<PAGE>
As filed with the Securities and Exchange Commission on April 18, 1997.
REGISTRATION NO. 333-_____
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
KEYSTONE FINANCIAL KEYSTONE FINANCIAL, INC.
MID-ATLANTIC FUNDING CORP.
(Exact name of registrants as specified in their charters)
PENNSYLVANIA PENNSYLVANIA
(State or other jurisdiction of incorporation or organization)
23-2894664 23-2289209
(I.R.S. Employer Identification No.)
ONE KEYSTONE PLAZA ONE KEYSTONE PLAZA
FRONT AND MARKET STREETS FRONT AND MARKET STREETS
P.O. BOX 3660 P.O. BOX 3660
HARRISBURG, PA 17105-3660 HARRISBURG, PA 17105-3660
(717) 233-1555 (717) 233-1555
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
BEN G. ROOKE, ESQ.
EXECUTIVE VICE PRESIDENT AND COUNSEL
ONE KEYSTONE PLAZA
FRONT AND MARKET STREETS
P.O. BOX 3660
HARRISBURG, PA 17105-3660
(717) 233-1555
(Name, address, including zip code, and telephone number, including area code,
of agent for service of process)
---------------
COPIES TO:
DANIEL P. GALLAGHER, JR., ESQ. DANIEL M. ROSSNER, ESQ.
REED SMITH SHAW & MCCLAY BROWN & WOOD LLP
435 SIXTH AVENUE ONE WORLD TRADE CENTER
PITTSBURGH, PA 15219 NEW YORK, NY 10048
---------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED (1) PER UNIT(2) OFFERING PRICE(2)(3) FEE
<S> <C> <C> <C> <C>
Debt Securities................
Guarantees of Debt Securities.. } $400,000,000 100%(4) $400,000,000 $121,212.12
===========================================================================================================
</TABLE>
(1) Or, if Debt Securities are to be issued with a principal amount denominated
in a foreign currency, such greater principal amount as shall result in an
aggregate initial offering price equivalent to $400,000,000 at the time of
initial offering, or if at an original issue discount, such greater
principal amount as shall result in proceeds to the registrant of
$400,000,000.
(2) Estimated solely for purpose of calculating the registration fee.
(3) Exclusive of accrued interest, if any.
(4) No separate consideration will be received for the guarantees.
<PAGE>
------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
2
<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED ___________, 1997
$400,000,000
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
SENIOR/SUBORDINATED MEDIUM-TERM NOTES
DUE 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST, IF ANY, BY
KEYSTONE FINANCIAL, INC.
___________
Keystone Financial Mid-Atlantic Funding Corp. (the "Issuer"), may offer from
time to time up to $400,000,000 aggregate initial offering price of its Senior
Medium-Term Notes (the "Senior Notes") and Subordinated Medium-Term Notes (the
"Subordinated Notes" and, together with the Senior Notes, the "Notes"). The
Senior Notes will be unconditionally guaranteed as to payment of principal,
premium, if any, and interest, if any (the "Senior Guarantees"), by Keystone
Financial, Inc. (the "Guarantor"). The Subordinated Notes will be fully and
unconditionally guaranteed, on a subordinated basis, as to payment of principal,
premium, if any, and interest, if any (the "Subordinated Guarantees" and,
together with the Senior Guarantees, the "Guarantees") by the Guarantor.
The Notes may be denominated in U.S. dollars or in such foreign currencies or
composite currencies as may be designated by the Issuer at the time of offering.
The Issuer will set forth the specific currency or composite currency, interest
rate (if any), issue price and maturity date of any Note in the related Pricing
Supplement to this Prospectus Supplement. Unless otherwise specified in the
applicable Pricing Supplement, Goldman, Sachs & Co., Bear, Stearns & Co. Inc.
and Keefe, Bruyette & Woods, Inc. (the "Agents") will not sell Notes denominated
other than in U.S. dollars or ECUs in, or to residents of, the country issuing
the Specified Currency. See "Description of Notes."
Unless otherwise specified in the applicable Pricing Supplement, interest on
the Fixed Rate Notes will be payable on each January 15 and July 15 and at
maturity. Interest on Floating Rate Notes will be payable on the dates
specified therein and in the applicable Pricing Supplement.
Unless the Issuer specifies an Initial Redemption Date in the applicable
Pricing Supplement, the Notes will not be redeemable prior to their Stated
Maturity Date. If an Initial Redemption Date is so specified, the Notes will be
redeemable at the option of the Issuer at any time after such date as described
herein.
The Notes offered hereby will be issued only in fully registered book-entry
form in minimum denominations of $100,000 and integral multiples of $1,000 in
excess thereof, or the approximate equivalent thereof in the Specified Currency.
See "Description of Notes."
SEE "RISK FACTORS" ON PAGE S-2 FOR A DISCUSSION OF CERTAIN RISKS THAT SHOULD
BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE NOTES OFFERED HEREBY.
__________________
THE NOTES AND RELATED GUARANTEES WILL NOT BE SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF ANY BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.
__________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADE-
QUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC (1) COMMISSIONS (2) ISSUER (3)
------------- ------------------- -------------------------
<S> <C> <C> <C>
Per Note... 100% .125%-.750% 99.250%-99.875%
Total (4).. $400,000,000 $500,000-3,000,000 $397,000,000-399,500,000
--
</TABLE>
(1) Notes will be issued at 100% of their principal amount, unless otherwise
specified in the applicable Pricing Supplement.
(2) The Issuer will pay the Agents a commission ranging from .125% to .750%,
depending upon the maturity, of the principal amount of any Notes sold
through them as Agents (or sold to such Agents as principal in
circumstances in which no other discount is agreed). The Issuer may also
sell Notes directly to investors on its own behalf, in which case no
commission will be payable. The Issuer has agreed to indemnify the Agents
against certain liabilities, including liabilities under the Securities Act
of 1933. See "Supplemental Plan of Distribution."
(3) Before deducting estimated expenses of $374,712.12 payable by the Issuer,
including expenses of the Agents to be reimbursed by the Issuer.
(4) Or the equivalent thereof in another currency or composite currency.
__________________
Offers to purchase Notes are being solicited, on a reasonable efforts basis,
from time to time by the Agents on behalf of the Issuer. Notes may be sold to
the Agents on their own behalf at negotiated discounts. The Issuer reserves the
right to sell Notes directly on its own behalf. The Issuer also reserves the
right to withdraw, cancel or modify the offering contemplated hereby without
notice. The Issuer or the Agents may reject any order as a whole or in part.
See "Supplemental Plan of Distribution."
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
KEEFE, BRUYETTE & WOODS, INC.
__________________
The date of this Prospectus Supplement is ___________, 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "SUPPLEMENTAL PLAN OF
DISTRIBUTION."
__________________
RISK FACTORS
This Prospectus Supplement does not describe all of the risks of an
investment in the medium-term notes due 9 months to 30 years from date of
issue (the "Notes") of the Issuer that result from such Notes being
denominated or payable in or determined by reference to a currency or
composite currency other than United States dollars or to one or more
interest rate, currency or other indices or formulas. The Issuer, the
Guarantor and the Agents disclaim any responsibility to advise prospective
investors of such risks as they exist at the date of this Prospectus
Supplement or as they change from time to time. Prospective investors should
consult their own financial and legal advisors as to the risks entailed by an
investment in such Notes. Such Notes are not an appropriate investment for
investors who are unsophisticated with respect to foreign currency
transactions or transactions involving the applicable interest rate index or
currency index or other indices or formulas.
RISKS OF ILLIQUIDITY
The Notes will not have an established trading market when issued, and
there can be no assurance of a secondary market for the Notes or the
liquidity of such market if one develops. See "Supplemental Plan of
Distribution."
The secondary market for Notes will be affected by a number of factors
independent of the creditworthiness of the Issuer and the Guarantor and the
value of the applicable index or indices or formula or formulas, including
the complexity and volatility of each such index or formula, the method of
calculating the principal, premium, if any, and/or interest, if any, in
respect of such Notes, the time remaining to the maturity of such Notes, the
outstanding amount of such Notes, any redemption features of such Notes, the
amount of other debt securities linked to such index or formula and the
level, direction and volatility of market interest rates generally. Such
factors also will affect the market value of such Notes. In addition,
certain Notes may be designed for specific investment objectives or
strategies and, therefore, may have a more limited secondary market and
experience more price volatility than conventional debt securities.
Investors may not be able to sell such Notes readily or at prices that will
enable investors to realize their anticipated yield. No investor should
purchase Notes unless such investor understands and is able to bear the risk
that such Notes may not be readily saleable, that the value of such Notes
will fluctuate over time and that such fluctuations may be significant.
RISKS ASSOCIATED WITH INDEXED NOTES
An investment in Notes indexed, as to principal or interest or both, to
one or more values of currencies (including exchange rates between
currencies), commodities or interest rate indices entails significant risks
that are not associated with similar investments in a conventional fixed rate
or floating rate debt security. If the interest rate on such a Note is so
indexed, it may result in an interest rate that is less than that payable on
a conventional fixed rate or floating rate debt security issued at the same
time, including the possibility that no interest will be paid or that
negative interest will accrue, and, if the principal amount of such a Note is
so indexed or if such principal amount is utilized to net against accrued
negative interest, the principal amount payable at maturity may be less than
the original purchase price of such Note if allowed pursuant to the terms of
such Note, including the possibility that no principal will be paid. The
secondary market for Indexed Notes (as defined below) will be affected
S-2
<PAGE>
by a number of factors independent of the creditworthiness of the Issuer and
the Guarantor, including the value of the applicable currency, commodity or
interest rate index, the time remaining to the maturity of such Indexed
Notes, the amount outstanding of such Indexed Notes and market interest
rates. The value of the applicable currency, commodity or interest rate
index depends on a number of interrelated factors, including economic,
financial and political events, over which the Issuer has no control.
Additionally, if the formula used to determine the principal amount or
interest payable with respect to such Indexed Notes contains a multiple or
leverage factor, the effect of any change in the applicable currency,
commodity or interest rate index will be increased. The historical
experience of the relevant currency, commodities or interest rate indices
should not be taken as an indication of future performance of such currency,
commodities or interest rate indices during the term of any Indexed Note.
Accordingly, prospective investors should consult their own financial and
legal advisors as to the risks entailed by an investment in such Notes and
the suitability of Indexed Notes in light of their particular circumstances.
Any optional redemption feature of Notes might affect the market value
of such Notes. Since the Issuer may be expected to redeem such Notes when
prevailing interest rates are relatively low, an investor might not be able
to reinvest the redemption proceeds at an effective interest rate as high as
the interest rate on such Notes.
FOREIGN CURRENCY RISKS
General
Exchange Rates and Exchange Controls. An investment in Notes
denominated in other than U.S. dollars entails significant risks that are not
associated with a similar investment in a security denominated in U.S.
dollars. Such risks include, without limitation, the possibility of
significant changes in rates of exchange between the U.S. dollar and the
various foreign currencies or composite currencies, and the possibility of
the imposition or modification of foreign exchange controls by either the
U.S. or foreign governments. Such risks generally depend on economic and
political events over which the Issuer has no control. In recent years,
rates of exchange between the U.S. dollar and certain foreign currencies have
been highly volatile, and such volatility may be expected to continue in the
future. Fluctuations in any particular exchange rate that have occurred in
the past are not necessarily indicative, however, of fluctuations in the rate
that may occur during the term of any Note. Depreciation of the Specified
Currency other than U.S. dollars against the U.S. dollar would result in a
decrease in the effective yield of such Note below its coupon rate, and in
certain circumstances could result in a loss to the investor on a U.S. dollar
basis.
Governments have imposed from time to time and may in the future impose
exchange controls that could affect exchange rates as well as the
availability of a specified foreign currency at a Note's maturity. Even if
there are no actual exchange controls, it is possible that the Specified
Currency for any particular Note would not be available at such Note's
maturity. In that event, the Issuer will repay such Note at maturity in U.S.
dollars on the basis of the most recently available Market Exchange Rate.
This Prospectus Supplement does not describe all the risks of an
investment in Notes denominated in other than U.S. dollars. Prospective
investors should consult their own financial and legal advisors as to the
risks entailed by an investment in Debt Securities denominated in other than
U.S. dollars. Notes denominated in other than U.S. dollars are not an
appropriate investment for investors who are unsophisticated about foreign
currency transactions.
Currently, there are limited facilities in the United States for
conversion of U.S. dollars into certain foreign currencies, and vice versa.
Unless otherwise specified in the Prospectus Supplement, Notes
denominated in other than U.S. dollars or European currency units will not be
sold in, or to residents of, the country issuing the
S-3
<PAGE>
Specified Currency in which particular Notes are denominated. The
information set forth in this Prospectus Supplement is directed to
prospective purchasers who are United States residents, and the Issuer
disclaims any responsibility to advise prospective purchasers who are
residents of countries other than the United States as to any matters that
may affect the purchase, holding, or receipt of payments of principal of and
interest on the Notes. Such persons should consult their own financial and
legal advisors with regard to such matters.
Governing Law and Judgments. The Notes will be governed by and construed
in accordance with the laws of the State of New York. Under the Judiciary
Law of the State of New York, a judgment in an action based upon an
obligation denominated in a currency other than U.S. dollars will be rendered
in the foreign currency of the underlying obligation and converted into U.S.
dollars at the rate of exchange prevailing on the date of the entry of the
judgment or decree.
EXCHANGE RATE AND CONTROLS FOR SPECIFIED CURRENCIES
For any Note denominated in other than U.S. dollars, the Pricing
Supplement relating to such Notes will contain information concerning
exchange rates. The information concerning exchange rates will be furnished
as a matter of information only and should not be regarded as indicative of
the rate of or trends in future fluctuations in currency exchange rates.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the Prospectus as "Debt Securities") supplements, and
to the extent inconsistent therewith replaces, the description of the general
terms and provisions of Debt Securities set forth in the Prospectus, to which
description reference is hereby made. The following description will apply
to each Note unless otherwise specified in the applicable Pricing Supplement.
GENERAL
The Notes are to be issued as one or more series of Debt Securities, and
will be either Senior Debt Securities or Subordinated Debt Securities of the
Issuer (each as defined in the accompanying Prospectus). At the date hereof,
the maximum amount of Debt Securities authorized for issuance is
$400,000,000. Whether an offering of Notes will constitute Senior Debt
Securities ("Senior Notes") or Subordinated Debt Securities ("Subordinated
Notes") will be set forth in a Pricing Supplement hereto. The Senior Notes
will be issued under an Indenture, dated as of April __, 1997 (the "Senior
Indenture"), between the Issuer, the Guarantor and Bankers Trust Company, as
senior trustee (the "Senior Trustee"), and the Subordinated Notes will be
issued under an Indenture, dated as of April __, 1997 (the "Subordinated
Indenture"), between the Issuer, the Guarantor and Bankers Trust Company, as
subordinated trustee (the "Subordinated Trustee"). The Senior Indenture and
the Subordinated Indenture are collectively referred to herein as
"Indentures" and are more fully described in the accompanying Prospectus.
The Senior Trustee and the Subordinated Trustee are referred to
herein collectively or individually as the "Trustee." The following
summaries of certain provisions of the Indentures encompass all their
material terms and provisions but are subject to, and are qualified in their
entirety by reference to, all of the provisions of the Indentures, including
the definitions therein of certain terms. The Indentures provide that such
Debt Securities may be issued in one or more series up to the aggregate
principal amount that may be authorized from time to time by the Issuer.
All Senior Debt Securities, including the Senior Notes, will be
unsecured obligations and will rank pari passu with all other unsecured and
unsubordinated indebtedness of the Issuer. As of the date hereof, no Senior
Debt Securities of the Issuer were outstanding.
S-4
<PAGE>
All Subordinated Debt Securities, including the Subordinated Notes, will
be unsecured and subordinated to Senior Issuer Indebtedness as set forth
under "Certain Terms Relating to Subordinated Debt Securities" in the
accompanying Prospectus.
Except as set forth under "Description of Debt Securities--Restrictive
Covenants" in the accompanying Prospectus, the Indentures do not contain
provisions which would provide protection to noteholders against a sudden and
dramatic decline in credit quality resulting from takeovers,
recapitalizations or similar restructurings. See "Description of Debt
Securities--Restrictive Covenants" in the accompanying Prospectus.
The Notes are currently limited to up to $400,000,000 aggregate initial
offering price, or the equivalent thereof in one or more foreign or composite
currencies. The Notes will be offered on a continuous basis and will mature
on any day nine months to 30 years from their dates of issue (each, a "Stated
Maturity Date"), as specified in the applicable Pricing Supplement. Unless
otherwise specified in the applicable Pricing Supplement, notes will bear
interest at fixed rates ("Fixed Rate Notes") or at floating rates ("Floating
Rate Notes"), as specified in the applicable Pricing Supplement. Notes may
also be issued that do not bear any interest currently or that bear interest
at a below market rate.
Unless otherwise specified in the applicable Pricing Supplement, the
Notes will be denominated in, and payments of principal, premium, if any,
and/or interest, if any, will be made in, United States dollars. The Notes
also may be denominated in, and payments of principal, premium, if any,
and/or interest, if any, may be made in, one or more foreign currencies or
composite currencies ("Foreign Currency Notes"). See "Special Provisions
Relating to Foreign Currency Notes--Payment of Principal, Premium, if any,
and Interest, if any." The currency or composite currency in which a Note is
denominated, whether United States dollars or otherwise, is herein referred
to as the "Specified Currency." References herein to "United States dollars,"
"U.S. dollars" or "$" are to the lawful currency of the United States of
America (the "United States").
Unless otherwise specified in the applicable Pricing Supplement,
purchasers are required to pay for the Notes in the applicable Specified
Currencies. At the present time, there are limited facilities in the United
States for the conversion of United States dollars into foreign currencies or
composite currencies and vice versa, and commercial banks do not generally
offer non-United States dollar checking or savings account facilities in the
United States. Each applicable Agent is prepared to arrange for the
conversion of United States dollars into the Specified Currency in which the
related Foreign Currency Note is denominated in order to enable the purchaser
to pay for such Foreign Currency Note, provided that a request is made to
such Agent on or prior to the fifth Business Day (as hereinafter defined)
preceding the date of delivery of such Foreign Currency Note, or by such
other day as determined by such Agent. Each such conversion will be made by
an Agent on such terms and subject to such conditions, limitations and
charges as such Agent may from time to time establish in accordance with its
regular foreign exchange practices. All costs of exchange will be borne by
the purchaser of each such Foreign Currency Note. See "Special Provisions
Relating to Foreign Currency Notes."
Interest rates offered by the Issuer with respect to the Notes may
differ depending upon, among other things, the aggregate principal amount of
Notes purchased in any single transaction. Interest rates or formulas and
other terms of Notes are subject to change by the Issuer from time to time,
but no such change will affect any Note already issued or as to which an
offer to purchase has been accepted by the Issuer.
Each Note will be issued in fully registered form as a Book-Entry Note.
The authorized denominations of each Note other than a Foreign Currency Note
will be $100,000 and integral multiples of $1,000 in excess thereof, unless
otherwise specified in the applicable Pricing Supplement, while the
authorized denominations of each Foreign Currency Note will be specified in
the applicable Pricing Supplement.
S-5
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Payments of principal of, and premium, if any, and interest, if any, on,
Book-Entry Notes will be made by the Issuer through the Trustee to the
Depositary. See "--Book-Entry System." Notwithstanding the foregoing, a
Holder of $10,000,000 (or, if the applicable Specified Currency is other than
United States dollars, the equivalent thereof in such Specified Currency) or
more in aggregate principal amount of Notes (whether having identical or
different terms and provisions) will be entitled to receive interest
payments, if any, on any Interest Payment Date other than the Maturity Date
by wire transfer of immediately available funds if appropriate wire transfer
instructions have been received in writing by the Trustee not less than 15
days prior to such Interest Payment Date. Any such wire transfer
instructions received by the Trustee shall remain in effect until revoked by
such Holder. For special payment terms applicable to Foreign Currency Notes,
see "Special Provisions Relating to Foreign Currency Notes--Payment of
Principal, Premium, if any, and Interest, if any."
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions are authorized or required by law, regulation or executive order
to close in The City of New York or the Commonwealth of Pennsylvania;
provided, however, that, with respect to Foreign Currency Notes, such day is
also not a day on which banking institutions are authorized or required by
law, regulation or executive order to close in the Principal Financial Center
(as hereinafter defined) of the country issuing the Specified Currency (or,
in the case of European Currency Units ("ECU"), is not a day that appears as
an ECU non-settlement day on the display designated as "ISDE" on the Reuter
Monitor Money Rates Service (or a day so designated by the ECU Banking
Association) or, if ECU non-settlement days do not appear on that page (and
are not so designated), is not a day on which payments in ECU cannot be
settled in the international interbank market); provided, further, that, with
respect to Notes as to which LIBOR is an applicable Interest Rate Basis (as
defined below), such day is also a London Business Day (as hereinafter
defined). "London Business Day" means (i) if the Index Currency (as
hereinafter defined) is other than ECU, any day on which dealings in such
Index Currency are transacted in the London interbank market or (ii) if the
Index Currency is ECU, any day that does not appear as an ECU non-settlement
day on the display designated as "ISDE" on the Reuter Monitor Money Rates
Service (or a day so designated by the ECU Banking Association) or, if ECU
non-settlement days do not appear on that page (and are not so designated),
is not a day on which payments in ECU cannot be settled in the international
interbank market.
"Principal Financial Center" means the capital city of the country
issuing the Specified Currency or, solely with respect to the calculation of
LIBOR, the Index Currency, except that with respect to United States dollars,
Australian dollars, Deutsche marks, Dutch guilders, Italian lire, Swiss
francs and ECUs, the Principal Financial Center shall be The City of New
York, Sydney, Frankfurt, Amsterdam, Milan, Zurich and Luxembourg,
respectively.
Book-Entry Notes may be transferred or exchanged only through the
Depositary. See "--Book-Entry Notes." No service charge will be made by the
Issuer or the Trustee for any such registration of transfer or exchange of
Notes, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith
(other than exchanges pursuant to the Indenture not involving any transfer).
REDEMPTION AT THE OPTION OF THE ISSUER
Unless otherwise specified in the applicable Pricing Supplement, the
Notes will not be subject to any sinking fund. The Notes will be redeemable
at the option of the Issuer prior to the Stated Maturity Date only if an
Initial Redemption Date is specified in the applicable Pricing Supplement.
If so specified, the Notes will be subject to redemption at the option of the
Issuer on any date on and after the applicable Initial Redemption Date in
whole or from time to time in part in increments of $1,000 (provided that any
remaining principal amount thereof shall be at least $100,000), at the
applicable Redemption Price (as hereinafter defined), together with unpaid
interest accrued to the date of redemption, on notice given not more than 60
nor less than 30 calendar days prior to the date of
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<PAGE>
redemption and in accordance with the provisions of the Indenture.
"Redemption Price," with respect to a Note, means an amount equal to the
Initial Redemption Percentage specified in the applicable Pricing Supplement
(as adjusted by the Annual Redemption Percentage Reduction, if applicable)
multiplied by the unpaid principal amount to be redeemed. The Initial
Redemption Percentage, if any, applicable to a Note shall decline at each
anniversary of the Initial Redemption Date by an amount equal to the
applicable Annual Redemption Percentage Reduction, if any, until the
Redemption Price is equal to 100% of the unpaid principal amount to be
redeemed. See also "--Original Issue Discount Notes."
REPAYMENT AT THE OPTION OF THE HOLDER
The Notes will be repayable by the Issuer at the option of the Holders
thereof prior to the Stated Maturity Date only if one or more Optional
Repayment Dates are specified in the applicable Pricing Supplement. If so
specified, the Notes will be subject to repayment at the option of the
Holders thereof on any Optional Repayment Date in whole or from time to time
in part in increments of $1,000 (provided that any remaining principal amount
thereof shall be at least $100,000), at a repayment price equal to 100% of
the unpaid principal amount to be repaid, together with unpaid interest
accrued to the date of repayment. For any Note to be repaid, such Note must
be received, together with the form thereon entitled "Option to Elect
Repayment" duly completed, by the Trustee at its Corporate Trust Office (or
such other address of which the Issuer shall from time to time notify the
Holders) not more than 60 nor less than 30 calendar days prior to the date of
repayment. Exercise of such repayment option by the Holder will be
irrevocable. See also "--Original Issue Discount Notes."
Only the Depositary may exercise the repayment option in respect of
Global Securities representing Book-Entry Notes. Accordingly, Beneficial
Owners (as hereinafter defined) of Global Securities that desire to have all
or any portion of the Book-Entry Notes represented by such Global Securities
repaid must instruct the Participant (as hereinafter defined) through which
they own their interest to direct the Depositary to exercise the repayment
option on their behalf by delivering the related Global Security and duly
completed election form to the Trustee as aforesaid. In order to ensure that
such Global Security and election form are received by the Trustee on a
particular day, the applicable Beneficial Owner must so instruct the
Participant through which it owns its interest before such Participant's
deadline for accepting instructions for that day. Different firms may have
different deadlines for accepting instructions from their customers.
Accordingly, Beneficial Owners should consult the Participants through which
they own their interest for the respective deadlines for such Participants.
All instructions given to Participants from Beneficial Owners of Global
Securities relating to the option to elect repayment shall be irrevocable.
In addition, at the time such instructions are given, each such Beneficial
Owner shall cause the Participant through which it owns its interest to
transfer such Beneficial Owner's interest in the Global Security or
Securities representing the related Book-Entry Notes, on the Depositary's
records, to the Trustee. See "--Book-Entry Notes."
If applicable, the Issuer will comply with the requirements of Rule 14e-
1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and any other securities laws or regulations in connection with any such
repayment.
The Issuer may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Issuer may, at the
discretion of the Issuer, be held, resold or surrendered to the Trustee for
cancellation.
INTEREST
General
Unless otherwise specified in the applicable Pricing Supplement, each
interest-bearing Note will bear interest from its date of issue at the rate
per annum, in the case of a Fixed Rate Note, or pursuant to the interest rate
formula, in the case of a Floating Rate Note, in each case as specified in
the
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applicable Pricing Supplement, until the principal thereof is paid or duly
made available for payment. Unless otherwise specified in the applicable
Pricing Supplement, interest payments in respect of Fixed Rate Notes and
Floating Rate Notes will equal the amount of interest accrued from and
including the immediately preceding Interest Payment Date in respect of which
interest has been paid or duly made available for payment (or from and
including the date of issue, if no interest has been paid or duly made
available for payment) to but excluding the applicable Interest Payment Date
or the Maturity Date, as the case may be (each, an "Interest Period").
Interest on Fixed Rate Notes and Floating Rate Notes will be payable in
arrears on each Interest Payment Date and on the Maturity Date. Unless
otherwise specified in the applicable Pricing Supplement, the first payment
of interest on any such Note originally issued between a Record Date (as
hereinafter defined) and the related Interest Payment Date will be made on
the Interest Payment Date immediately following the next succeeding Record
Date to the Holder on such next succeeding Record Date. Unless otherwise
specified in the applicable Pricing Supplement, a "Record Date" shall be the
fifteenth calendar day (whether or not a Business Day) immediately preceding
the related Interest Payment Date.
Fixed Rate Notes
Unless otherwise specified in the applicable Pricing Supplement,
interest on Fixed Rate Notes will be payable on January 15 and July 15 of
each year (each, an "Interest Payment Date") and on the Maturity Date.
Unless otherwise specified in the applicable Pricing Supplement, interest on
Fixed Rate Notes will be computed on the basis of a 360-day year of twelve
30-day months.
If any Interest Payment Date or the Maturity Date of a Fixed Rate Note
falls on a day that is not a Business Day, the required payment of principal,
premium, if any, and/or interest will be made on the next succeeding Business
Day as if made on the date such payment was due, and no interest will accrue
on such payment for the period from and after such Interest Payment Date or
the Maturity Date, as the case may be, to the date of such payment on the
next succeeding Business Day.
Floating Rate Notes
Unless otherwise specified in the applicable Pricing Supplement,
Floating Rate Notes will be issued as described below. The applicable
Pricing Supplement will specify certain terms with respect to which each
Floating Rate Note is being delivered, including: whether such Floating Rate
Note is a "Regular Floating Rate Note," a "Floating Rate/Fixed Rate Note" or
an "Inverse Floating Rate Note," the Fixed Rate Commencement Date, if
applicable, Fixed Interest Rate, if applicable, Interest Rate Basis or Bases,
Initial Interest Rate, if any, Initial Interest Reset Date, Interest Reset
Period and Dates, Interest Payment Period and Dates, Index Maturity, Maximum
Interest Rate and/or Minimum Interest Rate, if any, and Spread and/or Spread
Multiplier, if any, as such terms are defined below. If one or more of the
applicable Interest Rate Bases is LIBOR or the CMT Rate, the applicable
Pricing Supplement will also specify the Index Currency, if any, or the
Designated CMT Maturity Index and Designated CMT Telerate Page, respectively,
as such terms are defined below.
The interest rate borne by the Floating Rate Notes will be determined as
follows:
(i) Unless such Floating Rate Note is designated as a "Floating
Rate/Fixed Rate Note" or an "Inverse Floating Rate Note" or as having an
Addendum attached or having "Other/Additional Provisions" apply relating
to a different interest rate formula, such Floating Rate Note will be
designated as a "Regular Floating Rate Note" and, except as described
below or in the applicable Pricing Supplement, will bear interest at the
rate determined by reference to the applicable Interest Rate Basis or
Bases (a) plus or minus the applicable Spread, if any, and/or (b)
multiplied by the applicable Spread Multiplier, if any. Commencing on
the Initial Interest Reset Date, the rate at which interest on such
Regular Floating Rate Note shall be
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payable shall be reset as of each Interest Reset Date; provided,
however, that the interest rate in effect for the period, if any, from
the date of issue to the Initial Interest Reset Date will be the Initial
Interest Rate.
(ii) If such Floating Rate Note is designated as a "Floating
Rate/Fixed Rate Note," then, except as described below or in the
applicable Pricing Supplement, such Floating Rate Note will bear
interest at the rate determined by reference to the applicable Interest
Rate Basis or Bases (a) plus or minus the applicable Spread, if any,
and/or (b) multiplied by the applicable Spread Multiplier, if any.
Commencing on the Initial Interest Reset Date, the rate at which
interest on such Floating Rate/Fixed Rate Note shall be payable shall be
reset as of each Interest Reset Date; provided, however, that (y) the
interest rate in effect for the period, if any, from the date of issue
to the Initial Interest Reset Date will be the Initial Interest Rate and
(z) the interest rate in effect for the period commencing on the Fixed
Rate Commencement Date to the Maturity Date shall be the Fixed Interest
Rate, if such rate is specified in the applicable Pricing Supplement or,
if no such Fixed Interest Rate is specified, the interest rate in effect
thereon on the day immediately preceding the Fixed Rate Commencement
Date.
(iii)If such Floating Rate Note is designated as an "Inverse
Floating Rate Note," then, except as described below or in the
applicable Pricing Supplement, such Floating Rate Note will bear
interest at the Fixed Interest Rate minus the rate determined by
reference to the applicable Interest Rate Basis or Bases (a) plus or
minus the applicable Spread, if any, and/or (b) multiplied by the
applicable Spread Multiplier, if any; provided, however, that, unless
otherwise specified in the applicable Pricing Supplement, the interest
rate thereon will not be less than zero. Commencing on the Initial
Interest Reset Date, the rate at which interest on such Inverse Floating
Rate Note shall be payable shall be reset as of each Interest Reset
Date; provided, however, that the interest rate in effect for the
period, if any, from the date of issue to the Initial Interest Reset
Date will be the Initial Interest Rate.
The "Spread" is the number of basis points to be added to or subtracted
from the related Interest Rate Basis or Bases applicable to such Floating
Rate Note. The "Spread Multiplier" is the percentage of the related Interest
Rate Basis or Bases applicable to such Floating Rate Note by which such
Interest Rate Basis or Bases will be multiplied to determine the applicable
interest rate on such Floating Rate Note. The "Index Maturity" is the period
to maturity of the instrument or obligation with respect to which the related
Interest Rate Basis or Bases will be calculated.
Unless otherwise specified in the applicable Pricing Supplement, the
interest rate with respect to each Interest Rate Basis will be determined in
accordance with the applicable provisions below. Except as set forth above
or in the applicable Pricing Supplement, the interest rate in effect on each
day shall be (i) if such day is an Interest Reset Date, the interest rate
determined as of the Interest Determination Date (as hereinafter defined)
immediately preceding such Interest Reset Date or (ii) if such day is not an
Interest Reset Date, the interest rate determined as of the Interest
Determination Date immediately preceding the most recent Interest Reset Date.
Interest on Floating Rate Notes will be determined by reference to the
applicable Interest Rate Basis or Interest Rate Bases, which may, as
described below, include (i) the CD Rate, (ii) the CMT Rate, (iii) the
Commercial Paper Rate, (iv) Eleventh District Cost of Funds Rate, (v) the
Federal Funds Rate, (vi) J.J. Kenny Rate, (vii) LIBOR, (viii) the Prime Rate,
(ix) the Treasury Rate (each, an "Interest Rate Basis"), or (x) such other
Interest Rate Basis or interest rate formula as may be specified in the
applicable Pricing Supplement; provided, however, that the interest rate in
effect on a Floating Rate Note for the period, if any, from the date of issue
to the Initial Interest Reset Date will be the Initial Interest Rate;
provided, further, that with respect to a Floating Rate/Fixed Rate Note the
interest rate in effect for the period commencing on the Fixed Rate
Commencement Date to the Maturity Date shall be the Fixed Interest Rate, if
such rate is specified in the applicable Pricing Supplement or, if no such
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Fixed Interest Rate is specified, the interest rate in effect thereon on the
day immediately preceding the Fixed Rate Commencement Date.
The applicable Pricing Supplement will specify whether the rate of
interest on the related Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually or on such other specified basis
(each, an "Interest Reset Period") and the dates on which such rate of
interest will be reset (each, an "Interest Reset Date"). Unless otherwise
specified in the applicable Pricing Supplement, the Interest Reset Dates will
be, in the case of Floating Rate Notes which reset: (i) daily, each Business
Day; (ii) weekly, the Wednesday of each week (with the exception of weekly
reset Floating Rate Notes as to which the Treasury Rate is an applicable
Interest Rate Basis, which will reset the Tuesday of each week, except as
described below); (iii) monthly, the third Wednesday of each month; (iv)
quarterly, the third Wednesday of March, June, September and December of each
year; (v) semiannually, the third Wednesday of the two months specified in
the applicable Pricing Supplement; and (vi) annually, the third Wednesday of
the month specified in the applicable Pricing Supplement; provided however,
that, with respect to Floating Rate/Fixed Rate Notes, the rate of interest
thereon will not reset after the applicable Fixed Rate Commencement Date. If
any Interest Reset Date for any Floating Rate Note would otherwise be a day
that is not a Business Day, such Interest Reset Date will be postponed to the
next succeeding Business Day, except that in the case of a Floating Rate Note
as to which LIBOR is an applicable Interest Rate Basis and such Business Day
falls in the next succeeding calendar month, such Interest Reset Date will be
the immediately preceding Business Day. In addition, in the case of a
Floating Rate Note as to which the Treasury Rate is an applicable Interest
Rate Basis and the Interest Determination Date would otherwise fall on an
Interest Reset Date, then such Interest Reset Date will be postponed to the
next succeeding Business Day.
The interest rate applicable to each Interest Reset Period commencing on
the related Interest Reset Date will be the rate determined as of the
applicable Interest Determination Date and calculated on or prior to the
Calculation Date (as hereinafter defined). The "Interest Determination Date"
with respect to the CD Rate, the CMT Rate, the Commercial Paper Rate, the
Federal Funds Rate, the Prime Rate and the J.J. Kenny Rate will be the second
Business Day immediately preceding the applicable Interest Reset Date; the
Interest Determination Date with respect to the Eleventh District Cost of
Funds Rate will be the last working day of the month immediately preceding
each Interest Reset Date on which the Federal Home Loan Bank of San Francisco
(the "FHLB of San Francisco") publishes the Index (as herein defined); and
the "Interest Determination Date" with respect to LIBOR will be the second
London Business Day immediately preceding the applicable Interest Reset Date,
unless the Index Currency is British pounds sterling, in which case the
"Interest Determination Date" will be the applicable Interest Reset Date.
With respect to the Treasury Rate, the "Interest Determination Date" will be
the day in the week in which the applicable Interest Reset Date falls on
which day Treasury Bills (as hereinafter defined) are normally auctioned
(Treasury Bills are normally sold at an auction held on Monday of each week,
unless that day is a legal holiday, in which case the auction is normally
held on the following Tuesday, except that such auction may be held on the
preceding Friday); provided, however, that if an auction is held on the
Friday of the week preceding the applicable Interest Reset Date, the Interest
Determination Date will be such preceding Friday. The "Interest
Determination Date" pertaining to a Floating Rate Note the interest rate of
which is determined by reference to two or more Interest Rate Bases will be
the most recent Business Day which is at least two Business Days prior to the
applicable Interest Reset Date for such Floating Rate Note on which each
Interest Rate Basis is determinable. Each Interest Rate Basis will be
determined as of such date, and the applicable interest rate will take effect
on the applicable Interest Reset Date.
A Floating Rate Note may also have either or both of the following: (i)
a Maximum Interest Rate, or ceiling, that may accrue during any Interest
Period and (ii) a Minimum Interest Rate, or floor, that may accrue during any
Interest Period. In addition to any Maximum Interest Rate that may apply to
any Floating Rate Note, the interest rate on Floating Rate Notes will in no
event be higher than the maximum rate permitted by New York law, as the same
may be modified by United States law of general application.
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Except as provided below or in the applicable Pricing Supplement,
interest will be payable, in the case of Floating Rate Notes which reset: (i)
daily, weekly or monthly, on the third Wednesday of each month or on the
third Wednesday of March, June, September and December of each year, as
specified in the applicable Pricing Supplement; (ii) quarterly, on the third
Wednesday of March, June, September and December of each year; (iii)
semiannually, on the third Wednesday of the two months of each year specified
in the applicable Pricing Supplement; and (iv) annually, on the third
Wednesday of the month of each year specified in the applicable Pricing
Supplement (each, an "Interest Payment Date") and, in each case, on the
Maturity Date. If any Interest Payment Date other than the Maturity Date for
any Floating Rate Note would otherwise be a day that is not a Business Day,
such Interest Payment Date will be postponed to the next succeeding Business
Day, except that in the case of a Floating Rate Note as to which LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date will be the immediately
preceding Business Day. If the Maturity Date of a Floating Rate Note falls
on a day that is not a Business Day, the required payment of principal,
premium, if any, and interest, if any, will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest
will accrue on such payment for the period from and after the Maturity Date
to the date of such payment on the next succeeding Business Day.
All percentages resulting from any calculation on Floating Rate Notes
will be rounded to the nearest one hundred-thousandth of a percentage point,
with five-one millionths of a percentage point rounded upwards (e.g.,
9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all
amounts used in or resulting from such calculation on Floating Rate Notes
will be rounded, in the case of United States dollars, to the nearest cent
or, in the case of a foreign currency or composite currency, to the nearest
unit (with one-half cent or unit being rounded upwards).
With respect to each Floating Rate Note, accrued interest is calculated
by multiplying its principal amount by an accrued interest factor. Such
accrued interest factor is computed by adding the interest factor calculated
for each day in the applicable Interest Period. Unless otherwise specified
in the applicable Pricing Supplement, the interest factor for each such day
will be computed by dividing the interest rate applicable to such day by 360,
in the case of Floating Rate Notes for which an applicable Interest Rate
Basis is the CD Rate, the Commercial Paper Rate, the Eleventh District Cost
of Funds Rate, the Federal Funds Rate, the J.J. Kenny Rate, LIBOR or the
Prime Rate, or by the actual number of days in the year in the case of
Floating Rate Notes for which an applicable Interest Rate Basis is the CMT
Rate or the Treasury Rate. Unless otherwise specified in the applicable
Pricing Supplement, the interest factor for Floating Rate Notes for which the
interest rate is calculated with reference to two or more Interest Rate Bases
will be calculated in each period in the same manner as if only one of the
applicable Interest Rate Bases applied as specified in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
Trustee will be the "Calculation Agent." Upon request of the Holder of any
Floating Rate Note, the Calculation Agent will disclose the interest rate
then in effect and, if determined, the interest rate that will become
effective as a result of a determination made for the next succeeding
Interest Reset Date with respect to such Floating Rate Note. Unless
otherwise specified in the applicable Pricing Supplement, the "Calculation
Date," if applicable, pertaining to any Interest Determination Date will be
the earlier of (i) the tenth calendar day after such Interest Determination
Date, or, if such day is not a Business Day, the next succeeding Business Day
or (ii) the Business Day immediately preceding the applicable Interest
Payment Date or the Maturity Date, as the case may be.
Unless otherwise specified in the applicable Pricing Supplement, the
Calculation Agent shall determine each Interest Rate Basis in accordance with
the following provisions.
CD RATE. Unless otherwise specified in the applicable Pricing
Supplement, "CD Rate" means, with respect to any Interest Determination Date
relating to a Floating Rate Note for which the interest
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rate is determined with reference to the CD Rate (a "CD Rate Interest
Determination Date"), the rate on such date for negotiable United States
dollar certificates of deposit having the Index Maturity specified in the
applicable Pricing Supplement as published by the Board of Governors of the
Federal Reserve System in "Statistical Release H.15(519), Selected Interest
Rates" or any successor publication of the Board of Governors of the Federal
Reserve System ("H.15(519)") under the heading "CDs (Secondary Market)." If
such rate is not published in H.15(519) before 9:00 A.M., New York City time,
on the related Calculation Date, then the CD Rate on such CD Rate Interest
Determination Date will be calculated by the Calculation Agent and will be
the arithmetic mean of the secondary market offered rates as of 10:00 A.M.,
New York City time, on such CD Rate Interest Determination Date, of three
leading nonbank dealers in negotiable United States dollar certificates of
deposit in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent for negotiable United States
dollar certificates of deposit of major United States money center banks for
negotiable certificates of deposit with a remaining maturity closest to the
Index Maturity specified in the applicable Pricing Supplement in a
denomination of U.S.$5,000,000; provided, however, that if fewer than three
dealers so selected by the Calculation Agent are quoting as mentioned in this
sentence, the CD Rate determined as of such CD Rate Interest Determination
Date will be the CD Rate in effect on such CD Rate Interest Determination
Date.
