SUPPLEMENTAL INDENTURE

 

SUPPLEMENTAL INDENTURE, dated as of August 19, 2008, between TCF FINANCIAL CORPORATION, a Delaware corporation (the “Company”) having its principal office at 200 Lake Street East, Wayzata, Minnesota 55391-1693, and Wilmington Trust Company, a Delaware banking corporation, as Trustee (the “Trustee”).

 

WITNESSETH:

 

WHEREAS, the Company and the Trustee have heretofore executed and delivered a certain Indenture, dated as of August 19, 2008, (the “Indenture”), providing for the issuance from time to time of Securities;

 

WHEREAS, Section 9.01 of the Indenture provides that a supplemental indenture may be entered into by the Company and the Trustee without the consent of any Holder of any Securities to establish the form or terms of Securities of any series as permitted by Sections 2.01 and 3.01 of the Indenture;

 

WHEREAS, pursuant to Sections 2.01 and 3.01 of the Indenture, the Company desires to provide for the establishment of a new series of Securities under the Indenture, the form and substance of such Securities and the terms, provisions and conditions thereof to be set forth as provided in the Indenture and this Supplemental Indenture;

 

WHEREAS, the conditions set forth in the Indenture for the execution and delivery of this Supplemental Indenture have been satisfied; and

 

WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the Company and the Trustee, in accordance with its terms, and a valid amendment of, and supplement to, the Indenture have been done.

 

NOW, THEREFORE, in consideration of the premises and the purchase of the Securities of the series established by this Supplemental Indenture by the Holders thereof from time to time on or after the date hereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all such Holders, that the Indenture is supplemented and amended, to the extent and for the purposes expressed herein, as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.1            (a)            For all purposes of this Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise requires, (i) references to any Article, Section or subdivision thereof are references to an Article, Section or other subdivision of this Supplemental Indenture and (ii) capitalized terms not otherwise defined herein shall have the meanings set forth in the Indenture and the following terms used in this Supplemental Indenture shall have the following respective meanings:

 

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“ Additional Interest ” means the interest, if any, that shall accrue on any interest on the Notes the payment of which has not been made on the applicable Interest Payment Date and which shall accrue at the rate per annum specified in Section 2.1(e) from the applicable Interest Payment Date.

 

“ Alternative Payment Mechanism ” means the alternative payment mechanism set forth in Section 2.1(i).

 

“ APM Commencement Date ” means, with respect to any Deferral Period, the earlier of (i) the first Interest Payment Date following the commencement of such Deferral Period on which the Company pays any current interest on the Notes and (ii) the fifth anniversary of the commencement of such Deferral Period.

 

“ Bankruptcy Event ” means any of the events set forth in Section 7.01(i) or (ii) of the Indenture.

 

  “ Capital Securities ” has the meaning set forth in the Trust Agreement.

 

 “ Common Equity Issuance Cap ” has the meaning set forth in clause (1) of Section 2.1(i).

 

“ Common Stock ” means any of the Company’s equity securities (including equity securities held as treasury shares and equity securities sold pursuant to any dividend reinvestment plan and employee benefit plans of the Company) that have no preference in the payment of dividends or amounts payable upon the Company’s liquidation, dissolution or winding up (including a security that tracks the performance of, or relates to the results of, a business, unit or division of the Company), and any securities issued in exchange therefor in connection with a merger, consolidation, binding share exchange, business combination, recapitalization or other similar event.

 

“ Current Stock Market Price ” of the Common Stock on any date means (i) the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions by the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, as reported by the principal U.S. securities exchange on which the Common Stock is traded or quoted, (ii) if the Common Stock is not listed on any U.S. securities exchange on the relevant date, the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization, or (iii) if the Common Stock is not so quoted, the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

 

“ Deferral Period ” means each period beginning on an Interest Payment Date with respect to which the Company elects pursuant to Section 2.1(g) to defer all or part of any interest payment and ending, subject to Section 2.1(o), on the earlier of (i) the tenth anniversary of such Interest Payment Date and (ii) the next Interest Payment Date on which the Company has paid the deferred amount, all deferred amounts with respect to any subsequent period and all other accrued interest on the Notes.

