MARVIN MANDEL, Governor

1773

is added to list completely the ways in which
stock may be obtained.

The term affirmation" is deleted as
unnecessary in light of Art. 1, § 9 of the
Code.

The provisions of present §106 as they relate
to trust companies are included in §6-145 of
this subtitle.

6-125. DEBT INSTRUMENTS.

(A)   GENERAL RULE.

IF THE COMMISSIONER APPROVES, A STATE BANK MAY
ISSUE, SELL, OR HYPOTHECATE ITS DEBT INSTRUMENTS
REPAYABLE ON THE TERMS AND BEARING THE RATE OF INTEREST,
IF ANY, STATED IN THE DEBT INSTRUMENT.

(B)   IMPAIRMENT OF CAPITAL STOCK.

THE ISSUANCE OF A DEBT INSTRUMENT DOES NOT IMPAIR
THE CAPITAL STOCK OF THE STATE BANK IF THE AMOUNT OF THE
DEBT INSTRUMENT IS REPRESENTED BY CASH OR SOUND ASSETS
WHICH EXCEED THE IMPAIRMENT DETERMINED BY THE
COMMISSIONER.

(C)   NO STOCKHOLDER LIABILITY.

THE HOLDER OF A DEBT INSTRUMENT IS NOT SUBJECT
TO ANY LIABILITY IMPOSED ON STOCKHOLDERS UNDER ANY LAW OF
THE STATE.

(D)   PRIORITIES.

A DEBT INSTRUMENT IS SUBORDINATE TO THE CLAIMS OF
ANY DEPOSITOR OR CREDITOR, BUT IT IS PREFERRED TO THE
CLAIM OF ANY STOCKHOLDER IN THE EVENT OF LIQUIDATION.

(E)   VOTING RIGHTS.

THE HOLDER OF ANY DEBT INSTRUMENT HAS THE VOTING
RIGHTS APPROVED BY THE COMMISSIONER AND PROVIDED IN THE
CHARTER.

(F)   RETIREMENT.

BEFORE A STATE BANK RETIRES OR PAYS ANY DEBT
INSTRUMENT, ANY EXISTING DEFICIT IN ITS CAPITAL,
DISREGARDING ANY DEBT INSTRUMENT TO BE RETIRED, SHALL BE
PAID IN CASH SO THAT THE SOUND CAPITAL ASSETS OF THE
STATE BANK ARE AT LEAST EQUAL TO ITS CAPITAL STOCK.