CMT RATE. Unless otherwise specified in the applicable Pricing
Supplement, "CMT Rate" means, with respect to any Interest Determination Date
relating to a Floating Rate Note for which the interest rate is determined
with reference to the CMT Rate (a "CMT Rate Interest Determination Date"),
the rate displayed on the Designated CMT Telerate Page under the caption
"...Treasury Constant Maturities...Federal Reserve Board Release
H.15...Mondays Approximately 3:45 P.M.," under the column for the Designated
CMT Maturity Index for (i) if the Designated CMT Telerate Page is 7055, the
rate on such CMT Rate Interest Determination Date and (ii) if the Designated
CMT Telerate Page is 7052, the week or the month, as applicable, ended
immediately preceding the week in which the related CMT Rate Interest
Determination Date occurs. If such rate is no longer displayed on the
relevant page or is not displayed by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in H.15(519). If such rate is no
longer published or is not published by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate on such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date
with respect to such Interest Reset Date as may then be published by either
the Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in H.15(519). If such information is not provided by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT Rate
on the CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic
mean of the secondary market closing offer side prices as of approximately
3:30 P.M., New York City time, on such CMT Rate Interest Determination Date
reported, according to their written records, by three leading primary United
States government securities dealers (each, a "Reference Dealer") in The City
of New York (which may include the Agents or their affiliates) selected by
the Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes")
with an original maturity of approximately the Designated CMT Maturity Index
and a remaining term to maturity of not less than such Designated CMT
Maturity Index minus one year. If the Calculation Agent is unable to obtain
three such Treasury Note quotations, the CMT Rate on such CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity based on the arithmetic mean of the secondary market offer
side prices as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date of three Reference Dealers in The City of
New York (from five such Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation (or, in the
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event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for Treasury Notes with an original
maturity of the number of years that is the next highest to the Designated
CMT Maturity Index and a remaining term to maturity closest to the Designated
CMT Maturity Index and in an amount of at least $100,000,000. If three or
four (and not five) of such Reference Dealers are quoting as described above,
then the CMT Rate will be based on the arithmetic mean of the offer prices
obtained and neither the highest nor the lowest of such quotes will be
eliminated; provided, however, that if fewer than three Reference Dealers so
selected by the Calculation Agent are quoting as mentioned herein, the CMT
Rate determined as of such CMT Rate Interest Determination Date will be the
CMT Rate in effect on such CMT Rate Interest Determination Date. If two
Treasury Notes with an original maturity as described in the second preceding
sentence have remaining terms to maturity equally close to the Designated CMT
Maturity Index, the Calculation Agent will obtain from the five Reference
Dealers quotations for the Treasury Note with the shorter remaining term to
maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service (or any successor service) on the page specified in the
applicable Pricing Supplement (or any other page as may replace such page on
such service) for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519). If no such page is specified in the applicable
Pricing Supplement, the Designated CMT Telerate Page shall be 7052 for the
most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
COMMERCIAL PAPER RATE. Unless otherwise specified in the applicable
Pricing Supplement, "Commercial Paper Rate" means, with respect to any
Interest Determination Date relating to a Floating Rate Note for which the
interest rate is determined with reference to the Commercial Paper Rate (a
"Commercial Paper Rate Interest Determination Date"), the Money Market Yield
(as hereinafter defined) on such date of the per annum rate (quoted on a bank
discount basis) for commercial paper having the Index Maturity specified in
the applicable Pricing Supplement as published in H.15(519) under the heading
"Commercial Paper." If such rate is not published in H.15(519) by 3:00 P.M.,
New York City time, on the related Calculation Date, then the Commercial
Paper Rate on such Commercial Paper Rate Interest Determination Date will be
calculated by the Calculation Agent and will be the Money Market Yield of the
arithmetic mean of the offered per annum rates (quoted on a bank discount
basis) as of 11:00 A.M., New York City time, on such Commercial Paper Rate
Interest Determination Date of three leading dealers of commercial paper in
The City of New York (which may include the Agents or their affiliates)
selected by the Calculation Agent for commercial paper having the Index
Maturity specified in the applicable Pricing Supplement placed for an
industrial issuer whose bond rating is "AA," or the equivalent, from a
nationally recognized rating agency; provided, however, that if fewer than
three dealers so selected by the Calculation Agent are quoting as mentioned
in this sentence, the Commercial Paper Rate determined as of such Commercial
Paper Rate Interest Determination Date will be the Commercial Paper Rate in
effect on such Commercial Paper Rate Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360 X 100
Money Market Yield = ---------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
period from the Interest Reset Date to but excluding the day that numerically
corresponds to such Interest Reset Date (or, if there is not any numerically
corresponding day, the last day) in the calendar month that is the number of
months corresponding to the specified Index Maturity after the month in which
such Interest Reset Date falls.
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ELEVENTH DISTRICT COST OF FUNDS RATE. Unless otherwise specified in the
applicable Pricing Supplement, "Eleventh District Cost of Funds Rate" means,
with respect to any Interest Determination Date relating to an Eleventh
District Cost of Funds Rate Note or any Floating Rate Note for which the
interest rate is determined with reference to the Eleventh District Cost of
Funds Rate (an "Eleventh District Cost of Funds Rate Interest Determination
Date"), the rate equal to the monthly weighted average cost of funds for the
calendar month immediately preceding the month in which such eleventh
District Cost of Funds Rate Interest Determination Date falls, as set forth
under the caption "11th District" on Telerate Page 7058 (as defined below) as
of 11:00 A.M., San Francisco time, on such Eleventh District Cost of Funds
Rate Interest Determination Date. If such rate does not appear on Telerate
Page 7058 on any related Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate for such
Eleventh District Cost of Funds Rate Interest Determination Date shall be the
monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced
(the "Index") by the FHLB of San Francisco as such cost of funds for the
calendar month immediately preceding the date of such announcement. If the
FHLB of San Francisco fails to announce such rate for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, then the Eleventh District Cost of Funds Rate determined
as of such Eleventh District Cost of Funds Rate Interest Determination Date
shall be the Eleventh District Cost of Funds Rate in effect on such Eleventh
District Cost of Funds Rate Interest Determination Date.
"Telerate Page 7058" means the display designated as page "7058" on the
Dow Jones Telerate Service (or such other page as may replace the 7058 page
on that service for the purpose of displaying the monthly weighted average
cost of funds paid by member institutions of the Eleventh Federal Home Loan
Bank District).
FEDERAL FUNDS RATE. Unless otherwise specified in the applicable
Pricing Supplement, "Federal Funds Rate" means, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest
rate is determined with reference to the Federal Funds Rate (a "Federal Funds
Rate Interest Determination Date"), the rate on such date for United States
dollar federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)." If such rate is not published in H.15(519) by 3:00 P.M.,
New York City time, on the related Calculation Date, then the Federal Funds
Rate on such Federal Funds Rate Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
rates as of 9:00 A.M., New York City time, on such Federal Funds Rate
Interest Determination Date, for the last transaction in overnight federal
funds arranged by three leading brokers of federal funds transactions in The
City of New York (which may include the Agents or their affiliates) selected
by the Calculation Agent; provided, however, that if fewer than three brokers
so selected by the Calculation Agent are quoting as mentioned in this
sentence, the Federal Funds Rate determined as of such Federal Funds Rate
Interest Determination Date will be the Federal Funds Rate in effect on such
Federal Funds Rate Interest Determination Date.
J.J. KENNY RATE. Unless otherwise indicated in the applicable Pricing
Supplement, "J.J. Kenny Rate" means, with respect to any Interest
Determination Date relating to a J.J. Kenny Rate Note or any Floating Rate
Note for which the interest rate is determined with reference to the J.J.
Kenny Rate (a "J.J. Kenny Interest Determination Date"), the rate specified
in the high grade weekly index (the "Weekly Index") on such J.J. Kenny
Interest Determination Date made available by Kenny Information Systems
("Kenny") to the Calculation Agent. The Weekly Index is based on 30-day
yield evaluations at par of bonds, the interest of which is exempt from
federal income taxation under the Internal Revenue Code of 1986, as amended
(the "Code"), of not less than five high grade component issuers selected by
Kenny, which shall include, without limitation, issuers of general obligation
bonds. The specific issuers to be included among the component issuers may be
changed from time to time by Kenny at its discretion. The bonds on which the
Weekly Index is based do not include any bonds on which the interest is
subject to a minimum tax or similar tax under the Code unless all tax-exempt
bonds are subject to such tax. In the event Kenny ceases to make available
such Weekly Index, a successor indexing agent will be selected by the
Calculation Agent, such index to reflect the prevailing
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rate for bonds rated in the highest short-term rating category by Moody's
Investors Service, Inc. and Standard & Poor's Ratings Group in respect of
issuers most closely resembling the high grade component issuers selected by
Kenny for its Weekly Index, the interest on which is (a) variable on a weekly
basis, (b) exempt from federal income taxation under the Code and (c) not
subject to a minimum tax or similar tax under the Code, unless all tax-exempt
bonds are subject to such tax. If such a successor indexing agent is not
available, the rate for any J.J. Kenny Interest Determination Date will equal
67% of the rate calculated using methodology set forth below under "Treasury
Rate." The Calculation Agent shall calculate the J.J. Kenny Rate in
accordance with the foregoing. At the request of a holder of a Floating Rate
Note bearing interest at the J.J. Kenny Rate, the Calculation Agent will
provide such holder with the interest rate that will become effective as of
the next Interest Reset Date.
LIBOR. Unless otherwise specified in the applicable Pricing Supplement,
"LIBOR" means the rate determined by the Calculation Agent in accordance with
the following provisions:
(i) With respect to any Interest Determination Date relating to a
Floating Rate Note for which the interest rate is determined with
reference to LIBOR (a "LIBOR Interest Determination Date"), LIBOR will
be either: (a) the arithmetic mean of the offered rates for deposits in
the Index Currency for the period of the applicable Index Maturity which
appear on the Reuters Screen LIBO Page at approximately 11:00 A.M.,
London time, on such LIBOR Interest Determination Date if at least two
such offered rates appear on the Reuters Screen LIBO Page" ("LIBOR
Reuters"), or (b) the rate for deposits in the Index Currency for the
period of the applicable Index Maturity that appears on the Telerate
Page 3750 as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date ("LIBOR Telerate"). "Reuters Screen LIBO Page" means
the display designated as Page "LIBO" on the Reuters Monitor Money Rate
Service (or such other page as may replace the LIBO page on the service
for the purpose of displaying London interbank offered rates of major
banks). "Telerate Page 3750" means the display designated as page
"3750" on the Telerate Service (or such other page as may replace the
3750 page on that service or such other service or services as may be
nominated by the British Bankers' Association for the purpose of
displaying London Interbank offered rates for deposits in the Index
Currency). If neither LIBOR Reuters nor LIBOR Telerate is specified in
the applicable Pricing Supplement, LIBOR will be determined as if LIBOR
Telerate is specified. If fewer than two offered rates appear on the
Reuters Screen LIBO Page, or if no rate appears on the Telerate Page
3750, as applicable, LIBOR in respect of that LIBOR Interest
Determination Date will be determined as if the parties had specified
the rates described in (ii) below.
(ii) If fewer than two offered rates appear on the Reuters Screen LIBO
page or no rate appears on Telerate Page 3750, as applicable, the
Calculation Agent will request the principal London offices of four
major banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered
quotations for deposits in the Index Currency for the period of the
applicable Index Maturity to prime banks in the London interbank market
at approximately 11:00 A.M., London time, commencing on the second
London Business Day immediately following such LIBOR Interest
Determination Date and in a principal amount that is representative of a
single transaction in such Index Currency in such market at such time.
If at least two such quotations are provided, LIBOR on such LIBOR
Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR on such
LIBOR Interest Determination Date will be the arithmetic mean of the
rates quoted at approximately 11:00 A.M. in the applicable Principal
Financial Center by three major banks in such Principal Financial Center
for loans in the Index Currency to leading European Banks, having the
Index Maturity specified in the applicable Pricing Supplement and in a
principal amount that is representative for a single transaction in such
Index Currency in such market at such time; provided, however, that if
fewer than three banks selected as aforesaid by the Calculation Agent
are quoting rates as mentioned in this sentence, the rate of interest in
effect for the applicable period will be the LIBOR in effect on such
LIBOR Interest Determination Date.
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"Index Currency" means the currency or composite currency specified in
the applicable Pricing Supplement as to which LIBOR shall be calculated. If
no such currency or composite currency is specified in the applicable Pricing
Supplement, the Index Currency shall be United States dollars.
PRIME RATE. Unless otherwise specified in the applicable Pricing
Supplement, "Prime Rate" means, with respect to any Interest Determination
Date relating to a Floating Rate Note for which the interest rate is
determined with reference to the Prime Rate (a "Prime Rate Interest
Determination Date"), the rate on such date as such rate is published in
H.15(519) under the heading "Bank Prime Loan." If such rate is not published
prior to 9:00 A.M., New York City time, on the related Calculation Date, then
the Prime Rate shall be the arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters Screen US PRIME 1 Page (as
hereinafter defined) as such bank's prime rate or base lending rate as in
effect for such Prime Rate Interest Determination Date. If fewer than four
such rates appear on the Reuters Screen US PRIME 1 Page for such Prime Rate
Interest Determination Date, then the Prime Rate shall be the arithmetic mean
of the prime rates quoted on the basis of the actual number of days in the
year divided by a 360-day year as of the close of business on such Prime Rate
Interest Determination Date by three major banks in The City of New York
selected by the Calculation Agent. If fewer than three such quotations are
so provided, then the Prime Rate shall be the Prime Rate in effect on such
Prime Rate Interest Determination Date.
"Reuters Screen US PRIME 1 Page" means the display designated as page "US
PRIME 1" on the Reuter Monitor Money Rates Service (or any successor service)
(or such other page as may replace the US PRIME 1 page on such service (or
any successor service) for the purpose of displaying prime rates or base
lending rates of major United States banks).
TREASURY RATE. Unless otherwise specified in the applicable Pricing
Supplement, "Treasury Rate" means, with respect to any Interest Determination
Date relating to a Floating Rate Note for which the interest rate is
determined by reference to the Treasury Rate (a "Treasury Rate Interest
Determination Date"), the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the
United States ("Treasury Bills") having the Index Maturity specified in the
applicable Pricing Supplement, as such rate is published in H.15(519) under
the heading "U.S. Government Securities/Treasury Bills/Auction Average
(Investment)" or, if not published by 9:00 A.M., New York City time, on the
related Calculation Date, the auction average rate of such Treasury Bills
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) as otherwise announced by the
United States Department of the Treasury. In the event that the results of
the Auction of Treasury Bills having the Index Maturity specified in the
applicable Pricing Supplement are not reported as provided by 3:00 P.M., New
York City time, on the related Calculation Date, or if no such auction is
held, then the Treasury Rate will be the rate set forth in H.15(519) for the
relevant Treasury Interest Determination Date for the specified Index
Maturity under the heading "U.S. Government Securities/Treasury
Bills/Secondary market." If such rate is not published by 3:00 P.M. New York
City time on the relevant Calculation Date, the Treasury Rate will be
calculated by the Calculation Agent and will be a yield to maturity
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Treasury Rate Interest Determination Date, of three primary
United States government securities dealers in The City of New York (which
may include the Agents or their affiliates) selected by the Calculation
Agent, for the issue of Treasury Bills with a remaining maturity closest to
the Index Maturity specified in the applicable Pricing Supplement; provided,
however, that if fewer than three dealers so selected by the Calculation
Agent are quoting as mentioned in this sentence, the Treasury Rate determined
as of such Treasury Rate Interest Determination Date will be the Treasury
Rate in effect on such Treasury Rate Interest Determination Date.
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BOOK-ENTRY NOTES
Each Debt Security will be issued in fully registered book-entry form (a
"Book-Entry Note"). Each Book-Entry Note will be represented by one or more
fully registered global securities (the "Global Securities") deposited with
or on behalf of The Depository Trust Company (the "Depositary") and
registered in the name of the Depositary or the Depositary's nominee.
Interests in the Global Securities will be shown on, and transfers thereof
will be effected only through, records maintained by the Depositary (with
respect to its participants) and the Depositary's participants (with respect
to beneficial owners). Any additional or differing terms of the depositary
arrangement with respect to the Book-Entry Notes will be described in the
applicable Prospectus Supplement. No Global Security may be transferred
except as a whole by a nominee of the Depositary to the Depositary or to
another nominee of the Depositary, or by the Depositary or such nominee to a
successor of the Depositary or a nominee of such successor.
Upon issuance, all Book-Entry Notes bearing interest (if any) at the same
rate or pursuant to the same formula and having the same date of issue,
Specified Currency, Interest Payment Dates (if any), Stated Maturity Date,
redemption provisions (if any), repayment provisions (if any) and other terms
will be represented by a single Global Security.
So long as the Depositary or its nominee is the registered owner of a
Global Security, the Depositary or its nominee, as the case may be, will be
the sole Holder of the Book-Entry Notes represented thereby for all purposes
under the Indenture. Except as otherwise provided in this section, the
Beneficial Owners of the Global Security or Securities representing Book-
Entry Notes will not be entitled to receive physical delivery of Debt
Securities in certificated form ("Certificated Notes") and will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing Book-Entry Notes shall be exchangeable or
transferable. Accordingly, each Beneficial Owner must rely on the procedures
of the Depositary and, if such Beneficial Owner is not a Participant, on the
procedures of the Participant through which such Beneficial Owner owns its
interest in order to exercise any rights of a Holder under such Global
Security or the Indenture. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
certificated form. Such limits and such laws may impair the ability to
transfer beneficial interests in a Global Security representing Book-Entry
Notes.
Book-Entry Notes represented by a Global Security are exchangeable for
definitive Notes in registered form, of like tenor and of an equal aggregate
principal amount, only if (x) the Depositary notifies the Issuer in writing
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time the Depositary ceases to be a clearing agency
registered under the Exchange Act, and a successor depositary is not
appointed by the Issuer within 60 days (y) the Issuer in its sole discretion
determines not to have such Book-Entry Notes represented by one or more
Global Securities or (z) an event shall have happened and be continuing
which, after notice or lapse of time, or both, would constitute an Event of
Default with respect to such Book-Entry Notes. Any Global Security
representing Book-Entry Notes that is exchangeable pursuant to the preceding
sentence shall be exchangeable in whole for definitive Notes in registered
form, of like tenor and of an equal aggregate principal amount, in minimum
denominations of $100,000 and integral multiples of $1,000 in excess thereof
(or in such amounts in other currencies or composite currencies as specified
in the applicable Prospectus Supplement). Such definitive Notes shall be
registered in the name or names of such person or persons as the Depositary
shall instruct the Security Registrar. It is expected that such instructions
may be based upon directions received by the Depositary from its participants
with respect to ownership of Book-Entry Notes.
Except as provided above, owners of Book-Entry Notes will not be entitled
to receive physical delivery of Notes in definitive form and no Global
Security representing Book-Entry Notes shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in
the name of the Depositary or its nominee. Accordingly, each person owning a
Book-Entry Note must rely
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on the procedures of the Depositary and, if such person is not a participant,
on the procedures of the participant through which such person owns its
beneficial interest, to exercise any rights of a Holder under the Notes. The
Issuer understands that, under existing industry practices, in the event that
(i) the Issuer requests any action of Holders or (ii) an owner of a Book-
Entry Note desires to give or take any action which a Holder is entitled to
give or take under the Notes in accordance with the terms of the Notes, the
Depositary would authorize the participants owning the relevant Book-Entry
Notes to give or take such action, and such participants would authorize
beneficial owners owning through such participants to give or take such
action or would otherwise act upon the instructions of beneficial owners
owning through them.
The Depositary will act as securities depository for the Book-Entry Notes.
The Book-Entry Notes will be issued as fully registered securities registered
in the name of Cede & Co. (the Depositary's partnership nominee). One fully
registered Global Security will be issued for each issue of Book-Entry Notes,
each in the aggregate principal amount of such issue, and will be deposited
with the Depositary.
The Depository has advised the Issuer and the Agents as follows: it is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. The Depository holds securities that its participants
("Participants") deposit with the Depository. The Depository also
facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates.
"Direct Participants" include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. The
Depository is owned by a number of its Direct Participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the Depository's
system is also available to others such as securities brokers and dealers,
banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The Rules applicable to the Depository and its
participants are on file with the Securities and Exchange Commission.
Purchase of interests in the Book-Entry Notes under the Depository's system
must be made by or through Direct Participants, which will receive a credit
for such interests on the Depository's records. The ownership interest of
each actual purchaser of interests in the Book-Entry Notes ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect Participants'
records. Beneficial Owners will not receive written confirmation from the
Depository of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Book-Entry Notes are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in the Book-Entry Notes, except as
described below.
To facilitate subsequent transfers, all Book-Entry Notes deposited by
Participants with the Depository are registered in the name of the
Depository's partnership nominee, Cede & Co. The deposit of Book-Entry Notes
with the Depository and their registration in the name of Cede & Co. affect
no change in beneficial ownership. The Depository has no knowledge of the
actual Beneficial Owners of the interests in the Book-Entry Notes; the
Depository's records reflect only the identity of the Direct Participants to
whose accounts interests in the Book-Entry Notes are credited, which may or
may not be the Beneficial Owners. The Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
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Conveyance of notices and other communications by the Depository to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangement among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Redemption notices shall
be sent to Cede & Co. If less than all the interests in the Book-Entry Notes
are being redeemed, the Depository's practice is to determine by lot the
amount of the interest of each Direct Participant in such Book-Entry Note to
be redeemed.
Neither the Depository nor Cede & Co. will consent or vote with respect to
the Book-Entry Notes. Under its usual procedures, the Depository mails an
Omnibus Proxy to the issuer as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts interests in the Book-Entry Notes are
credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Principal and interest payments, if any, on the Book-Entry Notes will be
made in same-day funds to the Depository. The Depository's practice is to
credit Direct Participants' accounts on the payment date in accordance with
their respective holdings shown on the Depository's records unless the
Depository has reason to believe that it will not receive payment on the
payment date. Payments by Participants to Beneficial Owners will be governed
by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participant and not of
the Depository, the related Trustee, the Issuer or any paying agent or the
Securities Registrar, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal and interest, if
any, to the Depository is the responsibility of the Issuer or its paying
agent, disbursement of such payments to Direct and Indirect Participants
shall be the responsibility of the Depository, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
The Depository may discontinue providing its services as depository with
respect to the Notes at any time by giving reasonable notice to the Issuer or
its paying agent. The Issuer may decide to discontinue use of the system of
book-entry transfers through the Depositary (or a successor securities
depository). In either of those events, Certificated Notes will be printed
and delivered.
GUARANTEES
The Senior Notes will be fully and unconditionally guaranteed (the "Senior
Guarantees") by the Guarantor as to payment of principal, premium, if any,
and interest, if any, when and as the same shall become due and payable,
whether at maturity or upon redemption, repayment or otherwise. The Senior
Guarantees will rank pari passu with all other unsecured and unsubordinated
obligations of the Guarantor that, as of March 31, 1997, totalled
$1,125,000.
The Subordinated Notes will be fully and unconditionally guaranteed (the
"Subordinated Guarantees" and, together with the Senior Guarantees, the
"Guarantees") by the Guarantor, on a subordinated basis, as to payment of
principal, premium, if any, and interest, if any, when and as the same shall
become due and payable, whether at maturity or upon redemption, repayment or
otherwise. The Subordinated Guarantees will be unsecured and will be
subordinated as set forth under "Guarantees" in the accompanying Prospectus.
The obligations of the Guarantor under the Guarantees will be full and
unconditional regardless of the enforceability of the applicable Notes or the
related Indenture and will not be discharged until all obligations contained
in such Notes and the related Indenture are satisfied. Holders of the Notes
may proceed directly against the Guarantor in the event of a default under
the applicable Notes without first proceeding against the Issuer.
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OTHER/ADDITIONAL PROVISIONS; ADDENDUM
Any provisions with respect to the Notes, including the specification and
determination of one or more Interest Rate Bases, the calculation of the
interest rate applicable to a Floating Rate Note, the Interest Payment Dates,
the Maturity Date or any other term relating thereto, may be modified and/or
supplemented as specified under "Other/Additional Provisions" on the face
thereof or in an Addendum relating thereto, if so specified on the face
thereof. Such provisions will be described in the applicable Pricing
Supplement.
AMORTIZING NOTES
The Issuer may from time to time offer Amortizing Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest on each Amortizing
Note will be computed on the basis of a 360-day year of twelve 30-day months.
Payments with respect to Amortizing Notes will be applied first to interest
due and payable thereon and then to the reduction of the unpaid principal
amount thereof. Further information concerning additional terms and
provisions of Amortizing Notes will be specified in the applicable Pricing
Supplement, including a table setting forth repayment information for such
Amortizing Notes.
ORIGINAL ISSUE DISCOUNT NOTES
The Issuer may offer Notes ("Original Issue Discount Notes") from time to
time that have an Issue Price (as specified in the applicable Pricing
Supplement) that is less than 100% of the principal amount thereof (i.e.
par). Original Issue Discount Notes may not bear any interest currently or
may bear interest at a rate that is below market rates at the time of
issuance. The difference between the Issue Price of an Original Issue
Discount Note and par is referred to herein as the "Discount." In the event
of redemption, repayment or acceleration of maturity of an Original Issue
Discount Note, the amount payable to the Holder of such Original Issue
Discount Note, unless otherwise specified in the applicable Pricing
Supplement, will be equal to the sum of (i) the Issue Price (increased by any
accruals of Discount) and, in the event of any redemption of such Original
Issue Discount Note (if applicable), multiplied by the Initial Redemption
Percentage specified in the applicable Pricing Supplement (as adjusted by the
Annual Redemption Percentage Reduction, if applicable) and (ii) any unpaid
interest on such Original Issue Discount Note accrued from the date of issue
to the date of such redemption, repayment or acceleration of maturity, as the
case may be.
Unless otherwise specified in the applicable Pricing Supplement, for
purposes of determining the amount of Discount that has accrued as of any
date on which a redemption, repayment or acceleration of maturity occurs for
an Original Issue Discount Note, such Discount will be accrued using a
constant yield method. The constant yield will be calculated using a 30-day
month, 360-day year convention, a compounding period that, except for the
Initial Period (as hereinafter defined), corresponds to the shortest period
between Interest Payment Dates for the applicable Original Issue Discount
Note (with ratable accruals within a compounding period), a coupon rate equal
to the initial coupon rate applicable to such Original Issue Discount Note
and an assumption that the maturity of such Original Issue Discount Note will
not be accelerated. If the period from the date of issue to the initial
Interest Payment Date for an Original Issue Discount Note (the "Initial
Period") is shorter than the compounding period for such Original Issue
Discount Note, a proportionate amount of the yield for an entire compounding
period will be accrued. If the Initial Period is longer than the compounding
period, then such period will be divided into a regular compounding period
and a short period with the short period being treated as provided in the
preceding sentence. The accrual of the applicable Discount may differ from
the accrual of original issue discount for purposes of the Internal Revenue
Code of 1986, as amended (the "Code"), certain Original Issue Discount Notes
may not be treated as having original issue discount within the meaning of
the Code, and Notes other than Original Issue Discount Notes may be treated
as issued with original issue discount for Federal income tax purposes. See
"Certain United States Federal Income Tax Considerations."
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INDEXED NOTES
The Issuer may from time to time offer Notes ("Indexed Notes") the
principal amount of which payable on the Stated Maturity Date or earlier
redemption or repayment and/or interest thereon is determined by reference to
such objective price or economic measures as are described in the Book-Entry
Note representing such Note. The manner of determining the amount of
interest payable and the amount of principal payable on the Stated Maturity
Date or upon earlier redemption or repayment of an Indexed Note will be set
forth in such Book-Entry Note, and historical and other information
concerning the price or economic measures used in such determination, will be
set forth in a supplement to this Prospectus Supplement.
AN INVESTMENT IN NOTES INDEXED, AS TO PRINCIPAL OR INTEREST OF BOTH, TO ONE
OR MORE VALUES OF CURRENCIES (INCLUDING EXCHANGE RATES BETWEEN CURRENCIES),
COMMODITIES OR INTEREST RATE INDICES ENTAILS SIGNIFICANT RISKS THAT ARE NOT
ASSOCIATED WITH SIMILAR INVESTMENTS IN A CONVENTIONAL FIXED RATE OR FLOATING
RATE DEBT SECURITY. IF THE INTEREST RATE ON SUCH A NOTE IS SO INDEXED, IT
MAY RESULT IN AN INTEREST RATE THAT IS LESS THAN THAT PAYABLE ON A
CONVENTIONAL FIXED RATE OR FLOATING RATE DEBT SECURITY ISSUED AT THE SAME
TIME, INCLUDING THE POSSIBILITY THAT NO INTEREST WILL BE PAID OR THAT
NEGATIVE INTEREST WILL ACCRUE, AND, IF THE PRINCIPAL AMOUNT OF SUCH A NOTE IS
SO INDEXED OR IF SUCH PRINCIPAL AMOUNT IS UTILIZED TO NET AGAINST ACCRUED
NEGATIVE INTEREST, THE PRINCIPAL AMOUNT PAYABLE AT MATURITY MAY BE LESS THAN
THE ORIGINAL PURCHASE PRICE OF SUCH NOTE IF ALLOWED PURSUANT TO THE TERMS OF
SUCH NOTE, INCLUDING THE POSSIBILITY THAT NO PRINCIPAL WILL BE PAID. The
secondary market for Indexed Notes will be affected by a number of factors
independent of the creditworthiness of the Issuer, including the value of the
applicable currency, commodity or interest rate index, the time remaining to
the maturity of such Indexed Notes, the amount outstanding of such Indexed
Notes and market interest rates. The value of the applicable currency,
commodity or interest rate index depends on a number of interrelated factors,
including economic, financial and political events, over which the Issuer has
no control. Additionally, if the formula used to determine the principal
amount or interest payable with respect to such Indexed Notes contains a
multiple or leverage factor, the effect of any change in the applicable
currency, commodity or interest rate index will be increased. The historical
experience of the relevant currency, commodities or interest rate indices
should not be taken as an indication of future performance of such currency,
commodities or interest rate indices during the term of any Indexed Note.
Accordingly, prospective investors should consult their own financial and
legal advisors as to the risks entailed by an investment in such Notes and
the suitability of Indexed Notes in light of their particular circumstances.
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
GENERAL
Unless otherwise specified in the applicable Pricing Supplement, Foreign
Currency Notes will not be sold in, or to residents of, the country issuing
the applicable specified currency. The information set forth in this
Prospectus Supplement is directed to prospective purchasers who are United
States residents and, with respect to Foreign Currency Notes, is by necessity
incomplete. The Issuer disclaims any responsibility to advise prospective
purchasers who are residents of countries other than the United States with
respect to any matters that may affect the purchase, holding or receipt of
payments of principal of, and premium, if any, and interest, if any, on, the
Foreign Currency Notes. Such persons should consult their own financial and
legal advisors with regard to such matters. See "Risk Factors--Exchange Rate
and Controls for Specified Currencies."
PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST, IF ANY
Unless otherwise specified in the applicable Pricing Supplement, the Issuer
is obligated to make payments of principal of, and premium, if any, and
interest, if any, on, Foreign Currency Notes in the applicable Specified
Currency (or, if such Specified Currency is not at the time of such payment
legal
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tender for the payment of public and private debts, in such other coin or
currency of the country which issued such Specified Currency as at the time
of such payment is legal tender for the payment of such debts). Any such
amounts payable by the Issuer in the Specified Currency will, unless
otherwise specified in the applicable Pricing Supplement, be converted by the
exchange rate agent named in the applicable Pricing Supplement (the "Exchange
Rate Agent") into United States dollars for payment to Holders. However, the
Holder of a Foreign Currency Note may elect to receive such amounts payable
in the Specified Currency as hereinafter described.
Any United States dollar amount to be received by a Holder of a Foreign
Currency Note will be based on the highest bid quotation in The City of New
York received by the Exchange Rate Agent at approximately 11:00 A.M., New
York City time, on the second Business Day preceding the applicable payment
date from three recognized foreign exchange dealers (one of whom may be the
Exchange Rate Agent) selected by the Exchange Rate Agent and approved by the
Issuer for the purchase by the quoting dealer of the Specified Currency for
United States dollars for settlement on such payment date in the aggregate
amount of such Specified Currency payable to all Holders of Foreign Currency
Notes scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the Holders of such Foreign Currency Notes by deductions
from such payments. If three such bid quotations are not available, payments
will be made in the Specified Currency.
Holders of Foreign Currency Notes may elect to receive all or a specified
portion of any payments of principal, premium, if any, and/or interest, if
any, in the Specified Currency by submitting a written request for such
payment to the Trustee at its corporate trust office in The City of New York
on or prior to the applicable Record Date or at least fifteen calendar days
prior to the Maturity Date, as the case may be. Such written request may be
mailed or hand delivered or sent by cable, telex or other form of facsimile
transmission. Holders of Foreign Currency Notes may elect to receive all or
a specified portion of all future payments in the Specified Currency and need
not file a separate election for each payment. Such election will remain in
effect until revoked by written notice to the Trustee, but written notice of
any such revocation must be received by the Trustee on or prior to the
applicable Record Date or at least fifteen calendar days prior to the
Maturity Date, as the case may be. Holders of Foreign Currency Notes to be
held in the name of a broker or nominee should contact such broker or nominee
to determine whether and how an election to receive payments in the Specified
Currency may be made.
Payments of the principal of, and premium, if any, and/or interest, if any,
on, Foreign Currency Notes which are to be made in United States dollars will
be made in the manner specified herein with respect to Notes denominated in
United States dollars. See "Description of Notes--General." Payments of
interest, if any, on Foreign Currency Notes which are to be made in the
Specified Currency on an Interest Payment Date other than the Maturity Date
will be made by check mailed to the address of the Holders of such Foreign
Currency Notes as they appear in the Security Register, subject to the right
to receive such interest payments by wire transfer of immediately available
funds under the circumstances described under "Description of Notes--
General." Payments of principal of, and premium, if any, and/or interest, if
any, on, Foreign Currency Notes which are to be made in the Specified
Currency on the Maturity Date will be made by wire transfer of immediately
available funds to an account with a bank designated at least fifteen
calendar days prior to the Maturity Date by each Holder thereof, provided
that such bank has appropriate facilities therefor and that the applicable
Foreign Currency Note is presented and surrendered at the principal corporate
trust office of the Trustee in time for the Trustee to make such payments in
such funds in accordance with its normal procedures.
Unless otherwise specified in the applicable Pricing Supplement, if the
Specified Currency is other than United States dollars, a Beneficial Owner of
the related Global Security or Securities which elects to receive payments of
principal, premium, if any, and/or interest, if any, in the Specified
Currency must notify the Participant through which it owns its interest on or
prior to the applicable Record Date or at least fifteen calendar days prior
to the Maturity Date, as the case may be, of such
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Beneficial Owner's election. Such Participant must notify the Depositary of
such election on or prior to the third Business Day after such Record Date or
at least twelve calendar days prior to the Maturity Date, as the case may be,
and the Depositary will notify the Trustee of such election on or prior to
the fifth Business Day after such Record Date or at least ten calendar days
prior to the Maturity Date, as the case may be. If complete instructions are
received by the Participant from the Beneficial Owner and forwarded by the
Participant to the Depositary, and by the Depositary to the Trustee, on or
prior to such dates, then such Beneficial Owner will receive payments in the
applicable foreign currency or composite currency.
AVAILABILITY OF SPECIFIED CURRENCY
If the Specified Currency for a Foreign Currency Note is not available for
the required payment of principal, premium, if any, and/or interest, if any,
due to the imposition of exchange controls or other circumstances beyond the
control of the Issuer, the Issuer will be entitled to satisfy its obligations
to the Holder of such Foreign Currency Note by making such payment in United
States dollars on the basis of the Market Exchange Rate on the second
Business Day prior to such payment or, if such Market Exchange Rate is not
then available, on the basis of the most recently available Market Exchange
Rate or as otherwise specified in the applicable Pricing Supplement.
If payment in respect of a Foreign Currency Note is required to be made in
any composite currency, and such composite currency is unavailable due to the
imposition of exchange controls or other circumstances beyond the control of
the Issuer, the Issuer will be entitled to satisfy its obligations to the
Holder of such Foreign Currency Note by making such payment in United States
dollars. The amount of each payment in United States dollars shall be
computed by the Exchange Rate Agent on the basis of the equivalent of the
composite currency in United States dollars. The component currencies of the
composite currency for this purpose (collectively, the "Component Currencies"
and each, a "Component Currency") shall be the currency amounts that were
components of the composite currency as of the last day on which the
composite currency was used. The equivalent of the composite currency in
United States dollars shall be calculated by aggregating the United States
dollar equivalents of the Component Currencies. The United States dollar
equivalent of each of the Component Currencies shall be determined by the
Exchange Rate Agent on the basis of the most recently available Market
Exchange Rate for each such Component Currency, or as otherwise specified in
the applicable Pricing Supplement.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a
Component Currency shall be divided or multiplied in the same proportion. If
two or more Component Currencies are consolidated into a single currency, the
amounts of those currencies as Component Currencies shall be replaced by an
amount in such single currency equal to the sum of the amounts of the
consolidated Component Currencies expressed in such single currency. If any
Component Currency is divided into two or more currencies, the amount of the
original Component Currency shall be replaced by the amounts of such two or
more currencies, the sum of which shall be equal to the amount of the
original Component Currency.
The "Market Exchange Rate" for a currency or composite currency other than
United States dollars means the noon dollar buying rate in The City of New
York for cable transfers for such currency or composite currency as certified
for customs purposes by (or if not so certified, as otherwise determined by)
the Federal Reserve Bank of New York. Any payment made in United States
dollars under such circumstances where the required payment is in a currency
or composite currency other than United States dollars will not constitute an
Event of Default under the Indenture with respect to the Notes.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holders of the Foreign
Currency Notes.
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GOVERNING LAW; JUDGMENTS
The Notes will be governed by and construed in accordance with the laws of
the State of New York. Under current New York law, a state court in the
State of New York rendering a judgment on a Foreign Currency Note would be
required to render such judgment in the Specified Currency, and such judgment
would be converted into United States dollars at the exchange rate prevailing
on the date of entry of the judgment. Accordingly, Holders of Foreign
Currency Notes would be subject to of exchange rate fluctuations after such
date. It is not certain, however that a non-New York court would follow the
same rules and procedures with respect to such conversions of the Specified
Currency.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including changes in effective dates) or possible
differing interpretations. It deals only with Notes held as capital assets
and does not purport to deal with persons in special tax situations, such as
financial institutions, insurance companies, regulated investment companies,
dealers in securities or currencies, persons holding Notes as a hedge against
currency risks or as a position in a "straddle" for tax purposes, or persons
whose functional currency is not the United States dollar. It also does not
deal with holders other than original purchasers (except where otherwise
specifically noted). Persons considering the purchase of the Notes should
consult their own tax advisors concerning the application of United States
Federal income tax laws to their particular situations as well as any
consequences of the purchase, ownership and disposition of the Notes arising
under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States Federal income tax purposes (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or of
any political subdivision thereof, (iii) an estate that is described in
Section 7701(a)(30)(D) of the Code or a trust that is described in Section
7701(a)(30)(E) of the Code, (iv) any other person whose income or gain in
respect of a Note is effectively connected with the conduct of a United
States trade or business. As used herein, the term "non-U.S. Holder" means a
beneficial owner of a Note that is not a U.S. Holder.
U.S. HOLDERS
Payments of Interest
Payments of interest on a Note generally will be taxable to a U.S. Holder
as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting).
Original Issue Discount
The following summary is a general discussion of the United States Federal
income tax consequences to U.S. Holders of the purchase, ownership and
disposition of Notes issued with original issue discount ("Discount Notes").
The following summary is based upon final Treasury regulations (the "OID
Regulations") released by the Internal Revenue Service ("IRS") on January 27,
1994, as amended on June 11, 1996, under the original issue discount
provisions of the Code.
For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a Note over its
issue price, if such excess equals or exceeds a
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de minimis amount (generally 1/4 of 1% of the Note's stated redemption price
at maturity multiplied by the number of complete years to its maturity from
its issue date or, in the case of a Note providing for the payment of any
amount other than qualified stated interest (as hereinafter defined) prior to
maturity, multiplied by the weighted average maturity of such Note). The
issue price of each Note in an issue of Notes equals the first price at which
a substantial amount of such Notes has been sold (ignoring sales to bond
houses, brokers, or similar persons or organizations acting in the capacity
of underwriters, placement agents, or wholesalers). The stated redemption
price at maturity of a Note is the sum of all payments provided by the Note
other than "qualified stated interest" payments. The term "qualified stated
interest" generally means stated interest that is unconditionally payable in
cash or property (other than debt instruments of the issuer) at least
annually at a single fixed rate. In addition, under the OID Regulations, if
a Note bears interest for one or more accrual periods at a rate below the
rate applicable for the remaining term of such Note (e.g., Notes with teaser
rates or interest holidays), and if the greater of either the resulting
foregone interest on such Note or any "true" discount on such Note (i.e., the
excess of the Note's stated principal amount over its issue price) equals or
exceeds a specified de minimis amount, then the stated interest on the Note
would be treated as original issue discount rather than qualified stated
interest.
Payments of qualified stated interest on a Note are taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or
are received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Note must include original issue
discount in income as ordinary interest for United States Federal income tax
purposes as it accrues under a constant yield method in advance of receipt of
the cash payments attributable to such income, regardless of such U.S.
Holder's regular method of tax accounting. In general, the amount of
original issue discount included in income by the initial U.S. Holder of a
Discount Note is the sum of the daily portions of original issue discount
with respect to such Discount Note for each day during the taxable year (or
portion of the taxable year) on which such U.S. Holder held such Discount
Note. The "daily portion" of original issue discount on any Discount Note is
determined by allocating to each day in any accrual period a ratable portion
of the original issue discount allocable to that accrual period. An "accrual
period" may be of any length and the accrual periods may vary in length over
the term of the Discount Note, provided that each accrual period is no longer
than one year and each scheduled payment of principal or interest occurs
either on the final day of an accrual period or on the first day of an
accrual period. The amount of original issue discount allocable to each
accrual period is generally equal to the difference between (i) the product
of the Discount Note's adjusted issue price at the beginning of such accrual
period and its yield to maturity (determined on the basis of compounding at
the close of each accrual period and appropriately adjusted to take into
account the length of the particular accrual period) and (ii) the amount of
any qualified stated interest payments allocable to such accrual period. The
"adjusted issue price" of a Discount Note at the beginning of any accrual
period is the sum of the issue price of the Discount Note plus the amount of
original issue discount allocable to all prior accrual periods minus the
amount of any prior payments on the Discount Note that were not qualified
stated interest payments. Under these rules, U.S. Holders generally will
have to include in income increasingly greater amounts of original issue
discount in successive accrual periods.
A U.S. Holder who purchases a Discount Note for an amount that is greater
than its adjusted issue price as of the purchase date and less than or equal
to the sum of all amounts payable on the Discount Note after the purchase
date other than payments of qualified stated interest, will be considered to
have purchased the Discount Note at an "acquisition premium." Under the
acquisition premium rules, the amount of original issue discount which such
U.S. Holder must include in its gross income with respect to such Discount
Note for any taxable year (or portion thereof in which the U.S. Holder holds
the Discount Note) will be reduced (but not below zero) by the portion of the
acquisition premium properly allocable to the period.