 

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“ Distributions ” means, with respect to the Capital Securities (as defined in the Trust Agreement), amounts payable in respect of such Capital Securities as provided in the Trust Agreement and referred to therein as “Distributions.”

 

“ Distribution Date ” means a date on which Distributions are payable.

 

“ Eligible Proceeds ” means, with respect to any Interest Payment Date, the net proceeds (after underwriters’ or placement agents’ fees, commissions or discounts and other expenses relating to the issuance or sale) the Company has received during the 180-day period prior to such Interest Payment Date from the issuance or sale of Qualifying APM Securities (excluding sales of Qualifying Preferred Stock and Mandatorily Convertible Preferred Stock in excess of the Preferred Stock Issuance Cap) to Persons that are not Subsidiaries.

 

“ Existing Parity Securities ” has the meaning set forth in Section 2.1(g).

 

 “ Federal Reserve ” means the Board of Governors of the Federal Reserve System collectively with any successor federal bank regulatory agency having primary jurisdiction over the Company.

 

 “ Guarantee ” means the Company’s guarantee of the Notes issued as described in Section 2.1(a).

 

“ Intent-Based Replacement Disclosure ” means, as to any Qualifying Preferred Stock, that the issuer has publicly stated its intention, either in the prospectus or other offering document under which such securities were initially offered for sale or in filings with the Securities and Exchange Commission made by the issuer under the Securities Exchange Act of 1934, as amended,  prior to or contemporaneously with the issuance of such securities, that the issuer and its subsidiaries will repay, redeem or purchase such securities only with the proceeds of replacement capital securities that have terms and provisions at the time of repayment, redemption or purchase that are as or more equity-like than the securities then being repaid, redeemed or repurchased, raised within 180 days prior to the applicable repayment, redemption or repurchase date.  Notwithstanding the use of the term “Intent-Based Replacement Disclosure” in the definition of “Qualifying Preferred Stock”, the requirement in such definition that a particular security or the related transaction documents include Intent-Based Replacement Disclosure shall be disregarded and given no force or effect for so long as the Company is a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended.

 

“ Interest Payment Date ” has the meaning set forth in Section 2.1(e).

 

“ Interest Period ” means the period from and including any Interest Payment Date (or, in the case of the first Interest Payment Date, August 19, 2008) to but excluding the next Interest Payment Date.

 

“ Mandatorily Convertible Preferred Stock ” means preferred stock with (a) no prepayment obligations of the liquidation preference on the part of the issuer thereof, whether at the election of the holders or otherwise, and (b) a requirement that the preferred stock converts into Common Stock within three years from the date of its issuance at a conversion ratio within a range

 

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established at the time of issuance of the preferred stock, subject to customary anti-dilution adjustments.

 

“ Market Disruption Event ” means the occurrence or existence of any of the following events or sets of circumstances:

 

(a)           trading in securities generally (or in the Common Stock or the Company’s preferred stock specifically) on the New York Stock Exchange or any other national securities exchange or over-the-counter market on which the Common Stock and/or the Company’s preferred stock is then listed or traded shall have been suspended or its settlement generally shall have been materially disrupted or minimum prices shall have been established on any such exchange or market by the Commission, the relevant exchange or market or by any other regulatory body or governmental agency having jurisdiction, and the establishment of such minimum prices materially disrupts or otherwise has a material adverse effect on trading in, or the issuance and sale of, Common Stock or the Company’s preferred stock or Qualifying APM Securities, as the case may be;

 

(b)           the Company would be required to obtain the consent or approval of its stockholders or a regulatory body (including, without limitation, any securities exchange) or governmental authority to issue Qualifying APM Securities pursuant to Section 2.1(i) and the Company fails to obtain such consent or approval notwithstanding its commercially reasonable efforts to obtain such consent or approval (including, without limitation, failing to obtain approval for such issuance if required from the Federal Reserve after having given notice to the Federal Reserve as required under Section 2.1(i));

 

(c)           a banking moratorium shall have been declared by the federal or state authorities of the United States and such moratorium materially disrupts or otherwise has a material adverse effect on trading in, or the issuance and sale of, Common Stock or the Company’s preferred stock or Qualifying APM Securities, as the case may be;

