Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), and "non-employee directors" as contemplated by Rule 16b-3 under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). The Committee shall have full and exclusive power to interpret the Plan and to adopt such rules, regulations and guidelines for carrying out the Plan as it may deem necessary or proper, all of which power shall be executed in the best interests of Bank Plus and in keeping with the objectives of the Plan. This power includes but is not limited to selecting award recipients, establishing all award terms and conditions and adopting modifications, amendments and procedures, as well as rules and regulations governing awards under the Plan, and to making all other determinations necessary or advisable for the administration of the Plan. The interpretation and construction of any provision of the Plan or any award granted hereunder and all determinations by the Committee in each case shall be final, binding and conclusive with respect to all interested parties. 4. ELIGIBILITY Employees and non-employee directors of Bank Plus, or any subsidiary or affiliate of Bank Plus or any entity in which Bank Plus has a significant equity interest, as determined by the Committee, shall be eligible to receive awards under the Plan; provided, however, that non-employee directors shall not be eligible for awards of restricted stock or deferred stock units. 5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN Subject to the provisions of Section 6 of the Plan, the aggregate number of shares of Common Stock ($.01 par value) of Bank Plus ("Shares") which may be transferred to participants pursuant to awards under the Plan shall be 2,125,000. In no event may any employee receive stock options with respect to more than 100,000 Shares in any calendar year. 1 Shares subject to awards under the Plan, which expire, terminate or are canceled prior to exercise shall thereafter be available for the granting of other awards. Any Shares tendered by a person as full or partial payment made to Bank Plus, in connection with any exercise of a stock option or receipt of Shares under the Plan, shall again be available for grants under the Plan. Any Shares that are issued by Bank Plus, and any awards that are granted through the assumption of, or in substitution for, outstanding awards previously granted by an acquired entity shall not be counted against the Shares available for issuance under the Plan. Any Shares issued under the Plan may consist in whole or in part of authorized and unissued Shares or of treasury Shares, and no fractional Shares shall be issued under the Plan. Cash may be paid in lieu of any fractional Shares in settlements of awards under the Plan. 6. ADJUSTMENTS AND REORGANIZATION In the event of any stock dividend, stock split, reverse stock split, combination or exchange of Shares, merger, consolidation, spin-off, recapitalization or other distribution (other than normal cash dividends) of the assets of Bank Plus to its stockholders, or any other change affecting Shares or Share price, such proportionate adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change shall be made with respect to (a) the aggregate number of Shares that may be issued under the Plan, (b) each outstanding award made under the Plan, and (c) the exercise price per Share for any outstanding stock options under the Plan. 7. AWARDS Awards under the Plan may consist of stock options, restricted stock, deferred stock units and deferred stock grants. Set forth below are the terms and conditions of awards, which may include such other terms and conditions established by the Committee: (a) Stock Options. A stock option is a grant of a right to purchase a specified number of Shares during a specified period as determined by the Committee. A stock option may be in the form of an incentive stock option which, in addition to being subject to applicable terms, conditions and limitations established by the Committee, complies with Section 422 of the Code. The price at which Shares may be purchased under a stock option shall be paid in full by the optionee at the time of the exercise in cash or such other method permitted by the Committee, including (i) tendering Shares, (ii) authorizing a third party to sell the Shares (or a sufficient portion thereof) acquired upon exercise of a stock option and assigning the delivery to Bank Plus of a sufficient amount of the sale proceeds to pay for all the Shares acquired through such exercise, (iii) delivering an interest-bearing full recourse promissory note (subject to any limitations of applicable law), or (iv) any combination of the above. Notwithstanding anything contained herein to the contrary, the only awards of stock options to nonemployee directors shall be options granted on the first business day after the date of each annual meeting of the stockholders of Bank Plus, commencing with the 1997 annual meeting, to purchase 2,500 Shares at an exercise price equal to the Fair Market Value of such Shares on such date. Each such award shall be fully vested and exercisable on the date of the award. For purposes of the Plan, "Fair Market Value" shall be the closing price of one Share as reported daily in The Wall Street Journal or similar readily available source for the data in question. If no sales of Shares were made on such day, the closing price of a Share as reported for the preceding day on which a sale of Shares occurred shall be used. In the event that Shares are not listed on a public market, then the Share price representing the most recent sale shall be used. (b) Restricted Stock. An award of restricted stock is made or denominated in Shares and shall be subject to vesting conditions established by the Committee which may be based on service with Bank Plus and its subsidiaries and affiliates (or any entity in which Bank Plus has a significant equity interest), the achievement of performance criteria or a combination thereof. Any stock certificate issued in respect of an award of restricted stock shall be held by Bank Plus until the end of the restricted period. 2 (c) Deferred Stock Units. An award of deferred stock units shall have a value equal to an identical number of shares. The Committee shall establish vesting conditions for awards of deferred stock units which may be based on service with Bank Plus and its subsidiaries and affiliates (or any entity in which Bank Plus has a significant equity interest), the achievement of performance criteria, or a combination thereof. (d) Deferred Stock Grants. Each non-employee director who was elected to the Board or to the board of directors of a subsidiary of Bank Plus on or after January 1, 1996 shall receive the retainer and fees payable to the director in the form of deferred stock grants. Each other non-employee director may elect to receive the retainer and fees payable to the director prior to the annual meeting of shareholders of Bank Plus in the year 2000 in the form of deferred stock grants; thereafter, the retainer and fee payments to all directors shall be made in the form of awards of deferred stock grants. On the date on which the non-employee director would otherwise receive a cash payment of retainer or fees, there shall be credited to an account established for such director a number of Shares equal to the result of dividing (i) the applicable payment of retainer or fees by (ii) the Fair Market Value of one Share on the applicable payment date. On each dividend payment date, an additional number of Shares shall be credited to the account of each non-employee director equal to the result of dividing (x) the dividends that would have been payable to the director if the shares credited to the account had been issued and outstanding by (y) the Fair Market Value of one Share on the dividend payment date. The Shares credited to the account of a non-employee director shall be issued to the director upon the director's retirement from service on the board (or to the beneficiary designated by the non-employee director in the event of the director's death). 8. DIVIDENDS AND DIVIDEND EQUIVALENTS Solely with respect to employees, the Committee may provide that any awards under the Plan earn dividends or dividend equivalents. Such dividends or dividend equivalents may be paid currently or may be credited to a participant's account. Any crediting of dividends or dividend equivalents may be subject to such restrictions and conditions as the Committee may establish, including reinvestment in additional Shares or Share equivalents. 9. DEFERRALS AND SETTLEMENTS Payment of awards may be in the form of cash, stock, other awards or combinations thereof as the Committee shall determine, and with such restrictions as it may impose. The Committee also may require or permit participants to elect to defer the issuance of Shares of the settlement of awards in cash under such rules and procedures as it may establish under the Plan. It also may provide that deferred settlements include the payment or crediting of interest on the deferral amounts, or the payment or crediting of dividend equivalents where the deferral amounts are denominated in Shares. 10. TRANSFERABILITY AND EXERCISABILITY Awards granted under the Plan shall not be transferable or assignable other than by will or the laws of descent and distribution, except that the Committee may provide for the transferability of particular awards: (a) by gift or other transfer of an award to (i) any trust or estate in which the original award recipient or such participant's spouse or other immediate relative has a substantial beneficial interest or (ii) a spouse or other immediate relative; and (b) pursuant to a domestic relations order (as defined by the Code). However, any award so transferred shall continue to be subject to all the terms and conditions contained in the instrument evidencing such award. In the event that a participant terminates his or her position with Bank Plus or its subsidiary to assume a position with a governmental, charitable, educational or other non-profit institution, the Committee may subsequently authorize a third party, including but not limited to a "blind" trust, to act on behalf of and for the benefit of such participant regarding any outstanding awards held by the participant subsequent to such termination of employment. If so permitted by the Committee, a participant may designate a beneficiary or beneficiaries to exercise the rights of the participant and receive any distribution under the Plan upon the death of the participant. 3 11. AWARD AGREEMENTS Awards under the Plan shall be evidenced by agreements that set forth the terms, conditions and limitations for each award which may include the term of an award (except that in no event shall the term of any incentive stock option exceed a period of ten years from the date of its grant), the provisions applicable in the event the participant's service terminates, and the authority of the Committee to unilaterally or bilaterally amend, modify, suspend, cancel or rescind any award. The Committee need not require the execution of any such agreement, in which case acceptance of the award by the participant shall constitute agreement to the terms of the award. 