Under the OID Regulations, Floating Rate Notes and Indexed Notes ("Variable
Notes") are subject to special rules whereby a Variable Note will qualify as
a "variable rate debt instrument" if (a) its issue price does not exceed the
total noncontingent principal payments due under the Variable Note
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by more than a specified de minimis amount and (b) it provides for stated
interest, paid or compounded at least annually, at current values of (i) one
or more qualified floating rates, (ii) a single fixed rate and one or more
qualified floating rates, (iii) a single objective rate, or (iv) a single
fixed rate and a single objective rate that is a qualified inverse floating
rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Note is denominated. Although a multiple of a qualified floating
rate will generally not itself constitute a qualified floating rate, a
variable rate equal to the product of a qualified floating rate and a fixed
multiple that is greater than .65 but not more than 1.35 will constitute a
qualified floating rate. A variable rate equal to the product of a qualified
floating rate and a fixed multiple that is greater than .65 but not more than
1.35, increased or decreased by a fixed rate, will also constitute a
qualified floating rate. In addition, under the OID Regulations, two or more
qualified floating rates that can reasonably be expected to have
approximately the same values throughout the term of the Variable Note (e.g.,
two or more qualified floating rates with values within 25 basis points of
each other as determined on the Variable Note's issue date) will be treated
as a single qualified floating rate. Notwithstanding the foregoing, a
variable rate that would otherwise constitute a qualified floating rate but
which is subject to one or more restrictions such as a maximum numerical
limitation (i.e., a cap) or a minimum numerical limitation (i.e., a floor)
may, under certain circumstances, fail to be treated as a qualified floating
rate under the OID Regulations unless such cap or floor is fixed throughout
the term of the Note. An "objective rate" is a rate that is not itself a
qualified floating rate but which is determined using a single fixed formula
and that is based on objective financial or economic information. A rate
will not qualify as an objective rate if it is based on information that is
within the control of the issuer (or a related party) or that is unique to
the circumstances of the issuer (or a related party), such as dividends,
profits, or the value of the issuer's stock (although a rate does not fail to
be an objective rate merely because it is based on the credit quality of the
issuer). A "qualified inverse floating rate" is any objective rate where
such rate is equal to a fixed rate minus a qualified floating rate, as long
as variations in the rate can reasonably be expected to inversely reflect
contemporaneous variations in the qualified floating rate. The OID
Regulations also provide that if a Variable Note provides for stated interest
at a fixed rate for an initial period of one year or less followed by a
variable rate that is either a qualified floating rate or an objective rate
and if the variable rate on the Variable Note's issue date is intended to
approximate the fixed rate (e.g., the value of the variable rate on the issue
date does not differ from the value of the fixed rate by more than 25 basis
points), then the fixed rate and the variable rate together will constitute
either a single qualified floating rate or objective rate, as the case may
be.
If a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term
thereof qualifies as a "variable rate debt instrument" under the OID
Regulations, and if the interest on such Note which is unconditionally
payable in cash or property (other than debt instruments of the issuer) at
least annually, then all stated interest on the Note will constitute
qualified stated interest and will be taxed accordingly. Thus, a Variable
Note that provides for stated interest at either a single qualified floating
rate or a single objective rate throughout the term thereof and that
qualifies as a "variable rate debt instrument" under the OID Regulations will
generally not be treated as having been issued with original issue discount
unless the Variable Note is issued at a "true" discount (i.e., at a price
below the Note's stated principal amount) in excess of a specified de minimis
amount. The amount of qualified stated interest and the amount of original
issue discount, if any, that accrues during an accrual period on such a
Variable Note is determined under the rules applicable to fixed rate debt
instruments by assuming that the variable rate is a fixed rate equal to (i)
in the case of a qualified floating rate or qualified inverse floating rate,
the value, as of the issue date, of the qualified floating rate or qualified
inverse floating rate, or (ii) in the case of an objective rate (other than a
qualified inverse floating rate), a fixed rate that reflects the yield that
is reasonably expected for the Variable Note. The qualified stated interest
allocable to an accrual period is increased (or decreased) if the interest
actually paid during an accrual period exceeds (or is less than) the interest
assumed to be paid during the accrual period pursuant to the foregoing rules.
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In general, any other Variable Note that qualifies as a "variable rate
debt instrument" will be converted into an "equivalent" fixed rate debt
instrument for purposes of determining the amount and accrual of original
issue discount and qualified stated interest on the Variable Note. The OID
Regulations generally require that such a Variable Note be converted into an
"equivalent" fixed rate debt instrument by substituting any qualified
floating rate or qualified inverse floating rate provided for under the terms
of the Variable Note with a fixed rate equal to the value of the qualified
floating rate or qualified inverse floating rate, as the case may be, as of
the Variable Note's issue date. Any objective rate (other than a qualified
inverse floating rate) provided for under the terms of the Variable Note is
converted into a fixed rate that reflects the yield that is reasonably
expected for the Variable Note. In the case of a Variable Note that
qualifies as a "variable rate debt instrument" and provides for stated
interest at a fixed rate in addition to either one or more qualified floating
rates or a qualified inverse floating rate, the fixed rate is initially
converted into a qualified floating rate (or a qualified inverse floating
rate, if the Variable Note provides for a qualified inverse floating rate).
Under such circumstances, the qualified floating rate or qualified inverse
floating rate that replaces the fixed rate must be such that the fair market
value of the Variable Note as of the Variable Note's issue date is
approximately the same as the fair market value of an otherwise identical
debt instrument that provides for either the qualified floating rate or
qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a
qualified inverse floating rate, the Variable Note is then converted into an
"equivalent" fixed rate debt instrument in the manner described above.
Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original
issue discount rules to the "equivalent" fixed rate debt instrument and a
U.S. Holder of the Variable Note will account for such original issue
discount and qualified stated interest as if the U.S. Holder held the
"equivalent" fixed rate debt instrument. Each accrual period appropriate
adjustments will be made to the amount of qualified stated interest or
original issue discount assumed to have been accrued or paid with respect to
the "equivalent" fixed rate debt instrument in the event that such amounts
differ from the actual amount of interest accrued or paid on the Variable
Note during the accrual period.
If a Variable Note does not qualify as a "variable rate debt instrument"
under the OID Regulations, then the Variable Note would be treated as a
contingent payment debt obligation. U.S. Holders should be aware that on
June 11, 1996, the Treasury Department issued final regulations (the "CPDI
Regulations") concerning the proper United States Federal income tax
treatment of contingent payment debt instruments. In general, the CPDI
Regulations would cause the timing and character of income, gain or loss
reported on a contingent payment debt instrument to substantially differ from
the timing and character of income, gain or loss reported on a contingent
payment debt instrument under general principles of current United States
Federal income tax law. Specifically, the CPDI Regulations generally require
a U.S. Holder of such an instrument to include future contingent and
noncontingent interest payments in income as such interest accrues based upon
a projected payment schedule. Moreover, in general, under the CPDI
Regulations, any gain recognized by a U.S. Holder on the sale, exchange, or
retirement of a contingent payment debt instrument will be treated as
ordinary income and all or a portion of any loss realized could be treated as
ordinary loss as opposed to capital loss (depending upon the circumstances).
The CPDI Regulations apply to debt instruments issued on or after August 13,
1996. Moreover, certain Indexed Notes may not constitute indebtedness for
United States Federal income tax purposes. In such case, the United States
Federal income tax treatment of such Indexed Notes would not significantly
differ from the treatment thereof if such Indexed Notes were to constitute
indebtedness. The proper United States Federal income tax treatment of
Variable Notes that are treated as contingent payment debt obligations will
be more fully described in the applicable Pricing Supplement. Furthermore,
any other special United States Federal income tax considerations, not
otherwise discussed herein, which are applicable to any particular issue of
Notes will be discussed in the applicable Pricing Supplement.
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Certain of the Notes (i) may be redeemable at the option of the Issuer
prior to their stated maturity (a "call option") and/or (ii) may be repayable
at the option of the holder prior to their stated maturity (a "put option").
Notes containing such features may be subject to rules that differ from the
general rules discussed above. Investors intending to purchase Notes with
such features should consult their own tax advisors, since the original issue
discount consequences will depend, in part, on the particular terms and
features of the purchased Notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
Short-Term Notes
Notes that have a fixed maturity of one year or less ("Short-Term Notes")
will be treated as having been issued with original issue discount. In
general, an individual or other cash method U.S. Holder is not required to
accrue such original issue discount unless the U.S. Holder elects to do so.
If such an election is not made, any gain recognized by the U.S. Holder on
the sale, exchange or maturity of the Short-Term Note will be ordinary income
to the extent of the original issue discount accrued on a straight-line
basis, or upon election under the constant yield method (based on daily
compounding), through the date of sale or maturity, and a portion of the
deductions otherwise allowable to the U.S. Holder for interest on borrowings
allocable to the Short-Term Note will be deferred until a corresponding
amount of income is realized. U.S. Holders who report income for United
States Federal income tax purposes under the accrual method, and certain
other holders including banks and dealers in securities, are required to
accrue original issue discount on a Short-Term Note on a straight-line basis
unless an election is made to accrue the original issue discount under a
constant yield method (based on daily compounding).
Market Discount
If a U.S. Holder purchases a Note, other than a Discount Note, for an
amount that is less than its issue price (or, in the case of a subsequent
purchaser, its stated redemption price at maturity) or, in the case of a
Discount Note, for an amount that is less than its adjusted issue price as of
the purchase date, such U.S. Holder will be treated as having purchased such
Note at a "market discount," unless such market discount is less than a
specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of a Discount Note, any
payment that does not constitute qualified stated interest) on, or any gain
realized on the sale, exchange, retirement or other disposition of, a Note as
ordinary income to the extent of the lesser of (i) the amount of such payment
or realized gain or (ii) the market discount which has not previously been
included in income and is treated as having accrued on such Note at the time
of such payment or disposition. Market discount will be considered to accrue
ratably during the period from the date of acquisition to the maturity date
of the Note, unless the U.S. Holder elects to accrue market discount on the
basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note
or certain earlier dispositions, because a current deduction is only allowed
to the extent the interest expense exceeds an allocable portion of market
discount. A U.S. Holder may elect to include market discount in income
currently as it accrues (on either a ratable or semiannual compounding
basis), in which case the rules described above regarding the treatment as
ordinary income of gain upon the disposition of the Note and upon the receipt
of certain cash payments and regarding the deferral of interest deductions
will not apply. Generally, such currently included market
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discount is treated as ordinary interest for United States Federal income tax
purposes. Such an election will apply to all debt instruments acquired by
the U.S. Holder on or after the first day of the first taxable year to which
such election applies and may be revoked only with the consent of the IRS.
Premium
If a U.S. Holder purchases a Note for an amount that is greater than the
sum of all amounts payable on the Note after the purchase date other than
payments of qualified stated interest, such U.S. Holder will be considered to
have purchased the Note with "amortizable bond premium" equal in amount to
such excess. A U.S. Holder may elect to amortize such premium using a
constant yield method over the remaining term of the Note and may offset
interest otherwise required to be included in respect of the Note during any
taxable year by the amortized amount of such excess for the taxable year.
However, if the Note may be optionally redeemed after the U.S. Holder
acquires it at a price in excess of its stated redemption price at maturity,
special rules would apply which could result in a deferral of the
amortization of some bond premium until later in the term of the Note. Any
election to amortize bond premium applies to all taxable debt instruments
acquired by the U.S. Holder on or after the first day of the first taxable
year to which such election applies and may be revoked only with the consent
of the IRS.
Disposition of a Note
Except as discussed above, upon the sale, exchange or retirement of a Note,
a U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and such U.S.
Holder's adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis
in a Note generally will equal such U.S. Holder's initial investment in the
Note increased by any original issue discount included in income (and accrued
market discount, if any, if the U.S. Holder has included such market discount
in income) and decreased by the amount of any payments, other than qualified
stated interest payments, received and amortizable bond premium taken with
respect to such Note. Such gain or loss generally will be long-term capital
gain or loss if the Note were held for more than one year.
NOTES DENOMINATED, OR IN RESPECT OF WHICH INTEREST IS PAYABLE, IN A FOREIGN
CURRENCY
As used herein, "Foreign Currency" means a currency or currency unit other
than U.S. dollars.
Payments of Interest in a Foreign Currency
CASH METHOD. A U.S. Holder who uses the cash method of accounting for
United States Federal income tax purposes and who receives a payment of
interest on a Note (other than original issue discount or market discount)
will be required to include in income the U.S. dollar value of the Foreign
Currency payment (determined on the date such payment is received) regardless
of whether the payment is in fact converted to U.S. dollars at that time, and
such U.S. dollar value will be the U.S. Holder's tax basis in such Foreign
Currency.
ACCRUAL METHOD. A U.S. Holder who uses the accrual method of accounting
for United States Federal income tax purposes, or who otherwise is required
to accrue interest prior to receipt, will be required to include in income
the U.S. dollar value of the amount of interest income (including original
issue discount or market discount and reduced by amortizable bond premium to
the extent applicable) that has accrued and is otherwise required to be taken
into account with respect to a Note during an accrual period. The U.S. dollar
value of such accrued income will be determined by translating such income at
the average rate of exchange for the accrual period or, with respect to an
accrual period that spans two taxable years, at the average rate for the
partial period within the taxable year. A U.S. Holder may elect, however, to
translate such accrued interest income using the rate of exchange on the last
day of the accrual period or, with respect to an accrual period that spans
two taxable years,
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using the rate of exchange on the last day of the taxable year. If the last
day of an accrual period is within five business days of the date of receipt
of the accrued interest, a U.S. Holder may translate such interest using the
rate of exchange on the date of receipt. The above election will apply to
other debt obligations held by the U.S. Holder and may not be changed without
the consent of the IRS. A U.S. Holder should consult a tax advisor before
making the above election. A U.S. Holder will recognize exchange gain or
loss (which will be treated as ordinary income or loss) with respect to
accrued interest income on the date such income is received. The amount of
ordinary income or loss recognized will equal the difference, if any, between
the U.S. dollar value of the Foreign Currency payment received (determined on
the date such payment is received) in respect of such accrual period and the
U.S. dollar value of interest income that has accrued during such accrual
period (as determined above).
Purchase, Sale and Retirement of Notes
A U.S. Holder who purchases a Note with previously owned Foreign Currency
will recognize ordinary income or loss in an amount equal to the difference,
if any, between such U.S. Holder's tax basis in the Foreign Currency and the
U.S. dollar fair market value of the Foreign Currency used to purchase the
Note, determined on the date of purchase.
Except as discussed above with respect to Short-Term Notes, upon the sale,
exchange or retirement of a Note, a U.S. Holder will recognize taxable gain
or loss equal to the difference between the amount realized on the sale,
exchange or retirement and such U.S. Holder's adjusted tax basis in the Note.
Such gain or loss generally will be capital gain or loss (except to the
extent of any accrued market discount not previously included in the U.S.
Holder's income) and will be long-term capital gain or loss if at the time of
sale, exchange or retirement the Note has been held by such U.S. Holder for
more than one year. To the extent the amount realized represents accrued but
unpaid interest, however, such amounts must be taken into account as interest
income, with exchange gain or loss computed as described in "Payments of
Interest in a Foreign Currency" above. If a U.S. Holder receives Foreign
Currency on such a sale, exchange or retirement the amount realized will be
based on the U.S. dollar value of the Foreign Currency on the date the
payment is received or the Note is disposed of (or deemed disposed of as a
result of a material change in the terms of such Note). In the case of a
Note that is denominated in Foreign Currency and is traded on an established
securities market, a cash basis U.S. Holder (or, upon election, an accrual
basis U.S. Holder) will determine the U.S. dollar value of the amount
realized by translating the Foreign Currency payment at the spot rate of
exchange on the settlement date of the sale. A U.S. Holder's adjusted tax
basis in a Note will equal the cost of the Note to such holder, increased by
the amounts of any market discount or original issue discount previously
included in income by the holder with respect to such Note and reduced by any
amortized acquisition or other premium and any principal payments received by
the holder. A U.S. Holder's tax basis in a Note, and the amount of any
subsequent adjustments to such holder's tax basis, will be the U.S. dollar
value of the Foreign Currency amount paid for such Note, or of the Foreign
Currency amount of the adjustment, determined on the date of such purchase or
adjustment.
Gain or loss realized upon the sale, exchange or retirement of a Note that
is attributable to fluctuations in currency exchange rates will be ordinary
income or loss which will not be treated as interest income or expense. Gain
or loss attributable to fluctuations in exchange rates will equal the
difference between the U.S. dollar value of the Foreign Currency principal
amount of the Note, determined on the date such payment is received or the
Note is disposed of, and the U.S. dollar value of the Foreign Currency
principal amount of the Note, determined on the date the U.S. Holder acquired
the Note. Such Foreign Currency gain or loss will be recognized only to the
extent of the total gain or loss realized by the U.S. Holder on the sale,
exchange or retirement of the Note.
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Original Issue Discount
In the case of a Discount Note or Short-Term Note, (i) original issue
discount is determined in units of the Foreign Currency, (ii) accrued
original issue discount is translated into U.S. dollars as described in
"Payments of Interest in a Foreign Currency--Accrual Method" above and (iii)
the amount of Foreign Currency gain or loss on the accrued original issue
discount is determined by comparing the amount of income received
attributable to the discount (either upon payment, maturity or an earlier
disposition), as translated into U.S. dollars at the rate of exchange on the
date of such receipt, with the amount of original issue discount accrued, as
translated above.
Premium and Market Discount
In the case of a Note with market discount, (i) market discount is
determined in units of the Foreign Currency, (ii) accrued market discount
taken into account upon the receipt of any partial principal payment or upon
the sale, exchange, retirement or other disposition of the Note (other than
accrued market discount required to be taken into account currently) is
translated into U.S. dollars at the exchange rate on such disposition date
(and no part of such accrued market discount is treated as exchange gain or
loss) and (iii) accrued market discount currently includible in income by a
U.S. Holder for any accrual period is translated into U.S. dollars on the
basis of the average exchange rate in effect during such accrual period, and
the exchange gain or loss is determined upon the receipt of any partial
principal payment or upon the sale, exchange, retirement or other disposition
of the Note in the manner described in "Payments of Interest in a Foreign
Currency--Accrual Method" above with respect to computation of exchange gain
or loss on accrued interest.
With respect to a Note issued with amortizable bond premium, such premium
is determined in the relevant Foreign Currency and reduces interest income in
units of the Foreign Currency. Although not entirely clear, a U.S. Holder
should recognize exchange gain or loss equal to the difference between the
U.S. dollar value of the bond premium amortized with respect to a period,
determined on the date the interest attributable to such period is received,
and the U.S. dollar value of the bond premium determined on the date of the
acquisition of the Note.
Exchange of Foreign Currencies
A U.S. Holder will have a tax basis in any Foreign Currency received as
interest or on the sale, exchange or retirement of a Note equal to the U.S.
dollar value of such Foreign Currency, determined at the time the interest is
received or at the time of the sale, exchange or retirement. Any gain or loss
realized by a U.S. Holder on a sale or other disposition of Foreign Currency
(including its exchange for U.S. dollars or its use to purchase Notes) will
be ordinary income or loss.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest (including original
issue discount, if any) on a Note, unless such non-U.S. Holder is a direct or
indirect 10% or greater shareholder of the Issuer, a controlled foreign
corporation related to the Issuer or a bank receiving interest described in
section 881(c)(3)(A) of the Code. To qualify for the exemption from
taxation, the last United States payor in the chain of payment prior to
payment to a non-U.S. Holder (the "Withholding Agent") must have received in
the year in which a payment of interest or principal occurs, or in either of
the two preceding calendar years, a statement that (i) is signed by the
beneficial owner of the Note under penalties of perjury, (ii) certifies that
such owner is not a U.S. Holder and (iii) provides the name and address of
the beneficial owner. The statement may be made on an IRS Form W-8 or a
substantially similar form, and the beneficial owner must inform the
Withholding Agent of any change in the information on the statement within 30
days of such change. If a Note is held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding
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Agent. However, in such case, the signed statement must be accompanied by a
copy of the IRS Form W-8 or the substitute form provided by the beneficial
owner to the organization or institution. The Treasury Department is
considering implementation of further certification requirements aimed at
determining whether the issuer of a debt obligation is related to holders
thereof.
Generally, a non-U.S. Holder will not be subject to Federal income taxes on
any amount which constitutes capital gain upon retirement or disposition of a
Note, provided the gain is not effectively connected with the conduct of a
trade or business in the United States by the non-U.S. Holder. Certain other
exceptions may be applicable, and a non-U.S. Holder should consult its tax
advisor in this regard.
The Notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of the
Issuer or, at the time of such individual's death, payments in respect of the
Notes would have been effectively connected with the conduct by such
individual of a trade or business in the United States.
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the Notes to registered owners who are
not "exempt recipients" and who fail to provide certain identifying
information (such as the registered owner's taxpayer identification number)
in the required manner. Generally, individuals are not exempt recipients,
whereas corporations and certain other entities generally are exempt
recipients. Payments made in respect of the Notes to a U.S. Holder must be
reported to the IRS, unless the U.S. Holder is an exempt recipient or
establishes an exemption. Compliance with the identification procedures
described in the preceding section would establish an exemption from backup
withholding for those non-U.S. Holders who are not exempt recipients.
In addition, upon the sale of a Note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller is a non-
U.S. Holder (and certain other conditions are met). Such a sale must also be
reported by the broker to the IRS, unless either (i) the broker determines
that the seller is an exempt recipient or (ii) the seller certifies its non-
U.S. status (and certain other conditions are met). Certification of the
registered owner's non-U.S. status would be made normally on an IRS Form W-8
under penalties of perjury, although in certain cases it may be possible to
submit other documentary evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
SUPPLEMENTAL PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Distribution
Agreement, the Notes are being offered on a continuing basis by the Issuer
through the Agents, who have agreed to use reasonable efforts to solicit
purchases of the Notes. The Issuer will have the sole right to accept offers
to purchase Notes and may reject any proposed purchase of Notes in whole or
in part. The Agents shall have the right, in their discretion reasonably
exercised, to reject any offer to purchase Notes, in whole or in part. The
Issuer will pay the Agents a commission of from 0.125% to 0.750% of the
principal amount of Notes, depending upon maturity, for sales made through
them as Agents.
The Issuer may also sell Notes to the Agents as principals for their own
accounts at a discount to be agreed upon at the time of sale, or the
purchasing Agents may receive from the Issuer a
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commission or discount equivalent to that set forth on the cover page hereof
in the case of any such principal transaction in which no other discount is
agreed. Such Notes may be resold at prevailing market prices, or at prices
related thereto, at the time of such resale, as determined by the Agents.
the Issuer reserves the right to sell Notes directly on its own behalf. No
commission will be payable on any Notes sold directly by the Issuer.
In addition, the Agents may offer the Notes they have purchased as
principal to other dealers. The Agents may sell Notes to any dealer at a
discount and, unless otherwise specified in the applicable Pricing
Supplement, such discount allowed to any dealer may include all or part of
the discount to be received from the Issuer. Unless otherwise indicated in
the applicable Pricing Supplement, any Note sold to an Agent as principal
will be purchased by such Agent at a price equal to 100% of the principal
amount thereof less a percentage equal to the commission applicable to any
agency sale of a Note of identical maturity. After the initial public
offering of Notes to be resold to investors and other purchasers on a fixed
public offering price basis, the public offering price, concession and
discount may be changed.
The Agents, as agents or principals, may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933 (the "Act"). The Issuer and
the Guarantor have agreed to indemnify the Agents against certain
liabilities, including liabilities under the Act. The Issuer and the
Guarantor have agreed to reimburse the Agents for certain expenses.
The Agents may sell to or through dealers who may resell to investors, and
the Agents may pay all or part of their discount or commission to such
dealers. Such dealers may be deemed to be "underwriters" within the meaning
of the Act.
Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Notes will be required to be made in immediately
available funds in The City of New York.
The Agents may be customers of, engage in transactions with and perform
services for the Issuer and/or the Guarantor in the ordinary course of
business.
The Notes are a new issue of securities with no established trading market
and will not be listed on any securities exchange. No assurance can be given
as to the existence or liquidity of the secondary market for the Notes.
In connection with the offering, the Agents may purchase and sell the Notes
in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover short positions created by
the Agents in connection with the offering. Stabilizing transactions consist
of certain bids or purchases for the purpose of preventing or retarding a
decline in the market price of the Notes; and short positions created by the
Agents involve the sale by the Agents of a greater number of Notes than they
are required to purchase from the Issuer in the offering. The Agents also may
impose a penalty bid, whereby selling concessions allowed to broker-dealers
in respect of the securities sold in the offering may be reclaimed by the
Agents if such Notes are repurchased by the Agents in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect
the market price of the Notes, which may be higher than the price that might
otherwise prevail in the open market; and these activities, if commenced, may
be discontinued at any time. These transactions may be effected in the over-
the-counter market or otherwise.
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<PAGE>
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
DEBT SECURITIES
UNCONDITIONALLY GUARANTEED AS TO PAYMENT
OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST, IF ANY, BY
KEYSTONE FINANCIAL, INC.
_________________
Keystone Financial Mid-Atlantic Funding Corp. ("the Issuer") may
from time to time offer its debt securities (the "Debt Securities") in
one or more series at an aggregate initial offering price not to exceed
$400,000,000 or its equivalent in any other currency or composite
currency on terms and conditions to be determined at the time of sale.
The Debt Securities may be offered as separate series in amounts, at
prices and on terms to be determined at the time of the offering. The
accompanying Prospectus Supplement sets forth, with regard to the Debt
Securities in respect of which this Prospectus is being delivered, the
title, aggregate principal amount, denominations (which may be in United
States dollars, in any other currency or in a composite currency),
maturity date, interest rate or rates, if any (which may be fixed or
variable), and time of payment of any interest, any terms for redemption
at the option of the Issuer or the holder, any terms for sinking fund
payments, any listing on a securities exchange, the initial public
offering or purchase price and any other terms in connection with the
offering and sale of such series of Debt Securities.
The Debt Securities may be senior debt securities (the "Senior Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities"). The Senior Debt Securities will be fully and
unconditionally guaranteed (the "Senior Guarantees") by Keystone
Financial, Inc. (the "Guarantor") as to payment of principal, premium, if
any, and interest, if any, and will rank equally with all other
unsubordinated and unsecured indebtedness of the Issuer. The
Subordinated Debt Securities will be fully and unconditionally guaranteed
(the "Subordinated Guarantees" and, together with the Senior Guarantees,
the "Guarantees") by the Guarantor, on a subordinated basis, as to
payment of principal, premium, if any, and interest, if any, and will be
subordinated to all outstanding and future Senior Issuer Indebtedness (as
defined herein). Unless otherwise specified in the applicable Prospectus
Supplement, the Subordinated Debt Securities will be subject to
acceleration of maturity only in the case of certain events of
bankruptcy, insolvency or reorganization. See "Description of Debt
Securities," "Certain Terms Relating to Senior Debt Securities," "Certain
Terms Relating to Subordinated Debt Securities" and "Guarantees."
The Prospectus Supplement may contain information concerning certain
United States Federal income tax considerations applicable to the Debt
Securities offered therein.
The Debt Securities may be sold by the Issuer directly or through
agents, underwriters or dealers, as designated from time to time or
through a combination of such methods. Such agents, underwriters or
dealers may include Goldman, Sachs & Co., Bear, Stearns & Co. Inc. and
Keefe, Bruyette & Woods, Inc. or a group of agents, underwriters or
dealers represented by firms including Goldman, Sachs & Co., Bear,
Stearns & Co. Inc. and Keefe, Bruyette & Woods, Inc. If agents of the
Issuer or any dealers or underwriters are involved in the sale of the
Debt Securities in respect of which this Prospectus is being delivered,
the names of such agents, dealers or underwriters and any applicable
commissions or discounts will be set forth in or may be calculated from
the Prospectus Supplement with respect to such Debt Securities. See
"Plan of Distribution."
_________________
THE DEBT SECURITIES AND RELATED GUARANTEES WILL NOT BE SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR
ANY OTHER GOVERNMENT AGENCY.
<PAGE>
_________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_________________
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
KEEFE, BRUYETTE & WOODS, INC.
_________________
The date of this Prospectus is _________, 1997.
2
<PAGE>
AVAILABLE INFORMATION
The Guarantor is subject to certain information 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 Securities and Exchange Commission (the
"Commission"). The Issuer and the Guarantor have filed with the
Commission a registration statement on Form S-3 under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Debt
Securities offered hereby (together with any amendments thereto, the
"Registration Statement"). The Registration Statement and the exhibits
thereto, as well as the reports, proxy statements and other information
concerning the Guarantor can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: Midwest Regional Office, Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and
Northeast Regional Office, 7 World Trade Center, 13th Floor, New York,
New York 10048. 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 Web site
(http://www.sec.gov) that contains reports, proxy statements and other
information regarding registrants that file electronically with the
Commission. The Common Stock of the Guarantor is quoted on the NASDAQ
National Market System, and such reports, proxy statements and other
information can also be inspected at the offices of NASDAQ Operations,
1735 K St., NW, Washington, DC.
This Prospectus does not contain all of the information set forth in
the Registration Statement and the exhibits thereto, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to the Registration Statement and to the
exhibits relating thereto for further information with respect to the
Issuer, the Guarantor and the Debt Securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Guarantor with the
Commission and are incorporated herein by reference: (i) the Guarantor's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996
and (ii) the Guarantor's Current Reports on Form 8-K dated January 20,
1997 and January 28, 1997.
All documents filed by the Guarantor with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
hereof and prior to the termination of the offering of the Debt
Securities shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained herein or 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 statement or document so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS MAY OBTAIN, WITHOUT
CHANGE UPON REQUEST, A COPY OF ANY AND ALL OF THE DOCUMENTS DESCRIBED
ABOVE OTHER THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY
INCORPORATED BY REFERENCE IN SUCH DOCUMENTS. WRITTEN REQUESTS SHOULD BE
MAILED TO KEYSTONE FINANCIAL, INC., ONE KEYSTONE PLAZA, FRONT AND MARKET
STREETS, P.O. BOX 3660, HARRISBURG, PA, 17105-3660, ATTENTION: BEN G.
ROOKE, SECRETARY. TELEPHONE REQUESTS SHOULD BE DIRECTED TO (717) 231-
5701.
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<PAGE>
KEYSTONE FINANCIAL, INC.
The Guarantor is a bank holding company incorporated under the laws
of Pennsylvania with its principal executive offices at One Keystone
Plaza, Front and Market Streets, P.O. Box 3660, Harrisburg, Pennsylvania
17105-3660 (telephone: 717-233-1555).
In terms of assets, the Guarantor is the fifth largest bank holding
company headquartered in Pennsylvania. Its banking subsidiaries are
American Trust Bank, N.A., Cumberland, Maryland ("American Trust Bank");
Frankford Bank, N.A., Horsham, Pennsylvania ("Frankford Bank"); Keystone
National Bank, Lancaster, Pennsylvania ("Keystone Bank"); Mid-State Bank
and Trust Company, Altoona, Pennsylvania ("Mid-State Bank"); Northern
Central Bank, Williamsport, Pennsylvania ("Northern Central Bank"); and
Pennsylvania National Bank and Trust Company, Pottsville, Pennsylvania
("Pennsylvania National Bank"). The Guarantor also has several non-bank
subsidiaries and divisions providing specialized services, including
Keystone Financial Mortgage Company, Lancaster, Pennsylvania; Martindale
Andres & Co. (an asset management firm), West Conshohocken, Pennsylvania;
and Keystone Financial Dealer Center, Williamsport, Pennsylvania.
The Guarantor's subsidiary banks provide a wide range of financial
products and services through a combined total of 145 community offices
located in central and southeastern Pennsylvania, western Maryland and
northeastern West Virginia. The Guarantor's subsidiary banks operate
under the "supercommunity" banking philosophy, functioning as local
community banks with a personalized service approach to customers while
at the same time taking advantage of the size of the Guarantor's
organization to provide a broad product line and gain operating and
management efficiencies through centralized banking operations. In
addition to traditional banking services provided by its community banks,
the Guarantor's non-bank subsidiaries deliver an array of services to
both the Guarantor and its customers, including brokerage, investment,
mortgage banking, leasing, and credit life and accident and health
insurance.
The Guarantor's common stock is traded in the over-the-counter
market under the symbol "KSTN" and is listed in the NASDAQ National
Market System.
At December 31, 1996, the Guarantor reported total assets of $5.231
billion, deposits of $4.097 billion, and net loans and leases of $3.509
billion. The Guarantor reported net income of $69,475,000, or $1.83 per
share for the year ended December 31, 1996. See "Keystone Financial,
Inc. Selected Historical Consolidated Financial Information" and
"Incorporation of Certain Documents by Reference."
On November 26, 1996, the Guarantor announced that it would acquire
First Financial Corporation of Western Maryland ("FFWM"), Cumberland,
Maryland (the "FFWM Merger"). FFWM, a thrift holding company with one
depositary institution subsidiary, First Federal Savings Bank of Western
Maryland, has approximately $361 million in assets and operates ten
community offices in Allegany, Garrett and Washington Counties, Maryland.
FFWM had net income of $1.2 million during the six months ended December
31, 1996, which produced an annualized return on average assets of .72%
and a return on average equity of 5.97%. Under terms of the acquisition
agreement, each shareholder of FFWM will receive common stock, at a fixed
exchange rate of 1.29 shares of the Guarantor for each FFWM share, or an
equivalent amount of cash. The stock issuance will amount to 55% to 60%
of the total consideration. Based on the $26.50 per share closing bid
price of the Guarantor on November 25, 1996, the value per share of FFWM
approximates $34.19 and aggregates $74 million. FFWM's banking operations
will be combined with those of American Trust Bank, the Guarantor's
member bank currently providing financial services to these markets. The
acquisition agreement is subject to approval by the shareholders of FFWM.
Completion
4
<PAGE>
of the acquisition, which will be accounted for as a purchase business
combination, is expected during the first half of 1997.
On December 20, 1996 the Guarantor announced that it would acquire
Financial Trust Corp ("FTC"), Carlisle, Pennsylvania (the "FTC Merger").
FTC, a bank holding company with four member banks and approximately $1.2
billion in assets, operates 48 community offices in seven counties in
Pennsylvania and Maryland. FTC's banking subsidiaries include, Financial
Trust Company, Carlisle, Pennsylvania; Chambersburg Trust Company,
Chambersburg, Pennsylvania; First National Bank and Trust Company,
Waynesboro, Pennsylvania; and Washington County National Bank,
Williamsport, Maryland. For the year ended December 31, 1996, FTC
reported net income of $20.0 million, or $2.35 per share, which produced
a return on average assets of 1.7% and a return on average equity of
14.01%. Under the terms of the agreement, each share of FTC will be
converted into 1.65 shares of the Guarantor, pursuant to a fixed exchange
ratio. Based on the $26.50 per share closing bid price of the Guarantor
on December 19, 1996, the value per share of FTC approximates $43.73 and
aggregates $373 million. The agreement is subject to approval by the
shareholders of both FTC and the Guarantor. Completion of the merger,
which will be accounted for as a pooling of interests, is expected during
the first half of 1997.
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
The Issuer, a wholly-owned subsidiary of the Guarantor incorporated
under the laws of Pennsylvania, functions primarily as a financing entity
for the Guarantor and its subsidiaries and affiliates through the
issuance of debt guaranteed by the Guarantor. Financial data for the
Issuer and the Guarantor are combined for financial reporting purposes
due to this limited function of the Issuer and the unconditional
guarantees of all of the Issuer's obligations by the Guarantor. The
principal office of the Issuer is located at One Keystone Plaza, Front
and Market Streets, P.O. Box 3660, Harrisburg, PA 17105-3660 (telephone:
(717) 233-1555).
CERTAIN LEGAL AND REGULATORY CONSIDERATIONS
The Issuer and the Guarantor are legal entities separate and
distinct from the Guarantor's bank subsidiaries, although the principal
source of the Guarantor's cash revenues are payments of dividends from
such subsidiaries. There are various legal limitations on the extent to
which the Guarantor's bank subsidiaries can finance or otherwise supply
funds to the Issuer, the Guarantor and certain of its other affiliates.
Provisions of federal banking law restrict the amount of dividends
that can be paid to the Guarantor by its national bank subsidiaries,
while state banking regulations limit the amount of dividends that can be
paid to the Guarantor by its state chartered bank subsidiaries. Under
applicable federal law, no dividends may be paid in an amount greater
than "undivided profits then on hand," after deduction therefrom of
certain loan losses. In addition, for each of the Guarantor's national
bank subsidiaries, prior approval of the Office of the Comptroller of the
Currency (the "Comptroller") is required if dividends declared by such
subsidiary in any calendar year will exceed its net profits (as defined)
for that year, combined with its retained net profits for the preceding
two calendar years, less any required transfers to surplus or a fund for
the retirement of preferred stock. Under applicable state law, dividends
may be declared only after any required transfer of net earnings to
surplus has been made. Dividends may be paid only out of accumulated net
earnings, which are the accumulated and undistributed net profits
recorded on the books of an institution for the last complete calendar or
fiscal year. Based on these regulations, the Guarantor's subsidiary
banks, without regulatory approval, had approximately $145 million
available for dividends at December 31, 1996.
5
<PAGE>
In addition, the Comptroller, in the case of national bank
subsidiaries, and the Federal Deposit Insurance Corporation ("FDIC"), in
the case of state bank subsidiaries, has authority to prohibit payment of
a dividend if such payment constitutes, what, in its opinion, is an
unsafe or unsound practice. The ability of the Guarantor and its
subsidiary banks to pay dividends may be affected by bank regulatory
requirements and agreements and minimum capital requirements. The rights
of the Guarantor, its shareholders and its creditors to participate in
any distribution of the assets or earnings of its subsidiaries is further
subject to the prior claims of creditors of the respective subsidiaries.
According to Federal Reserve Board policy, the Guarantor is expected
to act as a source of financial strength to each subsidiary bank and to
commit resources to support each subsidiary bank in circumstances in
which it might not do so absent such policy. In addition, any capital
loans by the Guarantor to any subsidiary bank would be subordinated in
right of payment to deposits and certain other indebtedness of each
subsidiary bank.
In addition, the Guarantor's subsidiary banks are subject to certain
restrictions imposed by Federal law on any extension of credit to, and
certain other transactions with the Guarantor, the Issuer and certain
other non-bank subsidiaries, on investments in stock or other securities
thereof and on the taking of such securities as collateral for loans.
Among other things, the aggregate of such loans made by each of the
Guarantor's subsidiary banks to the Guarantor or to any single non-bank
subsidiary generally may not exceed 10% of the sum of such bank's capital
and surplus, as defined, and all such loans by each of the Guarantor's
bank and non-bank subsidiaries are limited to 20% of such bank's capital
and surplus. Such loans must be secured by collateral with a value
between 100% and 130% of the loan amount, depending on the type of
collateral.
The Financial Institution Reform, Recovery, and Enforcement Act
("FIRREA") enacted in August 1989 provides among other things for cross-
guarantees of the liabilities of insured depository institutions pursuant
to which any bank or savings association subsidiary of a holding company
may be required to reimburse the FDIC for any loss or anticipated loss to
the FDIC that arises from a default of any of such holding company's
other subsidiary banks or savings associations or assistance provided to
such an institution in danger of default. The Guarantor's banking
subsidiaries are subject to such cross-guarantee.
USE OF PROCEEDS
Unless otherwise provided in the Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used by the Issuer
for general corporate purposes, including extensions of credit to the
Guarantor and its subsidiaries and affiliates, including the Guarantor's
banking subsidiaries. The Guarantor, including its banking subsidiaries,
will use the proceeds for general corporate purposes, including to
finance its acquisition of FFWM and possibly other acquisitions, and
repayment at maturity of commercial paper or other existing debt. The
precise amounts and timing of the application of proceeds will depend
upon funding requirements of the Guarantor and its subsidiaries and
affiliates and the amount of Debt Securities offered from time to time
pursuant to this Prospectus. If the Guarantor elects at the time of
issuance of Debt Securities to make different or more specific use of
proceeds other than as set forth herein, such use will be described in
the Prospectus Supplement.
In view of its anticipated requirements, the Issuer and the
Guarantor expect to engage, on a recurring basis, in additional private
or public financings of a character and amount to be determined as the
need arises. The Guarantor is continually evaluating acquisition
opportunities and frequently conducts due diligence activities in
connection with possible acquisitions both on an assisted and unassisted
basis. Acquisitions that may be under consideration at any time include,
without limitation, acquisitions of banking organizations and thrift or
savings-type associations or their assets or liabilities,
6
<PAGE>
acquisitions of other financial service companies or their assets or
liabilities or acquisition of other business or businesses closely
related to banking or their assets or liabilities.
7
<PAGE>
KEYSTONE FINANCIAL, INC.
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
The following unaudited selected historical consolidated financial
information for each of the five years in the period ended December 31,
1996, is derived from financial statements previously filed with the
Commission and incorporated by reference in this Prospectus. The
unaudited selected historical consolidated financial information is
qualified in its entirety by and should be read in conjunction with those
consolidated financial statements and related footnotes thereto.
The Issuer is a wholly-owned subsidiary of the Guarantor and has no
independent operations. The Issuer functions primarily as a financing
entity for the Guarantor and its subsidiaries and affiliates through the
issuance of debt fully and unconditionally guaranteed by the Guarantor.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
OPERATIONS:
Interest income......................................... $ 384,521 $ 363,931 $ 313,202 $ 307,755 $ 330,645
Interest expense........................................ 174,758 166,579 124,784 125,245 152,718
----------- ----------- ----------- ----------- -----------
Net interest income..................................... 209,763 197,352 188,418 182,510 177,927
Provision for credit losses............................. 9,858 7,859 9,484 7,940 16,053
Noninterest income...................................... 62,673 50,321 44,629 45,819 39,276
Noninterest expense..................................... 162,559 150,634 151,723 148,003 138,840
Income tax expense...................................... 30,544 27,866 20,481 21,037 16,568
----------- ----------- ----------- ----------- -----------
Net income.............................................. $ 69,475 $ 61,314 $ 51,359 $ 51,349 $ 45,742
----------- ----------- ----------- ----------- -----------
Pre-tax security gains, included in above............... $ 556 $ 1,317 $ 834 $ 1,669 $ 1,750
----------- ----------- ----------- ----------- -----------
PER SHARE (1):
Net income.............................................. $ 1.83 $ 1.73 $ 1.46 $ 1.47 $ 1.33
Cash dividends declared................................. .98 .93 .86 .79 .73
Dividend payout ratio (%)............................... 53.55 53.28 59.22 54.01 55.27
Average shares outstanding.............................. 38,045,585 35,462,358 35,093,138 34,956,927 34,475,862
BALANCES AT PERIOD END:
Loans and leases........................................ $ 3,553,662 $ 3,365,716 $ 3,193,405 $ 2,775,198 $ 2,785,335
Allowances for credit losses............................ 45,016 44,377 42,440 40,181 38,940
Total assets............................................ 5,231,268 5,074,785 4,706,000 4,419,726 4,311,779
Deposits................................................ 4,097,111 4,061,888 3,827,983 3,582,688 3,655,261
Long-term debt.......................................... 2,154 4,048 6,054 5,990 5,144
Shareholders' equity.................................... 507,307 480,694 407,774 412,880 378,314
Book value per share (1)................................ 13.38 12.69 11.64 11.77 10.86
SELECTED RATIOS (%):
Return on average assets................................ 1.37 1.29 1.16 1.19 1.08
Return on average equity................................ 14.11 14.06 12.71 12.98 12.58
Interest rate spread.................................... 3.75 3.77 4.04 4.07 4.02
Net interest margin..................................... 4.49 4.49 4.63 4.63 4.67
Equity to assets, average............................... 9.74 9.16 9.09 9.13 8.62
Loans to deposits at period end......................... 86.74 82.86 83.42 77.46 76.20
Allowance for credit losses to loans at period end...... 1.27 1.32 1.33 1.45 1.40
Nonperforming assets to loans and ORE................... .75 .78 .95 1.32 1.66
Loans 90 days past due.................................. .50 .44 .24 .14 .22
Total risk elements to loans and ORE at period end (2).. 1.25 1.22 1.19 1.46 1.88
RISK-ADJUSTED CAPITAL RATIOS (%):
Leverage ratio.......................................... 9.64 9.28 8.84 9.18 8.66
"Tier 1" capital ratio.................................. 13.54 13.65 12.96 14.05 13.06
"Total" capital ratio................................... 14.77 14.83 14.21 15.30 14.26
RATIO OF EARNINGS TO FIXED CHARGES:
Excluding interest on deposits.......................... 5.19 4.18 5.62 6.90 8.39
Including interest on deposits.......................... 1.57 1.53 1.57 1.57 1.40
</TABLE>
- ----------
(1) The Guarantor's per share amounts have been restated to reflect a 3-
for-2 stock split, in the form of a 50% stock dividend, in 1996.