 

(d)           a material disruption shall have occurred in commercial banking or securities settlement or clearance services in the United States and such disruption materially disrupts or otherwise has a material adverse effect on trading in, or the issuance and sale of, Common Stock or the Company’s preferred stock or Qualifying APM Securities, as the case may be;

 

(e)           the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States, there shall have been a declaration of a national emergency or war by the United States or there shall have occurred any other national or international calamity or crisis and such event materially disrupts or otherwise has a material adverse effect on trading in, or the issuance and sale of, Common Stock or the Company’s preferred stock or Qualifying APM Securities, as the case may be;

 

(f)            there shall have occurred such a material adverse change in general domestic or international economic, political or financial conditions, including as a result of terrorist activities, and such change materially disrupts or otherwise has a material adverse effect on trading in, or the issuance and sale of, Common Stock or the Company’s preferred securities or Qualifying APM Securities, as the case may be;

 

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(g)           an event occurs and is continuing as a result of which the offering document for the offer and sale of Qualifying APM Securities would, in the Company’s reasonable judgment, contain an untrue statement of a material fact or omit to state a material fact required to be stated in such offering document or necessary to make the statements in such offering document not misleading and either (i) the disclosure of such event at such time, in the Company’s reasonable judgment, is not otherwise required by law and would have a material adverse effect on its business or (ii) the disclosure relates to a previously undisclosed proposed or pending development or material business transaction, and the Company has a bona fide business reason for keeping the same confidential or the disclosure of which would impede the Company’s ability to consummate such transaction; provided that no single suspension period described in this clause (g) shall exceed 90 consecutive days and multiple suspension periods described in this clause (g) shall not exceed an aggregate of 180 days in any 360-day period; or

 

(h)           the Company reasonably believes that the offering document for the offer and the sale of Qualifying APM Securities would not be in compliance with a rule or regulation of the Commission (for reasons other than those referred to in clause (g)) and the Company determines that it is unable to comply with such rule or regulation or such compliance is unduly burdensome, provided that no single suspension period described in this clause (h) shall exceed 90 consecutive days and multiple suspension periods described in this clause (h) shall not exceed an aggregate of 180 days in any 360-day period.

 

“ Maturity Date ” has the meaning set forth in Section 2.1(d).

 

“ Notes ” has the meaning set forth in Section 2.1(a).

 

“ Parity Securities ” means any debt securities that the Company may issue in the future that rank pari passu upon the Company’s liquidation with the Notes.

 

“ Permitted Remedies ” means, with respect to any securities, one or more of the following remedies:

 

(a)           rights in favor of the holders of such securities permitting such holders to elect one or more directors of the issuer (including any such rights required by the listing requirements of any stock or securities exchange on which such securities may be listed or traded); and

 

(b)           complete or partial prohibitions on the issuer paying distributions on and on the issuer and its subsidiaries purchasing Common Stock or other securities that rank pari passu with or junior as to distributions to such securities for so long as distributions on such securities, including unpaid distributions, remain unpaid.

 

“ Preferred Stock Issuance Cap ” has the meaning set forth in clause (2) of Section 2.1(i).

 

“ Qualifying APM Securities ” means Common Stock, Qualifying Preferred Stock, Qualifying Warrants and Mandatorily Convertible Preferred Stock, provided that the Company may, without the consent of the Holders of the Notes, amend the definition of “Qualifying APM Securities” to eliminate Common Stock or Qualifying Warrants (but not both) and/or Mandatorily Convertible Preferred Stock from the definition if, after the issue date, an

 

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accounting standard or interpretive guidance of an existing accounting standard issued by an organization or regulator that has responsibility for establishing or interpreting accounting standards in the United States becomes effective such that there is more than an insubstantial risk that failure to eliminate Common Stock and/or Mandatorily Convertible Preferred Stock from the definition would result in a reduction in the earnings per share of the Company as calculated for financial reporting purposes.