12. ACCELERATION AND SETTLEMENT OF AWARDS The Committee shall have the discretion, exercisable at any time before a sale, merger, consolidation, reorganization, liquidation or change of control (as defined below) of Bank Plus, to provide for the acceleration of vesting and for settlement, including cash payment, of an award granted under the Plan upon or immediately before such event is effective. However, the granting of awards under the Plan shall in no way affect the right of Bank Plus to adjust, reclassify, reorganize, or otherwise change its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any portion of its businesses or assets. For purposes of this Plan, a "change in control" of Bank Plus shall be deemed to occur if (a) any "person" (as such term is defined in Section 3(a) and as used in Sections 13(d) and 14(d) of the Exchange Act), excluding Bank Plus or any of its subsidiaries, a trustee or any fiduciary holding securities under an employee benefit plan of Bank Plus or any of its subsidiaries, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly, by stockholders of Bank Plus in substantially the same proportion as their ownership of Bank Plus, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities Bank Plus representing 25% or more of the combined voting power of Bank Plus' then outstanding securities ("Voting Securities"); (b) during any period of not more than two years, individuals who constitute the Board as of the beginning of the period and any new director (other than a director designated by a person who has entered into an agreement with Bank Plus to effect a transaction described in clause (a) or (b) of this sentence) whose election by the Board or nomination for election by Bank Plus' stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at such time or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; (c) the stockholders of Bank Plus approve a merger or consolidation of Bank Plus with any other corporation, other than a merger or consolidation which would result in the Voting Securities of Bank Plus outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 60% of the combined voting power of the Voting Securities of Bank Plus or such surviving entity outstanding immediately after such merger or consolidation; (d) the stockholders of Bank Plus approve a plan of complete liquidation of Bank Plus; or (e) Bank Plus enters into one or more agreements to sell or transfer to one or more third parties, in one transaction or a series of related transactions, assets and/or liabilities representing fifty percent (50%) or more of the book value of its assets and/or liabilities. 13. PLAN AMENDMENT The Plan may be amended by the Board at any time and from time to time as it deems necessary or appropriate to better achieve the purposes of the Plan. 14. TAX WITHHOLDING Bank Plus shall have the right to deduct from any settlement of an award to employees made under the Plan, including the delivery or vesting of Shares, a sufficient amount to cover withholding of any federal, state or local taxes required by law, or to take such other action as may be necessary to satisfy any such withholding obligations. The Committee may, in its discretion and subject to such rules as it may adopt, permit participants to use Shares to satisfy required tax withholding and such Shares shall be valued at the Fair Market Value as of the settlement date of the applicable award. 4 15. OTHER BENEFIT AND COMPENSATION PROGRAMS Unless otherwise specifically determined by the Committee, settlements of awards received by participants under the Plan shall not be deemed a part of a participant's regular, recurring compensation for purposes of calculating payments or benefits from any benefit plan or severance program of Bank Plus or any subsidiary of Bank Plus, or any severance pay law. Further, Bank Plus may adopt other compensation programs, plans or arrangements as it deems appropriate or necessary. 16. UNFUNDED PLAN Unless otherwise determined by the Committee, the Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Plan shall not establish any fiduciary relationship between Bank Plus and any participant or other person. To the extent any person holds any rights by virtue of an award granted under the Plan, such rights (unless otherwise determined by the Committee) shall be no greater than the rights or an unsecured general creditor of Bank Plus. 17. REGULATORY APPROVALS The implementation of the Plan, the granting of any award under the Plan, and the issuance of Shares upon the exercise or settlement of any award shall be subject to Bank Plus' procurement of all approvals required by regulatory authorities having jurisdiction over the Plan, the awards granted under it or the Shares issued pursuant to it. 18. FUTURE RIGHTS No person shall have any claim or rights to be granted an award under the Plan, and no participant shall have any rights under the Plan to be retained as a director or as an employee of Bank Plus or its subsidiaries or affiliates (or any entity in which Bank Plus has a significant equity interest). 19. GOVERNING LAW The validity, construction and effect of the Plan and any actions taken or relating to the Plan shall be determined in accordance with the laws of the State of California and applicable federal law. 20. SUCCESSORS AND ASSIGNS The Plan shall be binding on all successors and assigns of a participant, including, without limitation, the estate of such participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the participant's creditors. 5 EX-4.4 3 INDENTURE BETWEEN CO. AND BANK OF N.Y. Exhibit 4.4 - -------------------------------------------------------------------------------- BANK PLUS CORPORATION TO THE BANK OF NEW YORK Trustee ------- ________________ Indenture Dated as of July 18, 1997 ________________ $51,750,000 12% Senior Notes due July 18, 2007 - -------------------------------------------------------------------------------- ..................................... Certain Sections of this Indenture relating to Sections 310 through 318 of the Trust Indenture Act of 1939:
Trust Indenture Indenture Act Section Section - --------------- --------- (S) 310(a)(1)................................................. 609 (a)(2)................................................. 609 (a)(3)................................................. Not Applicable (a)(4)................................................. Not Applicable (b).................................................... 608 610 (S) 311(a).................................................... 613 (b).................................................... 613 (S) 312(a).................................................... 701 702(a) (b).................................................... 702(b) (c).................................................... 702(c) (S) 313(a).................................................... 703(a) (a)(4)................................................. 101 1004 (b).................................................... 703(a) (c).................................................... 703(a) (d).................................................... 703(b) (S) 314(a).................................................... 704 (b).................................................... Not Applicable (c)(1)................................................. 102 (c)(2)................................................. 102 (c)(3)................................................. Not Applicable (d).................................................... Not Applicable (e).................................................... 102 (S) 315(a).................................................... 601 (b).................................................... 602
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Trust Indenture Indenture Act Section Section - --------------- --------- (c).................................................... 601 (d).................................................... 601 (e).................................................... 514 (S) 316(a).................................................... 101 (a)(1)(A).............................................. 502 512 (a)(1)(B).............................................. 513 (a)(2)................................................. Not Applicable (b).................................................... 508 (c).................................................... 104(c) (S) 317(a)(1)................................................. 503 (a)(2)................................................. 504 (b).................................................... 1003 (S) 318(a).................................................... 107
- ------------- Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of this Indenture. -ii- TABLE OF CONTENTS
Page ---- Parties.................................................................... 1 Recitals of the Company.................................................... 1 ARTICLE ONE Definitions and Other Provisions of General Application SECTION 101. Definitions.................................................. 1 Act........................................................................ 2 Affiliate.................................................................. 2 Authenticating Agent....................................................... 2 Board of Directors......................................................... 2 Board Resolution........................................................... 2 Business Day............................................................... 2 Capital Lease Obligation................................................... 2 Change of Control.......................................................... 3 Commission................................................................. 3 Company.................................................................... 3 Company Notice............................................................. 3 Company Request or Company Order........................................... 3 Consolidated Net Worth..................................................... 3 Corporate Trust Office..................................................... 3 corporation................................................................ 3 Defaulted Interest......................................................... 3 Event of Default........................................................... 3 Funded Indebtedness........................................................ 3 Guarantee.................................................................. 4 Holder..................................................................... 4 Indenture.................................................................. 4 Interest Payment Date...................................................... 4 Lien....................................................................... 4 Maturity................................................................... 5 Officers' Certificate...................................................... 5 Opinion of Counsel......................................................... 5 Outstanding................................................................ 5 Paying Agent............................................................... 6 Person..................................................................... 6 Predecessor Security....................................................... 6 Property................................................................... 6