(2) Total risk elements include nonperforming assets and loans past due
90 days or more.
8
<PAGE>
KEYSTONE FINANCIAL, INC. AND FINANCIAL TRUST CORP
PRO FORMA COMBINED CONDENSED STATEMENT OF CONDITION
DECEMBER 31, 1996
(UNAUDITED)
The FTC Merger will be accounted for by the Guarantor under the
pooling of interests method of accounting, which views the FTC Merger as
a uniting of the separate ownership interests of the Guarantor and FTC
through an exchange of shares. As such, the pro forma financial
information which follows represents the combined historical financial
data of the Guarantor and FTC, subject only to certain adjustments
described in the notes to the data presented. Certain reclassifications
have been made to conform FTC's presentation with the Guarantor's
presentation. There is no impact on net income from these
reclassifications. Intercompany transactions between the Guarantor and
FTC are immaterial and, accordingly, have not been eliminated.
The FFWM Merger will be accounted for by the Guarantor under the
purchase method of accounting. Pro forma financial information
concerning the FFWM Merger is not included herein. The addition of FFWM
would not have materially affected the pro forma combined financial
information as presented.
The pro forma financial information is unaudited and is not
necessarily indicative of the financial condition or the results of
operations of the Guarantor as they would have been had the FTC Merger
been effective during the periods presented, or as they may be in the
future. The pro forma financial information should be read in
conjunction with the historical financial statements of the Guarantor,
including the notes thereto, incorporated by reference herein. See
"Incorporation of Certain Documents by Reference."
The following unaudited pro forma combined condensed statement of
condition combines in condensed form the consolidated statement of
condition of the Guarantor and the consolidated balance sheet of FTC as
of December 31, 1996 with certain pro forma adjustments described in the
notes below. This statement should be read in conjunction with the
historical financial statements of the Guarantor, including the notes
thereto; the notes to this pro forma combined condensed statement of
condition; and the pro forma combined condensed statements of income,
including the notes thereto.
<TABLE>
<CAPTION>
COMBINED
GUARANTOR
GUARANTOR FTC PRO FORMA AND FTC
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
----------- ----------- ----------- -----------
(in thousands)
<S> <C> <C> <C> <C>
ASSETS:
Cash and due from banks................... $ 167,403 $ 39,569 $ 206,972
Federal funds sold and other.............. 78,354 3,059 81,413
Investment securities available for sale.. 856,380 353,714 1,210,094
Investment securities held to maturity.... 379,958 -- 379,958
Assets held for resale.................... 51,225 -- 51,225
Loans and leases.......................... 3,553,662 782,808 4,336,470
Allowance for credit losses............... (45,016) (11,240) (56,256)
---------- ---------- ----------
Net loans................................. 3,508,646 771,568 4,280,214
Premises and equipment.................... 74,407 23,525 97,932
Other assets.............................. 114,895 27,876 142,771
---------- ---------- ----------
TOTAL ASSETS.............................. $5,231,268 $1,219,311 $6,450,579
---------- ---------- ----------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
COMBINED
GUARANTOR
GUARANTOR FTC PRO FORMA AND FTC
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
----------- ----------- ----------- -----------
(in thousands)
<S> <C> <C> <C> <C>
LIABILITIES:
Noninterest-bearing deposits.......................... $ 511,931 $ 113,605 $ 625,536
Interest-bearing deposits............................. 3,585,180 849,005 4,434,185
---------- ---------- ----------
Total deposits........................................ 4,097,111 962,610 5,059,721
Fed Funds purchased & security repurchase agreements.. 299,895 68,991 368,886
Other short-term borrowings........................... 26,175 2,903 29,078
---------- ---------- ----------
Total short-term borrowings........................... 326,070 71,894 397,964
FHLB borrowings....................................... 205,929 18,274 224,203
Long-term debt........................................ 2,154 419 2,573
Other liabilities..................................... 92,697 13,015 105,712
---------- ---------- ----------
TOTAL LIABILITIES..................................... 4,723,961 1,066,212 5,790,173
---------- ---------- ----------
SHAREHOLDERS' EQUITY:
Preferred stock....................................... -- -- --
Common stock.......................................... 76,456 42,703 (14,519)(1) 104,640
Surplus............................................... 73,201 51,493 14,519 (1) 139,213
Retained earnings..................................... 368,172 53,846 422,018
Deferred KSOP benefit expense......................... (1,249) __ (1,249)
Treasury stock........................................ (8,186) (226) (8,412)
Net unrealized securities gains (losses), net of tax.. (1,087) 5,283 4,196
---------- ---------- --------- ----------
TOTAL SHAREHOLDERS' EQUITY............................ 507,307 153,099 -- 660,406
---------- ---------- --------- ----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY.............. $5,231,268 $1,219,311 -- $6,450,579
---------- ---------- --------- ----------
</TABLE>
- ----------
(1) To transfer the common stock of FTC to surplus and reflect the
issuance of 1.65 shares of Common Stock of the Guarantor for each
outstanding share of FTC Common Stock.
10
<PAGE>
KEYSTONE FINANCIAL, INC. AND FINANCIAL TRUST CORP
PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
The FTC Merger will be accounted for as a pooling of interests.
Accordingly, the following unaudited pro forma combined condensed
statements of income result from the combination of historical
consolidated condensed statements of income of the Guarantor and FTC for
each period presented. These statements should be read in conjunction
with the historical financial statements of the Guarantor, including the
notes thereto; the notes to these pro forma combined condensed statements
of income; and the pro forma combined condensed statement of condition,
including the notes thereto. The pro forma combined results are not
necessarily indicative of the results that would have been obtained had
the FTC Merger been effective during the periods presented or of the
combined results of future operations.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1996 1995 1994
----------- ----------- -----------
(in thousands except per share
amounts and shares outstanding)
<S> <C> <C> <C>
INTEREST INCOME:
Loans and fees on loans................................ $ 370,364 $ 353,025 $ 296,492
Investment securities.................................. 92,700 83,062 84.494
Other.................................................. 10,356 10,699 5,908
----------- ----------- -----------
473,420 446,786 386,894
INTEREST EXPENSE:
Deposits............................................... 186,257 176,571 137,103
Short-term borrowings.................................. 14,506 12,910 8,418
FHLB borrowings........................................ 10,175 10,827 6,446
Long-term debt......................................... 363 467 496
----------- ----------- -----------
211,301 200,775 152,463
----------- ----------- -----------
NET INTEREST INCOME 262,119 246,011 234,431
Provision for credit losses............................ 10,713 8,568 10,324
----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES.. 251,406 237,443 224,107
Other Income........................................... 71,525 58,137 51,921
Other expense.......................................... 196,245 182,130 182,333
----------- ----------- -----------
INCOME BEFORE INCOME TAXES............................. 126,686 113,450 93,695
Applicable income tax expense.......................... 37,180 34,001 25,907
----------- ----------- -----------
NET INCOME............................................. $ 89,506 $ 79,449 $ 67,788
----------- ----------- -----------
AVERAGE NUMBER OF SHARES OUTSTANDING (1)............... 52,118,819 49,557,082 49,188,960
----------- ----------- -----------
EARNINGS PER SHARE..................................... $1.72 $1.60 $1.38
----------- ----------- -----------
</TABLE>
- ----------
(1) The average number of shares outstanding reflects the Guarantor's
historical shares outstanding, adjusted for the 1996 three-for-two
stock split, plus the historical shares outstanding of FTC, adjusted
for the 1996 10% stock dividend, multiplied by the FTC Merger
exchange ratio of 1.65.
11
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either Senior Debt Securities or
Subordinated Debt Securities of the Issuer which will be unconditionally
guaranteed as to payment of principal, premium, if any, and interest, if
any, by the Guarantor. The Senior Debt Securities will be issued under an
indenture dated as of _______ __, 1997 (the "Senior Indenture"), between
the Issuer, the Guarantor and Bankers Trust Company, as senior trustee
(the "Senior Trustee"). The Subordinated Debt Securities will be issued
under an indenture dated as of ______ __, 1997 (the "Subordinated
Indenture"), between the Issuer, the Guarantor and Bankers Trust Company,
as subordinated trustee (the "Subordinated Trustee"). The Senior
Indenture and Subordinated Indenture are collectively referred to herein
as the "Indentures." The Senior Trustee and the Subordinated Trustee are
referred to herein individually or collectively as the "Trustee." A copy
of each of the Indentures has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
The Trustee shall not be responsible for the acts, obligations,
liabilities or responsibilities of any successor trustee. The following
summaries of certain provisions of the Indentures do not purport to be
complete and are subject to, and are qualified in their entirety by
reference to, all the provisions of the Indentures, including the
definitions therein of certain terms. Wherever particular sections or
defined terms of the Indentures are referred to, it is intended that such
sections or definitions shall be incorporated herein by reference. The
following summaries set forth certain general terms and provisions of the
Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus
Supplement, and the extent, if any, to which such general provisions may
apply to the Debt Securities so offered, will be described in the
Prospectus Supplement relating to such Debt Securities. Unless otherwise
indicated, section references contained herein refer to both the Senior
Indenture and the Subordinated Indenture.
Because the Guarantor is a holding company, its rights and the
rights of its creditors, including the Holders of the Debt Securities
offered hereby, to participate in the assets of any subsidiary upon the
latter's bankruptcy, conservatorship, receivership, liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
creditors (including, in the case of any bank subsidiary, its depositors)
except to the extent that the Guarantor may itself be a creditor with
recognized claims against the subsidiary. In addition, there are certain
regulatory and other limitations on the payments of dividends and on
loans and other transfers of funds to the Guarantor by the Guarantor's
subsidiary banks. See "Certain Legal and Regulatory Considerations."
GENERAL
The Debt Securities to be offered by this Prospectus are limited to
the amounts described on the cover of this Prospectus. The Indentures,
however, do not limit the aggregate principal amount of Debt Securities
which may be issued thereunder and provide that Debt Securities may be
issued from time to time in one or more series. The Debt Securities will
be unsecured obligations of the Issuer. Neither the Indentures nor the
Debt Securities will limit or otherwise restrict the amount of other
indebtedness which may be incurred or other securities which may be
issued by the Issuer, the Guarantor or any of their affiliates. The
Senior Debt Securities will rank pari passu with all other unsecured
unsubordinated indebtedness of the Issuer and the Senior Guarantees will
rank pari passu with all other unsecured and unsubordinated obligations
of the Guarantor. The indebtedness represented by the Subordinated Debt
Securities and the related Guarantees will be subordinated as described
below under "Certain Terms Relating to Subordinated Debt Securities" and
"Guarantees."
Reference is made to the Prospectus Supplement relating to the
particular series of Debt Securities offered thereby for the following
terms, where applicable, of the Debt Securities in respect of which this
Prospectus is being delivered: (1) the title of the Debt Securities; (2)
the limit, if any, on
12
<PAGE>
the aggregate principal amount or initial public offering price of the
Debt Securities; (3) the priority of payment of such Debt Securities; (4)
the price or prices (which may be expressed as a percentage of the
aggregate principal amount thereof) at which the Debt Securities will be
issued; (5) the date or dates on which the Debt Securities will mature;
(6) the rate or rates (which may be fixed or variable) per annum at which
the Debt Securities will bear interest, if any, and the method of
determining the same; (7) the date from which such interest, if any, on
the Debt Securities will accrue, the date or dates on which such
interest, if any, will be payable, the dates on which payment of such
interest, if any, will commence and the Regular Record Dates for such
Interest Payment Dates, if any; (8) the extent to which any of the Debt
Securities will be issuable in temporary or permanent global form and, if
so, the identity of the depositary for such global Debt Securities, or
the manner in which any interest payable on a temporary or permanent
global Debt Security will be paid; (9) the dates, if any, on which, and
the price or prices at which, the Debt Securities will, pursuant to any
mandatory sinking fund provisions, or may, pursuant to any optional
sinking fund or to any purchase fund provisions, be redeemed by the
Issuer, and the other detailed terms and provisions of such sinking
and/or purchase funds; (10) the date, if any, after which, and the price
or prices at which, the Debt Securities may, pursuant to any optional
redemption provisions, be redeemed at the option of the Issuer or the
Holder thereof and the other detailed terms and provisions of such
optional redemption; (11) the denomination or denominations in which such
Debt Securities are authorized to be issued; (12) whether any of the Debt
Securities will be issued in bearer form and, if so, any limitations on
issuance of such bearer Debt Securities (including exchange for
registered Debt Securities of the same series); (13) information with
respect to book-entry procedures; (14) whether any of the Debt Securities
will be issued as Original Issue Discount Securities; (15) each office or
agency where, subject to the terms of the applicable Indenture, such Debt
Securities may be presented for registration of transfer or exchange;
(16) any other terms of the series (which will not be inconsistent with
the provisions of the applicable Indenture); (17) the currencies or
currency units in which such Debt Securities are issued and in which the
principal of, interest on and additional amounts, if any, in respect of
such Debt Securities will be payable; (18) whether the amount of payments
of principal of or interest on such Debt Securities may be determined
with reference to an index, formula or other method (which index, formula
or method may, but need not be, based on a currency, currencies, currency
unit or units or composite currency or currencies) and the manner in
which such amounts shall be determined; (19) whether the Issuer or a
Holder may elect payment of the principal of or interest on such Debt
Securities in a currency, currencies, currency unit or units or composite
currency or currencies other than that in which such Debt Securities are
denominated or stated to be payable, the period or periods within which,
and the terms and conditions upon which, such election may be made, and
the time and manner of determining the exchange rate between the coin or
currency, currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are denominated or stated to be
payable and the coin or currency, currencies, currency unit or units or
composite currency or currencies in which such Debt Securities are to be
so payable; (20) if other than the Trustee, the identity of the Security
Registrar and/or Paying Agent and the designation of the initial Exchange
Rate Agent; (21) if applicable, the defeasance of certain obligations by
the Issuer pertaining to Debt Securities of the series; (22) the Person
to whom any interest on any Registered Security of the series shall be
payable, if other than the Person in whose name that Debt Security (or
one or more predecessor Debt Securities) is registered at the close of
business on the Regular Record Date for such interest, the manner in
which, or the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and
surrender of the coupons appertaining thereto as they severally mature,
and the extent to which, or the manner in which,
any interest payable on a temporary global Debt Security on an Interest
Payment Date will be paid if other than in the manner provided in the
related Indenture; (23) if such Debt Securities are to be issued upon the
exercise of warrants, the time, manner and place for the Debt Securities
to be authenticated and delivered; (24) whether and under what
circumstances the Issuer will pay additional amounts as contemplated by
Section 1104 of the related Indenture (the term "interest," as used in
this Prospectus, shall include such additional amounts) on such Debt
Securities to any Holder who is not a United States person (including any
modification to the definition of such
13
<PAGE>
term as contained in the Indenture as originally executed) in respect of
any tax, assessment or governmental charge and, if so, whether the Issuer
will have the option to redeem such Debt Securities rather than pay such
additional amounts (and the terms of any such option); (25) any other
terms of such Debt Securities. Neither Indenture limits the aggregate
principal amount of Debt Securities that may be issued thereunder or of
any particular series of such Debt Securities and both Indentures provide
that, in addition to the Debt Securities, additional Debt Securities may
be issued thereunder from time to time in one or more series (Section
301). All Debt Securities issued under each Indenture will rank equally
and ratably with any additional Debt Securities issued under such
Indenture.
Debt Securities may be issued as Original Issue Discount Securities
(bearing no interest or interest at a rate which at the time of issuance
is below market rates) to be sold at a substantial discount below their
face amount. In the event of an acceleration of the maturity of any
Original Issue Discount Security, the amount payable to the Holder of
such Original Issue Discount Security upon such acceleration will be
determined in accordance with the applicable Prospectus Supplement, the
terms of such security and the applicable Indenture, but will be an
amount less than the amount payable at the maturity of the principal of
such Original Issue Discount Security.
Special federal income tax and other considerations relating thereto
will be described in the applicable Prospectus Supplement.
The provisions of the Indentures described below under "Restrictive
Covenants" are the only provisions which would provide protection to
Holders in the event of a highly leveraged transaction involving the
Issuer.
ACCELERATION OF MATURITY
If any Event of Default with respect to Debt Securities of the
Issuer of any series at the time Outstanding shall occur and be
continuing, then and in every such case the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Debt Securities of
that series may declare to be due and payable immediately by a notice in
writing to the Issuer and the Guarantor (and to the Trustee if given by
Holders) the principal amount or, if the Debt Securities of that series
are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series, of all Debt
Securities of that series. However, at any time after such a declaration
of acceleration with respect to Debt Securities of any series has been
made, but before a judgment or decree based on such acceleration has been
obtained, the Holders of a majority in principal amount of Outstanding
Debt Securities of that series may, under certain circumstances, rescind
and annul such acceleration if all Events of Default, except, in the case
of Senior Debt Securities, the non-payment of acceleration of principal,
of that series have been cured or waived as provided in the Indentures
(Section 602). Reference is made to the Prospectus Supplement relating
to each series of Debt Securities which are Original Issue Discount
Securities for the particular provisions relating to acceleration of the
Maturity of a portion of the principal amount of such Original Issue
Discount Securities upon the occurrence of an Event of Default and the
continuation thereof.
REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENT
Unless otherwise indicated in the applicable Prospectus Supplement,
each series of Debt Securities will be issued in registered form only,
without coupons. The Indentures, however, provide that the Issuer may
also issue Debt Securities in bearer form only, or in both registered and
bearer form. Debt Securities issued in bearer form shall have interest
coupons attached, unless issued as zero coupon securities. Debt
Securities in bearer form shall not be offered, sold, resold or delivered
in connection with their original issuance in the United States or to any
United States person (as defined below) other than offices located
outside the United States of certain United States financial
14
<PAGE>
institutions. As used herein, "United States person" means any citizen
or resident of the United States, any corporation, partnership or other
entity created or organized in or under the laws of the United States, or
any estate or trust, the income of which is subject to United States
federal income taxation regardless of its source, and "United States"
means the United States of America (including the states thereof and the
District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction. Purchasers of Debt Securities in bearer form
will be subject to certification procedures and may be affected by
certain limitations under United States tax laws. Such procedures and
limitations will be described in the Prospectus Supplement relating to
the offering of the Debt Securities in bearer form.
Unless otherwise indicated in the applicable Prospectus Supplement,
Debt Securities will be issued in denominations of $100,000 and integral
multiples of $1,000 in excess thereof. No service charge will be made
for any transfer or exchange of the Debt Securities, but the Issuer may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Presently, the
Issuer is not aware of any taxes or other governmental charges that would
be payable in connection with any transfer or exchange of a Debt
Security. However, such taxes or charges may be imposed in the future.
Unless otherwise described in the Prospectus Supplement relating thereto,
the principal, premium, if any, and interest, if any, of or on the Debt
Securities will be payable, and transfer of the Debt Securities will be
registrable, at the office of Bankers Trust Company, as Paying Agent and
Security Registrar under the Indenture, in New York, New York, provided
that payments of interest may be made at the option of the Issuer by
check mailed to the address appearing in the Security Register of the
person in whose name such Registered Security is registered at the close
of business on the Regular Record Date (Sections 305 and 307).
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal of, premium, if any, and interest, if any, on Debt
Securities in bearer form will be made payable, subject to any applicable
laws and regulations, at such office outside the United States as
specified in the Prospectus Supplement and as the Issuer may designate
from time to time, at the option of the Holder, by check or by transfer
to an account maintained by the payee with a bank located outside the
United States. Unless otherwise indicated in the applicable Prospectus
Supplement, payment of interest and certain additional amounts on Debt
Securities in bearer form will be made only against surrender of the
coupon relating to such Interest Payment Date. No payment with respect
to any Debt Security in bearer form will be made at any office or agency
of the Issuer in the United States or by check mailed to any address in
the United States or by transfer to an account maintained with a bank
located in the United States.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities ("Global Securities") that will
be deposited with, or on behalf of, a depository (the "Depository")
identified in the Prospectus Supplement relating to such series. Global
Securities may be issued in either registered or bearer form and in
either temporary or permanent form. Unless and until it is exchanged in
whole or in part for individual certificates evidencing Debt Securities
in definitive form represented thereby, a Global Security may not be
transferred except as a whole by the Depository for such Global Security
to a nominee of such Depository or by a nominee of such Depository to
such Depository or another nominee of such Depository or by such
Depository or any such nominee to a successor of such Depository or a
nominee of such successor.
The specific terms of the depositary arrangement with respect to a
series of Debt Securities and certain limitations and restrictions
relating to a series of Bearer Securities, will be described in the
Prospectus Supplement relating to such series.
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RESTRICTIVE COVENANTS
The Senior Indenture contains a covenant by the Guarantor limiting
its ability to dispose of the Voting Stock of the Issuer or any Major
Constituent Bank. A "Major Constituent Bank" is defined to mean any
Banking Subsidiary of the Guarantor whose Consolidated Banking Assets
constitute 20% or more of the Guarantor's Consolidated Banking Assets.
Currently, Frankford Bank, Mid-State Bank, Northern Central Bank and
Pennsylvania National Bank each qualify as a Major Constituent Bank. Such
covenant provides that, subject to certain exceptions, so long as any of
the Senior Debt Securities are outstanding, the Guarantor: (a) will not,
nor will it permit any Subsidiary to, sell, assign, transfer or otherwise
dispose of any shares of, or securities convertible into, or options,
warrants or rights to subscribe for or purchase shares of, Voting Stock
of the Major Constituent Banks or the Issuer, nor will the Guarantor
permit the Major Constituent Banks or the Issuer to issue any shares of,
or securities convertible into, or options, warrants or rights to
subscribe for or purchase shares of, Voting Stock of the Major
Constituent Banks or the Issuer, unless the Guarantor will own, directly
or indirectly, at least 80% of the issued and outstanding Voting Stock of
such Major Constituent Bank or the Issuer, as the case may be, after
giving effect to such transaction; or (b) will not permit the Issuer or a
Major Constituent Bank to either (i) merge or consolidate with or into
any corporation (other than the Guarantor), unless at least 80% of the
surviving corporation's Voting Stock is, or upon consummation of the
merger or consolidation will be, owned, directly or indirectly, by the
Guarantor and the Consolidated Banking Assets of the Guarantor are at
least equal to what they were prior to such transaction or (ii) lease,
sell or transfer all or substantially all of its properties or assets to
any corporation or other person (other than the Guarantor), unless 80% of
the Voting Stock of such corporation or other person is owned, or will be
owned upon such lease, sale or transfer, directly or indirectly, by the
Guarantor (Section 1107).
MODIFICATION AND WAIVER
Each Indenture provides that modifications and amendments may be
made by the Issuer and the Senior Trustee or the Subordinated Trustee, as
applicable, with the consent of the Holders of a majority in principal
amount of the Outstanding Debt Securities of each series affected
thereby; provided, however, that no such modification or amendment may,
without the consent of the Holder of each Outstanding Debt Security
affected thereby, (a) change the stated maturity date of the principal
of, or any installment of principal of or interest on, any Debt Security,
(b) reduce the principal amount of, or the premium (if any) or interest
(if any) on, or additional amounts, if any, in respect of, any Debt
Security, (c) change the place or currency of payment of principal of, or
premium (if any) or interest (if any) on, any Debt Security, (d) impair
the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security, (e) reduce the above-stated percentage of
Outstanding Debt Securities of any series the consent of the Holders of
which is required to modify or amend the related Indenture, (f) reduce
the percentage in principal amount of Outstanding Debt Securities of any
series the consent of the Holders of which is required for waiver of
compliance with certain provisions of the related Indenture or for waiver
of certain defaults, (g) modify (with certain exceptions) any provision
of the Indentures relating to modification and amendment of such
Indenture or waiver of compliance with conditions and defaults
thereunder, (h) modify or affect in any manner adverse to a Holder the
terms and conditions of the Guarantees, (i) with respect to the
Subordinated Indenture, alter in any respect the provisions regarding
subordination of the Debt Securities issued thereunder, or (j) reduce the
principal amount of Original Issue Discount Securities which could be
declared due and payable upon acceleration of maturity thereof (Section
1002).
The Holders of a majority in principal amount of the Outstanding
Debt Securities of any series may on behalf of the Holders of all Debt
Securities of that series waive, insofar as that series is concerned,
compliance by the Issuer or the Guarantor, as the case may be, with
certain restrictive provisions of the Indentures (Section 1110). The
Holders of a majority in principal amount of the
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<PAGE>
Outstanding Debt Securities of any series may on behalf of the Holders of
all Debt Securities of that series waive any past default under the
applicable Indenture with respect to that series, except a default in the
payment of the principal of (or premium, if any) or interest, if any, on
any Debt Security of that series or in respect of a provision which under
the applicable Indenture cannot be modified or amended without the
consent of the Holder of each Outstanding Debt Security of that series
affected (Section 613).
Modification and amendment of either of the Indentures may be made
by the Issuer and the Trustee without the consent of any Holder for any
of the following purposes: (i) to evidence the succession of another
corporation to the Issuer; (ii) to add to the covenants of the Issuer for
the benefit of the Holders of all or any series of Debt Securities; (iii)
to add Events of Default; (iv) to add or change any provisions of either
of the Indentures to facilitate the issuance of Bearer Securities; (v) to
add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities; (vi) to establish the form or
terms of Debt Securities of any series and any related coupons; (vii) to
provide for the acceptance of appointment by a successor Trustee; (viii)
to cure any ambiguity, defect or inconsistency in the Indenture, provided
such action does not adversely affect the interests of Holders of Debt
Securities of any series or any related coupons in any material respect;
(ix) to modify, eliminate or add to the provisions of either of the
Indentures to such extent as is necessary to effect qualification under
the Trust Indenture Act of 1939, as amended, or (x) to effect the
assumption by the Issuer of the obligations under either of such
Indentures (Section 1001).
Consents of Holders for modifications and amendments to the
Indenture must be solicited by the Issuer, and waivers by Holders of
compliance with provisions under the Indenture must be obtained in
accordance with, the terms of the applicable Indenture (Section 104).
Any such modifications, amendments or waivers will be binding upon all
future Holders of Debt Securities. To the extent that consents are
properly obtained and all requirements for any changes, amendments or
waivers are otherwise satisfied, there are no provisions in either
Indenture which allow remedies to Holders who do not consent to changes
or amendments to, or waivers of past defaults under, the applicable
Indenture.
OUTSTANDING DEBT SECURITIES
In determining whether the Holders of the requisite principal amount
of Outstanding Debt Securities have given any request, demand,
authorization, direction, notice, consent or waiver under each Indenture,
(i) the portion of the principal amount of an Original Issue Discount
Security that shall be deemed to be Outstanding for such purposes shall
be that portion of the principal amount thereof that could be declared to
be due and payable pursuant to the terms of such Original Issue Discount
Security as of the date of such determination, and (ii) the principal
amount of a Debt Security denominated in a foreign currency or currencies
shall be the U.S. dollar equivalent, determined on the settlement date
therefor, of the principal amount of such Debt Security (Section 101).
ADDITIONAL PROVISIONS
The Indentures provide that the Senior Trustee or the Subordinated
Trustee, as the case may be, will be under no obligation, subject to the
duty of such Trustee during a default thereunder to act with the required
standard of care, to exercise any of its rights or powers under the
related Indenture at the request or direction of any of the Holders,
unless such Holders shall have offered such Trustee reasonable indemnity
(Section 701). Subject to such provisions for indemnification of the
related Trustee, the Holders of a majority in principal amount of the
Outstanding Debt Securities of any series will have the right to direct
the time, method and place of conducting any proceeding for any remedy
17
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available to the related Trustee, or exercising any trust or power
conferred on such Trustee, with respect to the Debt Securities of that
series (Section 612).
No holder of any Debt Security of any series will have the right to
institute any proceeding with respect to the Indenture under which such
Holder's Debt Securities were issued for any remedy thereunder, unless:
(a) such Holder shall have previously given to the Trustee written notice
of a continuing Event of Default with respect to the Debt Securities of
that series; (b) the Holders of no less than 25% in principal amount of
the Outstanding Senior Debt Securities or Subordinated Debt Securities,
as the case may be, of that series shall have made written request, and
offered reasonable indemnity, to the related Trustee to institute such
proceeding as Trustee; (c) the related Trustee shall not have received
from the Holders of a majority in principal amount of the Outstanding
Senior Debt Securities or Subordinated Debt Securities, as the case may
be, of that series a direction inconsistent with such request and (d) the
related Trustee shall have failed to institute such proceeding within 60
days after its receipt of such notice, request and offer of indemnity
(Section 607).
However, the Holder of any Debt Security will have an absolute and
unconditional right to receive payment of the principal of (and premium,
if any) and interest, if any, on such Debt Security on or after the due
dates expressed in such Debt Security and to institute suit for the
enforcement of any such payment (Section 608).
The Issuer is required to furnish to the Senior Trustee or the
Subordinated Trustee, as applicable, annually a statement as to
performance or fulfillment of certain of its obligations under the
applicable Indenture and as to any default in such performance or
fulfillment (Sections 1105 and 1106).
Each of the Issuer and the Guarantor may consolidate with, merge
into, or transfer substantially all of its properties to, any other
corporation provided that the successor corporation assumes all of its
obligations of the Issuer or the Guarantor under the Debt Securities and
the Guarantees, as the case may be, and provided that certain other
conditions are met (Sections 901, 902, 903 and 904). In addition, the
Guarantor may, by supplemental indenture, assume all of the obligations
of the Issuer under either Indenture to pay principal of (and premium, if
any) and interest on and additional amounts in respect of Debt Securities
issued thereunder and to perform every covenant of such Indenture on the
part of the Issuer to be performed (Section 905).
CERTAIN TERMS RELATING TO SENIOR DEBT SECURITIES
The Senior Debt Securities will be direct, unsecured obligations of
the Issuer and will rank pari passu with all outstanding and future
senior indebtedness of the Issuer.
EVENTS OF DEFAULT
The following will be Events of Default under the Senior Indenture
with respect to Debt Securities of any series issued thereunder: (a)
failure to pay principal of or premium, if any, on any Senior Debt
Security of that series when due; (b) failure to pay any interest, if
any, or any additional amounts, if any, on any Senior Debt Security of
that series when due, and continuance of such default for 30 days; (c)
failure to deposit any sinking fund payment, when due, in respect of any
Senior Debt Security of that series; (d) failure to perform any other
covenant of the Issuer or the Guarantor in such Indenture and the related
Guarantees, (other than a covenant included in the Indenture solely for
the benefit of a series of Senior Debt Securities other than that
series), continued for 60 days after written notice as provided in the
Indenture; (e) acceleration of indebtedness in principal amount in excess
of $5,000,000 for money borrowed by the Issuer, the Guarantor or any
Major Constituent Bank under the terms of the instrument under which such
indebtedness is issued or secured, if such acceleration is not
18
<PAGE>
annulled, or such indebtedness is not discharged, within 30 days after
written notice as provided in the Indenture; (f) certain events in
bankruptcy, insolvency or reorganization of the Issuer, the Guarantor or
any Major Constituent Bank; and (g) any other Event of Default provided
with respect to Senior Debt Securities of that series (Senior Indenture,
Section 601).
CONCERNING THE TRUSTEE
The Issuer and the Guarantor have, from time to time, engaged in
transactions with the Trustee in the ordinary course of its business.
CERTAIN TERMS RELATING TO SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will be direct, unsecured
obligations of the Issuer and will rank in priority of payment with
outstanding and future indebtedness of the Issuer as set forth below.
SUBORDINATION
During the continuance beyond any applicable grace period of any
default with respect to Senior Issuer Indebtedness, no payment of
principal of and interest on the Subordinated Debt Securities shall be
made by the Issuer until payment in full of all principal of and premium
and interest on such Senior Issuer Indebtedness. In addition, upon any
distribution of assets of the Issuer, upon any dissolution, winding up,
liquidation or reorganization, the payment of the principal of and
interest on the Subordinated Debt Securities is to be subordinated to the
extent provided in the Subordinated Indenture in right of payment to the
prior payment in full of principal, premium and interest on all Senior
Issuer Indebtedness. By reason of such subordination, in the event of
the dissolution of the Issuer, holders of Senior Issuer Indebtedness may
receive more, ratably, and holders of the Subordinated Debt Securities
may receive less, ratably, then the other creditors of the Issuer. Such
subordination will not prevent the occurrence of any Event of Default
under the Subordinated Indenture (Subordinated Indenture, Article
Sixteen).
For purposes of the preceding paragraph, the term "Senior Issuer
Indebtedness" means any indebtedness or other obligation of the Issuer,
whether outstanding at the date of execution of the Indentures or
thereafter incurred, except indebtedness or obligations expressly
subordinated in right of payment to the Subordinated Debt Securities or
ranking on a parity with the Subordinated Debt Securities (Subordinated
Indenture, Section 101). As of the date hereof, the Issuer had no Senior
Issuer Indebtedness outstanding.
EVENT OF DEFAULT
An Event of Default will be defined under the Subordinated Indenture
with respect to Subordinated Debt Securities of any series issued
thereunder as certain events in bankruptcy, insolvency or reorganization
of the Issuer, the Guarantor or any Major Constituent Bank.
The Subordinated Indenture does not provide for any right of
acceleration of the payment of the principal of a series of Subordinated
Debt Securities upon a default in the payment of principal or interest or
a default in the performance of any covenant or agreement in the
Subordinated Debt Securities of a particular series or in the
Subordinated Indenture. In the event of a default in the payment of
interest or principal, the Holder of a Subordinated Debt Security (or the
Subordinated Trustee on behalf of the Holders of all of the series of
Subordinated Debt Securities so affected) may, subject to certain
limitations and conditions, seek to enforce payment of such interest or
principal.
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GUARANTEES
The Senior Debt Securities will be fully and unconditionally
guaranteed by the Guarantor as to payment of principal, premium, if any,
and interest, if any, when and as the same shall become due and payable,
whether at maturity or upon redemption, repayment or otherwise. The
Senior Guarantees will rank pari passu with all other unsecured and
unsubordinated obligations of the Guarantor.
The Subordinated Debt Securities will be fully and unconditionally
guaranteed by the Guarantor, on a subordinated basis, as to payment of
principal, premium, if any, and interest, if any, when and as the same
shall become due and payable, whether at maturity or upon redemption,
repayment or otherwise. The Subordinated Guarantees will be unsecured and
will be subordinated to all outstanding and future Senior Guarantor
Indebtedness to the same extent that Subordinated Debt Securities issued
by the Issuer are subordinated to all outstanding and future Senior
Issuer Indebtedness.
For purposes of the preceding paragraph, the term "Senior Guarantor
Indebtedness" will be defined to mean any indebtedness or other
obligation of the Guarantor, whether outstanding at the date of execution
of the Indentures or thereafter incurred, except indebtedness or
obligations expressly subordinated in right of payment to the
Subordinated Guarantees or ranking on a parity with the Subordinated
Guarantees (Subordinated Indenture, Section 101). As of December 31,
1996, the Guarantor had approximately $1,250,000 principal amount of
Senior Guarantor Indebtedness outstanding, excluding trade payables,
guarantees and other contingent obligations of the Guarantor.
The obligations of the Guarantor under the Guarantees will be full
and unconditional regardless of the enforceability of the applicable Debt
Securities or the related Indenture and will not be discharged until all
obligations contained in such Debt Securities and the related Indenture
are satisfied. Holders of the Debt Securities may proceed directly
against the Guarantor in the event of a default under the applicable Debt
Securities without first proceeding against the Issuer.
CERTAIN TAX CONSIDERATIONS
The Issuer will be required to withhold the Pennsylvania Corporate
Loans Tax from interest payments on Debt Securities held by or for those
subject to such tax, principally individuals and partnerships resident in
Pennsylvania and resident trustees of Pennsylvania trusts. The tax, at
the current rate of four mills on each dollar of nominal value ($4.00 per
$1,000), will be withheld, at any time when it is applicable, from any
interest payment to taxable holders at the annual rate of $4.00 per
$1,000 principal amount of the Debt Securities. The Debt Securities will
be exempt, under current law, from personal property taxes imposed by
political subdivisions in Pennsylvania.
See "Certain United States Federal Income Tax Considerations" in the
accompanying Prospectus Supplement for additional information concerning
certain tax considerations relating to specific series of Debt
Securities. Holders of Debt Securities should consult their tax advisors
as to the applicability to the Debt Securities and interest, if any,
payable thereon of Federal, state and local taxes.
PLAN OF DISTRIBUTION
The Issuer may sell Debt Securities to or through underwriters and
also may sell Debt Securities directly to other purchasers or through
agents. Such underwriters may include Goldman, Sachs & Co., Bear,
Stearns & Co. Inc. and Keefe, Bruyette & Woods, Inc. or a group of
underwriters represented by firms including Goldman, Sachs & Co., Bear,
Stearns & Co. Inc. and Keefe, Bruyette & Woods, Inc.
20
<PAGE>
Goldman, Sachs & Co., Bear, Stearns & Co. Inc. and Keefe, Bruyette &
Woods, Inc. may also act as agents.
The distribution of the Debt Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters may
receive compensation from the Issuer or from purchasers of Debt
Securities for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters may sell Debt Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the distribution of
Debt Securities may be deemed to be underwriters, and any discounts or
commissions received by them from the Issuer and any profit on the resale
of Debt Securities by them may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any such underwriter or agent
will be identified, and any such compensation received from the Issuer
will be described, in the Prospectus Supplement.
Under agreements which may be entered into by the Issuer,
underwriters and agents who participate in the distribution of Debt
Securities may be entitled to indemnification by the Issuer against
certain liabilities, including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Issuer will
authorize underwriters or other persons acting as the Issuer's agents to
solicit offers by certain institutions to purchase Debt Securities from
the Issuer pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others,
but in all cases such institutions must be approved by the Issuer. The
obligations of any purchaser under any such contract will be subject to
the condition that the purchase of the Debt Securities shall not at the
time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject. The underwriters and such other agents
will not have any responsibility in respect of the validity or
performance of such contracts.
VALIDITY OF THE DEBT SECURITIES
The validity of the Debt Securities offered hereby and other legal
matters will be passed upon for the Issuer by Reed Smith Shaw & McClay,
Pittsburgh, Pennsylvania. The validity of the Debt Securities will be
passed upon for the underwriters or agents by Brown & Wood LLP, New York,
New York.
EXPERTS
The consolidated financial statements of the Guarantor incorporated
by reference in the Guarantor's Annual Report on Form 10-K for the year
ended December 31, 1996 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein in reliance upon such
report, given upon the authority of such firm as experts in auditing and
accounting.
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================================================================================
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus Supplement or the
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized. This Prospectus Supplement and the
Prospectus do not constitute an offer to sell or the solicitation of an offer to
buy any securities other than the securities described in this Prospectus
Supplement or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus Supplement or the Prospectus nor any
sale made hereunder or thereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Issuer or the
Guarantor since the date hereof or that the information contained herein or
therein is correct as of any time subsequent to its date.
________________
TABLE OF CONTENTS
Page
----
Prospectus Supplement
Risk Factors...............................................................
Description of Notes.......................................................
Special Provisions Relating to Foreign
Currency Notes...........................................................
Certain United States Federal Income Tax
Considerations...........................................................
Supplemental Plan of Distribution..........................................
Prospectus
Available Information......................................................
Incorporation of Certain Documents
By Reference.............................................................
Keystone Financial, Inc....................................................
Keystone Financial Mid-Atlantic Funding Corp...............................
Selected Consolidated Financial Data.......................................
Certain Legal and
Regulatory Considerations................................................
Use of Proceeds............................................................
Selected Historical Consolidated
Financial Information....................................................
Pro Forma Combined Condensed
Statement of Condition...................................................
Pro Forma Combined Condensed
Statements of Income.....................................................
Description of Debt Securities.............................................
Certain Terms Relating to
Senior Debt Securities...................................................
Certain Terms Relating to
Subordinated Debt Securities.............................................
Guarantees.................................................................
Certain Tax Considerations.................................................
Plan of Distribution.......................................................
Validity of the Debt Securities............................................
Experts....................................................................
$400,000,000
Keystone Financial
Mid-Atlantic Funding Corp.
Senior/Subordinated
Medium-Term Notes
Due from 9 Months to 30 Years
from Date of Issue
Unconditionally Guaranteed as to
Principal, Premium, if any,
and Interest, if any, by
Keystone Financial, Inc.
_________________
PROSPECTUS SUPPLEMENT
_________________
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Keefe, Bruyette & Woods, Inc.
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following statement sets forth the estimated amounts of expenses
that will be incurred in connection with the distribution of the
securities offered hereby:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee $121,212.12
Accounting fees and expenses 20,000.00
Legal fees and expenses 150,000.00
Trustee's fees and expenses 6,000.00
Printing and engraving expenses 8,000.00
Rating Agency fees 67,500.00
Miscellaneous expenses 2,000.00
-----------
Total $374,712.12
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
1. Pennsylvania Business Corporation Law. Sections 1741 and 1742
of the Pennsylvania Business Corporation Law (the "BCL") provide that a
business corporation shall have the power to indemnify any person who was
or is a party, or is threatened to be made a party, to any proceeding,
whether civil, criminal, administrative or investigative, by reason of
the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such proceeding, if
such person acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the corporation, and,
with respect to any criminal proceeding, has no reasonable cause to
believe his conduct was unlawful. In the case of an action by or in the
right of the corporation, such indemnification is limited to expenses
(including attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action,
except that no indemnification shall be made in respect of any claim,
issue or matter as to which such person has been adjudged to be liable to
the corporation unless, and only to the extent that, a court determines
upon application that, despite the adjudication of liability but in view
of all the circumstances, such person is fairly and reasonably entitled
to indemnity for the expenses that the court deems proper.