 

“ Qualifying Preferred Stock ” means non-cumulative perpetual preferred stock of the Company that (i) ranks pari passu with or junior to all other outstanding preferred stock of the Company, (ii) as to which the transaction documents provide for no remedies as a consequence of non-payment of dividends other than Permitted Remedies and (iii) either (a) is subject to a Qualifying Replacement Capital Covenant or (b) is subject to both (x) a provision that prohibits the Company from paying any dividends thereon upon its failure to satisfy one or more financial tests set forth therein and (y) Intent-Based Replacement Disclosure.

 

“ Qualifying Replacement Capital Covenant ” means a replacement capital covenant, as identified by the Company’s Board of Directors acting in good faith and in its reasonable discretion, (i) entered into by an issuer that at the time it enters into such replacement capital covenant is a reporting company under the Securities Exchange Act of 1934, as amended, and (ii) that restricts the issuer and its subsidiaries from redeeming, repaying or purchasing identified securities except to the extent of a specified percentage of the net proceeds from the issuance of specified replacement capital securities that have terms and provisions at the time of redemption, repayment or purchase that are as or more equity-like than the securities then being redeemed, repaid or purchased within the 180-day period prior to the applicable redemption, repayment or purchase date.

 

“ Qualifying Warrants ” means any net share settled warrants to purchase Common Stock that (i) have an exercise price per share greater than the Current Stock Market Price as of the date the Company agrees to issue the warrants and (ii) the Company is not entitled to redeem for cash and the holders of which are not entitled to require the Company to repurchase for cash in any circumstances.

 

“ Rating Agency ” means any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) under the Securities Exchange Act of 1934 that currently publishes a rating for the Company.

 

“ Share Cap ” has the meaning set forth in clause (5) of Section 2.1(i).

 

“ Trust ” has the meaning set forth in Section 2.1(a).

 

“ Trust Agreement ” has the meaning set forth in Section 2.1(a).

 

“ Underwriters ” means the underwriters named in Schedule I to the Underwriting Agreement.

 

“ Underwriting Agreement ” means the Underwriting Agreement dated August 13, 2008 among the Company, the Trust and RBC Capital Markets Corporation, as representative of the Underwriters named therein.

 

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ARTICLE II

 

TERMS OF SERIES OF SECURITIES

 

2.1.           Pursuant to Sections 2.01 and 3.01 of the Indenture, there is hereby established a series of Securities, the terms of which shall be as follows:

 

(a)            Designation . The Securities of this series shall be known and designated as the “10.75% Junior Subordinated Notes, Series I” of the Company (the “Notes”). The Notes initially shall be issued to TCF Capital I, a Delaware statutory trust (the “Trust”).  The Trust Agreement for the Trust shall be the Amended and Restated Trust Agreement, dated as of August 19, 2008, among the Company, as Depositor, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as Property Trustee, and the Administrative Trustees (as defined therein) named therein (the “Trust Agreement”). The Guarantee will be issued pursuant to the Guarantee Agreement, dated as of August 19, 2008, between the Company and Wilmington Trust Company, as Guarantee Trustee.

 

(b)           Aggregate Principal Amount .  The aggregate principal amount of the Notes that may be authenticated and delivered under the Indenture and this Supplemental Indenture is unlimited.  $100,000,000 aggregate principal amount of the Notes are issued on the date of this Supplemental Indenture. The Company has the right to issue up to $15,000,000 aggregate principal amount of Notes of this series if the Underwriters exercise their over-allotment option to purchase additional Notes as set forth in the Underwriting Agreement and/or additional Notes of this series from time to time in the future. Any such additional Notes shall have the same terms as the Notes issued on the date of this Supplemental Indenture but may be offered at a different offering price and accrue interest from a different date than the Notes issued on the date of this Supplemental Indenture. Any such additional Notes will be treated as part of the same series as the Notes issued on the date of this Supplemental Indenture for all purposes under the Indenture.

 

(c)            Denominations .  The Notes shall be issued only in fully registered form, and the authorized denominations of the Notes shall be $25 principal amount and any integral multiple thereof.

 

(d)           Maturity Date.  The principal amount of, and all accrued and unpaid interest on, the Notes shall be payable in full on August 15, 2068, or if such day is not a Business Day, the following Business Day (the “Maturity Date”).