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Page ---- Redemption Date............................................................ 6 Redemption Price........................................................... 6 Regular Record Date........................................................ 6 Repurchase Date............................................................ 6 Repurchase Price........................................................... 6 Responsible Officer........................................................ 6 Security Register and Security Registrar................................... 6 Special Record Date........................................................ 7 Stated Maturity............................................................ 7 Subsidiary................................................................. 7 Trustee.................................................................... 7 Trust Indenture Act........................................................ 7 Vice President............................................................. 7 SECTION 102. Compliance Certificates and Opinions..................... 7 SECTION 103. Form of Documents Delivered to Trustee................... 7 SECTION 104. Acts of Holders; Record Dates............................ 8 SECTION 105. Notices, Etc., to Trustee and Company.................... 9 SECTION 106. Notice to Holders; Waiver................................ 9 SECTION 107. Trust Indenture Act...................................... 10 SECTION 108. Effect of Headings and Table of Contents................. 10 SECTION 109. Successors and Assigns................................... 10 SECTION 110. Separability Clause...................................... 10 SECTION 111. Benefits of Indenture.................................... 11 SECTION 112. Governing Law............................................ 11 SECTION 113. Legal Holidays........................................... 11 ARTICLE TWO Security Forms SECTION 201. Forms Generally.......................................... 11 SECTION 202. Form of Face of Security................................. 12 SECTION 203. Form of Reverse of Security.............................. 14 SECTION 204. Form of Trustee's Certificate of Authentication.......... 16
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Page ---- ARTICLE THREE The Securities SECTION 301. Title and Terms.......................................... 16 SECTION 302. Denominations............................................ 17 SECTION 303. Execution, Authentication, Delivery and Dating........... 17 SECTION 304. Temporary Securities..................................... 17 SECTION 305. Registration, Registration of Transfer and Exchange...... 18 SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities......... 19 SECTION 307. Payment of Interest; Interest Rights Preserved........... 20 SECTION 308. Persons Deemed Owners.................................... 21 SECTION 309. Cancellation............................................. 21 SECTION 310. Computation of Interest.................................. 21 ARTICLE FOUR Satisfaction and Discharge SECTION 401. Satisfaction and Discharge of Indenture....................... 21 SECTION 402. Application of Trust Money.................................... 23 ARTICLE FIVE Remedies SECTION 501. Events of Default........................................ 23 SECTION 502. Acceleration of Maturity; Rescission and Annulment....... 25 SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee............................................. 26 SECTION 504. Trustee May File Proofs of Claim......................... 26 SECTION 505. Trustee May Enforce Claims Without Possession of Securities............................................. 27 SECTION 506. Application of Money Collected........................... 27 SECTION 507. Limitation on Suits...................................... 27 SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest................................... 28 SECTION 509. Restoration of Rights and Remedies....................... 28 SECTION 510. Rights and Remedies Cumulative........................... 29 SECTION 511. Delay or Omission Not Waiver............................. 29 SECTION 512. Control by Holders....................................... 29 SECTION 513. Waiver of Past Defaults.................................. 29
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Page ---- SECTION 514. Undertaking for Costs.................................... 30 SECTION 515. Waiver of Stay or Extension Laws......................... 30 ARTICLE SIX The Trustee SECTION 601. Certain Duties and Responsibilities...................... 30 SECTION 602. Notice of Defaults....................................... 31 SECTION 603. Certain Rights of Trustee................................ 31 SECTION 604. Not Responsible for Recitals or Issuance of Securities... 32 SECTION 605. May Hold Securities...................................... 32 SECTION 606. Money Held in Trust...................................... 32 SECTION 607. Compensation and Reimbursement........................... 33 SECTION 608. Disqualification; Conflicting Interests.................. 33 SECTION 609. Corporate Trustee Required; Eligibility.................. 33 SECTION 610. Resignation and Removal; Appointment of Successor........ 34 SECTION 611. Acceptance of Appointment by Successor................... 35 SECTION 612. Merger, Conversion, Consolidation or Succession to Business............................................... 35 SECTION 613. Preferential Collection of Claims Against Company........ 36 SECTION 614. Appointment of Authenticating Agent...................... 36 ARTICLE SEVEN Holders' Lists and Reports by Trustee and Company SECTION 701. Company to Furnish Trustee Names and Addresses of Holders............................................. 38 SECTION 702. Preservation of Information; Communications to Holders................................................ 38 SECTION 703. Reports by Trustee....................................... 38 SECTION 704. Reports by Company....................................... 39 ARTICLE EIGHT Consolidation, Merger, Conveyance, Transfer or Lease SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.......... 39 SECTION 802. Successor Substituted......................................... 40
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Page ---- ARTICLE NINE Supplemental Indentures SECTION 901. Supplemental Indentures Without Consent of Holders....... 40 SECTION 902. Supplemental Indentures with Consent of Holders.......... 41 SECTION 903. Execution of Supplemental Indentures..................... 42 SECTION 904. Effect of Supplemental Indentures........................ 42 SECTION 905. Conformity with Trust Indenture Act...................... 42 SECTION 906. Reference in Securities to Supplemental Indentures....... 42 ARTICLE TEN Covenants SECTION 1001. Payment of Principal, Premium and Interest.............. 43 SECTION 1002. Maintenance of Office or Agency......................... 43 SECTION 1003. Money for Security Payments to Be Held in Trust......... 43 SECTION 1004. Statement by Officers as to Default..................... 45 SECTION 1005. Existence............................................... 45 SECTION 1006. Maintenance of Property................................. 45 SECTION 1007. Payment of Taxes and Other Claims....................... 45 SECTION 1008. Limitations on Dividends................................ 45 SECTION 1009. Restrictions on Additional Indebtedness................. 46 SECTION 1010. Additional Covenants.................................... 46 SECTION 1011. Waiver of Certain Covenants............................. 46 ARTICLE ELEVEN Redemption of Securities SECTION 1101. Right of Redemption..................................... 47 SECTION 1102. Applicability of Article................................ 47 SECTION 1103. Election to Redeem; Notice to Trustee................... 47 SECTION 1104. Selection by Trustee of Securities to Be Redeemed....... 47 SECTION 1105. Notice of Redemption.................................... 48 SECTION 1106. Deposit of Redemption Price............................. 48 SECTION 1107. Securities Payable on Redemption Date................... 49 SECTION 1108. Securities Redeemed in Part............................. 49
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Page ---- ARTICLE TWELVE Repurchase of Securities at the Option of the Holder Upon a Change of Control SECTION 1201. Right to Require Repurchase............................. 49 SECTION 1202. Notices; Method of Exercising Repurchase Right, Etc..... 50 SECTION 1203. Certain Definitions..................................... 51 TESTIMONIUM................................................................ 53 SIGNATURES AND SEALS....................................................... 53 ACKNOWLEDGMENTS............................................................ 54
- ------------- Note: This table of contents shall not, for any purpose, be deemed to be a part of the Indenture. -vi- INDENTURE, dated as of July 18, 1997, between Bank Plus Corporation, a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company"), having its principal office at 4565 Colorado Boulevard, Los Angeles, California 90039, and The Bank of New York, a New York banking corporation, as Trustee (herein called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the creation of an issue of its 12% Senior Notes due July 18, 2007 (herein called the "Securities") of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. All things necessary to make the Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company, in accordance with their and its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows: ARTICLE ONE Definitions and Other Provisions of General Application SECTION 101. Definitions. ----------- For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and (4) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Act", when used with respect to any Holder, has the meaning specified in Section 104. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities. "Board of Directors" means either the board of directors of the Company or any duly authorized committee of that board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York, New York, or Los Angeles, California are authorized or obligated by law or executive order to close. "Capital Lease Obligation" of any Person means the obligation to pay rent or other payment amounts under a lease of (or other Funded Indebtedness arrangements conveying the right to use) real or personal property of such Person which is required to be classified and accounted for as a capital lease or a liability on the face of a balance sheet of such Person in accordance with generally accepted accounting principles. The stated maturity of such obligation shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. -2- "Change of Control" has the meaning specified in Section 1203(c). "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Notice" has the meaning specified in Section 1202. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Consolidated Net Worth" means, at any date, the total amount of preferred stock (excluding any preferred stock that is subject to mandatory redemption) and common shareholders' equity (excluding amounts attributable to securities that are exchangeable for or convertible into securities other than common stock) that would appear on a consolidated statement of financial condition of the Company as of such date, prepared in accordance with generally accepted accounting principles. "Corporate Trust Office" means the principal office of the Trustee in New York, New York at which at any particular time its corporate trust business shall be administered, and which initially shall be at 101 Barclay St., Floor 21 West, New York, New York 10286. "corporation" means a corporation, association, company, joint- stock company or business trust. "Defaulted Interest" has the meaning specified in Section 307. "Event of Default" has the meaning specified in Section 501. "Funded Indebtedness" means any of the following obligations of the Company: (a) any obligation, contingent or otherwise, for borrowed money or for the deferred purchase price of property or services (including any interest accruing subsequent to an Event of Default), (b) all obligations (including the Securities) evidenced by bonds, notes, debentures or other similar instruments, (c) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired, except for trade payables and accrued liabilities arising in the ordinary course of business, if and to the extent such indebtedness would appear as a liability upon a balance sheet prepared on a consolidated basis in accordance with generally accepted accounting principles, (d) all Capital Lease Obligations, -3- (e) all indebtedness referred to above secured by (or for which the holder of such debt has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including, without limitation, accounts and contract rights), even though the Company has not assumed or become liable for the payment of such debt, and (f) any Guarantee of any item included above. Notwithstanding the foregoing, there shall be excluded from the definition of Funded Indebtedness all ordinary course and similar borrowings having a contractual term to maturity of one year or less and not constituting offerings of securities or commercial paper, including repurchase and reverse repurchase agreements and brokers' margin loans and similar borrowings, but not including revolving lines of credit or similar borrowings. "Guarantee" by any Person means any obligation, contingent or otherwise, of such Person guaranteeing any Funded Indebtedness of any other Person (the "primary obligator") in any manner, whether directly or indirectly, and including, without limitation, any obligation of such Person, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Funded Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Funded Indebtedness, (ii) to purchase property, securities or services for the purpose of assuring the holder of such Funded Indebtedness of the payment of such Funded Indebtedness, or (iii) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Funded Indebtedness (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings correlative to the foregoing); provided, -------- however, that the Guarantee by any Person shall not include endorsements by such - ------- Person for collection or deposit, in either case, in the ordinary course of business. "Holder" means a Person in whose name a Security is registered in the Security Register. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. "Interest Payment Date" means the Stated Maturity of an instalment of interest on the Securities. "Lien" means, with respect to any property or assets, any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, lien, charge, easement (other than any easement not materially impairing usefulness or marketability), encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such property or assets (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing). -4- "Maturity", when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 1004 shall be the principal executive, financial or accounting officer of the Company. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company, and who shall be acceptable to the Trustee. "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: ------ (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are -------- to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite - -------- ------- principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor. -5- "Paying Agent" means any Person authorized by the Company to pay the principal of (and premium, if any), the Repurchase Price of or interest on any Securities on behalf of the Company. "Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Property" means all properties used or useful in the conduct of the business of the Company or of any Subsidiary, provided however that Property shall not include any properties the discontinuance or failure to maintain of which is, in the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary and not disadvantageous in any material respect to the Holders. "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Regular Record Date" for the interest payable on any Interest Payment Date means the January 30, April 30, July 30, or October 30 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. "Repurchase Date" has the meaning specified in Section 1201. "Repurchase Price" has the meaning specified in Section 1201. "Responsible Officer", when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any vice-chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security Register" and "Security Registrar" have the respective meanings specified in Section 305. -6- "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307. "Stated Maturity", when used with respect to any Security or any instalment of interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such instalment of interest is due and payable. "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, -------- ------- that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Vice President", when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president". SECTION 102. Compliance Certificates and Opinions. ------------------------------------ Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under Section 314 of the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirement set forth in this Indenture. SECTION 103. Form of Documents Delivered to Trustee. -------------------------------------- In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters -7- and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 104. Acts of Holders; Record Dates. ----------------------------- (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are received by the Trustee and, where it is hereby expressly required, delivered to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, -8- or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 701) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action. (d) The ownership of Securities shall be proved by the Security Register. (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. SECTION 105. Notices, Etc., to Trustee and Company. ------------------------------------- Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Administration, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company. SECTION 106. Notice to Holders; Waiver. ------------------------- Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. -9- Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. SECTION 107. Trust Indenture Act. ------------------- The provisions of the Trust Indenture Act shall be deemed to apply to this Indenture to the extent such provisions would be applicable if this Indenture were required to be qualified under the Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that would be required under the Trust Indenture Act to be a part of and govern this Indenture, if this Indenture were required to be qualified under the Trust Indenture Act, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. SECTION 108. Effect of Headings and Table of Contents. ---------------------------------------- The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 109. Successors and Assigns. ---------------------- All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. SECTION 110. Separability Clause. ------------------- In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. -10- SECTION 111. Benefits of Indenture. --------------------- Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 112. Governing Law. ------------- This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts-of-laws provisions thereof. SECTION 113. Legal Holidays. -------------- In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal (and premium, if any) need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity. ARTICLE TWO Security Forms SECTION 201. Forms Generally. --------------- The Securities and the Trustee's certificates of authentication shall be in substantially the forms set forth in this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. -11- SECTION 202. Form of Face of Security. ------------------------ Bank Plus Corporation 12% Senior Notes due July 18, 2007 CUSIP No. 064446 AA 5 $________ No. __________ Bank Plus Corporation, a corporation duly organized and existing under the laws of Delaware (herein called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to __________________, or registered assigns, the principal sum of _____________________ Dollars on July 18, 2007, and to pay interest thereon from July 18, 1997 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly on February 15, May 15, August 15 and November 15 in each year, commencing August 15, 1997, at the rate of 12% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such 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, which shall be the, January 30, April 30, July 30 or October 30 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease 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 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 said Indenture. Payment of the principal of (and premium, if any), the Repurchase Price of and interest on this Security will be made at the office or agency of the Company maintained for that purpose in New York, New York, 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; provided, however, that at the option of -------- ------- the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. -12- Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: BANK PLUS CORPORATION By _____________________________ Attest: ______________________________ -13- SECTION 203. Form of Reverse of Security. --------------------------- This Security is one of a duly authorized issue of Securities of the Company designated as its 12% Senior Notes due July 18, 2007 (herein called the "Securities"), limited in aggregate principal amount to $51,750,000 issued and to be issued under an Indenture, dated as of July 18, 1997 (herein called the "Indenture"), between the Company and The Bank of New York, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. The Securities are subject to redemption at the option of the Company, in whole or in part, at any time or from time to time, on or after November 15, 2005, on not less than 45 nor more than 60 days' notice by first-class mail to the holders of this Security, at the Redemption Prices set forth below, plus in each case an amount equal to accrued interest, if any, to (and including) the Redemption Date: If redeemed during the 12-month period beginning November 15 of the years indicated,