BCL Section 1744 provides that, unless ordered by a court, any
indemnification referred to above shall be made by the corporation only
as authorized in the specific case upon a determination that
indemnification is proper in the circumstances because the indemnitee has
met the applicable standard of conduct. Such determination shall be
made:
(1) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding; or
(2) if such a quorum is not obtainable, or if obtainable and a
majority vote of a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion; or
(3) by the shareholders.
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Notwithstanding the above, BCL Section 1743 provides that to the
extent that a director, officer, employee or agent of a business
corporation is successful on the merits or otherwise in defense of any
proceeding referred to above, or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in
connection therewith.
BCL Section 1745 provides that expenses (including attorneys' fees)
incurred by an officer, director, employee or agent of a business
corporation in defending any proceeding may be paid by the corporation in
advance of the final disposition of the proceeding upon receipt of an
undertaking to repay the amount advanced if it is ultimately determined
that the indemnitee is not entitled to be indemnified by the corporation.
BCL Section 1746 provides that the indemnification and advancement
of expenses provided by, or granted pursuant to, the foregoing provisions
is not exclusive of any other rights to which a person seeking
indemnification may be entitled under any bylaw, agreement, vote of
shareholders or directors or otherwise, and that indemnification may be
granted under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise for any action taken or any failure to take any
action whether or not the corporation would have the power to indemnify
the person under any other provision of law and whether or not the
indemnified liability arises or arose from any action by or in the right
of the corporation, provided, however, that no indemnification may be
made in any case where the act or failure to act giving rise to the claim
for indemnification is determined by a court to have constituted willful
misconduct or recklessness.
BCL Section 1747 permits a Pennsylvania business corporation to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation or other enterprise, against any
liability asserted against such person and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify the person against such
liability under the provisions described above.
2. Indemnification Article and By-Law. Section 8.01 of the
Guarantor's By-Laws (the "Guarantor's Indemnification By-Law") was
adopted by the shareholders at their Annual Meeting held on May 28, 1987
and became effective on that date. Under the Guarantor's Indemnification
By-Law, except as prohibited by law, every director and officer of the
Guarantor is entitled as of right to be indemnified by the Guarantor
against all expenses and liabilities incurred in connection with any
actual or threatened claim or proceeding, whether civil, criminal,
administrative, investigative or other, whether brought by or in the
right of the Guarantor or otherwise, in which the director or officer may
be involved in any manner, by reason of his being or having been a
director or officer of the Guarantor or by reason of the fact that his is
or was serving at the request of the Guarantor as a director, officer,
employee, fiduciary or other representative of another corporation or
other entity. In an action brought by a director or officer against the
Guarantor, the director or officer is only entitled to indemnification
for expenses in certain circumstances. Each director and officer is also
entitled as of right to have his expenses in defending an action paid in
advance by the Guarantor prior to final disposition of the action,
subject to any obligation which may be imposed to reimburse the Guarantor
in certain events. The Guarantor's Indemnification By-Law establishes a
procedure whereby a director or officer may bring an action against the
Guarantor if a written claim for indemnification or advancement of
expenses is not paid by the Guarantor in full within thirty days after
the claim has been presented. The director or officer is also entitled
to advancement of expenses in this proceeding. The only defense to an
action to recover a claim for indemnification is that the indemnitee's
conduct was such that under Pennsylvania law the Guarantor is prohibited
from indemnifying the indemnitee. The only defense to an action to
recover payment of expenses in advance is failure by the indemnitee to
make an undertaking to reimburse the Guarantor if such an undertaking is
required.
The Guarantor's Indemnification By-Law applies to every action,
other than actions filed prior to January 27, 1987, except that it does
not apply to the extent that Pennsylvania law does not permit its
application to any breach or failure of performance of duty by a director
or officer occurring prior to January 27, 1987. Any
II-2
<PAGE>
amendment or repeal of the Guarantor's Indemnification By-Law will
operate prospectively only and will not affect any action taken, or
failure to act, by a director or officer prior to the adoption of such
amendment or repeal.
Article 7 of the Issuer's Articles of Incorporation became effective
as of March 26, 1997. Section 2.12 of the Issuer's By-Laws were adopted
by the Issuer's Board of Directors and sole shareholder, and became
effective, on April 16, 1997 (the "Issuer's Indemnification Provisions").
Under the Issuer's Indemnification Provisions, except as prohibited by
law, every director and officer of the Issuer is entitled as of right to
be indemnified by the Issuer against all expenses and liabilities
incurred in connection with any actual or threatened claim or proceeding,
whether civil, criminal, administrative, investigative or other, whether
brought by or in the right of the Issuer or otherwise, in which the
director or officer may be involved in any manner, by reason of his being
or having been a director or officer of the Issuer or by reason of the
fact that he is or was serving at the request of the Issuer as a
director, officer, employee, fiduciary or other representative of another
corporation or other entity. In an action brought by a director or
officer against the Issuer, the director or officer is only entitled to
indemnification for expenses in certain circumstances. Each director and
officer is also entitled as of right to have his expenses in defending an
action paid in advance by the Issuer prior to final disposition of the
action, subject to any obligation which may be imposed to reimburse the
Issuer in certain events. The Issuer's Indemnification Provisions
establish a procedure whereby a director or officer may bring an action
against the Issuer if a written claim for indemnification or advancement
of expenses is not paid by the Issuer in full within thirty days after
the claim has been presented. The director or officer is also entitled to
advancement of expenses in this proceeding. The only defense to an action
to recover a claim for indemnification is that the indemnitee's conduct
was such that under Pennsylvania law the Issuer is prohibited from
indemnifying the indemnitee. The only defense to an action to recover
payment of expenses in advance is failure by the indemnitee to make an
undertaking to reimburse the Issuer if such an undertaking is required.
The Issuer's Indemnification Provisions apply to every action. Any
amendment or repeal of the Issuer's Indemnification Provisions will
operate prospectively only and will not affect any action taken, or
failure to act, by a director or officer prior to the adoption of such
amendment or repeal.
3. Director and Officer Liability Insurance. The Guarantor and the
Issuer maintain director and officer liability insurance covering their
directors and officers with respect to liability such officers and
directors they may incur in connection with their serving as such, which
liability could include liability under the Securities Act of 1933. Under
the insurance, the Guarantor and the Issuer are entitled to reimbursement
for amounts as to which the directors and officers are indemnified under
the Guarantor's Indemnification By-Law and the Issuer's Indemnifination
provisions, respectively. The insurance may also provide certain
additional coverage for the directors and officers against certain
liability even though such liability is not subject to indemnification
under the Guarantor's Indemnification By-Law and the Issuer's
Indemnification provisions, respectively.
4. Indemnification Agreements. At their Annual Meeting held on May
28, 1987, the shareholders also approved a proposed form of
Indemnification Agreement to be entered into between the Guarantor and
each of its present and future directors and such other officers,
employees and agents of the Guarantor and its subsidiaries as shall be
designated from time to time by the Board of Directors.
The Guarantor's form of agreement provides essentially the same
rights to indemnification against liabilities and expenses as are
provided in the Guarantor's Indemnification By-Law. In addition, the
Guarantor's form of agreement requires the Guarantor to either maintain
the liability insurance coverage currently in effect for the benefit of
the contractee or to hold the contractee harmless to the full extent of
such coverage.
II-3
<PAGE>
Further, the Guarantor's form of agreement provides that if the full
indemnification claimed by the contractee may not be paid by the
Guarantor because prohibited by law and the Guarantor is jointly liable
with the contractee as to the matter for which indemnification was sought
(or would be so liable if the Guarantor were joined in such matter), the
contractee has a right to contribution from the Guarantor for the amount
of any expenses and liabilities incurred by the contractee as to such
matter based on the relative benefits received by the Guarantor and the
contractee from the transaction from which the liability arose and the
relative fault of the Guarantor (including the Guarantor's other
directors, officers, employees or agents) and the contractee in
connection with the events which resulted in such expenses or liability,
as well as any other relevant equitable considerations.
Under the Guarantor's form of agreement, a contractee is entitled to
the rights to indemnification for expenses and liability, advancement of
expenses and contribution provided by the agreement notwithstanding any
amendment or repeal of the Guarantor's Indemnification By-Law. In
addition, although a change in law restricting indemnification rights
would automatically restrict the indemnification rights provided under
the Guarantor's Indemnification By-Law, the form of agreement provides
that a change in law restricting indemnification rights will not affect
the rights of a contractee under the agreement unless the law so
requires.
The Issuer has no indemnification agreements.
See Item 17 herein for the undertaking with respect to
indemnification.
ITEM 16. EXHIBITS
1. Form of Distribution Agreement
4.1 Form of Senior Indenture
4.2 Form of Subordinated Indenture
4.3 Form of Senior Fixed Rate Note
4.4 Form of Senior Floating Rate Note
4.5 Form of Subordinated Fixed Rate Note
4.6 Form of Subordinated Floating Rate Note
5. Opinion of Reed Smith Shaw & McClay
12. Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Ernst & Young LLP
23.3 Consent of Reed Smith Shaw & McClay (contained in Exhibit 5)
25. Form T-1 Statement of Eligibility of Trustee
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
1. That for purposes of determining any liability under the
Securities Act of 1933, each filing of the Guarantor's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this
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.
2. (a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement 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, (b) 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
II-4
<PAGE>
the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof, and (c) 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.
3. That insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers
or controlling persons of the registrants pursuant to the foregoing
provisions, or otherwise, the registrants have been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 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 registrants
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person of the
registrants in connection with the securities being registered, the
registrants 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 Securities Act of
1933 and will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Keystone
Financial Mid-Atlantic Funding Corp. certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on
Form S-3 and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Harrisburg, Pennsylvania on the ____ day of April, 1997.
KEYSTONE FINANCIAL
MID-ATLANTIC FUNDING CORP.
By: /s/ Mark L. Pulaski
---------------------
Mark L. Pulaski
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in
the capacities indicated on the ___ day of April, 1997:
NAME AND SIGNATURE TITLE
/s/ Mark L. Pulaski President and Chief Financial
- ----------------------
Mark L. Pulaski Officer
/s/ Donald F. Holt Treasurer and Principal Accounting
- ----------------------
Donald F. Holt Officer
/s/ Carl L. Campbell Director
- ----------------------
Carl L. Campbell
/s/ George H. Groves Director
- ----------------------
George H. Groves
/s/ Mark L. Pulaski Director
- ----------------------
Mark L. Pulaski
/s/ Ben G. Rooke Director
- ----------------------
Ben G. Rooke
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Keystone
Financial, Inc. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Harrisburg,
Pennsylvania on the ____ day of April, 1997.
KEYSTONE FINANCIAL, INC.
By: /s/ Carl L. Cambell
-----------------------
Carl L. Campbell
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in
the capacities indicated on the ___ day of April, 1997:
NAME AND SIGNATURE TITLE
/s/ Carl L. Campbell President, Chief Executive Officer
- ---------------------------
Carl L. Campbell and Director
/s/ Mark L. Pulaski Senior Executive Vice President,
- ---------------------------
Mark L. Pulaski Chief Administrative Officer and
Chief Financial Officer
/s/ Donald F. Holt Senior Vice President, Controller
- ---------------------------
Donald F. Holt and Principal Accounting Officer
/s/ A. Joseph Antanavage Director
- ---------------------------
A. Joseph Antanavage
/s/ June B. Barry Director
- ---------------------------
June B. Barry
/s/ J. Glenn Beall, Jr. Director
- ---------------------------
J. Glenn Beall, Jr.
/s/ Paul I. Detwiler, Jr. Director
- ---------------------------
Paul I. Detwiler, Jr.
II-7
<PAGE>
NAME AND SIGNATURE TITLE
/s/ Donald Devorris Director
- ---------------------------
Donald Devorris
/s/ Richard W. DeWald Director
- ---------------------------
Richard W. DeWald
/s/ Gerald E. Field Director
- ---------------------------
Gerald E. Field
/s/ Walter W. Grant Director
- ---------------------------
Walter W. Grant
/s/ Philip C. Herr II Director
- ---------------------------
Philip C. Herr II
/s/ Uzal H. Martz, Jr. Director
- ---------------------------
Uzal H. Martz, Jr.
/s/ Max A. Messenger Director
- ---------------------------
Max A. Messenger
Director
- ---------------------------
William L. Miller
/s/ Don A. Rosini Director
- ---------------------------
Don A. Rosini
/s/ F. Dale Schoeneman Director
- ---------------------------
F. Dale Schoeneman
/s/ Ronald C. Unterberger Director
- ---------------------------
Ronald C. Unterberger
Director
- ---------------------------
G. William Ward
II-8
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
1. Form of Distribution Agreement
4.1 Form of Senior Indenture
4.2 Form of Subordinated Indenture
4.3 Form of Senior Fixed Rate Note
4.4 Form of Senior Floating Rate Note
4.5 Form of Subordinated Fixed Rate Note
4.6 Form of Subordinated Floating Rate Note
5. Opinion of Reed Smith Shaw & McClay
12. Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Ernst & Young LLP
23.3 Consent of Reed Smith Shaw & McClay (contained in Exhibit 5)
25. Form T-1 Statement of Eligibility of Trustee
<PAGE>
EXHIBIT 1
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
SENIOR/SUBORDINATED MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
UNCONDITIONALLY GUARANTEED AS TO PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST, IF ANY, BY
KEYSTONE FINANCIAL, INC.
Distribution Agreement
----------------------
_________, 1997
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Bear, Stearns & Co. Inc.
55 Water Street
New York, New York 10041
Keefe, Bruyette & Woods, Inc.
2 World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Keystone Financial Mid-Atlantic Funding Corp., a Pennsylvania
corporation (the "Company"), proposes to issue and sell from time to time its
Senior Medium-Term Notes (the "Senior Notes") and Subordinated Medium-Term Notes
(the "Subordinated Notes" and, together with the Senior Notes, the
"Securities"). The Securities will be due 9 months to 30 years from date of
issue. The Senior Notes will be unconditionally guaranteed as to payment of
principal, premium, if any, and interest, if any (the "Senior Guarantees"), by
Keystone Financial, Inc. (the "Guarantor"). The Subordinated Notes will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest, if any (the "Subordinated Guarantees" and, together with the Senior
Guarantees, the "Guarantees") by the Guarantor. Each of the Company and the
Guarantor agrees with each of Goldman, Sachs & Co., Bear, Stearns & Co. Inc. and
Keefe, Bruyette & Woods, Inc. (each, an "Agent" and collectively, the "Agents")
as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities and related Guarantees directly on
its own behalf, the Company hereby (i) appoints each Agent as an agent of the
Company for the purpose of soliciting and receiving offers to purchase
Securities and related Guarantees from the Company pursuant to Section 2(a)
hereof and (ii) agrees that, except as otherwise contemplated herein, whenever
it determines to sell Securities and related Guarantees directly to any Agent as
principal, it will enter into a separate agreement (each a "Terms Agreement"),
substantially in the form of Annex I hereto, relating to such sale in accordance
with Section 2(b) hereof. This Distribution Agreement shall not be construed to
create either an obligation on the part of the
<PAGE>
Company to sell any Securities and related Guarantees or an obligation of any of
the Agents to purchase Securities and related Guarantees as principal.
The Senior Notes and the Senior Guarantees will be issued under an
indenture, dated as of __________, 1997 (the "Senior Indenture"), between the
Company, the Guarantor and Bankers Trust Company, as Senior Trustee (the "Senior
Trustee") and the Subordinated Notes and the Subordinated Guarantees will be
issued under an indenture, dated as of ___________, 1997 (the "Subordinated
Indenture"), between the Company, the Guarantor and Bankers Trust Company, as
subordinated trustee ("The Subordinated Trustee"). The Senior Indenture and the
Subordinated Indenture are collectively referred to herein as the "Indentures."
The Senior Trustee and the Subordinated Trustee are referred to herein
collectively and individually as the "Trustee."
As of the date hereof, the Company and the Guarantor have authorized
the issuance and sale of up to U.S.$400,000,000 aggregate principal amount (or
its equivalent in any other currency or composite currency as the Company shall
designate at the time of issuance) of Securities and the related Guarantees
through the Agents pursuant to the terms of this Agreement. It is understood,
however, that the Company and the Guarantor may from time to time authorize the
issuance of additional Securities and related Guarantees and that such
additional Securities and related Guarantees may be sold through or to the
Agents pursuant to the terms of this Agreement, all as though the issuance of
such Securities were authorized as of the date hereof.
1. The Company and the Guarantor jointly and severally represent and
warrant to, and agree with, each Agent that:
(a) A registration statement on Form S-3 (File No. 333- ) (the
"Initial Registration Statement") has been filed by the Company and the
Guarantor with the Securities and Exchange Commission (the "Commission") for
the registration of the Securities and the Guarantees; the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to such Agent, including all
documents incorporated by reference in the prospectus included therein, have
been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a "Rule
462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration Statement
has heretofore been filed or transmitted for filing with the Commission
(other than the prospectuses filed pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act, each in the form heretofore
delivered to the Agents); and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the 462(b) Registration Statement, if any, including all
exhibits thereto and the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the time such
part of the registration statement became effective but excluding Form T-1,
each as amended at the time such part of the registration statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, is hereinafter collectively called
the "Registration Statement"; the prospectus (including, if applicable, any
prospectus supplement)
2
<PAGE>
relating to the Securities and the Guarantees, in the form in which it has
most recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus, including any supplement to the Prospectus
that sets forth only the terms of a particular issue of the Securities and
the related Guarantees (a "Pricing Supplement"), shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated therein by
reference; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the Guarantor
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the Prospectus
as amended or supplemented shall be deemed to refer to and include the
Prospectus as amended or supplemented (including by the applicable Pricing
Supplement filed in accordance with Section 4(a) hereof) in relation to
Securities and Guarantees to be sold pursuant to this Agreement, in the form
filed or transmitted for filing with the Commission pursuant to Rule 424(b)
under the Act and in accordance with Section 4(a) hereof, including any
documents incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus,
or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission thereunder and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Agent expressly for
use in the Prospectus as amended or supplemented to relate to a particular
issuance of Securities and related Guarantees, it being understood and
agreed that the only such information is that described as such in Section
7(a) below;
3
<PAGE>
(d) Neither the Company, the Guarantor nor any of the Guarantor's
Significant Subsidiaries (as defined in Rule 405 of Regulation C under the
Act) has sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been any material change in the capital stock or long-term
debt of the Company, the Guarantor (other than the share repurchase program
that has been disclosed to the Agents) or any of the Guarantor's
Significant Subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company, the Guarantor or any of the Guarantor's
Significant Subsidiaries, otherwise than as set forth or contemplated in the
Prospectus.
(e) Each of the Company and the Guarantor and each of the Guarantor's
Significant Subsidiaries has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority to own its properties and
conduct its business as described in the Prospectus;
(f) The Guarantor is duly registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended (the "BHC Act");
(g) The Guarantor has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Guarantor
have been duly and validly authorized and issued and are fully paid and non-
assessable. All of the issued shares of the Company and each other
Significant Subsidiaries of the Guarantor have been duly and validly
authorized and issued and are fully paid and non-assessable (subject to the
provisions of Section 55 of Title 12 of the United States Code in the case
of Significant Subsidiaries which are national banks) and are owned by the
Guarantor, directly or through Significant Subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity;
(h) The Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement and any Terms Agreement, will have been
duly executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the benefits
provided by the Indentures, which will be substantially in the forms filed
as exhibits to the Registration Statement; the Guarantees have been duly
authorized and, upon due issuance and delivery of the related Securities and
due endorsement of the Guarantees, the Guarantees will have been duly
executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Guarantor entitled to the benefits
provided by the Indentures; the Indentures have been duly authorized and
duly qualified under the Trust Indenture Act and constitute valid and
legally binding instruments, enforceable in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indentures conform and the
Securities and the Guarantees of any particular issuance of Securities will
conform to the descriptions thereof contained in the Prospectus as amended
or supplemented to relate to such issuance;
4
<PAGE>
(i) The issue and sale of the Securities and the Guarantees, the
compliance by the Company and the Guarantor with all of the provisions of
the Securities, the Guarantees, the Indentures, this Agreement and any Terms
Agreement, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company, the Guarantor or any of the Guarantor's
Significant Subsidiaries is a party or by which the Company, the Guarantor
or any of the Guarantor's Significant Subsidiaries is bound or to which any
of the property or assets of the Company, the Guarantor or the Guarantor's
Significant Subsidiaries is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation (which term, as
used herein, shall be deemed to include other chartering documents, as
applicable), as amended, or the By-laws of the Company, the Guarantor or any
of the Guarantor's Significant Subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company, the Guarantor or the Guarantor's
Significant Subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or with any
court or governmental agency or body is required for the solicitation of
offers to purchase Securities or related Guarantees, the issue and sale of
the Securities and the related Guarantees or the consummation by the Company
or the Guarantor of the other transactions contemplated by this Agreement,
any Terms Agreement or the Indentures, except such as have been, or will
have been prior to the Commencement Date (as defined in Section 3 hereof),
obtained under the Act or the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
solicitation by such Agent of offers to purchase Securities and related
Guarantees and with purchases of Securities and related Guarantees by such
Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(j) Neither the Company nor the Guarantor nor any of the Guarantor's
Significant Subsidiaries is in violation of its Articles of Incorporation or
By-laws or in default in the performance or observance of any material
obligation, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to which it
is a party or by which it or any of its properties may be bound; and the
Company has no Significant Subsidiaries;
(k) The statements set forth in the Prospectus under the caption
"Description of Debt Securities," "Description of Notes" and "Certain Tax
Consequences," insofar as they purport to constitute a summary of the terms
of the Securities, "Guarantees," insofar as it purports to constitute a
summary of the terms of the Guarantees, under the caption "Certain United
States Federal Income Tax Considerations," and under the caption "Plan of
Distribution" and "Supplemental Plan of Distribution," and the information
incorporated by reference in the Prospectus under the captions "Regulation
and Supervision of Bank Holding Companies," "Regulation and Supervision of
Banks," "Properties" and "Legal Proceedings" in the Company's Annual Report
on Form 10-K for the Fiscal Year ended December 31, 1996, insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;
(l) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company, the Guarantor or any
of the Guarantor's Significant Subsidiaries is a party or to which any
property of the Company, the Guarantor or any of the Guarantor's Significant
Subsidiaries is subject, which, if determined adversely to the Company, the
Guarantor or any of the Guarantor's Significant Subsidiaries, would
individually or in the aggregate have a material adverse effect
5
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on the current or future consolidated financial position, shareholders'
equity or results of operations of the Company, the Guarantor and the
Guarantor's Significant Subsidiaries, and, to the best knowledge of the
Company, the Guarantor or any of the Guarantor's Significant Subsidiaries,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(m) Neither the Company nor the Guarantor is and, after giving effect
to each offering and sale of the Securities and the Guarantees, neither the
Company nor the Guarantor will be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
The Company is exempt from the provisions of the Investment Company Act by
virtue of compliance with the provisions of Rule 3a-5 thereunder;
(n) Neither the Company, the Guarantor nor any of the Guarantor's
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(o) Immediately after any sale of Securities and related Guarantees by
the Company hereunder or under any Terms Agreement, the aggregate amount of
Securities and related Guarantees which shall have been issued and sold by
the Company hereunder or under any Terms Agreement and of any debt
securities of the Company (other than such Securities and related
Guarantees) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of debt securities
registered under the Registration Statement; and
(p) The accountants who have certified certain financial statements
included or incorporated by reference in the Prospectus are independent
public accountants as required by the Act and the rules and regulations of
the Commission thereunder.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each of the
Agents hereby severally and not jointly agrees, as agent of the Company, to use
its reasonable efforts to solicit and receive offers to purchase the Securities
and related Guarantees from the Company upon the terms and conditions set forth
in the Prospectus as amended or supplemented from time to time. So long as this
Agreement shall remain in effect with respect to any Agent, the Company shall
not, without the consent of such Agent, solicit or accept offers to purchase, or
sell, any debt securities with a maturity at the time of original issuance of 9
months to 30 years except pursuant to this Agreement, any Terms Agreement, or
except pursuant to a private placement not constituting a public offering under
the Act or except in connection with a firm commitment underwriting pursuant to
an underwriting agreement that does not provide for a continuous offering of
medium-term debt securities. However, the Company reserves the right to sell,
and may solicit and accept offers to purchase, Securities and related Guarantees
directly on its own behalf in transactions with persons other than broker-
dealers, and, in the case of any such sale not resulting from a solicitation
made by any Agent, no commission will be payable with respect to such sale.
These provisions shall not limit Section 4(f) hereof or any similar provision
included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities
and related Guarantees, the solicitation of offers to purchase Securities and
related Guarantees and the payment in each case therefor shall be as set forth
in the Administrative Procedure attached hereto as Annex II as it may be amended
from time to time by written agreement between the Agents, the Company and the
Guarantor (the "Administrative Procedure"). The provisions of the Administrative
Procedure shall apply to all
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transactions contemplated hereunder other than those made pursuant to a Terms
Agreement. Each Agent, the Company and the Guarantor agree to perform the
respective duties and obligations specifically provided to be performed by each
of them in the Administrative Procedure. The Company will furnish to the Trustee
a copy of the Administrative Procedure as from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities and related Guarantees. As
soon as practicable, but in any event not later than one business day in New
York City, after receipt of notice from the Company, the Agents will suspend
solicitation of offers to purchase Securities and related Guarantees from the
Company until such time as the Company has advised the Agents that such
solicitation may be resumed. During such period, the Company and the Guarantor
shall not be required to comply with the provisions of Sections 4(h), 4(i), 4(j)
and 4(k). Upon advising the Agents that such solicitation may be resumed,
however, the Company and the Guarantor shall simultaneously provide the
documents required to be delivered by Sections 4(h), 4(i), 4(j) and 4(k), and
the Agents shall have no obligation to solicit offers to purchase the Securities
and the related Guarantees until such documents have been received by the
Agents. In addition, any failure by the Company and the Guarantor to comply
with its obligations hereunder, including without limitation its obligations to
deliver the documents required by Sections 4(h), 4(i), 4(j) and 4(k), shall
automatically terminate the Agents' obligations hereunder, including without
limitation its obligations to solicit offers to purchase the Securities and the
related Guarantees hereunder as agent or to purchase Securities and related
Guarantees hereunder as principal.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
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COMMISSION
(PERCENTAGE
OF AGGREGATE
PRINCIPAL
AMOUNT OF
RANGE OF MATURITIES SECURITIES SOLD)
------------------- ----------------
From 9 months to less than 1 year.... .125%
From 1 year to less than 18 months... .150%
From 18 months to less than 2 years.. .200%
From 2 years to less than 3 years.... .250%
From 3 years to less than 4 years.... .350%
From 4 years to less than 5 years.... .450%
From 5 years to less than 6 years.... .500%
From 6 years to less than 7 years.... .550%
From 7 years to less than 10 years... .600%
From 10 years to less than 15 years.. .625%
From 15 years to less than 20 years.. .675%
From 20 years to 30 years............ .750%
(b) Each sale of Securities and related Guarantees to any Agent as
principal shall be made in accordance with the terms of this Agreement and
(unless the Company and such Agent shall otherwise agree) a Terms Agreement
which will provide for the sale of such Securities and related Guarantees to,
and the purchase thereof by, such Agent; a Terms Agreement may also specify
certain provisions relating to the reoffering of such Securities and related
Guarantees by such Agent; the commitment of any Agent to purchase Securities and
related Guarantees as principal, whether pursuant to any Terms Agreement or
otherwise, shall be deemed to have been made on the basis of the representations
and warranties of the Company and the Guarantor herein contained and shall be
subject to the terms and conditions herein set forth; each Terms Agreement shall
specify the principal amount of Securities and related Guarantees to be
purchased by any Agent pursuant thereto, the price to be paid to the Company for
such Securities and related Guarantees, any provisions relating to rights of,
and default by, underwriters acting together with such Agent in the reoffering
of the Securities and related Guarantees and the time and date and place of
delivery of and payment for such Securities and related Guarantees; and such
Terms Agreement shall also specify any requirements for opinions of counsel,
accountants' letters and officers' certificates pursuant to Section 4 hereof.
Each Agent proposes to offer Securities and related Guarantees purchased by it
as principal for sale at prevailing market prices or prices related thereto at
the time of sale, which may be equal to, greater than or less than the price at
which such Securities and related Guarantees are purchased by such Agent from
the Company.
For each sale of Securities and related Guarantees to an Agent as
principal that is not made pursuant to a Terms Agreement, the procedural details
relating to the issue and delivery of such Securities and related Guarantees and
payment therefor shall be as set forth in the Administrative Procedure. For
each such sale of Securities and related Guarantees to an Agent as principal
that is not made pursuant to
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a Terms Agreement, the Company agrees to pay such Agent a commission (or grant
an equivalent discount) as provided in Section 2(a) hereof and in accordance
with the schedule set forth therein.
Each time and date of delivery of and payment for Securities and
related Guarantees to be purchased by an Agent as principal, whether set forth
in a Terms Agreement or in accordance with the Administrative Procedure, is
referred to herein as a "Time of Delivery."
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Security
in, or to residents of, the country issuing such currency, except as permitted
by applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agents at the
offices of Brown & Wood LLP, New York, New York, at 11:00 a.m., New York City
time, on the date of this Agreement, which date and time of such delivery may be
postponed by agreement between the Agents and the Company but in no event shall
be later than the day prior to the date on which solicitation of offers to
purchase Securities and related Guarantees is commenced or on which any Terms
Agreement is executed (such time and date being referred to herein as the
"Commencement Date").
4. The Company and the Guarantor jointly and severally covenant and
agree with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which shall
be disapproved by any Agent promptly after reasonable notice thereof or (B)
after the date of any Terms Agreement or other agreement by an Agent to
purchase Securities and related Guarantees as principal and prior to the
related Time of Delivery which shall be disapproved by any Agent party to
such Terms Agreement or so purchasing as principal promptly after reasonable
notice thereof; (ii) to prepare, with respect to any Securities and related
Guarantees to be sold through or to such Agent pursuant to this Agreement, a
Pricing Supplement with respect to such Securities and related Guarantees in
a form previously approved by such Agent and to file such Pricing Supplement
pursuant to Rule 424(b)(3) under the Act not later than the close of
business of the Commission on the fifth business day after the date on which
such Pricing Supplement is first used; (iii) if the Company elects to rely
on Rule 462(b), to file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C.
time, on the date of this Agreement and, at the time of such filing, to
either pay the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act; (iv) to make no amendment or
supplement to the Registration Statement or Prospectus, other than any
Pricing Supplement, at any time prior to having afforded each Agent a
reasonable opportunity to review and comment thereon; (v) to file promptly
all reports and any definitive proxy or information statements required to
be filed by the Company or the Guarantor with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or sale
of the Securities and the related Guarantees, and during such same period to
advise such Agent, promptly after the Company or the Guarantor receives
notice thereof, of the time when any amendment to the Registration Statement
has been filed or has become effective or any supplement to the Prospectus
or any amended Prospectus (other than any Pricing Supplement that relates to
Securities and related Guarantees not purchased through or by such Agent)
has been filed with the Commission, of the
9
<PAGE>
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities and the
related Guarantees, of the suspension of the qualification of the Securities
and the related Guarantees for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amendment or supplement of the
Registration Statement or Prospectus or for additional information; and (v)
in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as such Agent may
reasonably request to qualify the Securities and the related Guarantees for
offering and sale under the securities laws of such jurisdictions as such
Agent may request and to comply with such laws so as to permit the
continuance of sales and dealings therein for as long as may be necessary to
complete the distribution or sale of the Securities and the related
Guarantees; provided, however, that in connection therewith the Company and
the Guarantor shall not be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the business day
next succeeding the date of each Terms Agreement and from time to time, to
furnish such Agent with copies of the Registration Statement and each
amendment thereto, with copies of the Prospectus as each time amended or
supplemented, other than any Pricing Supplement (except as provided in the
Administrative Procedure), in the form in which it is filed with the
Commission pursuant to Rule 424 under the Act, and with copies of the
documents incorporated by reference therein, all in such quantities as such
Agent may reasonably request; and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Securities and the related Guarantees (including Securities and related
Guarantees purchased from the Company by such Agent as principal) and if at
such time any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act,
the Exchange Act or the Trust Indenture Act, to notify such Agent and
request such Agent, in its capacity as agent of the Company, to suspend
solicitation of offers to purchase Securities and related Guarantees from
the Company (and, if so notified, such Agent shall cease such solicitations
as soon as practicable, but in any event not later than one business day
later); and if the Company and the Guarantor shall decide to amend or
supplement the Registration Statement or the Prospectus as then amended or
supplemented, to so advise such Agent promptly by telephone (with
confirmation in writing) and to prepare and cause to be filed promptly with
the Commission an amendment or supplement to the Registration Statement or
the Prospectus as then amended or supplemented that will correct such
statement or omission or effect such compliance; provided, however, that if
during such same period such Agent continues to own Securities and related
Guarantees purchased from the Company by such Agent as principal or such
Agent is otherwise required to deliver a prospectus in respect of
transactions in the Securities and the related Guarantees, the Company and
the Guarantor shall promptly prepare and file with the Commission such an
amendment or supplement;
10
<PAGE>
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement (which need not be audited) complying
with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company and the
Guarantor, Rule 158);
(e) So long as any Securities and related Guarantees are
outstanding, to furnish to such Agent copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver
to such Agent (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Company
or the Guarantor are listed; and (ii) such additional information concerning
the business and financial condition of the Company and the Guarantor as
such Agent may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company, the Guarantor and the Guarantor's subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities and related Guarantees
as principal and continuing to and including the later of (i) the
termination of the trading restrictions for the Securities and the related
Guarantees purchased thereunder, as notified to the Company by such Agent
and (ii) the related Time of Delivery, not to offer, sell, contract to sell
or otherwise dispose of any debt securities of the Company or the Guarantor
which both mature more than 9 months after such Time of Delivery and are
substantially similar to the Securities, without the prior written consent
of such Agent;
(g) That each acceptance by the Company of an offer to purchase
Securities and related Guarantees hereunder (including any purchase by such
Agent as principal not pursuant to a Terms Agreement), and each execution
and delivery by the Company and the Guarantor of a Terms Agreement with such
Agent, shall be deemed to be an affirmation to such Agent that the
representations and warranties of the Company and the Guarantor contained in
or made pursuant to this Agreement are true and correct as of the date of
such acceptance or of such Terms Agreement, as the case may be, as though
made at and as of such date, and an undertaking that such representations
and warranties will be true and correct as of the settlement date for the
Securities and the related Guarantees relating to such acceptance or as of
the Time of Delivery relating to such sale, as the case may be, as though
made at and as of such date (except that such representations and warranties
shall be deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented relating to such Securities and related
Guarantees);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other than by
a Pricing Supplement), each time a document filed under the Act or the
Exchange Act is incorporated by reference into the Prospectus, and each time
the Company sells Securities and related Guarantees to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies
the delivery of an opinion or opinions by Brown & Wood LLP, counsel to the
Agents, as a condition to the purchase of Securities and related Guarantees
pursuant to such Terms Agreement, the Company and the Guarantor shall
furnish to such counsel such papers and information as they may reasonably
request to enable them to furnish to such Agent the opinion or opinions
referred to in Section 6(b) hereof;
11
<PAGE>
(i) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement), each
time a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus and each time the Company sells Securities and
related Guar antees to such Agent as principal pursuant to a Terms Agreement
and such Terms Agreement specifies the delivery of an opinion under this
Section 4(i) as a condition to the purchase of Securities and related
Guarantees pursuant to such Terms Agreement, the Company and the Guarantor
shall furnish or cause to be furnished forthwith to such Agent a written
opinion of Reed Smith Shaw & McClay, counsel for the Company and the
Guarantor, or other counsel for the Company and the Guarantor satisfactory
to such Agent, dated the date of such amendment, supplement, incorporation
or Time of Delivery relating to such sale, as the case may be, in form
satisfactory to such Agent, to the effect that such Agent may rely on the
opinion of such counsel referred to in Section 6(c) hereof which was last
furnished to such Agent to the same extent as though it were dated the date
of such letter authorizing reliance (except that the statements in such last
opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in lieu of such
opinion, an opinion of the same tenor as the opinion of such counsel
referred to in Section 6(c) hereof but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date;
(j) That each time the Registration Statement or the Prospectus
shall be amended or supplemented and each time that a document filed under
the Act or the Exchange Act is incorporated by reference into the
Prospectus, in either case to set forth financial information included in or
derived from the Company's or the Guarantor's consolidated financial
statements or accounting records, and each time the Company sells Securities
and related Guarantees to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of a letter under
this Section 4(j) as a condition to the purchase of Securities and related
Guarantees pursuant to such Terms Agreement, the Company and the Guarantor
shall cause the independent certified public accountants who have certified
the financial statements of the Guarantor, the Guarantor's subsidiaries
included or incorporated by reference in the Registration Statement
forthwith to furnish such Agent a letter, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale, as the
case may be, in form satisfactory to such Agent, of the same tenor as the
letter referred to in Section 6(d) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented to the
date of such letter, with such changes as may be necessary to reflect
changes in the financial statements and other information derived from the
accounting records of the Guarantor and the Guarantor's subsidiaries, to the
extent such financial statements and other information are available as of a
date not more than five business days prior to the date of such letter;
provided, however, that, with respect to any financial information or other
matter, such letter may reconfirm as true and correct at such date as though
made at and as of such date, rather than repeat, statements with respect to
such financial information or other matter made in the letter referred to in
Section 6(d) hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement), each
time a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus and each time the Company sells Securities and
related Guarantees to such Agent as principal and the applicable Terms
Agreement specifies the delivery of a certificate under this Section 4(k) as
a condition to the purchase of Securities and the related Guarantees
pursuant to such Terms Agreement, the Company and the Guarantor shall
furnish or cause to be furnished forthwith to such Agent a certificate,
dated the
12
<PAGE>
date of such supplement, amendment, incorporation or Time of Delivery
relating to such sale, as the case may be, in such form and executed by such
officers of the Company and the Guarantor as shall be satisfactory to such
Agent, to the effect that the statements contained in the certificates
referred to in Section 6(i) hereof which was last furnished to such Agent
are true and correct at such date as though made at and as of such date
(except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date) or,
in lieu of such certificate, certificates of the same tenor as the
certificates referred to in said Section 6(i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date; and
(l) To offer to any person who has agreed to purchase Securities and
related Guarantees from the Company as the result of an offer to purchase
solicited by such Agent the right to refuse to purchase and pay for such
Securities and related Guarantees if, on the related settlement date fixed
pursuant to the Administrative Procedure, any condition set forth in Section
6(a), 6(e), 6(f) or 6(g) hereof shall not have been satisfied (it being
understood that the judgment of such person with respect to the
impracticability or inadvisability of such purchase of Securities and
related Guarantees shall be substituted, for purposes of this Section 4(l),
for the respective judgments of an Agent with respect to certain matters
referred to in such Sections 6(e) and 6(g), and that such Agent shall have
no duty or obligation whatsoever to exercise the judgment permitted under
such Sections 6(e) and 6(g) on behalf of any such person).
5. The Company and the Guarantor jointly and severally covenant and
agree with each Agent that the Company and the Guarantor will pay or cause to be
paid the following: (i) the fees, disbursements and expenses of the Company's
and the Guarantor's counsel and accountants in connection with the registration
of the Securities and the related Guarantees under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus, the Prospectus and any
Pricing Supplements and all other amendments and supplements thereto and the
mailing and delivering of copies thereof to such Agent; (ii) the fees,
disbursements and expenses of counsel for the Agents in connection with the
establishment of the program contemplated hereby, any opinions to be rendered by
such counsel hereunder and under any Terms Agreement and the transactions
contemplated hereunder and under any Terms Agreement; (iii) the cost of
printing, producing or reproducing this Agreement, any Terms Agreement, any
Indenture, any Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities and the related
Guarantees; (iv) all expenses in connection with the qualification of the
Securities and the related Guarantees for offering and sale under state
securities laws as provided in Section 4(b) hereof, including the fees and
disbursements of counsel for the Agents in connection with such qualification
and in connection with the Blue Sky and legal investment surveys; (v) any fees
charged by securities rating services for rating the Securities and the related
Guarantees; (vi) any filing fees incident to, and the fees and disbursements of
counsel for the Agents in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities and the related Guarantees; (vii) the cost of preparing the
Securities and the related Guarantees; (viii) the fees and expenses of any
Trustee and any agent of any Trustee and any transfer or paying agent of the
Company and the fees and disbursements of counsel for any Trustee or such agent
in connection with any Indenture, the Securities and the related Guarantees;
(ix) any advertising expenses connected with the solicitation of offers to
purchase and the sale of Securities and the related Guarantees so long as such
advertising expenses have been approved by the Company; and (x) all other costs
and expenses incident to the performance of its obligations
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hereunder which are not otherwise specifically provided for in this Section.