 

(e)            Rate of Interest .  The Notes shall bear interest on their principal amount from and including the date they are issued to but excluding the Maturity Date or the date of earlier redemption at the annual rate of 10.75%, payable quarterly in arrears on February 15, May 15, August 15, and November 15 of each year (each such date an “Interest Payment Date”). In the event that any Interest Payment Date would otherwise fall on a day that is not a Business Day, the payment of interest shall be postponed to the next day that is a Business Day and no interest shall accrue as a result of that postponement.  Any installment of interest (or portion thereof) deferred in accordance with Section 2.1(g) or otherwise unpaid shall bear interest, to the extent

 

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permitted by law, at the rate of interest then in effect on the Notes, from the relevant Interest Payment Date, compounded on each subsequent Interest Payment Date, until paid in accordance with Section 2.1(h).

 

(f)            To Whom Interest Payable .  Subject to Section 2.1(o), interest shall be payable to the Person in whose name the Notes are registered at the close of business on the Regular Record Date next preceding the Interest Payment Date, except that interest payable on the Maturity Date shall be paid to the Person to whom principal is paid.

 

(g)           Option to Defer Interest Payments .  (i)  The Company shall have the right, at any time and from time to time prior to the Maturity Date, to defer the payment of interest on the Notes for one or more consecutive Interest Periods that do not exceed 10 years; provided that no Deferral Period shall extend beyond the Maturity Date or the earlier repayment or redemption in full of the Notes.

 

If an Event of Default has occurred and is continuing or the Company has given notice of its election to defer interest payments but the Deferral Period has not yet commenced or a Deferral Period is continuing or the Company is in default regarding its payment of any obligation under the Guarantee, the Company shall not, and shall not permit any Subsidiary, to:  (A) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company’s capital stock, (B) make any payment of principal of, or interest or premium, if any, on, nor repay, purchase or redeem any Parity Securities or other debt securities of the Company that rank on a parity with or junior upon the liquidation of the Company to the Notes, or (C) make any guarantee payments with respect to any guarantee by the Company if such guarantee ranks junior to the Notes. Notwithstanding the foregoing, at any time, including during a Deferral Period, the Company may: (a) make dividends or distributions payable in its capital stock or rights to acquire its capital stock and any cash payments in lieu of fractional shares issued in connection therewith; (b) make payments under the Guarantee; (c) make any declaration of a dividend in connection with the implementation of a shareholders’ rights plan, or redeem or purchase any rights under any such plan; (d) purchase Common Stock related to (1) the issuance of Common Stock or rights under any employment contract, benefit plan or other similar arrangement with or for the benefit of the directors, officers, employees or consultants of the Company; (2) the issuance of Common Stock or rights under a dividend reinvestment and stock purchase plan; (3) the issuance of Common Stock, or securities convertible into or exercisable for Common Stock, as consideration in an acquisition transaction that was entered into before the beginning of the Deferral Period; (4) secondary market activities by the Company’s subsidiaries for the account of persons other than the Company or its subsidiaries; (5) contractually binding arrangements to buy the Company’s capital stock entered into in the ordinary course of business prior to the beginning of the related deferral period, including under a contractually binding stock repurchase plan; (e) exchange or convert (1) any class or series of the Company’s capital stock for any other class or series of its capital stock or (2) any class or series of the Company’s indebtedness for any class or series of its capital stock; (f) purchase fractional interests in shares of the Company’s capital stock pursuant to conversion or exchange provisions of such capital stock or the security being converted or exchanged; or (g) make payments of current or deferred interest in respect of Parity Securities that are made pro rata in respect of the amounts due on such Parity Securities and the Notes or in accordance with clause (4) of Section 2.1(i) to the extent it applies, and make

 

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payments of deferred interest on any Parity Securities that were issued prior to the date the Notes are initially issued (“Existing Parity Securities”) that, if not made, would cause the Company to breach the terms of the instrument governing such Existing Parity Securities.

 

(ii)           Except as otherwise provided in Section 2.1(o), at the end of any Deferral Period, the Company shall pay all deferred interest on the Notes (together with Additional Interest thereon, if any, at the rate specified for the Notes) to the extent permitted by applicable law, to the Persons in whose names the Securities are registered at the close of business on the Regular Record Date with respect to the Interest Payment Date at the end of such Deferral Period.