Year Redemption Price (Per $1,000 of Principal Amount) 2007 $1,060 2006 $1,080
Interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture. The Indenture provides that if a Change of Control (as defined therein) occurs, each Holder of Securities shall have the right, in accordance with the provisions of the Indenture, to require the Company to repurchase all of such Holder's Securities, or any portion thereof that is an integral multiple of $1,000, for cash at a price equal to 110% of the principal amount of such Securities to be repurchased together with accrued interest to the Repurchase Date. In the event of redemption or repurchase of this Security in part only, a new Security or Securities for the unredeemed or unrepurchased portion hereof will be issued in the name of the Holder hereof or any such name designated by the Holder hereof upon the cancellation hereof. -14- If an Event of Default shall occur and be continuing, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the 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 premium, if any), the Repurchase Price of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in New York, New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, 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 denominations of $1,000 and any integral multiple 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 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. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this -15- Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. SECTION 204. Form of Trustee's Certificate of Authentication. ----------------------------------------------- This is one of the Securities referred to in the within-mentioned Indenture. ____________________________, as Trustee By __________________________ Authorized Signatory Dated: ______________ ARTICLE THREE The Securities SECTION 301. Title and Terms. --------------- The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited to $51,750,000, except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 304, 305, 306, 906, 1108 or 1202. The Securities shall be known and designated as the "12% Senior Notes due July 18, 2007" of the Company. Their Stated Maturity shall be July 18, 2007, and they shall bear interest at the rate of 12% per annum, from July 18, 1997 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, payable quarterly on February 15, May 15, August 15 and November 15, commencing August 15, 1997, until the principal thereof is paid or made available for payment. The principal of (and premium, if any), the Repurchase Price of and interest on the Securities shall be payable at the office or agency of the Company in New York, New York maintained for such purpose and at any other office or agency maintained by the Company for such purpose; provided, however, -------- ------- that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. -16- The Securities shall be redeemable as provided in Article Eleven and subject to repurchase as provided in Article Twelve. SECTION 302. Denominations. ------------- The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 and any integral multiple thereof. SECTION 303. Execution, Authentication, Delivery and Dating. ---------------------------------------------- The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or one of its Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities; and the Trustee in accordance with such Company Order shall authenticate and make available for delivery such Securities as in this Indenture provided and not otherwise. Each Security shall be dated the date of its authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. SECTION 304. Temporary Securities. -------------------- Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and make available for delivery, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. -17- If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 1002, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a like principal amount of definitive Securities of authorized denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. SECTION 305. Registration, Registration of Transfer and Exchange. --------------------------------------------------- The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 1002 being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security at an office or agency of the Company designated pursuant to Section 1002 for such purpose, the Company shall execute, and the Trustee shall authenticate and make available for delivery, in the name of the designated transferee or transferees, one or more new Securities of any authorized denominations and of a like aggregate principal amount. At the option of the Holder, Securities may be exchanged for other Securities of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and make available for delivery, the Securities which the Holder making the exchange is entitled to receive. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. -18- No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906, 1108 or 1202. The Company shall not be required (i) to issue, register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities selected for redemption under Section 1104 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. ------------------------------------------------ If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. -19- The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 307. Payment of Interest; Interest Rights Preserved. ---------------------------------------------- Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest 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, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee. -20- Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 308. Persons Deemed Owners. --------------------- Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 307) interest on such Security and for all other purposes whatsoever, whether or not such Security shall be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. SECTION 309. Cancellation. ------------ All Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order, except that the Trustee shall not be required to destroy cancelled Securities. SECTION 310. Computation of Interest. ----------------------- Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months. ARTICLE FOUR Satisfaction and Discharge SECTION 401. Satisfaction and Discharge of Indenture. --------------------------------------- This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and -21- the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 and, if a Change of Control shall have occurred prior to -22- such satisfaction and discharge, the obligations of the Company under Article Twelve shall survive. SECTION 402. Application of Trust Money. -------------------------- Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee. ARTICLE FIVE Remedies SECTION 501. Events of Default. ----------------- "Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) default in the payment of any interest upon any Security when it becomes due and payable, and continuance of such default for a period of 30 days; or (2) default in the payment of the principal of (or premium, if any, on) any Security at its Maturity or in the payment of the Repurchase Price of any Security on the applicable Repurchase Date; or (3) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 30 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (4) a default under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company having an aggregate principal amount outstanding in excess of $20,000,000 or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or -23- evidenced any indebtedness for money borrowed by the Company having an aggregate principal amount outstanding in excess of $20,000,000, whether such indebtedness now exists or shall hereafter be created, which default shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such acceleration having been rescinded or annulled within a period of 10 days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities a written notice specifying such default and requiring the Company to cause such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" hereunder; provided, however, that, subject to the provisions of Sections 601 and 602, -------- ------- the Trustee shall not be deemed to have knowledge of such default unless either (A) a Responsible Officer of the Trustee shall have actual knowledge of such default or (B) the Trustee shall have received written notice thereof from the Company, from any Holder, from the holder of any such indebtedness or from the trustee under any such mortgage, indenture or other instrument; or (5) a final judgment or final judgments for the payment of money are entered against the Company or any Subsidiary in an aggregate amount in excess of $20,000,000 by a court or courts of competent jurisdiction, which judgments remain undischarged or unbonded for a period (during which execution shall not be effectively stayed) of 60 days after all rights to appeal all such judgments have been exhausted or have expired; or (6) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or (7) the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, -24- trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action. SECTION 502. Acceleration of Maturity; Rescission and Annulment. -------------------------------------------------- If an Event of Default (other than an Event of Default specified in Section 501(6) or 501(7)) occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal shall become immediately due and payable. If an Event of Default specified in Section 501(6) or 501(7) occurs, the principal amount of all the Securities shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable. At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (1) the Company has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue interest on all Securities, (B) the principal of (and premium, if any, on) any Securities which have become due otherwise than by such declaration of acceleration and the Repurchase Price due and payable with respect to Securities and interest thereon at the rate borne by the Securities, (C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Securities, and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (2) all Events of Default, other than the non-payment of the principal of Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513. -25- No such