Except as provided in Sections 7 and 8 hereof, each Agent shall pay all other
expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
related Guarantees and the obligation of any Agent to purchase Securities and
the related Guarantees as principal, pursuant to any Terms Agreement or
otherwise, shall in each case be subject, in such Agent's discretion, to the
condition that all representations and warranties and other statements of the
Company and the Guarantor herein (and, in the case of an obligation of an Agent
under a Terms Agreement, in or incorporated by reference in such Terms
Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, and, further, to the
condition that prior to such Solicitation Time or Time of Delivery, as the case
may be, the Company and the Guarantor shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) (i) With respect to any Securities and the related Guarantees
sold at or prior to such Solicitation Time or Time of Delivery, as the case
may be, the Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities and the related Guarantees shall
have been filed with the Commission pursuant to Rule 424(b) under the Act
within the applicable time period prescribed for such filing by the rules
and regulations under the Act and in accordance with Section 4(a) hereof;
(ii) if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10;00 p.m.,
Washington, D.C. time, on the date of this Agreement; (iii) no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and (iv) all requests for additional
information on the part of the Commission shall have been complied with to
the reasonable satisfaction of such Agent;
(b) Brown & Wood LLP, counsel to the Agents, shall have furnished to
such Agent (i) an opinion or opinions, dated the Commencement Date, in form
and substance satisfactory to the Agents and (ii) if and to the extent
requested by such Agent, with respect to each applicable date referred to in
Section 4(h) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, an opinion or opinions, dated such applicable
date, to the effect that such Agent may rely on the opinion or opinions
which were last furnished to such Agent pursuant to this Section 6(b) to the
same extent as though it or they were dated the date of such letter
authorizing reliance (except that the statements in such last opinion or
opinions shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in any case, in
lieu of such an opinion or opinions, an opinion or opinions of the same
tenor as the opinion or opinions referred to in clause (i) but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date; and in each case such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Reed Smith Shaw & McClay, counsel for the Company and the
Guarantor, or other counsel for the Company and the Guarantor satisfactory
to such Agent, shall have furnished to such Agent their written opinions,
dated the Commencement Date and each applicable date referred
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to in Section 4(i) hereof that is on or prior to such Solicitation Time or
Time of Delivery, as the case may be, in form and substance satisfactory to
such Agent, substantially to the effect that:
(i) Each of the Company and the Guarantor and each of the
Guarantor's Significant Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority to own
its properties and conduct its business as described in the Prospectus
as amended or supplemented;
(ii) The Guarantor is duly registered as a bank holding company
under the BHC Act;
(iii) The Guarantor has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the issued
shares of capital stock of the Guarantor have been duly and validly
authorized and issued and are fully paid and non-assessable. All of the
issued shares of the Company and each other Significant Subsidiary of
the Guarantor have been duly and validly authorized and issued and are
fully paid and non-assessable (subject to the provisions of Section 55
of Title 12 of the United States Code in the case of Significant
Subsidiary which are national banks) and are owned by the Guarantor,
directly or through subsidiaries ,free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity;
(iv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company, the Guarantor or any of the Guarantor's
Significant Subsidiary is a party or to which any property of the
Company, the Guarantor or any of the Guarantor's Significant Subsidiary
is subject, which, if determined adversely to the Company, the Guarantor
or any of the Guarantor's Significant Subsidiary, would individually or
in the aggregate have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company, the Guarantor and the Guarantor's Significant
Subsidiary; and to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(v) This Agreement and any applicable Terms Agreement have been
duly authorized, executed and delivered by the Company and the
Guarantor;
(vi) The Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered by the Company, will
constitute valid and legally binding obligations of the Company entitled
to the benefits provided by the Indentures; and the Indentures conform
and the Securities will conform to the descriptions thereof in the
Prospectus as amended or supplemented. The Guarantees have been duly
authorized and, when duly executed, authenticated, issued and delivered
by the Guarantor, will constitute valid and legally binding obligations
of the Guarantor entitled to the benefits provided by the Indentures;
and the Guarantees will conform to the description thereof in the
Prospectus as amended or supplemented; the Guarantees have been duly
authorized and, upon due issuance and delivery of the related Securities
and due endorsement of the Guarantees, the Guarantees will have been
duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Guarantor entitled to the
benefits
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provided by the Indentures, which will be substantially in the form
filed as an exhibit to the Registration Statement; the Indentures have
been duly authorized and duly qualified under the Trust Indenture Act
and constitutes a valid and legally binding instrument, enforceable in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Indentures conform and the Securities and the
Guarantees of any particular issuance of Securities will conform to the
descriptions thereof contained in the Prospectus as amended or
supplemented to relate to such issuance;
(vii) The issue and sale of the Securities and the related
Guarantees, the compliance by the Company and the Guarantor with all of
the provisions of the Securities and the related Guarantees, the
Indentures, this Agreement and any applicable Terms Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
known to such counsel to which the Company, the Guarantor or any of the
Guarantor's Significant Subsidiaries is a party or by which the Company,
the Guarantor or any of the Guarantor's Significant Subsidiaries is
bound or to which any of the property or assets of the Company, the
Guarantor or any of the Guarantor's Significant Subsidiaries is subject,
nor will such action result in any violation of the provisions of the
Articles of Incorporation of the Company, the Guarantor or any of the
Guarantor's Significant Subsidiaries or the By-laws of the Company, the
Guarantor or any of the Guarantor's Significant Subsidiaries or any
statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company, the Guarantor or any of the Guarantor's Significant
Subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any court
or governmental agency or body is required for the solicitation of
offers to purchase Securities and the related Guarantees, the issue and
sale of the Securities and the related Guarantees or the consummation by
the Company or the Guarantor of the other transactions contemplated by
this Agreement, any applicable Terms Agreement, or the Indentures,
except such as have been obtained under the Act and the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the solicitation by the Agents of offers to
purchase Securities and the related Guarantees from the Company and with
purchases of Securities and the related Guarantees by an Agent as
principal, as the case may be, in each case in the manner contemplated
hereby;
(viii) Neither the Company nor the Guarantor nor any of the
Guarantor's Significant Subsidiaries is in violation of its Articles of
Incorporation or By-laws, as the case may be, or in default in the
performance or observance of any material obligation, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound, and the Company
has no Significant Subsidiaries;
(ix) The statements set forth in the Prospectus under the captions
"Description of the Debt Securities," "Description of Notes" and
"Certain Tax Considerations," insofar as they purport to constitute a
summary of the terms of the Securities, under the caption "Guarantees,"
insofar as they purport to constitute a summary of the terms of the
Guarantees, under the caption "Certain United States Federal Income Tax
Considerations,"
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and under the captions "Plan of Distribution" and "Supplemental Plan of
Distribution," and the information incorporated by reference in the
Prospectus under the captions "Regulation and Supervision of Bank
Holding Companies," "Regulation and Supervision of Banks," "Properties"
and "Legal Proceedings" in the Company's Annual Report on Form 10-K for
the Fiscal Year ended December 31, 1996, insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair;
(x) Neither the Company nor the Guarantor is and, after giving
effect to each offering and sale of the Securities and the Guarantees,
neither the Company nor the Guarantor will be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act. The Company is exempt from the
provisions of the Investment Company Act by virtue of compliance with
the provisions of Rule 3a-5 thereunder;
(xi) The documents incorporated by reference in the Prospectus
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and they have no reason to
believe that any of such documents, when they became effective or were
so filed, as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and,
in the case of other documents which were filed under the Act or the
Exchange Act with the Commission, an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading;
(xii) The Registration Statement is effective under the Act and, to
the best of such counsel's knowledge, no stop order suspending the
Registration Statement has been issued under the Act or proceedings for
that purpose have been instituted or threatened by the Commission;
(xiii) The Registration Statement and the Prospectus as amended and
supplemented and any further amendments and supplements thereto made by
the Company or the Guarantor prior to the date of such opinion (other
than the financial statements and related schedules therein, as to which
such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations thereunder; although they do not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in subsection (ix) of this
Section 6(c), they have no reason to believe that, as of its effective
date, the Registration Statement or any further amendment or supplement
thereto made by the Company or the Guarantor prior to the date of such
opinion (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that, as of the date of such
17
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opinion, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company or the Guarantor
prior to the date of such opinion (other than the financial statements
and related schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading; and they
do not know of any amendment to the Registration Statement required to
be filed or any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or supplemented
or required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required.
(d) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in Section 4(j)
hereof that is on or prior to such Solicitation Time or Time of Delivery, as
the case may be, the independent certified public accountants who have
certified the financial statements included or incorporated by reference in
the Registration Statement shall have furnished to such Agent a letter,
dated the Commencement Date or such applicable date, as the case may be, in
form and substance satisfactory to such Agent, to the effect set forth in
Annex III hereto;
(e) (i) Neither the Company, the Guarantor nor any of the Guarantor's
Significant Subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus as amended or supplemented prior to the date of the Pricing
Supplement relating to the Securities and the related Guarantees to be
delivered at the relevant Time of Delivery any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented prior to the date of the Pricing
Supplement relating to the Securities and the related Guarantees to be
delivered at the relevant Time of Delivery and (ii) since the respective
dates as of which information is given in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to the
Securities and the related Guarantees to be delivered at the relevant Time
of Delivery there shall not have been any material change in the capital
stock or long-term debt of the Company, the Guarantor (other than the share
repurchase plan that has been disclosed to the Agents) or any of the
Guarantor's Significant Subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company, the Guarantor and the Guarantor's Significant
Subsidiaries, otherwise than as set forth or contemplated in the Prospectus
as amended or supplemented prior to the date of the Pricing Supplement
relating to the Securities and the related Guarantees to be delivered at the
relevant Time of Delivery, the effect of which, in any such case described
in Clause (i) or (ii), is in the judgment of such Agent so material and
adverse as to make it impracticable or inadvisable to proceed with the
solicitation by such Agent of offers to purchase Securities and related
Guarantees from the Company or the purchase by such Agent of Securities and
related Guarantees from the Company as principal, as the case may be, on the
terms and in the manner contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to the
Securities and the related Guarantees to be delivered at the relevant Time
of Delivery;
(f) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's or the Guarantor's debt
securities by any "nationally recognized statistical
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rating organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act, and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's or the Guarantor's
debt securities;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or the NASDAQ National
Market System; (ii) a suspension or material limitation in trading in the
Company's or Guarantor's securities on the NASDAQ National Market System;
(iii) a general moratorium on commercial banking activities in Pennsylvania
or New York declared by either Federal, Pennsylvania or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in the Clause
(iv) in the judgment of such Agent makes it impracticable or inadvisable to
proceed with the solicitation of offers to purchase Securities and related
Guarantees or the purchase of the Securities and the related Guarantees from
the Company as principal pursuant to the applicable Terms Agreement or
otherwise, as the case may be, on the terms and in the manner contemplated
in the Prospectus;
(h) With respect to any Security denominated in a currency other
than the U.S. dollar, more than one currency or a composite currency or any
Security the principal or interest of which is indexed to such currency,
currencies or composite currency, there shall not have occurred a suspension
or material limitation in foreign exchange trading in such currency,
currencies or composite currency by a major international bank, a general
moratorium on commercial banking activities in the country or countries
issuing such currency, currencies or composite currency, the outbreak or
escalation of hostilities involving, the occurrence of any material adverse
change in the existing financial, political or economic conditions of, or
the declaration of war or a national emergency by, the country or countries
issuing such currency, currencies or composite currency or the imposition or
proposal of exchange controls by any governmental authority in the country
or countries issuing such currency, currencies or composite currency;
(i) The Company shall have complied with the provisions of Section
4(c) hereof with respect to the furnishing of prospectuses on the business
day next succeeding the date of each Terms Agreement; and
(j) The Company and the Guarantor shall have furnished or caused to
be furnished to such Agent certificates of officers of the Company and the
Guarantor dated the Commencement Date and each applicable date referred to
in Section 4(k) hereof that is on or prior to such Solicitation Time or Time
of Delivery, as the case may be, in such form and executed by such officers
of the Company and the Guarantor as shall be satisfactory to such Agent, as
to the accuracy of the representations and warranties of the Company and the
Guarantor herein at and as of the Commencement Date or such applicable date,
as the case may be, as to the performance by the Company and the Guarantor
of all of their obligations hereunder to be performed at or prior to the
Commencement Date or such applicable date, as the case may be, as to the
matters set forth in subsections (a) and (e) of this Section 6, and as to
such other matters as such Agent may reasonably request.
7. (a) The Company and the Guarantor jointly and severally will
indemnify and hold harmless each Agent against any losses, claims, damages
or liabilities, joint or several, to which
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such Agent may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented or any
other prospectus relating to the Securities or the related Guarantees, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and will reimburse such Agent for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that the Company
or the Guarantor shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities and the related Guarantees, or any
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company or the Guarantor by such Agent
expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company and the
Guarantor against any losses, claims, damages or liabilities to which the
Company or the Guarantor may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus, the Prospectus as
amended or supplemented or any other prospectus relating to the Securities
and the related Guarantees, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities and the
related Guarantees, or any such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Company or the
Guarantor by such Agent expressly for use therein; and will reimburse the
Company or the Guarantor for any legal or other expenses reasonably incurred
by the Company or the Guarantor in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any
other
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expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include
a statement as to, or an admission of, fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Guarantor on
the one hand and each Agent on the other from the offering of the Securities
and the related Guarantees to which such loss, claim, damage or liability
(or action in respect thereof) relates. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law or
if the indemnified party failed to give the notice required under subsection
(c) above, then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the Guarantor on the one hand and each Agent on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative benefits received
by the Company and the Guarantor on the one hand and each Agent on the other
shall be deemed to be in the same proportion as the total net proceeds from
the sale of Securities and related Guarantees (before deducting expenses)
received by the Company and the Guarantor bear to the total commissions or
discounts received by such Agent in respect thereof. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading relates to
information supplied by the Company and the Guarantor on the one hand or by
any Agent on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company, the Guarantor and each Agent agree that it would not
be just and equitable if contribution pursuant to this subsection (d) were
determined by per capita allocation (even if all Agents were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), an Agent shall not be
required to contribute any amount in excess of the amount by which the total
public offering price at which the Securities and the related Guarantees
purchased by or through it were sold exceeds the amount of any damages which
such Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of
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Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of
each of the Agents under this subsection (d) to contribute are several in
proportion to the respective purchases made by or through it to which such
loss, claim, damage or liability (or action in respect thereof) relates and
are not joint.
(e) The obligations of the Company and the Guarantor under this
Section 7 shall be in addition to any liability which the Company or the
Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Agent within the
meaning of the Act; and the obligations of each Agent under this Section 7
shall be in addition to any liability which such Agent may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company
or the Guarantor within the meaning of the Act.
8. Each Agent, in soliciting offers to purchase Securities and related
Guarantees from the Company and in performing the other obligations of such
Agent hereunder (other than in respect of any purchase by an Agent as principal,
pursuant to a Terms Agreement or otherwise), is acting solely as agent for the
Company and not as principal. Each Agent will make reasonable efforts to assist
the Company in obtaining performance by each purchaser whose offer to purchase
Securities and related Guarantees from the Company was solicited by such Agent
and has been accepted by the Company, but such Agent shall not have any
liability to the Company or the Guarantor in the event such purchase is not
consummated for any reason. If the Company shall default on its obligation to
deliver Securities and related Guarantees to a purchaser whose offer it has
accepted, the Company shall (i) hold each Agent harmless against any loss, claim
or damage arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties
and other statements by any Agent, the Company and the Guarantor set forth in or
made pursuant to this Agreement shall remain in full force and effect regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Agent or any controlling person of any Agent, the Company or the
Guarantor, or any officer or director or any controlling person of the Company
or the Guarantor, and shall survive each delivery of and payment for any of the
Securities and the related Guarantees.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities and related Guarantees from the Company may be
suspended or terminated at any time by the Company as to any Agent or by any
Agent as to such Agent upon the giving of written notice of such suspension or
termination to such Agent or the Company, as the case may be. In the event of
such suspension or termination with respect to any Agent, (x) this Agreement
shall remain in full force and effect with respect to any Agent as to which such
suspension or termination has not occurred, (y) this Agreement shall remain in
full force and effect with respect to the rights and obligations of any party
which have previously accrued or which relate to Securities and related
Guarantees which are already issued, agreed to be issued or the subject of a
pending offer at the time of such suspension or termination and (z) in any
event, this Agreement shall remain in full force and effect insofar as the
fourth paragraph of Section 2(a), and Sections 4(d), 4(e), 5, 7, 8 and 9 hereof
are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Goldman, Sachs & Co. shall be sufficient in all respects when
delivered
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or sent by facsimile transmission or registered mail to 85 Broad
Street, New York, New York 10004, Facsimile Transmission No. (212) 363-7609,
Attention: Credit Department, Bear, Stearns & Co. Inc., 55 Water Street, New
York, New York 10041, Facsimile Transmission No. (212) ______________,
Attention: ____________, and Keefe, Bruyette & Woods, Inc., 2 World Trade
Center, New York, New York 10048, Facsimile Transmission No. (212)
______________, Attention: ____________; and if to the Company shall be
sufficient in all respects when delivered or sent by facsimile transmission or
registered mail to One Keystone Plaza, Front and Market Streets, P.O. Box 3660,
Harrisburg, PA 17105-3660, Facsimile Transmission No. (717) ______________,
Attention: ____________; and if to the Guarantor shall be sufficient in all
respects when delivered or sent by facsimile transmission or registered mail to
One Keystone Plaza, Front and Market Streets, P.O. Box 3660, Harrisburg, PA
17105-3660, Facsimile Transmission No. (717) ______________, Attention:
____________.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent, the Company and the Guarantor, and
to the extent provided in Sections 7, 8 and 9 hereof, the officers and directors
of the Company and the Guarantor and any person who controls any Agent, the
Company or the Guarantor and their respective personal representatives,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement or any Terms Agreement. No purchaser of
any of the Securities and the related Guarantees through or from any Agent
hereunder shall be deemed a successor or assign by reason merely of such
purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
14. This Agreement and any Terms Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
15. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
23
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
KEYSTONE FINANCIAL MID-ATLANTIC
FUNDING CORP.
By: _____________________________
Name:
Title:
KEYSTONE FINANCIAL, INC.
By: _____________________________
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
_______________________________
(Goldman, Sachs & Co.)
BEAR, STEARNS & CO. INC.
By: ___________________________
Name:
Title:
KEEFE, BRUYETTE & WOODS, INC.
By: ___________________________
Name:
Title:
24
<PAGE>
ANNEX I
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
SENIOR/SUBORDINATED MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 30 YEARS
FROM DATE OF ISSUE
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF THE
PRINCIPAL, PREMIUM, IF ANY, AND INTEREST, IF ANY, BY
KEYSTONE FINANCIAL, INC.
TERMS AGREEMENT
---------------
_______________, 1997
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Bear, Stearns & Co. Inc.
55 Water Street
New York, New York 10041
Keefe, Bruyette & Woods, Inc.
2 World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Keystone Financial Mid-Atlantic Funding Corp. (the "Company")
proposes, subject to the terms and conditions stated herein and in the
Distribution Agreement, dated _________, 1997 (the "Distribution Agreement"),
between the Company on the one hand and Goldman, Sachs & Co., Bear, Stearns &
Co. Inc. and Keefe, Bruyette & Woods, Inc. (the "Agents") on the other, to issue
and sell to Goldman, Sachs & Co., Bear, Stearns & Co. Inc. and Keefe, Bruyette &
Woods, Inc. the securities specified in the Schedule hereto (the "Purchased
Securities"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agents, as agents of the
Company, of offers to purchase Securities and related Guarantees is incorporated
herein by reference in its entirety, and shall be deemed to be part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein. Nothing contained herein or in the Distribution Agreement shall
make any party hereto an agent of the Company or make such party subject to the
provisions therein relating to the solicitation of offers to purchase Securities
and related Guarantees from the Company, solely by virtue of its execution of
this Terms Agreement. Each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Terms
Agreement, except that each representation and warranty in Section 1 of the
Distribution Agreement which makes reference to the Prospectus shall be deemed
to be a representation and warranty as of the date of the Distribution Agreement
in relation to the Prospectus
I-1
<PAGE>
(as therein defined), and also a representation and warranty as of the date of
this Terms Agreement in relation to the Prospectus as amended and supplemented
to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [GOLDMAN, SACHS & CO.,] [BEAR, STEARNS & CO. INC.,] [KEEFE,
BRUYETTE & WOODS, INC.] and [GOLDMAN, SACHS & CO.,] [BEAR, STEARNS & CO. INC.,]
[KEEFE, BRUYETTE & WOODS, INC.] agrees to purchase from the Company the
Purchased Securities, at the time and place, in the principal amount and at the
purchase price set forth in the Schedule hereto.
I-2
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us ...... counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
KEYSTONE FINANCIAL MID-ATLANTIC
FUNDING CORP.
By: _______________________________
Name:
Title:
KEYSTONE FINANCIAL, INC.
By: _______________________________
Name:
Title:
Accepted:
[__________________________
(GOLDMAN, SACHS & CO.)]
[BEAR, STEARNS & CO. INC.
By: _______________________
Name:
Title:]
[KEEFE, BRUYETTE & WOODS, INC.
By: _______________________
Name:
Title:]
I-3
<PAGE>
SCHEDULE TO ANNEX I
Title of Purchased Securities:
[ %] [SENIOR][SUBORDINATED] Medium-Term Notes[, SERIES ....]
Aggregate Principal Amount:
[$.................... or units of other Specified Currency]
[PRICE TO PUBLIC:]
Purchase Price by [GOLDMAN, SACHS & CO.] [BEAR, STEARNS & CO. INC.] [KEEFE,
BRUYETTE & WOODS, INC.]:
% of the principal amount of the Purchased Securities[, PLUS ACCRUED
INTEREST FROM ............... TO ...............] [AND ACCRUED AMORTIZATION, IF
ANY, FROM ................. TO ................]
Method of and Specified Funds for Payment of Purchase Price:
[BY CERTIFIED OR OFFICIAL BANK CHECK OR CHECKS, PAYABLE TO THE ORDER
OF THE COMPANY, IN IMMEDIATELY AVAILABLE FUNDS]
[BY WIRE TRANSFER TO A BANK ACCOUNT SPECIFIED BY THE COMPANY IN
IMMEDIATELY AVAILABLE FUNDS]
Indenture:
[SENIOR INDENTURE, DATED AS OF ___________, 1997, BETWEEN THE COMPANY, THE
GUARANTOR AND ..................., AS SENIOR TRUSTEE] [SUBORDINATED
INDENTURE, DATED AS OF __________, 1997, BETWEEN THE COMPANY, THE GUARANTOR
AND ____________, AS SUBORDINATED TRUSTEE.]
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[MONTHS AND DATES]
Sch. I-1
<PAGE>
Documents to be Delivered:
The following documents referred to in the Distribution Agreement
shall be delivered as a condition to the Closing:
[(1) THE OPINION OR OPINIONS OF COUNSEL TO THE AGENTS REFERRED TO IN
SECTION 4(h).]
[(2) THE OPINION OF COUNSEL TO THE COMPANY REFERRED TO IN SECTION 4(i).]
[(3) THE ACCOUNTANTS' LETTER REFERRED TO IN SECTION 4(j).]
[(4) THE OFFICERS' CERTIFICATE REFERRED TO IN SECTION 4(k).]
Other Provisions (including Syndicate Provisions, if applicable):
Sch. I-2
<PAGE>
ANNEX II
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
ADMINISTRATIVE PROCEDURE
------------------------
This Administrative Procedure relates to the Securities and the
related Guarantees defined in the Distribution Agreement, dated ___________,
1997 (the "Distribution Agreement"), between Keystone Financial Mid-Atlantic
Funding Corp. (the "Company"), Keystone Financial, Inc. (the "Guarantor") and
Goldman, Sachs & Co., Bear, Stearns & Co. Inc. and Keefe, Bruyette & Woods, Inc.
(together, the "Agents"), to which this Administrative Procedure is attached as
Annex II. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the Prospectus as
amended or supplemented or the Indentures.
The procedures to be followed with respect to the settlement of sales
of Securities and related Guarantees directly by the Company to purchasers
solicited by an Agent, as agent, are set forth below. The terms and settlement
details related to a purchase of Securities and related Guarantees by an Agent,
as principal, from the Company will be set forth in a Terms Agreement pursuant
to the Distribution Agreement, unless the Company and such Agent otherwise agree
as provided in Section 2(b) of the Distribution Agreement, in which case the
procedures to be followed in respect of the settlement of such sale will be as
set forth below. An Agent, in relation to a purchase of a Security by a
purchaser solicited by such Agent, is referred to herein as the "Selling Agent"
and, in relation to a purchase of a Security by such Agent as principal other
than pursuant to a Terms Agreement, as the "Purchasing Agent."
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Securities and
related Guarantees and the related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indentures.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Certificated Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
- -----------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a
II-1
<PAGE>
Medium-Term Note Certificate Agreement between the Trustee and the Depositary,
dated as of .................., 19.., (the "Certificate Agreement"), and its
obligations as a participant in the Depositary, including the Depositary's Same-
Day Funds Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the
case may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and initial
interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the applicable Exchange Rate for such Specified Currency (it
being understood that currently the Depositary accepts deposits of
Global Securities denominated in U.S. dollars only);
II-2
<PAGE>
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption
Commencement Date;
(12) If a Floating Rate Book-Entry Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a
list of CUSIP numbers previously delivered to the Trustee by the Company
representing such Book-Entry Security and then advise the Company and the
Selling Agent or Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
II-3
<PAGE>
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-Entry
Security;
(3) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
(4) Number of the participant account maintained by the Depositary on
behalf of the Selling Agent or Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security, number of
days by which such date succeeds the record date for the Depositary's
purposes (which in the case of Floating Rate Securities which reset
weekly shall be the date five calendar days immediately preceding the
applicable Interest Payment Date and in the case of all other Book-
Entry Securities shall be the Regular Record Date, as defined in the
Security) and, if calculable at that time, the amount of interest
payable on such Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the
Trustee's participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary to (i) debit such Book-
Entry Security to the Trustee's participant account and credit such Book-Entry
Security to such Agent's participant account and (ii) debit such Agent's
settlement account and credit the Trustee's settlement account for an amount
equal to the price of such Book-Entry Security less such Agent's commission.
The entry of such a deliver order shall constitute a representation and warranty
by the Trustee to the Depositary that (a) the Global Security representing such
Book-Entry Security has been issued and authenticated and (b) the Trustee is
holding such Global Security pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such Book-
Entry Security to such Agent's participant account and credit such Book-Entry
Security to the participant accounts of the Participants with respect to such
Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at ____________________, or such other
account as the Company may have previously specified to the Trustee, in funds
available for immediate use in the amount transferred to the Trustee in
accordance with Settlement Procedure "F."
II-4
<PAGE>
J. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indentures.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade Date
(as defined below), or if the Company and the purchaser agree to settlement on
the Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have ten
Pricing Supplements filed with the Commission not later than the close of
business of the Commission on the fifth Business Day following the date on which
such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third Business Day after the Trade Date pursuant
to the "Settlement Procedure Timetable" set forth below, unless the Company and
the purchaser agree to settlement on another Business Day which shall be no
earlier than the next Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set
II-5
<PAGE>
forth above shall be completed as soon as possible but not later than the
respective times (New York City time) set forth below:
SETTLEMENT
PROCEDURE TIME
- --------- ----
A 5:00 p.m. on the Business Day following the Trade Date or 10:00
a.m. on the Business Day prior to the Settlement Date,
whichever is earlier
B 12:00 noon on the second Business Day immediately preceding the
Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding the
Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the Business Day immediately
preceding the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F," the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled," make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
II-6
<PAGE>
If the purchase price for any Book-Entry Security is not timely paid
to the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure I, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall
have occurred for any reason other than default by the applicable Agent to
perform its obligations hereunder or under the Distribution Agreement, the
Company will reimburse such Agent on an equitable basis for the loss of its use
of funds during the period when the funds were credited to the account of the
Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book-Entry Securities to
have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D," for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
- --------------------------------------------------------------
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
II-7
<PAGE>
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other
than U.S. dollars, the applicable Exchange Rate for such
Specified Currency;
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Certificated Security, such of the following
as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of the
Redemption Commencement Date;
(12) If a Floating Rate Certificated Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
II-8
<PAGE>
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the
registered owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security,
it will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have ten Pricing Supplements filed with the
Commission not later than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the fifth Business Day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another Business Day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
II-9
<PAGE>
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date the
Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing
Agent, the Trustee will, by 2:15 p.m., New York City time, on the Settlement
Date, deliver the Certificated Securities to the Purchasing Agent against
delivery of payment for such Certificated Securities in immediately available
funds to the Company in an amount equal to the issue price of the Certificated
Securities less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment
to the Selling Agent for a Certificated Security, the Selling Agent will
promptly notify the Trustee and the Company thereof by telephone (confirmed in
writing) or by facsimile transmission or other acceptable written means. The
Selling Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
II-10
<PAGE>
ANNEX III
ACCOUNTANTS' LETTER
-------------------
Pursuant to Sections 4(j) and 6(d), as the case may be, of the
Distribution Agreement, the Guarantor's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with respect to
the Guarantor and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial
statements of the Guarantor for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been furnished
to the Agents;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Guarantor's quarterly report on Form
10-Q incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which are attached hereto; and on the basis of
specified procedures including inquiries of officials of the Guarantor
who have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;
III-1
<PAGE>
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the
Guarantor for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Guarantor's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for five
such fiscal years which were included or incorporated by reference in
the Guarantor's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Guarantor and its subsidiaries, inspection
of the minute books of the Guarantor and its subsidiaries since the date
of the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Guarantor and
its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference
in the Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange Act
and the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus or included in the
Guarantor's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus for them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data and
items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Guarantor's Annual Report
on Form 10-K for the most recent fiscal year;
III-2
<PAGE>
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to
in Clause (B) were not determined on a basis substantially consistent
with the basis for the audited financial statements included or
incorporated by reference in the Guarantor's Annual Report on Form 10-K
for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options
and stock appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Guarantor and its subsidiaries, or
any decreases in consolidated net current assets or stockholders' equity
or other items specified by the Agents, or any increases in any items
specified by the Agents, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (E) there were any decreases in consolidated
net revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Agents, or any
increases in any items specified by the Agents, in each case as compared
with the comparable period of the preceding year and with any other
period of corresponding length specified by the Agents, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Agents
which are derived from the general accounting records of the Guarantor
and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by the Agents or
in documents incorporated by reference in the Prospectus specified by
the Agents, and
III-3
<PAGE>
have compared certain of such amounts, percentages and financial
information with the accounting records of the Guarantor and its
subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(j) thereof.
III-4
<PAGE>
EXHIBIT 4.1
================================================================================
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.,
Issuer
and
KEYSTONE FINANCIAL, INC.,
Guarantor
to
BANKERS TRUST COMPANY,
Trustee
----------------
SENIOR INDENTURE
----------------
Dated as of _______, 1997
Senior Debt Securities
================================================================================
<PAGE>
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
and
KEYSTONE FINANCIAL, INC.
Reconciliation and tie between Trust Indenture Act of 1939
and Senior Indenture, dated as of _______, 1997
-----------------------------------------------
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
(S)310(a)(1)............................................ 709
(a)(2)............................................ 709
(a)(3)............................................ Not Applicable
(a)(4)............................................ Not Applicable
(b)............................................... 708, 710
(S)311(a)............................................... 713(a), (c)
(b)............................................... 713(b), (c)
(b)(2)............................................ 803(a)(2), 803(b)
(S)312(a)............................................... 801, 802(a)
(b)............................................... 802(b)
(c)............................................... 802(c)
(S)313(a)............................................... 803(a)
(b)(1)............................................ Not Applicable
(b)(2)............................................ 803(b)
(c)............................................... 803(c)
(d)............................................... 803(d)
(S)314(a)............................................... 804
(b)............................................... Not Applicable
(c)(1)............................................ 102
(c)(2)............................................ 102
(c)(3)............................................ Not Applicable
(d)............................................... Not Applicable
(e)............................................... 102
(S)315(a)............................................... 701(a)
(b)............................................... 702, 803(a)(6)
(c)............................................... 701(b)
(d)............................................... 701(c)
(d)(1)............................................ 701(a)(1), (c)(1)
(d)(2)............................................ 701(c)(2)
(d)(3)............................................ 701(c)(3)
(e)............................................... 614
(S)316(a)............................................... 101
(a)(1)(A)......................................... 602, 612
(a)(1)(B)......................................... 613
(a)(2)............................................ Not Applicable
(b)............................................... 608
(S)317(a)(1)............................................ 603
(a)(2)............................................ 604
(b)............................................... 1103
(S)318(a)............................................... 108
- ----------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of this Senior Indenture.
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
Parties......................................................................1
Recitals of the Company.................................................... 1
Recitals of Guarantor...................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions............................................ 2
"Act".......................................................... 2
"Additional Amounts"........................................... 2
"Affiliate".................................................... 2
"Authenticating Agent"......................................... 3
"Authorized Newspaper"......................................... 3
"Banking Subsidiary"........................................... 3
"Bearer Security".............................................. 3
"Board of Directors"........................................... 3
"Board Resolution"............................................. 3
"Business Day"................................................. 3
"Commission"................................................... 3
"Company"...................................................... 4
"Company Request".............................................. 4
"Company Order"................................................ 4
"Guarantor Request"............................................ 4
"Guarantor Order".............................................. 4
"Consolidated Banking Assets".................................. 4
"Controlled Subsidiary"........................................ 4
"Corporate Trust Office"....................................... 4
"Corporation".................................................. 4
"coupon"....................................................... 4
"Defaulted Interest"........................................... 4
"Dollars" or "$"............................................... 4
"Event of Default"............................................. 4
"Guarantee".................................................... 5
"Guarantor".................................................... 5
"Holder"....................................................... 5
"Indenture".................................................... 5
"Interest"..................................................... 5
"Interest Payment Date"........................................ 5
"Major Constituent Bank"....................................... 5
"Maturity"..................................................... 5
"Officers' Certificate"........................................ 5
"Opinion of Counsel"........................................... 5
"Original Issue Discount Security"............................. 6
"Outstanding".................................................. 6
"Paying Agent"................................................. 7
"Person"....................................................... 7
i
<PAGE>
"Place of Payment"............................................. 7
"Predecessor Security"......................................... 7
"Redemption Date".............................................. 7
"Redemption Price"............................................. 7
"Registered Security".......................................... 7
"Regular Record Date".......................................... 8
"Responsible Officer".......................................... 8
"Security" or "Securities"..................................... 8
"Security Register"............................................ 8
"Security Registrar"........................................... 8
"Special Record Date".......................................... 8
"Stated Maturity".............................................. 8
"Subsidiary"................................................... 8
"Trustee"...................................................... 8
"Trust Indenture Act".......................................... 8
"United States"................................................ 8
"United States Alien".......................................... 9
"U.S. Depository" or "Depository".............................. 9
"U.S. Government Obligations".................................. 9
"Vice President"............................................... 9
"Voting Stock"................................................. 9
Section 102. Compliance Certificates and Opinions................... 10
Section 103. Form of Documents Delivered to Trustee................. 10
Section 104. Acts of Holders........................................ 11
Section 105. Notices, etc., to Trustee, Company and
Guarantor............................................ 14
Section 106. Notice to Holders of Securities; Waiver................ 14
Section 107. Language of Notices.................................... 15
Section 108. Conflict with Trust Indenture Act...................... 15
Section 109. Effect of Headings and Table of Contents............... 16
Section 110. Successors and Assigns................................. 16
Section 111. Separability Clause.................................... 16
Section 112. Benefits of Indenture.................................. 16
Section 113. Governing Law.......................................... 16
Section 114. Legal Holidays......................................... 16
ARTICLE TWO
FORMS OF SECURITIES AND GUARANTEES
Section 201. Forms Generally........................................ 17
Section 202. Form of Trustee's Certificate of
Authentication......................................... 17
Section 203. Securities in Global Form.............................. 17
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series................... 18
Section 302. Denominations.......................................... 21
ii
<PAGE>
Section 303. Execution, Authentication, Delivery and Dating..... 21
Section 304. Temporary Securities............................... 23
Section 305. Registration, Transfer and Exchange................ 24
Section 306. Mutilated, Destroyed, Lost and Stolen Securities... 28
Section 307. Payment of Interest; Interest Rights Preserved..... 29
Section 308. Persons Deemed Owners.............................. 31
Section 309. Cancellation....................................... 32
Section 310. Computation of Interest............................ 32
ARTICLE FOUR
GUARANTEES OF SECURITIES
Section 401. Unconditional Guarantee............................ 32
Section 402. Execution, Authentication and Delivery............. 33
ARTICLE FIVE
SATISFACTION AND DISCHARGE
Section 501. Satisfaction and Discharge......................... 34
Section 502. Application of Trust Money......................... 36
Section 503. Satisfaction, Discharge and Defeasance of
Securities of Any Series........................... 36
ARTICLE SIX
REMEDIES
Section 601. Events of Default.................................. 38
Section 602. Acceleration of Maturity; Rescission and Annulment. 40
Section 603. Collection of Indebtedness and Suits for
Enforcement by Trustee............................. 41
Section 604. Trustee May File Proofs of Claim................... 42
Section 605. Trustee May Enforce Claims without Possession of
Securities or Coupons.............................. 43
Section 606. Application of Money Collected..................... 43
Section 607. Limitation on Suits................................ 44
Section 608. Unconditional Right of Holders to Receive Principal,
Premium and Interest............................... 45
Section 609. Restoration of Rights and Remedies................. 45
Section 610. Rights and Remedies Cumulative..................... 45
Section 611. Delay or Omission Not Waiver....................... 45
Section 612. Control by Holders of Securities................... 46
Section 613. Waiver of Past Defaults............................ 46
Section 614. Undertaking for Costs.............................. 46
Section 615. Waiver of Stay or Extension Laws................... 47
iii
<PAGE>
ARTICLE SEVEN
THE TRUSTEE
Section 701. Certain Duties and Responsibilities................ 47
Section 702. Notice of Defaults................................. 49
Section 703. Certain Rights of Trustee.......................... 49
Section 704. Not Responsible for Recitals or Issuance of
Securities and Guarantees.......................... 50
Section 705. May Hold Securities................................ 50
Section 706. Money Held in Trust................................ 51
Section 707. Compensation and Reimbursement..................... 51
Section 708. Disqualifications; Conflicting Interests........... 52
(a) Elimination of Conflicting Interest or
Resignation...................................52
(b) Notice of Failure to Eliminate Conflicting
Interest or Resign............................52
(c) "Conflicting Interest" Defined................52
(d) Definitions of Certain Terms Used in this
Section.......................................56
(e) Calculation of Percentages of Securities......57
Section 709. Corporate Trustee Required; Eligibility............ 58
Section 710. Resignation and Removal; Appointment of Successor.. 58
Section 711. Acceptance of Appointment by Successor............. 60
Section 712. Merger, Conversion, Consolidation or Succession to
Business........................................... 62
Section 713. Preferential Collection of Claims Against Company
and Guarantor...................................... 62
(a) Segregation and Apportionment of Certain
Collections by Trustee; Certain Exceptions....62
(b) Certain Creditor Relationships Excluded From
Segregation and Apportionment.................65
(c) Definitions of Certain Terms Used in this
Section.......................................66
Section 714. Appointment of Authenticating Agent................ 66
ARTICLE EIGHT
HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR
Section 801. Company and Guarantor to Furnish Trustee Names and
Addresses of Holders............................... 69
Section 802. Preservation of Information; Communications to
Holders............................................ 69
iv
<PAGE>
Section 803. Reports by Trustee................................. 71
Section 804. Reports by Company and Guarantor................... 73
ARTICLE NINE
CONSOLIDATION, MERGER AND SALES
Section 901. Company May Consolidate, Etc., Only on
Certain Terms...................................... 73
Section 902. Successor Corporation Substituted for Company...... 75
Section 903. Guarantor May Consolidate, Etc., Only on Certain
Terms.............................................. 75
Section 904. Successor Corporation Substituted for Guarantor.... 76
Section 905. Assumption by Guarantor............................ 76
ARTICLE TEN
SUPPLEMENTAL INDENTURES
Section 1001. Supplemental Indentures without Consent of Holders. 77
Section 1002. Supplemental Indentures with Consent of Holders.... 78
Section 1003. Execution of Supplemental Indentures............... 79
Section 1004. Effect of Supplemental Indentures.................. 80
Section 1005. Conformity with Trust Indenture Act................ 80
Section 1006. Reference in Securities to Supplemental Indentures 80
ARTICLE ELEVEN
COVENANTS
Section 1101. Payment of Principal, Premium, if any, and Interest 80
Section 1102. Maintenance of Office or Agency.................... 81
Section 1103. Money for Securities Payments to Be Held in Trust.. 82
Section 1104. Additional Amounts................................. 84
Section 1105. Company Statement as to Compliance; Notice of
Certain Defaults................................... 85
Section 1106. Guarantor Statement as to Compliance; Notice of
Certain Defaults................................... 85
Section 1107. Limitation upon Disposition of Voting Stock of
Company and Major Constituent Banks................ 86
Section 1108. Limitation on Creation of Liens.................... 87
Section 1109. Corporate Existence................................ 88
Section 1110. Waiver of Certain Covenants........................ 88
v
<PAGE>
ARTICLE TWELVE
REDEMPTION OF SECURITIES
Section 1201. Applicability of Article........................... 88
Section 1202. Election to Redeem; Notice to Trustee.............. 88
Section 1203. Selection by Trustee of Securities to Be Redeemed.. 89
Section 1204. Notice of Redemption............................... 89
Section 1205. Deposit of Redemption Price........................ 90
Section 1206. Securities Payable on Redemption Date.............. 91
Section 1207. Securities Redeemed in Part........................ 92
ARTICLE THIRTEEN
SINKING FUNDS
Section 1301. Applicability of Article........................... 92
Section 1302. Satisfaction of Sinking Fund Payments with
Securities......................................... 93
Section 1303. Redemption of Securities for Sinking Fund.......... 93
ARTICLE FOURTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1404. Applicability of Article........................... 94
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May Be Called.......... 94
Section 1503. Persons Entitled to Vote at Meetings............... 95
Section 1504. Quorum, Action..................................... 96
Section 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings............................ 97
Section 1506. Counting Votes and Recording Action of Meetings.... 98
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
Section 1601. Securities in Foreign Currencies................... 98
Testimonium...........................................................99
Signatures and Seals..................................................99
Acknowledgments.......................................................99
vi
<PAGE>
SENIOR INDENTURE, dated as of _______, 1997 (the "Indenture"), among
Keystone Financial Mid-Atlantic Funding Corp., a corporation duly organized and
existing under the laws of the Commonwealth of Pennsylvania hereinafter called
the "Company"), Keystone Financial, Inc., a corporation duly organized and
existing under the laws of the Commonwealth of Pennsylvania (hereinafter called
the "Guarantor"), each having its principal executive office at Front and Market
Streets, P.O. Box 3660, Harrisburg, Pennsylvania 17105-3660, and Bankers Trust
Company, a New York banking corporation (hereinafter called the "Trustee"),
having its Corporate Trust Office at 4 Albany Street, New York, New York 10006.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured and
unsubordinated debentures, notes or other evidences of indebtedness (hereinafter
called the "Securities"), unlimited as to principal amount, to bear such rates
of interest, to mature at such time or times, to be issued in one or more series
and to have such other provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this
Indenture and all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
RECITALS OF THE GUARANTOR
The Guarantor has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the Guarantees provided for herein and
the endorsement of such Guarantees on the Securities. All things necessary to
make this Indenture a valid agreement of the Guarantor, in accordance with 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 covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof as
follows:
<PAGE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
-----------
For all purposes of this Senior 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.
Certain terms, used principally in Article Seven, are defined in that
Article.
"Act," when used with respect to any Holders, has the meaning specified in
---
Section 104.
"Additional Amounts" means any additional amounts which are required by a
------------------
Security or by or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain taxes imposed on
certain Holders and which are owing to such Holders.
"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
2
<PAGE>
or otherwise; and the terms "controlling" and "controlled" have the meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
--------------------
to Section 714 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Authorized Newspaper" means a newspaper, in an official language of the
--------------------
country of publication or in the English language, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Banking Subsidiary" means a Subsidiary which is organized as a national
------------------
banking association under the laws of the United States or as a bank or trust
company under the laws of any State of the United States.
"Bearer Security" means any Security in the form established pursuant to
---------------
Section 201 which is payable to bearer.
"Board of Directors" means the Board of Directors of the Company or of the
------------------
Guarantor, as the case may be, or any committee of such board duly authorized to
act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
----------------
or an Assistant Secretary of the Company or of the Guarantor, as the case may
be, 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," except as may otherwise be provided in the form of
------------
Securities of any particular series pursuant to the provisions of this
Indenture, with respect to any Place of Payment means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
or trust companies in the Commonwealth of Pennsylvania or that Place of Payment
are authorized or obligated by law to close.
"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.
3
<PAGE>
"Company" means the Person named as the "Company" in the first paragraph of
-------
this instrument until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation, and any other obligor upon the Securities.
"Company Request," "Company Order," "Guarantor Request" and "Guarantor
--------------- ------------- ----------------- ---------
Order" mean, respectively, a written request or order signed in the name of the
- -----
Company or the Guarantor, as the case may be, by the Chairman of the Board of
Directors, a Vice Chairman, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company or the Guarantor, as the case may be, and delivered to the Trustee.