 

(iii)          Subject to Section 2.1(o) and the exceptions set forth in clause (i) above, in the case of any Deferral Period that does not terminate on or prior to the first anniversary of the commencement of such Deferral Period, the Company shall not, nor shall permit any of its Subsidiaries to, prior to the first anniversary of the date on which all deferred interest has been paid, purchase or acquire any securities ranking junior to or pari passu with any Qualifying APM Securities the proceeds of which were used to pay deferred interest pursuant to the Alternative Payment Mechanism during the relevant Deferral Period.

 

(iv)          Upon termination of any Deferral Period and upon the payment of all deferred interest and any Additional Interest then due on any Interest Payment Date, the Company may elect to begin a new Deferral Period pursuant to clause (i) of this Section 2.1(g).

 

(v)           The Company may elect to pay interest on any Interest Payment Date during any Deferral Period to the extent permitted by Section 2.1(h).

 

(vi)          The Company shall give written notice of its election to begin or extend any Deferral Period (i) if the Property Trustee is not the sole holder or a holder of the Notes, to the Holders of the Notes and the Trustee at least one Business Day prior to the next succeeding Interest Payment Date or (ii) if the Property Trustee is the sole holder of the Notes, to the Property Trustee and the Trustee at least one Business Day prior to the earlier of (a) the next Distribution Date or (b) the date the Administrative Trustees are required to give notice to any securities exchange or other applicable self-regulatory organization or to holders of the Capital Securities of the record date for such Distribution Date or of such Distribution Date.

 

(h)           Payment of Deferred Interest .  The Company shall not pay deferred interest (including Additional Interest thereon) on the Notes on any Interest Payment Date during any Deferral Period prior to the Maturity Date from any source other than Eligible Proceeds.  Notwithstanding the foregoing, (i) the Company may pay current interest during a Deferral Period from any available funds; (ii) the Company may pay deferred interest from any available funds at any time an Event of Default has occurred and is continuing and (iii) if the Federal Reserve disapproves of the Company’s sale of Qualifying APM Securities, the Company may pay deferred interest on the Notes with cash from any source and if the Federal Reserve disapproves of the use of proceeds of the Company’s sale of Qualifying APM Securities to pay deferred interest on the Notes, the Company may use the proceeds for other purposes and continue to defer interest on the Notes. If the Company has outstanding Parity Securities under which it is obligated to sell Qualifying APM Securities and apply the net proceeds to the payment of deferred interest or distributions, then on any date and for any period the amount of

 

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net proceeds received by the Company from those sales and available for payment of the deferred interest and distributions will be applied to the Notes and those other Parity Securities on a pro rata basis up to the Common Equity Issuance Cap, the Preferred Stock Issuance Cap and the Share Cap (or comparable provisions in the instruments governing those Parity Securities) for each series of Parity Securities, as the case may be, in proportion to the total amounts of accrued and unpaid interest or distributions that are due on the Notes and such Parity Securities at such time, or on such other basis as the Federal Reserve may approve.

 

(i)             Alternative Payment Mechanism .  Immediately following any APM Commencement Date and until the termination of the related Deferral Period, the Company shall, after notice to the Federal Reserve and except to the extent that the Federal Reserve shall have disapproved, issue Qualifying APM Securities until the Company has raised an amount of Eligible Proceeds at least equal to the aggregate and unpaid amount of deferred interest on the Notes (including Additional Interest thereon) and applied such Eligible Proceeds on the next Interest Payment Date to the payment of deferred interest (including Additional Interest thereon) in accordance with Section 2.1(h); provided that:

 

(1)           the Company shall not be required to issue Common Stock or Qualifying Warrants prior to the fifth anniversary of the commencement of a Deferral Period if the net proceeds of any issuance of Common Stock or Qualifying Warrants applied during that Deferral Period to pay interest on the Notes pursuant to this Section 2.1(i), together with the net proceeds of all prior issuances of Common Stock and Qualifying Warrants applied during that Deferral Period would exceed an amount equal to 2% of the product of the average of the Current Stock Market Prices of the Common Stock on the 10 consecutive trading days ending on the second trading day immediately prec