rescission shall affect any subsequent default or impair any right consequent thereon. SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee. --------------------------------------------------------------- The Company covenants that if (1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or (2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof or the payment of the Repurchase Price of any Security on the applicable Repurchase Date, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest and the Repurchase Price due and payable with respect to any Securities, and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and any overdue payment of the Repurchase Price of any Securities and on any overdue interest, at the rate borne by the Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. SECTION 504. Trustee May File Proofs of Claim. -------------------------------- In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607. -26- No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. SECTION 505. Trustee May Enforce Claims Without Possession of Securities. ----------------------------------------------------------- All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. SECTION 506. Application of Money Collected. ------------------------------ Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, or the payment of the Repurchase Price on any Securities upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 607; and SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any), the Repurchase Price of and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any), the Repurchase Price and interest, respectively. THIRD: To the Company. SECTION 507. Limitation on Suits. ------------------- No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless -27- (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity, reasonably satisfactory to the Trustee, against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities; it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders. SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and ---------------------------------------------------------------- Interest. - -------- Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any), the Repurchase Price of and (subject to Section 307) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date and, in the case of any repurchase, on the applicable Repurchase Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. SECTION 509. Restoration of Rights and Remedies. ---------------------------------- If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. -28- SECTION 510. Rights and Remedies Cumulative. ------------------------------ Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 511. Delay or Omission Not Waiver. ---------------------------- No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 512. Control by Holders. ------------------ The Holders of a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, provided that -------- (1) such direction shall not be in conflict with any rule of law or with this Indenture, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 513. Waiver of Past Defaults. ----------------------- The Holders of not less than a majority in principal amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except a default (1) in the payment of the principal of (or premium, if any), the Repurchase Price of or interest on any Security, or -29- (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 514. Undertaking for Costs. --------------------- In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided, that neither this Section nor the Trust Indenture Act -------- shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company. SECTION 515. Waiver of Stay or Extension Laws. -------------------------------- The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE SIX The Trustee SECTION 601. Certain Duties and Responsibilities. ----------------------------------- The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate -30- indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION 602. Notice of Defaults. ------------------ The Trustee shall give the Holders notice of any default hereunder as and to the extent provided by the Trust Indenture Act; provided, however, that -------- ------- in the case of any default of the character specified in Section 501(3), no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default. SECTION 603. Certain Rights of Trustee. ------------------------- Subject to the provisions of Section 601: (a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) shall, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity, reasonably satisfactory to the Trustee, against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; -31- (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. SECTION 604. Not Responsible for Recitals or Issuance of Securities. ------------------------------------------------------ The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. SECTION 605. May Hold Securities. ------------------- The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. SECTION 606. Money Held in Trust. ------------------- Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company. -32- SECTION 607. Compensation and Reimbursement. ------------------------------ The Company agrees (1) to pay to the Trustee from time to time compensation as the Company and the Trustee shall agree upon in writing from time to time for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. SECTION 608. Disqualification; Conflicting Interests. --------------------------------------- If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. SECTION 609. Corporate Trustee Required; Eligibility. --------------------------------------- There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000 and its Corporate Trust Office in New York, New York. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. -33- SECTION 610. Resignation and Removal; Appointment of Successor. ------------------------------------------------- (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 611. (b) The Trustee may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. (c) The Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by a Board Resolution may remove the Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the date of such Board Resolution or any order or decree of any court removing the Trustee, as the case may be, the retiring Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such -34- appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders in the manner provided in Section 106. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. SECTION 611. Acceptance of Appointment by Successor. -------------------------------------- Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 612. Merger, Conversion, Consolidation or Succession to Business. ----------------------------------------------------------- Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. -35- SECTION 613. Preferential Collection of Claims Against Company. ------------------------------------------------- If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). SECTION 614. Appointment of Authenticating Agent. ----------------------------------- The Trustee may appoint an Authenticating Agent or Agents which shall be authorized to act on behalf of the Trustee to authenticate Securities issued upon original issue and upon exchange, registration of transfer, partial conversion or partial redemption or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which -36- shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607. If an appointment is made pursuant to this Section, the Securities may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form: This is one of the Securities described in the within-mentioned Indenture. _____________________________, As Trustee ---------- By___________________________, As Authenticating Agent ----------------------- By___________________________ Authorized Officer ------------------ -37- ARTICLE SEVEN Holders' Lists and Reports by Trustee and Company SECTION 701. Company to Furnish Trustee Names and Addresses of Holders. --------------------------------------------------------- The Company will furnish or cause to be furnished to the Trustee (a) semi-annually, not more than 15 days after each Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; excluding from any such list names and addresses received by the Trustee in its - --------- capacity as Security Registrar. SECTION 702. Preservation of Information; Communications to Holders. ------------------------------------------------------ (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. (b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. SECTION 703. Reports by Trustee. ------------------ (a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. -38- (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when the Securities are listed on any stock exchange. SECTION 704. Reports by Company. ------------------ Within 60 days of May 15 of each year, the Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be -------- filed with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with the Trustee within 5 days after the same is so required to be filed with the Commission; provided further that the -------- ------- Company shall transmit to Holders copies of all annual and quarterly reports that it is required to file with the Trustee (or summaries thereof) within 30 days after such filing is required to be made. Delivery of such reports, information and documents to the Trustee is for the informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). ARTICLE EIGHT Consolidation, Merger, Conveyance, Transfer or Lease SECTION 801. Company May Consolidate, Etc., Only on Certain Terms. ---------------------------------------------------- The Company shall not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of its property to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company or convey, transfer or lease all or substantially all of its property to the Company, unless: (1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease all or substantially all of its property to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the property of the Company shall be a corporation duly organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall unconditionally assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the -39- Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or a Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such 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 and be continuing; (3) immediately after giving effect to such transaction, the surviving entity and its subsidiaries meet all applicable statutory capital requirements; and (4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. SECTION 802. Successor Substituted. --------------------- Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. ARTICLE NINE Supplemental Indentures SECTION 901. Supplemental Indentures Without Consent of Holders. -------------------------------------------------- Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: -40- (1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or (2) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or (3) to secure the Securities; or (4) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture which shall not be inconsistent with the provisions of this Indenture, provided that such action pursuant to this Clause (4) shall -------- not adversely affect the interests of the Holders in any material respect. SECTION 902. Supplemental Indentures with Consent of Holders. ----------------------------------------------- With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture; provided, however, that no such supplemental indenture shall, without the - -------- ------- consent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of the principal of, or any instalment of interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or change the place of payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or adversely affect the right to cause the Company to repurchase any Security pursuant to Article Twelve, or (2) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or (3) modify any of the provisions of this Section, Section 513 or Section 1011, except to increase any such percentage or to provide that certain other provisions of -41- this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 903. Execution of Supplemental Indentures. ------------------------------------ In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 904. Effect of Supplemental Indentures. --------------------------------- Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. SECTION 905. Conformity with Trust Indenture Act. ----------------------------------- Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act. SECTION 906. Reference in Securities to Supplemental Indentures. -------------------------------------------------- Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities. -42- ARTICLE TEN Covenants SECTION 1001. Payment of Principal, Premium and Interest. ------------------------------------------ The Company will duly and punctually pay the principal of (and premium, if any) and interest on the Securities in accordance with the terms of the Securities and this Indenture. SECTION 1002. Maintenance of Office or Agency. ------------------------------- The Company will maintain in New York, New York an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies (in or outside New York, New York) where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or -------- ------- rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in New York, New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. SECTION 1003. Money for Security Payments to Be Held in Trust. ----------------------------------------------- If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of (and premium, if any), the Repurchase Price of or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any), the Repurchase Price or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents, it will, prior to each due date of the principal of (and premium, if any), the Repurchase Price of or interest on -43- any Securities, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the continuance of any default by the Company (or any other obligor upon the Securities) in the making of any payment in respect of the Securities, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent as such. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any), the Repurchase Price of or interest on any Security and remaining unclaimed for two years after such principal (and premium, if any), the Repurchase Price or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being -------- ------- required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in New York, New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION 1004. Statement by Officers as to Default. ----------------------------------- The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate which shall be signed by the principal executive officer, the principal accounting officer, or the chief financial officer, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided -44- hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. SECTION 1005. Existence. --------- Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the -------- ------- Company shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders. SECTION 1006. Maintenance of Property. ----------------------- The Company will cause all Property to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times. SECTION 1007. Payment of Taxes and Other Claims. --------------------------------- The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or Property of the Company or any Subsidiary, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the Property of the Company or any Subsidiary; provided, -------- however, that the Company shall not be required to pay or discharge or cause to - ------- be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings. SECTION 1008. Limitations on Dividends. ------------------------ So long as any of the Securities are Outstanding, the Company will not declare or pay or set apart any funds for the payment of dividends on, or make any other distribution in respect of, or make or permit any Subsidiary or Affiliate of the Company to make any payment on account of the purchase, redemption or other acquisition or retirement of, any shares of the Company's capital stock (other than dividends or distributions payable solely in shares of its capital stock) if (at the time of such action and after giving effect, as if paid, to the proposed dividend, distribution or payment): (a) the declaration or payment of such dividend would be in violation of applicable federal or state banking laws and regulations, (b) Fidelity Federal Bank, A Federal Savings Bank, or the Company would fail to be in compliance with applicable regulatory capital requirements or (c) an Event of Default or an event which, after notice or -45- lapse of time or both, would become an Event of Default shall have occurred and be continuing. SECTION 1009. Restrictions on Additional Indebtedness. --------------------------------------- The Company will not incur, assume, guarantee or otherwise create any Funded Indebtedness if, immediately after giving effect thereto, the amount of Funded Indebtedness, including the Securities, would be greater than 100% of the Company's Consolidated Net Worth. SECTION 1010. Additional Covenants. -------------------- The Company covenants (a) that neither the Company nor any Subsidiary will engage in transactions with any Affiliate of the Company or any Subsidiary, except that the Company or Subsidiary may (i) make such payments and investments and enter into such transactions on terms and conditions at least as favorable to the Company or such Subsidiary, as the case may be, as those that could be obtained in a comparable arm's length transaction with a person who is not an Affiliate of the Company or any Subsidiary (as determined in good faith by the Board of Directors of the Company, whose determination shall be conclusive) and (ii) make payments or provide compensation (including the extension of credit in accordance with the requirements of applicable laws and regulations) for services rendered by an Affiliate of the Company or any Subsidiary who is an officer, director or employee of the Company or any Subsidiary, (b) to maintain and to cause each Subsidiary to maintain, with financially sound and reputable insurance companies, insurance on all its Property of an insurable nature in at least such amounts as are usually insured against in the same general area by companies of established repute engaged in a similar business, (c) to keep, and to cause each Subsidiary to keep, proper books of record and account and to cause its books of record and account and those of each of its Subsidiaries to be examined on a consolidated basis by a nationally recognized firm of independent public accountants not less frequently than annually for purposes of preparing audited consolidated financial statements and (d) that it and its Subsidiaries will comply with applicable laws, rules and regulations and renew any license, permit and other authorizations necessary to the ownership or operation of their properties or to the conduct of their businesses, if the failure to so comply, obtain, preserve and renew adversely affects in any material respect the Company's consolidated business, prospects, earnings, properties or condition. SECTION 1011. Waiver of Certain Covenants. --------------------------- The Company may omit in any particular instance to comply with any covenant or condition set forth in Sections 1005 to 1010, inclusive, if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver -46- shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect. ARTICLE ELEVEN Redemption of Securities SECTION 1101. Right of Redemption. ------------------- The Securities may be redeemed at the election of the Company, as a whole or in part, at any time or from time to time, on or after November 15, 2005 at the Redemption Prices specified in the form of Security hereinbefore set forth, together with accrued interest to (and including) the Redemption Date. SECTION 1102. Applicability of Article. ------------------------ Redemption of Securities at the election of the Company, as permitted by any provision of this Indenture, shall be made in accordance with such provision and this Article. SECTION 1103. Election to Redeem; Notice to Trustee. ------------------------------------- The election of the Company to redeem any Securities pursuant to Section 1101 shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed. SECTION 1104. Selection by Trustee of Securities to Be Redeemed. ------------------------------------------------- If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities not previously called for redemption, by lot or a substantially equivalent method which may provide for the selection for redemption of portions (equal to $1,000 or any integral multiple thereof) of the principal amount of Securities of a denomination larger than $1,000. The Trustee shall promptly notify the Company and each Security Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. -47- For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. SECTION 1105. Notice of Redemption. -------------------- Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 45 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. All notices of redemption shall include the CUSIP number of the Securities and shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all the Outstanding Securities are to be redeemed, the identification (and, in the case of partial redemption of any Securities, the principal amounts) of the particular Securities to be redeemed, (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and that interest thereon will cease to accrue on and after said date, and (5) the place or places where such Securities are to be surrendered for payment of the Redemption Price. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. SECTION 1106. Deposit of Redemption Price. --------------------------- Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date. -48- SECTION 1107. Securities Payable on Redemption Date. ------------------------------------- Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that installments of interest whose -------- ------- Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Security. SECTION 1107. Securities Redeemed in Part. --------------------------- Any Security which is to be redeemed only in part shall be surrendered at an office or agency of the Company designated for that purpose pursuant to Section 1002 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. ARTICLE TWELVE Repurchase of Securities at the Option of the Holder Upon a Change of Control SECTION 1201. Right to Require Repurchase. --------------------------- In the event that a Change of Control shall occur, then each Holder shall have the right, at the Holder's option, to require the Company to repurchase, and upon the exercise of such right the Company shall repurchase, all of such Holder's Securities, or any portion of the principal amount thereof that is an integral multiple of $1,000, on the date (the "Repurchase Date") that is 25 days after the date of the Company Notice (as defined in Section 1202) for cash at a purchase price equal to 110% of the principal amount of the Securities to be repurchased (the "Repurchase Price"), together in each case with accrued interest to the -49- Repurchase Date (unless the Repurchase Date shall occur prior to an Interest Payment Date and after the close of business on the corresponding Regular Record Date). Such right to require the repurchase of the Securities shall not continue after a discharge of the Company from its obligations with respect to the Securities in accordance with Article Four, unless a Change of Control shall have occurred prior to such discharge. SECTION 1202. Notices; Method of Exercising Repurchase Right, Etc. ---------------------------------------------------- (a) Unless the Redemption Date shall have occurred in connection with the Company's call for redemption of all the Outstanding Securities, on or before the 15th day after the occurrence of a Change of Control, the Company or, at the request of the Company, the Trustee, shall mail to all Holders a notice (the "Company Notice") of the occurrence of the Change of Control and of the repurchase right set forth herein arising as a result thereof. The Company shall also deliver a copy of such notice of a repurchase right to the Trustee and cause a copy of such notice of a repurchase right, or a summary of the information contained therein, to be published in a newspaper of general circulation in The City of New York. Each notice of a repurchase right shall state: (1) the Repurchase Date, (2) the date by which the repurchase right must be exercised, (3) the Repurchase Price, and (4) a description of the procedure which a Holder must follow to exercise a repurchase right. No failure of the Company to give the foregoing notices or defect therein shall limit any Holder's right to exercise a repurchase right or affect the validity of the proceedings for the repurchase of Securities. If any of the foregoing provisions are inconsistent with applicable law, such law shall govern. (b) To exercise a repurchase right, a Holder shall deliver to the Trustee on or before the 15th day after the date of the Company Notice (i) written notice of the Holder's exercise of such right, which notice shall set forth the name of the Holder, the principal amount of the Securities to be repurchased and a statement that an election to exercise the repurchase right is being made thereby, and (ii) the Securities with respect to which the repurchase right is being exercised, duly endorsed for transfer to the Company. Such written notice shall be irrevocable. (c) In the event a repurchase right shall be exercised in accordance with the terms hereof, the Company shall pay or cause to be paid the Repurchase Price in cash to -50- the Holder on the Repurchase Date, together with accrued and unpaid interest to the Repurchase Date payable with respect to the Securities as to which the repurchase right has been exercised; provided, however, in the event the -------- ------- Repurchase Date shall occur prior to the opening of business on an Interest Payment Date and after the close of business on the corresponding Regular Record Date, the interest payable on such Interest Payment Date shall be payable to the Holder of such Securities, or one or more predecessor Securities, registered as such on the relevant Regular Record Date as provided in Article Three and no accrued and unpaid interest shall be payable upon repurchase of such Securities. (d) If any Security surrendered for repurchase shall not be so paid on the Repurchase Date, the Repurchase Price shall, until paid, bear interest to the extent permitted by applicable law from the Repurchase Date at the rate borne by the Security. (e) Any Security which is to be repurchased only in part shall be surrendered to the Trustee (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities, containing identical terms and conditions, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unrepurchased portion of the principal of the Security so surrendered. SECTION 1203. Certain Definitions. ------------------- For purposes of this Article Twelve, (a) the term "beneficial owner" shall be determined in accordance with Rule 13d-3, as in effect on the date of the original execution of this Indenture, promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended; (b) the term "Person" shall include any syndicate or group which would be deemed to be a "person" under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, as in effect on the date of the original execution of this Indenture, other than the Company, any subsidiary of the Company or any employee benefit plan of the Company; and (c) a "Change of Control" will be deemed to have occurred at such time as: (i) any Person is or becomes the beneficial owner, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of capital stock of the Company entitling such Person to exercise 50% or more of the total voting power of all shares of capital stock of the Company entitled to vote generally in the election of directors; or -51- (ii) there occurs any consolidation of the Company with, or merger of the Company into, any other Person, any merger of another Person into the Company, or any sale or transfer of all or substantially all of the assets of the Company to another Person (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of any class of the Company's capital stock); provided, however, that no Change of Control shall be deemed to have occurred - -------- ------- unless and until the transaction that would result in such Change of Control has been approved by the Board of Directors of the Holding Company and by the Office of Thrift Supervision (or any successor agency). ____________________ This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. -52- IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. BANK PLUS CORPORATION By: /s/ W. L. SANDERS --------------------------- Name: W. L. Sanders Title: Executive Vice President And Chief Financial Officer Attest: /s/ GODFREY B. EVANS - -------------------- THE BANK OF NEW YORK, as Trustee By: /s/ MARY BETH LEWICKI -------------------------- Name: Mary Beth Lewicki Title: Assistant Vice President Attest: /s/ MARIE E. TRIMBOLI - --------------------- -53- STATE OF CALIFORNIA ) ss.: COUNTY OF LOS ANGELES ) On the 17th day of , July, 1997, before me personally came William L. Sanders, to me known, who, being by me duly sworn, did depose and say that he is Executive Vice President, CFO of Bank Plus Corporation, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. /s/ PATRICIA C. PALM ------------------------ STATE OF NEW YORK ) ss.: COUNTY OF NEW YORK ) On the _____ day of __________, 1997, before me personally came ___________________________, to me known, who, being by me duly sworn, did depose and say that he -- she is _____________________________________________ of The Bank of New York, one of the corporations described in and which executed the foregoing instrument; that he -- she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he -- she signed his -- her name thereto by like authority. ______________________________ -54- EX-5.1 4 OPINION OF SULLIVAN & CROMWELL Exhibit 5.1 [LETTERHEAD OF SULLIVAN & CROMWELL] September 4, 1997 Bank Plus Corporation, 4565 Colorado Boulevard, Los Angeles, California 90039. Dear Sirs: In connection with the registration under the Securities Act of 1933 (the "Act") of 750,000 shares (the "Securities") of Common Stock, par value $0.01 per share, of Bank Plus Corporation, a Delaware corporation (the "Company"), issued or to be issued pursuant to the Company's Stock Option and Equity Incentive Plan (the "Plan"), we, as your counsel, have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion. Upon the basis of such examination, we advise you that, in our opinion, when the registration statement relating to the Securities (the "Registration Statement") has become effective under the Act, the terms of the issue and sale of the Securities to be Bank Plus Corporation -2- issued subsequent to the date hereof have been duly established in conformity with the Company's certificate of incorporation, the Securities to be issued subsequent to the date hereof have been duly issued and the Securities have been sold as contemplated by the Registration Statement and the terms of the Plan, the Securities will be validly issued, fully paid and nonassessable. The foregoing opinion is limited to the Federal laws of the United States and the General Corporation Law of the State of Delaware, and we are expressing no opinion as to the effect of the laws of any other jurisdiction. We have relied as to certain matters on information obtained from public officials, officers of the Company and other sources believed by us to be responsible. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, SULLIVAN & CROMWELL EX-23.1 5 CONSENT OF DELOITTE & TOUCHE LLP EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Bank Plus Corporation on Form S-8 of our report dated February 7, 1997, which is included in the Annual Report on Form 10-K, and Amendment No. 1 to the Annual Report on Form 10-K/A, of Bank Plus Corporation for the year ended December 31, 1996, and to the reference to Deloitte & Touche LLP under the heading "Experts" in the Prospectus, which is part of this Registration Statement. Deloitte & Touche LLP Los Angeles, California September 3, 1997 EX-23.2 6 CONSENT OF DELOITTE & TOUCHE LLP EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Bank Plus Corporation on Form S-8 of our report dated April 17, 1997 (except Note 2, which is dated May 2, 1997), on the consolidated financial statements of Hancock Savings Bank, FSB and subsidiary (which report expresses an unqualified opinion and includes explanatory paragraphs referring to regulatory matters and the uncertainty about Hancock's ability to continue as a going concern) appearing in the Current Report on form 8-K of Bank Plus Corporation dated July 29, 1997. Deloitte & Touche LLP Los Angeles, California September 3, 1997 -----END PRIVACY-ENHANCED MESSAGE-----