"Consolidated Banking Assets" means all assets owned directly or indirectly
---------------------------
by any Banking Subsidiary and reflected on the Guarantor's consolidated balance
sheet prepared in accordance with generally accepted accounting principles.
"Controlled Subsidiary" means the Company and each Major Constituent Bank
---------------------
if at least 80% of the outstanding shares of its Voting Stock is at the time
owned by the Guarantor or by one or more Controlled Subsidiaries of the
Guarantor or by the Guarantor and one or more Controlled Subsidiaries.
"Corporate Trust Office" means the principal office of the Trustee, at
----------------------
which at any particular time its corporate trust business shall be administered,
which office at the date of original execution of this Indenture is located at 4
Albany Street, New York, New York 10006, Attention: [ ].
"Corporation" includes corporations, associations, companies and business
-----------
trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
------
"Defaulted Interest" has the meaning specified in Section 307.
------------------
"Dollars" or "$" or any similar reference shall mean the currency of the
------- -
United States, except as may otherwise be provided in the form of Securities of
any particular series pursuant to the provisions of this Indenture.
"Event of Default" has the meaning specified in Section 601.
----------------
"Guarantee" means an unconditional guarantee of the payment of the
---------
Securities by the Guarantor, as more fully described in Article Four.
4
<PAGE>
"Guarantor" means the Person named as the "Guarantor" in the first
---------
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean such successor corporation.
"Holder," when used with respect to any Security, means in the case of a
------
Registered Security, the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security, the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.
"Indenture" means this instrument as defined in the first paragraph hereof
---------
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.
"Interest," when used with respect to an Original Issue Discount Security
--------
which by its terms bears interest only after Maturity, means interest payable
after Maturity, and, when used with respect to a Security which provides for the
payment of Additional Amounts pursuant to Section 1104, includes such Additional
Amounts.
"Interest Payment Date" means the Stated Maturity of an installment of
---------------------
interest on the applicable Securities.
"Major Constituent Bank" means any Banking Subsidiary of the Guarantor the
----------------------
Consolidated Banking Assets of which constitute 20% or more of the Guarantor's
Consolidated Banking Assets.
"Maturity," when used with respect to any Security, means the date on which
--------
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, request for repayment or
otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
---------------------
Board, a Vice Chairman, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company
or the Guarantor, as the case may be, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may (except as
------------------
otherwise expressly provided in this Indenture) be an employee of or counsel for
the Company or the Guarantor, as the case may be, or other counsel who shall be
reasonably acceptable to the Trustee.
"Original Issue Discount Security" means a Security issued pursuant to this
--------------------------------
Indenture which provides for declaration of an
5
<PAGE>
amount less than the principal thereof to be due and payable upon acceleration
pursuant to Section 602.
"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 the Security
Registrar or received by the Trustee or the Security Registrar 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 or the Guarantor) in trust or set aside
and segregated in trust by the Company or the Guarantor (if the
Company shall act as its own, or authorize the Guarantor to act as,
Paying Agent) for the Holders of such Securities and any coupons
thereto appertaining, 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 and related Guarantees are
valid obligations of the Company and the Guarantor, respectively;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, the principal amount of
an Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes shall
be equal to the amount of the principal thereof that could be declared to be due
and payable pursuant to the terms of such Original Issue Discount Security at
the time the taking of such action by the Holders of such requisite principal
amount is evidenced to the Trustee as provided in Section 104(a), and, provided
--------
further, that Securities owned by the Company, the Guarantor or any other
- -------
obligor upon the Securities or any Affiliate of the Company, the Guarantor or
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,
6
<PAGE>
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, the
Guarantor or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
------------
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any series,
----------------
means the place or places where the principal of (and premium, if any) and
interest on the Securities of that series are payable as specified as provided
pursuant to Section 301(8).
"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
lost, destroyed, mutilated or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the lost, destroyed, mutilated or stolen Security or
the Security to which a mutilated, destroyed, lost or stolen coupon appertains.
"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 as determined pursuant to the
provisions of this Indenture.
"Registered Security" means any Security established pursuant to Section
-------------------
201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on a Registered Security on
-------------------
any Interest Payment Date means the date, if any, specified in such Security as
the "Regular Record Date."
7
<PAGE>
"Responsible Officer," when used with respect to the Trustee, means any
-------------------
officer of the Trustee in its Corporate Trust Office 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" or "Securities" means any Security or Securities, as the case
-------- ----------
may be, authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
----------------- ------------------
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on the
-------------------
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity," when used with respect to any Security or any
---------------
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means any corporation of which at the time of determination
----------
the Guarantor and/or one or more Subsidiaries owns or controls directly or
indirectly more than 50% of the shares of Voting Stock.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
-------
this instrument until a successor Trustee shall have become such with respect to
one or more series of Securities pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, "Trustee"
shall mean each such Person and as used with respect to the Securities of any
series shall mean the Trustee with respect to the Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
-------------------
as in force at the date as of which this instrument was executed, except as
provided in Section 1005.
"United States" means the United States of America (including the States
-------------
and the District of Columbia), its territories and possessions and other areas
subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
-------------------
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of
8
<PAGE>
a foreign estate or trust, or a foreign partnership one or more of the members
of which is, for United States Federal income tax purposes, a foreign
corporation, a non-resident alien individual or a non-resident alien fiduciary
of a foreign estate or trust.
"U.S. Depository" or "Depository" means, with respect to the Securities of
--------------- ----------
any series issuable or issued in whole or in part in the form of one or more
global Securities, the Person designated as U.S. Depository by the Company
pursuant to Section 301, which must be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and, if so provided pursuant to
Section 301 with respect to the Securities of any series, any successor to such
Person. If at any time there is more than one such Person, "U.S. Depository"
shall mean, with respect to any series of Securities, the qualifying entity
which has been appointed with respect to the Securities of that series.
"U.S. Government Obligations" means direct obligations of the United States
---------------------------
for the payment of which its full faith and credit is pledged, or obligations of
a person controlled or supervised by and acting as an agency or instrumentality
of the United States and the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
U.S. Government Obligations or a specific payment of principal of or interest on
any such U.S. Government Obligations held by such custodian for the account of
the holder of such depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligations or the specific payment
of principal of or interest on the U.S. Government Obligations evidenced by such
depository receipt.
"Vice President," when used with respect to the Company, the Guarantor 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."
"Voting Stock" means stock of the class or classes having general voting
------------
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such corporation provided that, for the
purposes hereof, stock which carries only the right to vote conditionally on the
happening of an event shall not be considered voting stock whether or not such
event shall have happened.
Section 102. Compliance Certificates and Opinions.
------------------------------------
9
<PAGE>
Upon any application or request by the Company or the Guarantor to the
Trustee to take any action under any provision of this Indenture, the Company or
the Guarantor, as the case may be, shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
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 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 or the Guarantor
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by,
10
<PAGE>
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 or the Guarantor, as the case may be, stating that the
information with respect to such factual matters is in the possession of the
Company or the Guarantor, as the case may be, 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.
---------------
(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.
If, but only if, Securities of a series are issuable as Bearer Securities, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders of Securities
of such series may, alternatively, be embodied in and evidenced by the record of
Holders of Securities of such series voting in favor thereof, either in person
or by proxies duly appointed in writing, at any meeting of Holders of Securities
of such series duly called and held in accordance with the provisions of Article
Fifteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company and the Guarantor.
Such instrument or instruments and any such record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments and so voting at any such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agent, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 701)
conclusive in favor of the Trustee and the Company and any agent of the Trustee
or the Company and the Guarantor, if made in the manner provided in this
Section. The record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 1506.
11
<PAGE>
Without limiting the generality of this Section 104, unless otherwise
established in or pursuant to a Board Resolution or set forth or determined in
an Officers' Certificate, or established in one or more indentures supplemental
hereto, pursuant to Section 301, a Holder, including a U.S. Depository that is a
Holder of a global Security, may make, give or take, by a proxy, or proxies,
duly appointed in writing, any request, demand, authorization, direction,
notice, consent, waiver or other action provided in this Indenture to be made,
given or taken by Holders, and a U.S. Depository that is a Holder of a global
Security may provide its proxy or proxies to the beneficial owners of interests
in any such global Security through such U.S. Depository's standing instructions
and customary practices.
The Trustee shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interest in any permanent global Security
held by a U.S. Depository entitled under the procedures of such U.S. Depository
to make, give or take, by a proxy or proxies duly appointed in writing, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided in this Indenture to be made, given or taken by Holders. If
such a record date is fixed, the Holders on such record date or their duly
appointed proxy or proxies, and only such Persons, shall be entitled to make,
give or take such request, demand, authorization, direction, notice, consent,
waiver or other action, whether or not such Holders remain Holders after such
record date. No such request, demand, authorization, direction, notice,
consent, waiver or other action shall be valid or effective if made, given or
taken more than 90 days after such record date.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any reasonable manner which the Trustee deems
sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(c) The ownership of Registered Securities and the principal amount and
serial numbers of Registered Securities held by any Person, and the date of
holding the same, shall be proved by the Security Register.
(d) The principal amount and serial numbers of Bearer Securities held by
any Person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary reasonably acceptable to the Company
and the Guarantor, wherever situated, if such certificate shall be deemed by the
Trustee to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the Bearer
Securities therein
12
<PAGE>
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee, the Company and the
Guarantor may assume that such ownership of any Bearer Security continues until
(1) another certificate or affidavit bearing a later date issued in respect of
the same Bearer Security is produced or (2) such Bearer Security is produced to
the Trustee by some other Person or (3) such Bearer Security is surrendered in
exchange for a Registered Security or (4) such Bearer Security is no longer
Outstanding. The Principal amount and serial numbers of Bearer Securities held
by the Person so executing such instrument or writing and the date of holding
the same may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company or the Guarantor shall solicit from the Holders of any
Registered Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company or the Guarantor, as the case may be,
may at their option, by Board Resolutions, fix in advance a record date for the
determination of Holders of Registered Securities entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company or the Guarantor shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only the
Holders of Registered Securities of record at the close of business on such
record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of Outstanding Securities have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six months
after the record date.
(f) Any request, demand, authorization, direction, notice, consent, waiver
or other action by 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 or suffered to be done by the Trustee, any Security Registrar, any
Paying Agent, the Company or the Guarantor in reliance thereon, whether or not
notation of such action is made upon such Security.
Section 105. Notices, etc. to Trustee, Company and
-------------------------------------
Guarantor.
---------
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or
13
<PAGE>
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 or the Guarantor 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, or
(2) the Company or the Guarantor 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 or the Guarantor, as the case may be, addressed to the
attention of its Treasurer 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 or the
Guarantor, as the case may be.
Section 106. Notice to Holders of Securities; Waiver.
---------------------------------------
Except as otherwise expressly provided herein or in the form of Securities
of any particular series pursuant to the provisions of this Indenture, where
this Indenture provides for notice to Holders of Securities of any event,
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each
Holder of a Registered Security affected by such event, at his address as
it appears in the Security Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such
Notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The City of
New York and, if the Securities of such series are then listed on any stock
exchange outside the United States, in an Authorized Newspaper in such city
as the Company shall advise the Trustee that such stock exchange so
requires, on a Business Day at least twice, the first such publication to
be not earlier than the earliest date and not later than the latest date
prescribed for the giving of such notice.
In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Any notice which is mailed in the manner
14
<PAGE>
herein provided shall be conclusively presumed to have been duly given or
provided. In the case 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.
In case of the suspension of publication of any Authorized Newspaper or
Authorized Newspapers or by reason of any other cause it shall be impracticable
to publish any notice to Holders of Bearers Securities as provided above, then
such notification to Holders of Bearer Securities as shall be given with the
approval of the Trustee shall constitute sufficient notice to such Holders for
every purpose hereunder. Neither failure to give notice by publication to
Holders of Bearer Securities as provided above, nor any defect in any notice so
published, shall affect the sufficiency of any notice mailed to Holders of
Registered Securities as provided above.
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 of Securities 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.
Section 107. Language of Notices.
-------------------
Any request, demand, authorization, direction, notice, consent, election or
waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company or the Guarantor so elects, any published
notice may be in an official language of the country of publication.
Section 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provisions shall
control.
Section 109. 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 110. Successors and Assigns.
----------------------
15
<PAGE>
All covenants and agreements in this Indenture by the Company and the
Guarantor shall bind their respective successors and assigns, whether so
expressed or not.
Section 111. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities or coupons or
the Guarantees 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.
Section 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities or coupons or the
Guarantees, express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent and their successors hereunder
and the Holders of Securities or coupons, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 113. Governing Law.
-------------
This Indenture and the Securities and coupons and the Guarantees shall be
governed by and construed in accordance with the laws of the State of New York.
Section 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at the Corporate Trust
Office and any Place of Payment, then (notwithstanding any other provision of
this Indenture or the Securities or coupons other than a provision in the
Securities which specifically states that such provision shall apply in lieu of
this Section) payment of interest or any Additional Amounts or principal (and
premium, if any) need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
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ARTICLE TWO
FORMS OF SECURITIES AND GUARANTEES
Section 201. Forms Generally.
---------------
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons, if any, the Guarantees
relating thereto, and temporary global Securities, if any, shall be in the form
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, shall have appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture or any
indenture supplemental hereto and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Securities
or Guarantees, as evidenced by their execution of such Securities.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Securities of each series shall be issuable in
registered form without coupons. If so provided as contemplated by Section 301,
the Securities of a series also shall be issuable in bearer form, with or
without interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing such Securities, as
evidenced by their execution of such Securities or coupons.
Section 202. Form of Trustee's Certificate of
--------------------------------
Authentication.
--------------
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
BANKERS TRUST COMPANY
By____________________________
Authorized Signatory
Section 203. Securities in Global Form.
-------------------------
If Securities of a series are issuable in global form, any such Security
may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and may also provide that the
aggregate amount of
17
<PAGE>
Outstanding Securities represented thereby may from time to time be reduced to
reflect exchanges. Any endorsement of a Security in global form to reflect the
amount, or any increase or decrease in the amount or changes in the rights of
Holders of Outstanding Securities represented thereby shall be made in such
manner and by such Person or Persons as shall be specified therein. Any
instructions by the Company with respect to a Security in global form shall be
in writing but need not comply with Section 102.
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto:
(1) the title of the Securities and the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the Securities of
such title or the Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration or transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 304, 305, 306, 1006
or 1207);
(3) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both; any
restrictions applicable to the offer, sale or delivery of Bearer Securities
and the terms upon which Bearer Securities of the series may be exchanged
for Registered Securities of the series and vice versa; and whether any
Securities of the series are to be issuable initially in global form and,
if so, (i) whether beneficial owners of interests in any such global
Security may exchange such interest for Securities of such series and of
like tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
specified in Section 305 and (ii) the name of the depository or the U.S.
Depository, as the case may be, with respect to any global Security;
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(4) the date as of which any Bearer Securities of the series and any
temporary global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first
Security of the series to be issued;
(5) if Securities of the series are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form (representing all of the Outstanding Bearer
Securities of the series) payable in respect of an Interest Payment Date
prior to the exchange of such temporary Bearer Security for definitive
Securities of the series shall be paid to any clearing organization with
respect to the portion of such temporary Bearer Security held for its
account and, in such event, the terms and conditions (including any
certification requirements) upon which any such interest payment received
by a clearing organization will be credited to the Persons entitled to
interest payable on such Interest Payment Date;
(6) the date or dates on which the principal of such Securities is
payable;
(7) the rate or rates at which such Securities shall bear interest, if
any, or method in which such rate or rates are determined, the date or
dates from which such interest shall accrue, the Interest Payment Dates on
which such interest shall be payable and the Regular Record Date for the
interest payable on Registered Securities on any Interest Payment Date,
whether and under what circumstances Additional Amounts on such securities
shall be payable in respect of specified taxes, assessments or other
governmental charges withheld or deducted and, if so, whether the Company
has the option to redeem the affected Securities rather than pay such
Additional Amounts, and the basis upon which interest shall be calculated
if other than that of a 360-day year of twelve 30-day months;
(8) the place or places, if any, in addition to or other than the
Borough of Manhattan, The City of New York, where the principal of (and
premium, if any) and interest on or Additional Amounts, if any, payable in
respect of such Securities shall be payable;
(9) the period or periods within which, the price or prices at which
and the terms and conditions upon which such Securities may be redeemed, in
whole or in part, at the option of the Company;
(10) the obligation, if any, of the Company to redeem or purchase such
Securities pursuant to any sinking fund or at the option of a Holder
thereof and the period or periods
19
<PAGE>
within which, the price or prices at which and the terms and conditions
upon which such Securities shall be redeemed or purchased, in whole or in
part, pursuant to such obligation, and any provisions for the remarketing
of such Securities;
(11) the denominations in which Registered Securities of the series,
if any, shall be issuable if other than denominations of $1,000 and any
integral multiple thereof, and the denominations in which Bearer Securities
of the series, if any, shall be issuable if other than the denomination of
$5,000;
(12) if other than the principal amount thereof, the portion of the
principal amount of such Securities which shall be payable upon declaration
of acceleration of the Maturity thereof pursuant to Section 602;
(13) if other than such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public or
private debts, the coin or currency, including composite currencies, in
which payment of the principal of (and premium, if any) or interest, if
any, on any Additional Amounts in respect of such Securities shall be
payable;
(14) if the principal of (and premium, if any) or interest, if any, on
any Additional Amounts in respect of such Securities are to be payable, at
the election of the Company or a Holder thereof, in a coin or currency,
including composite currencies, other than that in which the Securities are
stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(15) if the amount of payments of principal of (and premium, if any)
or interest, if any, on any Additional Amounts in respect of such
Securities may be determined with reference to an index, formula or other
method based on a coin or currency other than that in which the Securities
are stated to be payable, the manner in which such amounts shall be
determined;
(16) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and terms of
such certificates, documents or conditions; and
(17) any other terms of such Securities (which terms shall not be
inconsistent with the provisions of this Indenture).
20
<PAGE>
All Securities of any one series and coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except as to
denomination and the rate or rates of interest, if any, and Stated Maturity, the
date from which interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to such Board Resolution and set forth in such Officers'
Certificate or in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and, unless otherwise provided, a
series may be reopened for issuances of additional Securities of such series.
If any of the terms of the Securities of any series were established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of such series.
Section 302. Denominations.
-------------
Unless other denominations and amounts may from time to time be fixed by or
pursuant to a Board Resolution, the Registered Securities of each series if any,
shall be issuable in registered form without coupons in denominations of $1,000
and any integral multiple thereof, and the Bearer Securities of each series, if
any, shall be issuable in the denomination of $5,000, or in such other
denominations and amounts as may from time to time be fixed by or pursuant to a
Board Resolution.
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, one of its Vice Chairmen, its President or one of its Vice
Presidents under its corporate seal reproduced thereon and 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. Coupons shall bear the
facsimile signature of the Treasurer or any Assistant Treasurer of the Company.
Securities and coupons 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 of any series, together with any
coupons appertaining thereto,
21
<PAGE>
executed by the Company, with Guarantees endorsed thereon executed by the
Guarantor, to the Trustee for authentication, together with the Board Resolution
and Officers' Certificate or supplemental indenture with respect to such
Securities referred to in Section 301 and a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Company
Order and subject to the provisions hereof shall authenticate and deliver such
Securities. In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 701) shall be
fully protected in relying upon, an Opinion of Counsel stating:
(a) that the form and terms of such Securities and coupons, if any, have
been established in conformity with the provisions of this Indenture;
(b) that all conditions precedent to the authentication and delivery of
such Securities together with the coupons, if any, appertaining thereto, have
been complied with and that such Securities, and coupons, when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute legally
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally, and subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law); such Opinion of
Counsel need express no opinion as to the availability of equitable remedies;
(c) that all laws and requirements in respect of the execution and delivery
by the Company of such Securities and coupons, if any, have been complied with;
and
(d) such other matters as the Trustee may reasonably request.
The Trustee shall not be required to authenticate such Securities if the
issue of such Securities pursuant to this Indenture will affect the Trustee's
own rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee or if
the Trustee, being advised by counsel, determines that such action may not
lawfully be taken.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any temporary Bearer Security in global form shall be
dated as of the date specified as contemplated by Section 301.
22
<PAGE>
No Security or coupon appertaining thereto 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 in Section 202 or 714 executed by or on behalf of the Trustee
by the manual signature of one of its authorized signatories, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Except as permitted by Section 306 or 307, the Trustee shall not
authenticate and deliver any Bearer Security unless all appurtenant coupons for
interest then matured have been detached and cancelled.
Section 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities of any series, the Company
may execute and deliver to the Trustee, and upon Company Order the Trustee shall
authenticate and deliver, in the manner provided in Section 303, temporary
Securities (having Guarantees duly endorsed thereon) of such series 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, in registered form, or, if authorized, in
bearer form with one or more coupons or without coupons and with such
appropriate insertions, omissions, substitutions and other variations as the
officers of the Company executing such Securities may determine, as evidenced by
their execution of such Securities. In the case of Bearer Securities of any
series, such temporary Securities may be in global form, representing all of the
Outstanding Bearer Securities of such series.
Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities of
any series are issued, the Company will cause definitive Securities of that
series to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities of such series shall be
exchangeable upon request for definitive Securities of such series containing
identical terms and provisions upon surrender of the temporary Securities of
such series at an office or agency of the Company or the Guarantor maintained
for such purpose pursuant to Section 1102, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any series
(accompanied by any unmatured coupons appertaining thereto) the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities (having Guarantees duly endorsed
thereon) of authorized denominations of the same series containing identical
terms and provisions; provided, however, that no definitive Bearer Security,
-------- -------
except as provided pursuant to Section 301, shall be delivered in exchange for a
temporary
23
<PAGE>
Registered Security; and provided, further, that a definitive Bearer Security
-------- -------
shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth therein. Unless otherwise specified as
contemplated by Section 301 with respect to a temporary global Security, until
so exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. Registration, Transfer and Exchange.
-----------------------------------
With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept, at an office or agency of the Company or the
Guarantor maintained pursuant to Section 1102, a register (herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company or the Guarantor shall provide for
the registration of the Registered Securities of each series and of transfers of
the Registered Securities of each series. Unless otherwise specified in or
pursuant to this Indenture or the Securities, the Trustee shall be the initial
Security Registrar for each series of Securities. The Issuer shall have the
right to remove and replace from time to time the Security Registrar for any
series of Securities; provided that no such removal or replacement shall be
effective until a successor Security Registrar with respect to such series of
Securities shall have been appointed by the Issuer and shall have accepted such
appointment by the Issuer. In the event that the Trustee shall not be or shall
cease to be Security Registrar with respect to a series of Securities, it shall
have the right to examine the Security Register for such series at all
reasonable times. There shall be only one Security Register for each series of
Securities.
Upon surrender for registration of transfer of any Registered Security of
any series at any office or agency of the Company or the Guarantor maintained
for that series pursuant to Section 1102, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Registered Securities (having Guarantees duly
endorsed thereon) of the same series of any authorized denominations, of a like
aggregate principal amount bearing a number not contemporaneously outstanding
and containing identical terms and provisions.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any such office or agency. Whenever any Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities (having Guarantees duly
endorsed thereon) which the Holder making the exchange is entitled to receive.
24
<PAGE>
If so provided with respect to Securities of a series, at the option of the
Holder, Bearer Securities of any such series may be exchanged for Registered
Securities of the same series containing identical terms and provisions, of any
authorized denominations and aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company and the Trustee in an amount equal to the face amount of such
missing coupon or coupons, or the surrender of such missing coupon or coupons
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
any Paying Agent any such missing coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that, except as otherwise provided in Section
-------- -------
1102, interest represented by coupons shall be payable only upon presentation
and surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series and like tenor after the close of business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the coupon relating to such Interest
Payment Date or proposed date of payment, as the case may be (or, if such coupon
is so surrendered with such Bearer Security, such coupon shall be returned to
the person so surrendering the Bearer Security), and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such coupon when due in accordance with the provisions of this
Indenture.
If expressly provided with respect to the Securities of any series, at the
option of the Holder, Registered Securities of such series may be exchanged for
Bearer Securities upon such terms and conditions as may be provided with respect
to such series.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and
25
<PAGE>
deliver, the Securities (having Guarantees duly endorsed thereon) which the
Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any global Security shall be exchangeable only if
(i) the Securities Depository is at any time unwilling or unable to continue as
Securities Depository and a successor depository is not appointed by the Company
within 60 days, (ii) the Company executes and delivers to the Trustee a Company
Order to the effect that such global Security shall be so exchangeable, or (iii)
an Event of Default has occurred and is continuing with respect to the
Securities. If the beneficial owners of interests in a global Security are
entitled to exchange such interests for Securities of such series and of like
tenor and principal amount of any authorized form and denomination, as specified
as contemplated by Section 301, then without unnecessary delay but in any event
not later than the earliest date on which such interests may be so exchanged,
the Company shall deliver to the Trustee definitive Securities of that series
(having Guarantees duly endorsed thereon) in aggregate principal amount equal to
the principal amount of such global Security, executed by the Company. On or
after the earliest date on which such interests may be so exchanged, such global
Securities shall be surrendered from time to time by the U.S. Depository or such
other depository as shall be specified in the Company Order with respect
thereto, and in accordance with instructions given to the Trustee and the U.S.
Depository or such depository, as the case may be, which instructions shall be
in writing but need not comply with Section 102 or be accompanied by an Opinion
of Counsel), as shall be specified in the Company Order with respect thereto to
the Trustee, as the Company's agent for such purpose, to be exchanged, in whole
or in part, for definitive Securities of the same series without charge. The
Trustee shall authenticate and make available for delivery, in exchange for each
portion of such surrendered global Security, a like aggregate principal amount
of definitive Securities of the same series of authorized denominations and of
like tenor as the portion of such global Security to be exchanged which (unless
the Securities of the series are not issuable both as Bearer Securities and as
Registered Securities, in which case the definitive Securities exchanged for the
global Security shall be issuable only in the form in which the Securities are
issuable, as specified as contemplated by Section 301) shall be in the form of
Bearer Securities or Registered Securities, or any combination thereof, as shall
be specified by the beneficial owner thereof; provided, however, that no such
-------- -------
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities of that series is to be redeemed and ending
on the relevant Redemption Date; and provided, further, that (unless otherwise
-------- -------
specified as contemplated by Section 301) no Bearer Security delivered in
exchange for a portion of a global Security shall be mailed or otherwise
delivered to any
26
<PAGE>
location in the United States. Promptly following any such exchange in part,
such global Security shall be returned by the Trustee to such depository or the
U.S. Depository, as the case may be, or such other depository or U.S. Depository
referred to above in accordance with the instructions of the Company referred to
above. If a Registered Security is issued in exchange for any portion of a
global Security after the close of business at the office or agency where such
exchange occurs on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of interest or Defaulted
Interest, as the case may be, interest will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such global Security is payable in
accordance with the provisions of this Indenture.
All Securities and the Guarantees endorsed thereon issued upon any
registration of transfer or exchange of Securities shall be the valid
obligations of the Company and the Guarantor, respectively, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
and the Guarantees endorsed thereon surrendered upon such registration of
transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar for such series of Security presented) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and such Security Registrar duly executed by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange, or redemption 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, 1006 or 1207 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange any Securities of any series during a period beginning at the opening
of business 15 days before the day of the selection for redemption of Securities
of that series under Section 1203 and ending at the close of business on the day
of such selection, or (ii) to register the transfer of or exchange any
Registered Security so selected for redemption in
27
<PAGE>
whole or in part, except in the case of any Security to be redeemed in part, the
portion thereof not to be redeemed, or (iii) to exchange any Bearer Security so
selected for redemption except, to the extent provided with respect to
Securities of a series, that such a Bearer Security may be exchanged for a
Registered Security of that series, provided that such Registered Security shall
be immediately surrendered for redemption with written instruction for payment
consistent with the provisions of this Indenture.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
(having a Guarantee duly endorsed thereon) of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to the surrendered Security.
If there be delivered to the Company, the Guarantor and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon, 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, the Guarantor or the Trustee that such Security or
coupon has been acquired by a bona fide purchaser, the Company shall execute and
upon its request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Security or in exchange
for the Security to which a destroyed, lost or stolen coupon appertains with all
appurtenant coupons not destroyed, lost or stolen, a new Security (having a
Guarantee duly endorsed thereon) of the same series containing identical terms
and of like principal amount and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
such destroyed, lost or stolen Security or to the Security to which such
destroyed, lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon
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 or coupon; provided,
--------
however, that payment of principal of (and premium, if any) and any interest on
- -------
Bearer Securities shall, except as otherwise provided in Section 1102, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities
28
<PAGE>
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
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 of any series, with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon 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 of that
series, their coupons, if any, and Guarantees duly issued hereunder.
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 or coupons.
Section 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Registered Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall, if so provided in
such Security, be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered as of the close of business on the Regular
Record Date for such interest. In case a Bearer Security of any series is
surrendered in exchange for a Registered Security of such series after the close
of business (at an office or agency in a Place of Payment for such series) on
any Regular Record Date and before the opening of business (at such office or
agency) on the next succeeding Interest Payment Date, such Bearer Security shall
be surrendered without the coupon relating to such Interest Payment Date and
interest will not be payable on such Interest Payment Date in respect of the
Registered Security issued in exchange of such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
provisions of this Indenture.
Any interest on any Registered Security of any series which is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date for
such Registered Security (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 or the Guarantor, at its election in each case, as provided in Clause
(1) or (2) below:
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(1) The Company or the Guarantor may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered Securities
affected (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 or the Guarantor shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each such Registered Security
and the date of the proposed payment, and at the same time the Company or
the Guarantor, as the case may be, 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 and the
Company shall provide of cause to be provided to the Trustee a current list
of the names and addresses of the Holders of the Registered Securities.
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 or the Guarantor, as
the case may be, of such Special Record Date and, in the name and at the
expense of the Company or the Guarantor, as the case may be, 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 of such Registered Securities at his address as it appears in the
Security Register not less than 10 days prior to such Special Record Date.
The Trustee may, in its discretion, in the name and at the expense of the
Company or the Guarantor, as the case may be, cause a similar notice to be
published at least once in an Authorized Newspaper, customarily published
in the English language on each Business Day and of general circulation in
the Borough of Manhattan, The City of New York, but such publication shall
not be a condition precedent to the establishment of such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid such Defaulted
Interest shall be paid to the Persons in whose names such Registered
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). In case a Bearer Security of
any series is surrendered at the office or agency in a Place of Payment for
such series in exchange for a Registered Security of such series after the
close of business at such office or agency on any Special Record Date and
before the opening of business at such office or agency on the related
proposed date for payment of
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Defaulted Interest, such Bearer Security shall be surrendered without the
coupon relating to such proposed date of payment and Defaulted Interest
will not be payable on such proposed date of payment in respect of the
Registered Security issued in exchange for such Bearer Security, but will
be payable only to the Holder of such coupon when due in accordance with
the provisions of this Indenture.
(2) The Company or the Guarantor may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given by
the Company or the Guarantor to the Trustee of the proposed payment
pursuant to this Clause, such payment shall be deemed practicable by the
Trustee.
At the option of the Company, interest on Registered Securities of any
series that bear interest may be paid by mailing a check to the address of the
person entitled thereto as such address shall appear in the Security Register.
Subject to the foregoing provisions of this Section and Section 305, 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 Registered Security for registration of
transfer, the Company, the Guarantor, the Trustee and any agent of the Company
or the Guarantor or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Registered Security for
the purpose of receiving payment of principal of (and premium, if any), and
(subject to Sections 305 and 307) interest on and Additional Amounts with
respect to, such Registered Security and for all other purposes whatsoever,
whether or not such Registered Security be overdue, and neither the Company, the
Guarantor, the Trustee nor any agent of the Company or the Guarantor or the
Trustee shall be affected by notice to the contrary.
The Company, the Guarantor, the Trustee and any agent of the Company or the
Guarantor or the Trustee may treat the bearer of any Bearer Security and the
bearer of any coupon as the absolute owner of such Security or coupon for the
purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security or coupon be overdue, and
neither the Company, the Guarantor, the Trustee nor any agent
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of the Company or the Guarantor or the Trustee shall be affected by notice to
the contrary.
Section 309. Cancellation.
------------
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee or the
Security Registrar, be delivered to the Trustee or the Security Registrar, and
any such Securities and coupons and Securities and coupons surrendered directly
to the Trustee or the Security Registrar for any such purpose shall be promptly
cancelled by the Trustee or the Security Registrar, as the case may be. The
Company or the Guarantor may at any time deliver to the Trustee or the Security
Registrar for cancellation any Securities previously authenticated and delivered
hereunder which the Company or the Guarantor may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee or the Security Registrar, as the case may be. 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 and coupons held by the Trustee or the Security Registrar shall be
destroyed by the Trustee or the Security Registrar, as the case may be, unless
by a Company Order or Guarantor Order the Company or the Guarantor, as the case
may be, directs their return to it.
Section 310. Computation of Interest.
-----------------------
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
GUARANTEES OF SECURITIES
Section 401. Unconditional Guarantee.
-----------------------
The Guarantor hereby unconditionally guarantees to each Holder of a
Security authenticated and delivered by the Trustee the due and punctual payment
of the principal of and premium, if any, and any interest on or Additional
Amounts in respect of such Security and the due and punctual payment of the
sinking fund payments, if any, provided for pursuant to the terms of such
Security, when and as the same shall become due and payable, whether at
maturity, by acceleration, redemption, repayment or otherwise, in accordance
with the terms of such Security and of
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this Indenture. In case of the failure of the Company punctually to pay any
such principal, premium, interest, Additional Amounts or sinking fund payment,
the Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at maturity, upon
acceleration, redemption, repayment or otherwise, and as if such payment were
made by the Company.
The Guarantor hereby agrees that its obligations hereunder shall be as
principal and not merely as surety, and shall be absolute and unconditional,
irrespective of, and shall be unaffected by, any invalidity, irregularity or
unenforceability of such Security or this Indenture, any failure to enforce the
provisions of any such Security or this Indenture, or any waiver, modification,
consent or indulgence granted to the Company with respect thereto by the Holder
of such Security or the Trustee, the recovery of any judgment against the
Company or any action to enforce the same, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or guarantor.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger, insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest or
notice with respect to any such Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that the Guarantees will not be
discharged except by payment in full of the principal of and premium, if any,
and interest on, and any Additional Amounts and sinking fund payments required
with respect to, the Securities and the complete performance of all other
obligations contained in the Securities.
The Guarantor shall be subrogated to all rights of the Holder of any
Security against the Company in respect of any amounts paid to such Holder by
the Guarantor pursuant to the provisions of the Guarantees; provided, however,
-------- -------
that the Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until the principal of
and premium, if any, and interest on, and any Additional Amounts and sinking
fund payments required with respect to, all Securities of the same series shall
have been paid in full.
Section 402. Execution, Authentication and Delivery.
--------------------------------------
To evidence the Guarantees to the Holders specified in Section 401, the
Guarantor hereby agrees to execute a Guarantee on each Security authenticated
and delivered by the Trustee. The Guarantees shall be executed on behalf of the
Guarantor by its Chairman of the Board, one of its Vice Chairmen, its President
or one of its Vice Presidents, under its corporate seal reproduced thereon, and
attested by its Secretary or one of its Assistant
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Secretaries. The signature of any of these officers on the Guarantees may be
manual or facsimile.
Guarantees bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Guarantor shall bind the Guarantor
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Guarantees or did not
hold such offices at the date of such Guarantees. The delivery by the Trustee
of a Security with such a Guarantee endorsed thereon shall, after the
authentication of such Security hereunder, constitute due delivery of such
Guarantee on behalf of the Guarantor.
No Guarantee endorsed on any Security shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose unless there
appears on the Security on which such Guarantee is endorsed a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature.
ARTICLE FIVE
SATISFACTION AND DISCHARGE
Section 501. Satisfaction and Discharge.
--------------------------
Upon the direction of the Company by a Company Order or of the Guarantor by
a Guarantor Order, 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 any right to receive Additional Amounts, as
provided in Section 1104), and the Trustee on demand of and at the expense of
the Company and the Guarantor, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered and
all coupons appertaining thereto (other than (i) coupons appertaining to
Bearer Securities surrendered for exchange for Registered Securities and
maturing after such exchange, whose surrender is not required or has been
waived as provided in Section 305, (ii) Securities and coupons which have
been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306, (iii) coupons appertaining to Securities called
for redemption and maturing after the relevant Redemption Date, whose
surrender has been waived as provided in Section 1207, and (iv) Securities
and coupons for whose payment money has
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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 1103) have been delivered to the Trustee for
cancellation; or
(B) all such Securities and, in the case of (i) or (ii) below,
any such coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation; or
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, 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 Guarantor,
and the Company or the Guarantor, in the case of (i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee, or has made such
other arrangements as are satisfactory to the Trustee, as trust funds in an
amount sufficient to pay and discharge the entire indebtedness on such
Securities and coupons not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest, and any
Additional Amounts with respect thereto, 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 or the Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and the Guarantor; and
(3) the Company and the Guarantor have 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.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only
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if requested to do so with respect to Securities of all series as to which it is
Trustee and if the other conditions thereto are met. In the event there are two
or more Trustees hereunder, then the effectiveness of any such instrument shall
be conditioned upon receipt of such instruments from all Trustees hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company and the Guarantor to the Trustee under Section 707
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
502 and the last paragraph of Section 1103 shall survive.
Section 502. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1103, all money
deposited with the Trustee or in such other manner as is satisfactory to the
Trustee pursuant to Section 501 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons 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 any interest and Additional Amounts for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
Section 503. Satisfaction, Discharge and Defeasance of Securities of Any
-----------------------------------------------------------
Series.
------
The Company and the Guarantor shall be deemed to have paid and discharged
the entire indebtedness on all the Outstanding Securities of any series and the
Trustee, at the expense of the Company and the Guarantor, shall execute proper
instruments acknowledging satisfaction and discharge of such indebtedness, when
(1) either
(A) with respect to all Outstanding Securities of such series,
(i) the Company or the Guarantor has deposited or caused to be
deposited with the Trustee, as trust funds in trust for such purpose,
an amount sufficient to pay and discharge the entire indebtedness on
all Outstanding Securities of such series for principal (and premium,
if any), any Additional Amounts, and interest to the Stated Maturity
or any Redemption Date as contemplated by the penultimate paragraph of
this Section 503, as the case may be; or
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(ii) with respect to any Series of Securities which are
denominated in United States dollars, the Company or the Guarantor has
deposited or caused to be deposited with the Trustee, as obligations
in trust for such purpose, such amount of direct obligations of, or
obligations the timely payment of the principal of and interest on
which are fully guaranteed by, the United States of America and which
are not callable at the option of the issuer thereof as will, together
with the income to accrue thereon without consideration of any
reinvestment thereof, be sufficient to pay and discharge the entire
indebtedness on all Outstanding Securities of such series for
principal (and premium, if any), any Additional Amounts, and interest
to the stated Maturity or any Redemption Date as contemplated by the
penultimate paragraph of this Section 503; or
(B) The Company or the Guarantor, as the case may be, has properly
fulfilled such other means of satisfaction and discharge as is specified,
as contemplated by Section 301, to be applicable to the Securities of such
series; and
(2) the Company or the Guarantor has paid or caused to be paid all
other sums payable hereunder with respect to the Outstanding Securities of
such series; and
(3) the Company or the Guarantor has delivered to the Trustee a
certificate signed by a nationally recognized firm of independent public
accountants (who may be the independent public accountants regularly
retained by the Company or who may be other independent public accountants)
certifying as to the sufficiency of the amounts deposited pursuant to
subsections (A)(i) or (ii) of this Section for payment of the principal
(and premium, if any) and interest on the dates such payments are due, an
Officers' Certificate and an Opinion of Counsel, each such Certificate and
Opinion stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of the entire indebtedness on all
Outstanding Securities of any such series have been complied with; and
(4) the company or the Guarantor has delivered to the Trustee
(A) an opinion of independent counsel that the holders of the
Securities of such series will have no federal income tax consequences
as a result of such deposit and termination; and
(B) if the Securities of such series are then listed on the New
York Stock Exchange, an opinion of
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counsel that the Securities of such series will not be delisted as a
result of the exercise of this option.
Any deposits with the Trustee referred to in subsection (1)(A) of this
Section shall be irrevocable and shall be made under the terms of an escrow
trust agreement in form and substance satisfactory to the Trustee. If any
Outstanding Securities of such series are to be redeemed prior to their Stated
Maturity, whether pursuant to any optional redemption or repayment provisions or
in accordance with any mandatory sinking fund requirement, the Company shall
make such arrangements as are satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company.
Upon the satisfaction of the conditions set forth in this Section 503 with
respect to all the Outstanding Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, other than the provisions of Sections 305,
306 and 1102 and other than the right of Holders of Securities of such series to
receive, from the trust fund described in this Section, payment of the principal
(and premium, if any) of, the interest on and any Additional Amounts with
respect to such Securities when such payments are due, and the rights, powers,
duties and immunities of the Trustee hereunder, shall no longer be binding upon,
or applicable to, the Company or the Guarantor; provided that the Company and
--------
the Guarantor shall not be discharged from any payment obligations in respect of
Securities of such series which are deemed not to be Outstanding under clause
(iii) of the definition thereof if such obligations continue to be valid
obligations of the Company and the Guarantor under applicable law.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons 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.
ARTICLE SIX
REMEDIES
Section 601. Events of Default.
-----------------
"Event of Default," wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or be effected by operation
of law 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 or any Additional
Amounts payable in respect of any Security of that Series when such
interest or Additional Amounts become
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due and payable, and continuance of such default for a period of 30 days;
or
(2) default in the payment of the principal of (and premium, if any,
on) any Security of that series when it becomes due and payable at
Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company or the Guarantor in this Indenture or the Securities or the
Guarantees (other than a covenant or warranty a default in the performance
of which or breach of which is elsewhere in this Section specifically dealt
with or which has been expressly included in this Indenture solely for the
benefit of a series of Securities other than that series), and continuance
of such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company and the Guarantor by
the Trustee or to the Company, the Guarantor and the Trustee by the Holders
of at least 25% in principal amount of the Outstanding Securities of that
series 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
(5) if any event of default as defined in any mortgage, indenture or
instrument under which there may be issued, or by which there may be
secured or evidenced, any indebtedness of the Company, the Guarantor or any
Major Constituent Bank for money borrowed, whether such indebtedness now
exists or shall hereafter be created, shall happen and shall result in such
indebtedness in principal amount in excess of $5,000,000 becoming or being
declared due and payable prior to the date on which it would otherwise
become due and payable, and such acceleration shall not be rescinded or
annulled, or such indebtedness shall not have been discharged, within a
period of 30 days after there shall have been given, by registered or
certified mail, to the Company and the Guarantor by the Trustee or to the
Company, the Guarantor and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of that series, a written
notice specifying such event of default and requiring the Company or the
Guarantor to cause such acceleration to be rescinded or annulled or to
cause such indebtedness to be discharged and stating that such notice is a
"Notice of Default" hereunder; or
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(6) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company, the Guarantor or a Major
Constituent Bank in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, adjudging it
bankrupt or insolvent or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Company, the
Guarantor or a Major Constituent Bank or for any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and
such decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(7) the Company, the Guarantor or a Major Constituent Bank shall
commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or shall consent to the entry
of an order for relief in any involuntary case under any such law, or shall
consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Company, the Guarantor or a Major Constituent Bank or for
any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail generally to pay its debts as
they become due or shall take any corporate action in furtherance of any of
the foregoing.
Section 602. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of that series
may declare the principal of all the Securities of that series, or such lesser
amount as may be provided for in the Securities of that series, to be due and
payable immediately, by a notice in writing to the Company and the Guarantor
(and to the Trustee if given by the Holders), and upon any such declaration such
principal or such lesser amount shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series 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 of that series, by written notice to the Company, the
Guarantor and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company or the Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
40
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(A) all overdue installments of interest on and any Additional
Amounts payable in respect of all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates borne by or
provided for in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and Additional Amounts
at the rate or rates borne by or provided for in such 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 as provided in Section 707 hereof; and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which has become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 613.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 603. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company and the Guarantor covenant that if
(1) default is made in the payment of any installment of interest on
or any Additional Amounts payable in respect of any Security when such
interest or Additional Amounts shall have become 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 its Maturity,
the Company or the Guarantor will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities and coupons, the whole amount then
due and payable on such Securities and coupons for principal (and premium, if
any) and interest and Additional Amounts, if any, with interest upon the overdue
principal (and premium, if any) and, to the extent that payment of such interest
shall be legally enforceable, upon overdue installments of interest or any
Additional Amounts, at the rate or rates borne by or provided for in such
Securities, and, in
41
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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 the Company or the Guarantor fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or the Guarantor or any other obligor upon
such Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or the Guarantor or
any other obligor upon such Securities wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons 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 604. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, the Guarantor or any other obligor
upon the Securities or the property of the Company, the Guarantor or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Company or the Guarantor for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount or such lesser
amount as may be provided for in the Securities of that series, of
principal (and premium, if any) and interest and any Additional Amounts
owing and unpaid in respect of the Securities and to file such other papers
or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents or counsel)
and of the Holders allowed in such judicial proceeding, and
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(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each Holder of
Securities and coupons 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 of Securities and coupons, to pay to the Trustee any amount due to 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 707.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
Section 605. Trustee May Enforce Claims without Possession of Securities
-----------------------------------------------------------
or Coupons.
----------
All rights of action and claims under this Indenture or any of the
Securities or coupons or the Guarantees may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or coupons 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 or 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 and coupons in respect of which such judgment has been
recovered.
Section 606. 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 (and premium,
if any), interest or any Additional Amounts, upon presentation of the Securities
or coupons, or both, as the case may be, 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
707;
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SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and interest and
any Additional Amounts payable 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 aggregate amounts due and payable on
such Securities and coupons for principal (and premium, if any), interest
and Additional Amounts, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
Section 607. Limitation on Suits.
-------------------
No Holder of any Security of any series or any related coupons 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
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series 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 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 of that series:
it being understood and intended that no one or more of such 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 such
Holders or Holders of any other series, 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 such Holders.
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Section 608. Unconditional Right of Holders to Receive Principal, Premium
------------------------------------------------------------
and Interest.
- ------------
Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Sections 305 and 307) interest on and any Additional Amounts in respect of such
Security or payment of such coupon on the respective Stated Maturity or
Maturities expressed in such Security or coupon (or, in the case of redemption,
on the Redemption Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.
Section 609. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder of a Security or coupon 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 the Company, the Guarantor, the Trustee and the Holders of Securities and
coupons shall, subject to any determination in such proceeding, 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.
Section 610. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities or coupons 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 611. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security or
coupon 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 of Securities or coupons may
be exercised from time to time, and as often as
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may be deemed expedient, by the Trustee or by the Holders of Securities or
coupons, as the case may be.
Section 612. Control by Holders of Securities.
--------------------------------
The Holders of a majority in principal amount of the Outstanding Securities
of any series 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 with respect to the Securities of
such series, provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) such direction is not unduly prejudicial to the rights of other
Holders of Securities of such series.
Section 613. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past default
hereunder with respect to such series and its consequences except a default
(1) in the payment of the principal of (and premium, if any) or
interest on or Additional Amounts payable in respect of any Security of
such series, or
(2) in respect of a covenant or provision hereof which under Article
Ten cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series 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 614. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security or
coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
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taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit, other than the Trustee, of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
including the Trustee, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Company, the Guarantor,
the Trustee or by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series, or to
any suit instituted by any Holder of any Security or coupon for the enforcement
of the payment of the principal of (and premium, if any) or interest on or any
Additional Amounts in respect of any Security or the payment of any coupon on or
after the respective Stated Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date) or interest on any overdue
principal of any Security.
Section 615. Waiver of Stay or Extension Laws.
--------------------------------
The Company and the Guarantor covenant (to the extent that they may
lawfully do so) that they 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 and
the Guarantor (to the extent that they may lawfully do so) hereby expressly
waive all benefit or advantage of any such law and covenant that they 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 SEVEN
THE TRUSTEE
Section 701. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default.
(1) the Trustee undertakes to perform such duties, and only such
duties, as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the
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Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any provisions hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
------
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities of any series, relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such series; and
(4) 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 indemnity against such risk or
liability is not reasonably assured to it.
(d) 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.
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Section 702. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series entitled to receive reports pursuant to
Section 803(c), notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that, except in
-------- -------
the case of a default in the payment of the principal of (and premium, if any)
or interest on, or any Additional Amounts with respect to, any Security of such
series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interests of the
Holders of Securities and coupons of such series; and provided, further, that in
-------- -------
the case of any default of the character specified in Section 601(4) with
respect to Securities of such series, 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, with respect to Securities of
such series.
Section 703. Certain Rights of Trustee.
-------------------------
Except as otherwise provided in Section 701:
(a) the Trustee may 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, or
other paper or document reasonably 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 or the Guarantor mentioned
herein shall be sufficiently evidenced by a Company Request or Company Order or
Guarantor Request or Guarantor Order (other than delivery of any Security to the
Trustee for authentication and delivery pursuant to Section 303 which shall be
sufficiently evidenced as provided therein) 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) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
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(d) the Trustee may consult with counsel and the written 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 of Securities of any series or any related coupons pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(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 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 and the Guarantor, 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 704. Not Responsible for Recitals or Issuance of Securities and
----------------------------------------------------------
Guarantees.
----------
The recitals contained herein and in the Securities and Guarantees, except
the Trustee's certificate of authentication, and in any coupons shall be taken
as the statements of the Company or the Guarantor, as the case may be, and the
Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities or coupons or the Guarantees.
The Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company or by the Guarantor of Securities or the proceeds
thereof.
Section 705. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company or the Guarantor, in its individual
or any other capacity, may become
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the owner or pledgee of Securities and coupons and, subject to Sections 708 and
713, may otherwise deal with the Company and the Guarantor with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
Section 706. 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 and shall be held uninvested
except to the extent expressly directed by the Company pursuant to a Company
Order. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company or the
Guarantor.
Section 707. Compensation and Reimbursement.
------------------------------
The Company and the Guarantor agree
(1) to pay to the Trustee from time to time reasonable compensation
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 and its agents for, and to hold them
harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending themselves against any claim
or liability in connection with the exercise or performance of any of their
powers or duties hereunder; provided, that;
--------
(i) with respect to any such claim, the Trustee shall have given
the Company and the Guarantor written notice thereof promptly after
the Trustee shall have knowledge thereof, but failure by the Trustee
to give such notice shall not affect the Trustee's right or the
obligations of the Company and the Guarantor to indemnity hereunder;
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(ii) while maintaining absolute control over its own defense, the
Trustee shall cooperate and consult with the Company and the Guarantor
in preparing such defense. The Trustee may have separate counsel and
the Company and the Guarantor agree to pay the reasonable fees and
expenses of such counsel; and
(iii) notwithstanding anything to the contrary in this Section
707(3), neither the Company nor the Guarantor shall be liable for
settlement of any such claim by the Trustee entered into without the
prior consent of the Company and the Guarantor, which consent shall
not be unreasonably withheld.
As security for the performance of the obligations of the Company and the
Guarantor under this Section, the Trustee shall have a lien prior to the
Securities of any series upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the payment of principal of (or
premium, if any) or interest on Securities.
When the Trustee incurs expenses or renders services after an Event of
Default occurs, the expenses and compensation for the services of the Trustee
are intended to constitute expenses of administration under any bankruptcy law
or any similar federal or state law for the relief of debtors.
Section 708. Disqualifications; Conflicting Interests.
----------------------------------------
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Securities of any series, it shall,
within 90 days after ascertaining that it has such conflicting interest, either
eliminate such conflicting interest or resign with respect to the Securities of
that series, in the manner and with the effect hereinafter specified in this
Article.
(b) In the event that the Trustee shall fail to comply with the provisions
of Subsection (a) of this Section with respect to the Securities of any series,
the Trustee shall, within ten days after the expiration of such 90-day period,
transmit, in the manner and to the extent provided in Section 803(c) to all
Holders of Securities of that series, notice of such failure.
(c) For the purposes of this Section, the Trustee shall be deemed to have a
conflicting interest with respect to the Securities of any series, if
(1) the Trustee is trustee under this Indenture with respect to the
Outstanding Securities of any series other than that series or is trustee
under another indenture under which any other securities, or certificates
of interest or participation in any other securities, of the Company or the
Guarantor are outstanding, unless such other indenture is a collateral
trust indenture under which the only collateral consists of Securities
issued under this Indenture, provided that there shall be excluded from the
--------
operation of this paragraph (A) this Indenture with respect to the
Securities of any series other than that series, and (B) any indenture or
indentures under which other securities, or certificates
52
<PAGE>
of interest or participation in other securities, of the Company or the
Guarantor are outstanding, if
(i) this Indenture and such other indenture or indentures are
wholly unsecured and such other indenture or indentures are hereafter
qualified under the Trust Indenture Act, unless the Commission shall
have found and declared by order pursuant to Section 305(b) or Section
307(c) of the Trust Indenture Act that differences exist between the
provisions of this Indenture with respect to Securities of that series
and one or more other series or the provisions of such other indenture
or indentures which are so likely to involve a material conflict of
interest as to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from acting as such
under this Indenture with respect to the Securities of that series and
such other series or under such other indenture or indentures, or
(ii) the Company or the Guarantor shall have sustained the burden
of proving, on application to the Commission and after opportunity for
hearing thereon, that trusteeship under this Indenture with respect to
the Securities of that series and such other series or such other
indenture or indentures is not so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under this Indenture with respect to the Securities of that
series and such other series under such other indenture or indentures;
(2) the Trustee or any of its directors or executive officers is an
obligor upon the Securities or an underwriter for the Company or the
Guarantor;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
the Company or the Guarantor or an underwriter for the Company or the
Guarantor;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company or the Guarantor, or of an underwriter (other than the Trustee
itself) for the Company or the Guarantor who is currently engaged in the
business of underwriting, except that (i) one individual may be a director
or an executive officer, or both, of the Trustee and a director or an
executive officer, or both, of the Company or the Guarantor but may not be
at the same time an executive officer of both the Trustee and the Company
or
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the Guarantor; (ii) if and so long as the number of directors of the
Trustee in office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and a director of
the Company or the Guarantor; and (iii) the Trustee may be designated by
the Company or the Guarantor or by any underwriter for the Company or the
Guarantor to act in the capacity of transfer agent, registrar, custodian,
paying agent, fiscal agent, escrow agent, or depositary, or in any other
similar capacity, or, subject to the provisions of paragraph (1) of this
Subsection, to act as trustee, whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned by the Company or the Guarantor or by any director,
partner, or executive officer thereof, or 20% or more of such voting
securities is beneficially owned, collectively, by any two or more of such
persons; or 10% or more of the voting securities of the Trustee is
beneficially owned by an underwriter for the Company or the Guarantor or by
any director, partner or executive officer thereof, or is beneficially
owned, collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), (i) 5% or more of the voting securities, or 10% or
more of any other class of security, of the Company or the Guarantor not
including the Securities issued under this Indenture and securities issued
under any other indenture under which the Trustee is also trustee, or (ii)
10% or more of any class of security of an underwriter for the Company or
the Guarantor;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 5% or more of the voting securities of any person who,
to the knowledge of the Trustee, owns 10% or more of the voting securities
of, or controls directly or indirectly or is under direct or indirect
common control with, the Company or the Guarantor;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 10% or more of any class of security of any person
who, to the knowledge of the Trustee, owns 50% or more of the voting
securities of the Company or the Guarantor; or
(9) the Trustee owns, on May 15 in any calendar year, in the capacity
of executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or
54
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in any other similar capacity, an aggregate of 25% or more of the voting
securities, or of any class of security, of any person, the beneficial
ownership of a specified percentage of which would have constituted a
conflicting interest under paragraph (6), (7) or (8) of this Subsection.
As to any such securities of which the Trustee acquired ownership through
becoming executor, administrator, or testamentary trustee of an estate
which included them, the provisions of the preceding sentence shall not
apply, for a period of two years from the date of such acquisition, to the
extent that such securities included in such estate do not exceed 25% of
such voting securities or 25% of any such class of security. Promptly
after May 15 in each calendar year, the Trustee shall make a check of its
holdings of such securities in any of the above-mentioned capacities as of
such May 15. If the Company or the Guarantor fails to make payment in full
of the principal of (or premium, if any) or interest on any of the
Securities when and as the same becomes due and payable, and such failure
continues for 30 days thereafter, the Trustee shall make a prompt check of
its holdings of such securities in any of the above-mentioned capacities as
of the date of the expiration of such 30-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph, all such
securities so held by the Trustee, with sole or joint control over such
securities vested in it, shall, but only so long as such failure shall
continue, be considered as though beneficially owned by the Trustee for the
purposes of paragraphs (6), (7) and (8) of this Subsection.
The specification of percentages in paragraphs (5) to (9), inclusive,
of this Subsection shall not be construed as indicating that the ownership
of such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this
Subsection only, (i) the terms "security" and "securities" shall include
only such securities as are generally known as corporate securities, but
shall not include any note or other evidence of indebtedness issued to
evidence an obligation to repay moneys lent to a person by one or more
banks, trust companies or banking firms, or any certificate of interest or
participation in any such note or evidence of indebtedness; (ii) an
obligation shall be deemed to be "in default" when a default in payment of
principal shall have continued for 30 days or more and shall not have been
cured; and (iii) the Trustee shall not be deemed to be the owner or holder
of (A) any security which it holds as collateral security, as trustee or
otherwise, for an obligation which is not in default as defined in clause
(ii)
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above, or (B) any security which it holds as collateral security under this
Indenture, irrespective of any default hereunder, or (C) any security which
it holds as agent for collection, or as custodian, escrow agent, or
depositary, or in any similar representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter," when used with reference to the Company or
the Guarantor, means every person who, within three years prior to the time
as of which the determination is made, has purchased from the Company or
the Guarantor with a view to, or has offered or sold for the Company or the
Guarantor in connection with, the distribution of any security of the
Company or the Guarantor outstanding at such time, or has participated or
has had a direct or indirect participation in any such undertaking, or has
participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not include a
person whose interest was limited to a commission from an underwriter or
dealer not in excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" means any director of a corporation, or any
individual performing similar functions with respect to any organization,
whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" means any security presently entitling
the owner or holder thereof to vote in the direction or management of the
affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents
for the owner or holder of such security are presently entitled to vote in
the direction or management of the affairs of a person.
(5) The terms "Company" and "Guarantor" mean any obligor upon the
Securities.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any
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individual customarily performing similar functions with respect to any
organization whether incorporated or unincorporated, but shall not include
the chairman of the board of directors.
(e) The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company, the Guarantor or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means such
amount of the outstanding voting securities of such person as entitles the
holder or holders thereof to cast such specified percentage of the
aggregate votes which the holders of all the outstanding voting securities
of such person are entitled to cast in the direction or management of the
affairs of such person.
(2) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(3) The term "amount," when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares, and the number of units if relating
to any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or interest or
otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer
thereof;
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provided, however, that any voting securities of an issuer shall be deemed
-------- -------
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in
-------- -------
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series as different classes; and provided, further, that,
-------- -------
in the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
Section 709. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State or the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by Federal or State
authority. If such corporation 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 corporation 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.
Section 710. 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 711.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company and the
Guarantor. If the instrument of acceptance by a successor Trustee required by
Section 711 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may
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petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company and the Guarantor
(d) If at any time:
(1) the Trustee shall fail to comply with Section 708(a) after written
request therefor by the Company or the Guarantor or by any Holder of a
Security 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 709 and shall
fail to resign after written request therefor by the Company or the
Guarantor, or by any such Holder of a Security, 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 or the Guarantor, by Board Resolutions,
may remove the Trustee with respect to all Securities, or (ii) subject to
Section 614, any Holder of a Security who has been a bona fide Holder of a
Security of any series 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 with respect to all Securities of such series and the
appointment of a successor Trustee or Trustees.
(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, with respect
to the Securities of one or more series, the Company or the Guarantor, by Board
Resolutions, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 711. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding
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Securities of such series delivered to the Company, the Guarantor, the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
711, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company or
the Guarantor. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Guarantor or the
Holders of Securities and accepted appointment in the manner required by Section
711, any Holder of a Security who has been a bona fide Holder of a Security of
such series 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 with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issued as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 711. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company, the Guarantor and 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 the
request of the Company, the Guarantor and/or the successor Trustee, such
retiring Trustee shall, upon payment of its charges as provided in Section 707,
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.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
Guarantor, the retiring Trustee and
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each successor Trustee with respect to the Securities of one or more series
shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee and that no
Trustee shall be responsible for any notice given to, or received by, or any act
or failure to act on the part of any other Trustee hereunder, and upon the
execution and delivery of such supplemental indenture the resignation or removal
of the retiring Trustee shall become effective to the extent provided therein,
such retiring Trustee shall with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture other than as hereinafter expressly set forth, and each 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 with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company, the Guarantor or any
successor Trustee, such retiring Trustee shall duly assign, transfer and deliver
to such successor Trustee, to the extent contemplated by such supplemental
indenture, the property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company and the
Guarantor 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 referred to in paragraph (a) or (b) of this Section, as the case may be.
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(d) 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 712. 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 of 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.
Section 713. Preferential Collection of Claims Against Company and
-----------------------------------------------------
Guarantor.
---------
(a) Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company or the Guarantor within four months prior to a default, as defined in
Subsection (c) of this Section, or subsequent to such a default, then, unless
and until such default shall be cured, the Trustee shall set apart and hold in a
special account for the benefit of the Trustee individually, the Holders of the
Securities and coupons and the holders of other indenture securities (as defined
in Subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such four-month period and valid as against
the Company or the Guarantor and their other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of any
right of set-off which the Trustee could have exercised if a petition in
bankruptcy had been filed by or against the Company or the Guarantor upon
the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or
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in satisfaction or composition thereof, or otherwise, after the beginning
of such four-month period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any, of the
Company and the Guarantor and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company and the Guarantor) who is
liable thereon, and (ii) the proceeds of the bona fide sale of any such
claim by the Trustee to a third Person, and (iii) distributions made in
cash, securities or other property in respect of claims filed against the
Company or the Guarantor in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Code or applicable
State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such four-
month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
Subsection (c) of this Section, would occur within four months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim as
provided in paragraph (B) or (C), as the case may be, to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such four-month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
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If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned between the
Trustee, the Holders of Securities and the holders of other indenture securities
in such manner that the Trustee, the Holders of Securities and the holders of
other indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company or the
Guarantor in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Code or applicable State law, the same
percentage of their respective claims, figured before crediting to the claim of
the Trustee anything on account of the receipt by it from the Company or the
Guarantor of the funds and property in such special account and before crediting
to the respective claims of the Trustee and the Holders of Securities and the
holders of other indenture securities dividends on claims filed against the
Company or the Guarantor in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Code or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, whether such distribution is made in cash, securities or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion among the Trustee and the Holders of Securities
and the holders of other indenture securities, in accordance with the provisions
of this paragraph, the funds and property held in such special account and
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to
give to the provisions of this paragraph due consideration in determining the
fairness of the distributions to be made to the Trustee and the Holders of
Securities and the holders of other indenture securities with respect to their
respective claims, in which event it shall not be necessary to liquidate or to
appraise the value of any securities or other property held in such special
account or as security for any such claim, or to make a specific allocation of
such distributions as between the secured and unsecured portions of such claims,
or otherwise to apply the provisions of this paragraph as a mathematical
formula.
Any Trustee which has resigned or been removed after the beginning of such
four-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four-month period, it
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shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such four-month period; and
(ii) such receipt of property or reduction of claim occurred within
four months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders of Securities at the time and in
the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in Subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
which is organized under the provisions of Section 25(a) of the Federal
Reserve Act, as amended, and which is directly or indirectly a creditor of
the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in Subsection (c) of
this Section.
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(c) For the purpose of this Section only:
(1) the term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable;
(2) the term "other indenture securities" means securities upon which
the Company or the Guarantor is an obligor outstanding under any other
indenture (i) under which indenture and as to which securities the Trustee
is also trustee, (ii) which contains provisions substantially similar to
the provisions of this Section, and (iii) under which a default exists at
the time of the apportionment of the funds and property held in such
special account;
(3) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company or the Guarantor for the purpose of financing the
purchase, processing, manufacture, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing title to,
possession of, or lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company or the Guarantor arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation; and
(5) the terms "Company" and "Guarantor" mean any obligor upon the
Securities.
Section 714. Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
or exchange, registration of transfer or partial redemption thereof 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
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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 the
Guarantor 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 and the Guarantor. 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 and the
Guarantor. 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 shall be acceptable to the
Company and the Guarantor and shall (i) mail written notice of such appointment
by first-class mail, postage prepaid, to all Holders of Registered Securities,
if any, of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register, and (ii) if
Securities of the series are issued as Bearer Securities, publish notice of such
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appointment at least once in an Authorized Newspaper in the place where such
successor Authenticating Agent has its principal office if such office is
located outside the United States. 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 Company and the Guarantor agree to pay each Authenticating Agent from
time to time reasonable compensation for its services under this Section. If
the Trustee makes such payments, it shall be entitled to be reimbursed for such
payments, subject to the provisions of Section 707.
The provisions of Sections 308, 704 and 705 shall be applicable to each
Authenticating Agent.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
BANKERS TRUST COMPANY
By ______________________________
As Authenticating Agent
By ______________________________
Authorized Signatory
If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not comply
with Section 102) by the Company, shall appoint in accordance with this Section
714 an Authenticating Agent having an office in a Place of Payment designated by
the Company with respect to such series of Securities.
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ARTICLE EIGHT
HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR
Section 801. Company and Guarantor to Furnish Trustee Names and Addresses
------------------------------------------------------------
of Holders.
----------
The Company and Guarantor will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not later than 15 days after the Regular Record Date for
interest for each series of Securities, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Registered
Securities of such series as of such Regular Record Date, or if there is no
Regular Record Date for interest for such series of Securities, semi-annually,
upon such dates as are set forth in the Board Resolution or indenture
supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company or the Guarantor 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, provided, however, that so long as the Trustee is
-------- -------
the Security Registrar no such list shall be required to be furnished.
Section 802. 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 of Securities (i) contained in
the most recent list furnished to the Trustee for each series as provided in
Section 801, (ii) received by the Trustee for each series in the capacity of
Security Registrar if the Trustee is then acting in such capacity and (iii)
filed with it within the two preceding years pursuant to Section 803(c)(2). The
Trustee may destroy any list furnished to it as provided in Section 801 upon
receipt of a new list so furnished, and destroy not earlier than two years after
filing, any information filed with it pursuant to Section 803(c)(2).
(b) If three or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series with respect to
their rights under this Indenture or under the Securities of such series or the
Guarantees and is accompanied by
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a copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall, within five business days after the receipt
of such application, at its election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 802(a), or
(ii) inform such applicants as to the approximate number of Holders of
Securities whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 802(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of Securities of such series whose name and address appears
in the information preserved at the time by the Trustee in accordance with
Section 802(a), a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the Holders of Securities of such series or
would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Holders of Securities of such series with
reasonable promptness after the entry of such order and the renewal of such
tender.
(c) Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company, the Guarantor and the Trustee that neither the
Company, the Guarantor nor the Trustee nor any Paying Agent nor any Security
Registrar shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Securities in
accordance with Section 802(b), regardless of the source from which such
information was derived, and that the Trustee shall
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not be held accountable by reason of mailing any material pursuant to a request
made under Section 802(b).
Section 803. Reports by Trustee.
------------------
(a) Within 60 days after September 15 of each year commencing with the year
following the first issuance of Securities pursuant to Section 301, the Trustee
shall transmit by mail to all Holders of Securities, as their names and
addresses appear in the Security Register, a brief report dated as of such
September 15 with respect to:
(1) its eligibility under Section 709 and its qualifications under
Section 708, or in lieu thereof, if to the best of its knowledge it has
continued to be eligible and qualified under said Sections, a written
statement to such effect;
(2) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Securities or the Guarantees relating thereto, on any
property or funds held or collected by it as Trustee, except that the
Trustee shall not be required (but may elect) to report such advances if
such advances so remaining unpaid aggregate not more than 1/2 of 1% of the
principal amount of the Securities Outstanding on the date of such report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company or the Guarantor (or by any other obligor
on the Securities) to the Trustee in its individual capacity, on the date
of such report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 713(b)(2),(3),(4)
or (6);
(4) the property and funds, if any, physically in the possession of
the Trustee as such on the date of such report;
(5) any additional issue of Securities which the Trustee has not
previously reported; and
(6) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities or the Guarantees relating thereto,
except action in respect
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of a default, notice of which has been or is to be withheld by the Trustee
in accordance with Section 702.
(b) The Trustee shall transmit by mail to all Holders of Securities, as
provided in Subsection (c) of this Section, a brief report with respect to the
character and amount of any advances (and if the Trustee elects so to state, the
circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities or the Guarantees
relating thereto, on property or funds collected by it as Trustee, and which it
has not previously reported pursuant to this Subsection, except that the Trustee
shall not be required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal amount of
the Securities Outstanding at such time, such report to be transmitted within 90
days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail:
(1) to all Holders of Registered Securities, as the names and
addresses of such Holders appear in the Security Register;
(2) to such Holders of Bearer Securities as have, within the two years
preceding such transmission, filed their names and addresses with the
Trustee for that purpose; and
(3) except in the case of reports pursuant to Subsection (b) of this
Section, to each Holder of a Security whose name and address is preserved
at the time by the Trustee, as provided in Section 802(a).
(d) A copy of each such report shall, at the time of such transmission to
Holders of Securities, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company and
the Guarantor. The Company or the Guarantor will notify the Trustee when any
Securities are listed on any stock exchange.
Section 804. Reports by Company and Guarantor.
--------------------------------
The Company and the Guarantor shall:
(1) file with the Trustee, within 15 days after the Company or the
Guarantor is required to file the same with the Commission, copies of the
annual reports and of the
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information, documents and other reports (or copies of such portions of any
of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company or the Guarantor may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company or the Guarantor is not
required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents
and reports which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company and the Guarantor with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit within 30 days after the filing thereof with the Trustee,
in the manner and to the extent provided in Section 803(c) with respect to
reports pursuant to Section 803(a), such summaries of any information,
documents and reports required to be filed by the Company or the Guarantor
pursuant to paragraphs (1) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission.
ARTICLE NINE
CONSOLIDATION, MERGER AND SALES
Section 901. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
Subject to Section 1107, nothing contained in this Indenture or in any of
the Securities or Guarantees shall prevent any consolidation or merger of the
Company with or into any other corporation or corporations (whether or not
affiliated with the Company), or successive consolidations or mergers in which
the Company or its successor or successors shall be a party or parties, or shall
prevent any conveyance, transfer or lease of the property of the Company as an
entirety or substantially as an entirety, to any other corporation (whether or
not affiliated with the Company); provided, however, that:
-------- -------
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(1) in case the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by an
indenture (or indentures, if at such time there is more than one Trustee)
supplemental hereto, executed and delivered by the successor corporation
and the Guarantor 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 and Additional Amounts in respect of all the Securities and the
performance 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 Guarantor, Company or a
Subsidiary as a result of such transaction as having been incurred by the
Guarantor, the Company or such Subsidiary at the time of such transaction,
no Event of Default, and no event (including, without limitation, default
under Section 1107) which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) 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 such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with; and
(4) the Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that the Guarantees
remain in full force and effect.
Section 902. Successor Corporation Substituted for Company.
---------------------------------------------
Upon any consolidation or merger or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 901, the successor corporation 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,
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the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease to another Person, the predecessor corporation shall be relieved
of all obligations and covenants under this Indenture and the Securities;
Section 903. Guarantor May Consolidate, Etc., Only on Certain Terms.
------------------------------------------------------
Nothing contained in this Indenture or in any of the Securities or
Guarantees shall prevent any consolidation or merger of the Guarantor with or
into any other corporation or corporations (whether or not affiliated with the
Guarantor), or successive consolidations or mergers in which the Guarantor or
its successor or successors shall be a party or parties, or shall prevent any
conveyance, transfer or lease of the property of the Guarantor as an entirety or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Guarantor); provided, however that:
-------- -------
(1) in case the Guarantor shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Guarantor is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Guarantor substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by an
indenture (or indentures, if at such time there is more than one Trustee)
supplemental hereto, executed and delivered by the Guarantor and the
Company to the Trustee, in form satisfactory to the Trustee, the Guarantees
endorsed on the Securities and the performance of every covenant of this
Indenture on the part of the Guarantor to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Guarantor or a
Subsidiary as a result of such transaction as having been incurred by the
Guarantor 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 happened and be continuing; and
(3) the Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with this Article and that all conditions precedent herein
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provided for relating to such transaction have been complied with.
Section 904. Successor Corporation Substituted for Guarantor.
-----------------------------------------------
Upon any consolidation or merger or any conveyance, transfer or lease of
the properties and assets of the Guarantor substantially as an entirety to any
Person in accordance with Section 903, the successor corporation formed by such
consolidation or into which the Guarantor 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 Guarantor under this Indenture with the
same effect as if such successor corporation had been named as the Guarantor
herein, and thereafter, except in the case of a lease to another Person, the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Guarantees.
Section 905. Assumption by Guarantor.
-----------------------
The Guarantor, or a Subsidiary thereof, may directly 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 and Additional Amounts in respect of all
the Securities and the performance of every covenant of this Indenture on the
part of the Company to be performed or observed. Upon any such assumption, the
Guarantor or such Subsidiary 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 the Guarantor or such Subsidiary had been named as the Company
herein and the Company shall be released from its liability as obligor on the
Securities. No such assumption shall be permitted unless the Guarantor has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such assumption and supplemental indenture comply with this
Article, and that all conditions precedent herein provided for relating to such
transaction have been complied with and that, in the event of assumption by a
Subsidiary, the Guarantees remain in full force and effect.
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ARTICLE TEN
SUPPLEMENTAL INDENTURES
Section 1001. Supplemental Indentures without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders of Securities or coupons, the Company
and the Guarantor, when authorized by Board Resolutions, 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:
(1) to evidence the succession of another Person to the Company or the
Guarantor, and the assumption by any such successor of the covenants of the
Company or the Guarantor herein and in the Securities or the Guarantees, as
the case may be; or
(2) to add to the covenants of the Company or the Guarantor for the
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein conferred
upon the Company or the Guarantor; or
(3) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal (or
premium, if any) on Registered Securities or of principal (or premium, if
any) or any interest on Bearer Securities, to permit Registered Securities
to be exchanged for Bearer Securities or to permit the issuance of
Securities in uncertificated form, provided any such action shall not
--------
adversely affect the interests of the Holders of Securities of any series
or any related coupons in any material respect; or
(4) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 711(b); or
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(6) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or 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 and which shall not adversely affect the
interest of the Holders of Securities of any series or any related coupons
in any material respect; or
(7) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth; or
(8) to add any additional Events of Default; or
(9) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act or under any similar federal
statute hereafter enacted and to add to this Indenture such other
provisions as may be expressly required under the Trust Indenture Act; or
(10) to effect the assumption by the Guarantor or a Subsidiary thereof
pursuant to Section 905.
The Trustee shall be entitled to receive an Opinion of Counsel in
connection with any supplemental indenture purporting to comply with the
provisions of this Section 1001 which states that no consent is necessary under
Article Ten of this Indenture in order to enter into such supplemental
indenture.
Section 1002. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company, the
Guarantor and the Trustee, the Company and the Guarantor, when authorized by
Board Resolutions, 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 of Securities of such series
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 installment
of interest on, any Security, or reduce the principal amount thereof or the
rate of interest thereon or any Additional Amounts payable in respect
thereof, or any premium payable upon the redemption thereof, or change the
obligation of the Company and the Guarantor to pay Additional Amounts
pursuant to Section 1104 (except as
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contemplated by Section 901(i) and permitted by Section 1001(1)), or reduce
the amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 602, or change the Place of Payment, coin or
currency in which any Security or any premium or the 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
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, 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 reduce the requirements of Section 1504 for quorum or voting,
or
(3) modify any of the provisions of this Section, or Section 613, or
Section 107, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, or
(4) modify or affect in any manner adverse to the Holders the terms
and conditions of the obligations of the Guarantor in respect of the due
and punctual payments of principal of, or premium, if any, interest or
sinking fund requirements, if any, on, or Additional Amounts in respect of,
the Securities.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders of Securities 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 1003. Execution of Supplemental Indentures.
------------------------------------
As a condition to executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this
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Indenture, the Trustee shall be entitled to receive, and (subject to Section
701) 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 and that it complies with the terms of this Indenture and that,
upon execution, it will be valid and binding in accordance with its terms. 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 1004. 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
and of any coupons appertaining thereto shall be bound thereby.
Section 1005. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 1006. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series 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 of any series 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 of such series.
ARTICLE ELEVEN
COVENANTS
Section 1101. Payment of Principal, Premium, if any, and Interest.
---------------------------------------------------
The Company covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any), interest on and any Additional Amounts payable in respect of
the
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Securities of that series in accordance with the terms of such series of
Securities, any coupons appertaining thereto and this Indenture. Any interest
due on and any Additional Amounts payable in respect of Bearer Securities on or
before Maturity, other than Additional Amounts, if any, payable as provided in
Section 1104 in respect of principal of (or premium, if any, on) such a
Security, shall be payable only upon presentation and surrender of the several
coupons for such interest installments as are evidenced thereby as they
severally mature.
Section 1102. Maintenance of Office or Agency.
-------------------------------
The Company or the Guarantor will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series (but
not Bearer Securities, except as otherwise provided below, unless such Place of
Payment is located outside the United States) may be presented or surrendered
for payment, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company or
the Guarantor in respect of the Securities of that series and the Guarantees
relating thereto and this Indenture may be served. If Securities of a series
are issuable as Bearer Securities, the Company or the Guarantor will maintain,
subject to any laws or regulations applicable thereto, an office or agency in a
Place of Payment for such series which is located outside the United States
where Securities of such series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Securities of such series pursuant to Section 1104); provided, however, that if
-------- -------
the Securities of such series are listed on The Stock Exchange of the United
Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company or the Guarantor will maintain a Paying Agent in
London, Luxembourg or any other required city located outside the United States,
as the case may be, so long as the Securities of such series are listed on such
exchange. The Company or the Guarantor 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 or the Guarantor 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, except that Bearer
Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Bearer Securities of that series pursuant to Section 1104) at the place
specified for the purpose pursuant to Section 301, and the Company and the
Guarantor each hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
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Except as otherwise provided in the form of Bearer Security of any
particular series pursuant to the provisions of this Indenture, no payment of
principal, premium or interest on Bearer Securities shall be made at any office
or agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank located
in the United States; provided, however, payment of principal of and any premium
-------- -------
and interest in U.S. dollars (including Additional Amounts payable in respect
thereof) on any Bearer Security may be made at the Corporate Trust Office or any
office or agency designated by the Company in the Borough of Manhattan, The City
of New York if (but only if) payment of the full amount of such principal,
premium, interest or Additional Amounts at all offices outside the United States
maintained for the purpose by the Company in accordance with this Indenture is
illegal or effectively precluded by exchange controls or other similar
restrictions.
The Company or the Guarantor may also from time to time designate one or
more other offices or agencies where the Securities of one or more series 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 or the Guarantor of their
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company or the Guarantor 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. Unless
otherwise set forth in a Board Resolution or indenture supplemental hereto with
respect to a series of Securities, the Company and the Guarantor each hereby
designates as the Place of Payment for each series The City of New York, and
initially appoints the office or agency of the Company or the Guarantor for such
purpose. Pursuant to Section 3.01(8) of this Indenture, the Company or the
Guarantor may subsequently appoint a place or places in the Borough of
Manhattan, The City of New York where such Securities may be payable.
Section 1103. Money for Securities Payments to Be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any), or interest on, any of the Securities of
that series, segregate and hold in trust for the benefit of the Person entitled
thereto a sum sufficient to pay the principal (and premium, if any) 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.
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Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of (and
premium, if any), or interest on, any Securities of that series, deposit with
any Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, 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 for any series of Securities 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:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company or the
Guarantor (or any other obligor upon the Securities of that series) in the
making of any payment of principal (and premium, if any) or interest on the
Securities of that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company or the Guarantor 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 or Guarantor 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 terms 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.
Except as otherwise provided in the form of Securities of any particular
series pursuant to the provisions of this Indenture, 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) or interest on any Security of
any series and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become
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due and payable shall be paid to the Company on Company Request (or if deposited
by the Guarantor, paid to the Guarantor on Guarantor Request), or (if then held
by the Company) shall be discharged from such trust; and the Holder of such
Security or any coupon appertaining thereto shall thereafter, as an unsecured
general creditor, look only to the Company and the Guarantor 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 an Authorized Newspaper in each Place of
Payment or to be mailed to Holders of Registered Securities, or both, 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 or
mailing nor shall it be later than two years after such principal (and premium,
if any) or interest has become due and payable, any unclaimed balance of such
money then remaining will be repaid to the Company or the Guarantor, as the case
may be.
Section 1104. Additional Amounts.
------------------
If the Securities of a series provide for the payment of Additional
Amounts, the Company and the Guarantor agree to pay to the Holder of any
Security of any such series or any coupon appertaining thereto Additional
Amounts as provided therein. Whenever in this Indenture there is mentioned, in
any context, the payment of the principal of (or premium, if any) or interest
on, or in respect of, any Security of any series or any related coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided for in this Section to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section and express mention of the payment of Additional
Amounts (if applicable) in any provisions hereof shall not be construed as
excluding Additional Amounts in those provisions hereof where such express
mention is not made.
If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal (and
premium, if any) is made), and at least 10 days prior to each date of payment of
principal (and premium, if any) or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
the Company or the Guarantor, as the case may be, will furnish the Trustee and
the principal Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee
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and such Paying Agent or Paying Agents whether such payment of principal (and
premium, if any) or interest on the Securities of that series shall be made to
Holders of Securities of that series or the related coupons who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities or coupons and the Company and the Guarantor agree
to pay to the Trustee or such Paying Agent the Additional Amounts required by
this Section. The Company and the Guarantor each covenant to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officers' Certificate furnished pursuant to this
Section.
Section 1105. Company Statement as to Compliance; Notice of Certain
-----------------------------------------------------
Defaults.
--------
(a) The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year a written statement, which need not comply with Section 102,
signed by the Chairman of the Board, a Vice Chairman, the President or a Vice
President and by the Treasurer or an Assistant Treasurer of the Company,
stating, as to each signer thereof.
(1) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision, and
(2) to the best of his knowledge, based on such review, (a) the
Company has fulfilled all of its obligations under this Indenture
throughout such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to him and the
nature and status thereof, and (b) no event has occurred and is continuing
which is, or after notice or lapse of time or both would become, an Event
of Default, or, if such an event has occurred and is continuing, specifying
each such event known to him and the nature and status thereof.
(b) The Company will deliver to the Trustee, within five days after the
occurrence thereof, written notice of any event which after notice or lapse of
time or both would become an Event of Default.
Section 1106. Guarantor Statement as to Compliance; Notice of Certain
-------------------------------------------------------
Defaults.
--------
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(a) The Guarantor will deliver to the Trustee, within 120 days after the
end of each fiscal year, a written statement, which need not comply with Section
102, signed by the Chairman of the Board, a Vice Chairman, the President or a
Vice President and by the Treasurer or an Assistant Treasurer of the Guarantor,
stating, as to each signer thereof, that
(1) a review of the activities of the Guarantor during such year and
of performance under this Indenture has been made under his supervision and
(2) to the best of his knowledge, based on such review, (a) the
Guarantor has fulfilled all its obligations under this Indenture throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to him and the nature and
status thereof, and (b) no event has occurred and is continuing which
constitutes, or which after notice or lapse of time or both would become,
and Event of Default, or, if such an event has occurred and is continuing,
specifying each such event known to him and the nature and status thereof.
(b) The Guarantor will deliver to the Trustee, within five days after the
occurrence thereof, written notice of and go event which after notice or lapse
of time or both would become an Event of Default.
Section 1107. Limitation upon Disposition of Voting Stock of Company
------------------------------------------------------
and Major Constituent Banks.
---------------------------
So long as any of the Securities shall be Outstanding, but subject to the
provisions of Article Nine, the Guarantor:
(a) will not, nor will it permit any Subsidiary to, sell, assign, transfer
or otherwise dispose of any shares of, securities convertible into or options,
warrants or rights to subscribe for or purchase shares of, Voting Stock of the
Company or a Major Constituent Bank, and will not permit the Company or a Major
Constituent Bank to issue any shares of, or securities convertible into or
options, warrants or rights to subscribe for or purchase shares of, such Voting
Stock if, in each case, after giving effect to any such transaction and to the
issuance of the maximum number of shares of Voting Stock of the Company or such
Major Constituent Bank, as the case may be, issuable upon the exercise of all
such convertible securities, options, warrants or rights, the Company or such
Major Constituent Bank would cease to be a Controlled Subsidiary, or
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(b) will not permit the Company or a Major Constituent Bank to
(i) merge or consolidate with or into any other corporation, unless
the surviving corporation is the Guarantor or is, or upon consummation of
the merger or consolidation will become, a Controlled Subsidiary; or
(ii) lease, sell or transfer all or substantially all of its
properties and assets to any corporation or other Person, except to the
Guarantor or to a Controlled Subsidiary or a Person that, upon such lease,
sale or transfer, will become a Controlled Subsidiary.
Notwithstanding the foregoing, any such sale, assignment or transfer of
securities, any such merger or consolidation or any such lease, sale or transfer
of properties and assets shall not be prohibited if required (i) by any law or
any rule, regulation or order of any governmental agency or authority or (ii) as
a condition imposed by any law or any rule, regulation or order of any
governmental agency or authority to the acquisition by the Guarantor, directly
or indirectly, through purchase of stock or assets, merger, consolidation or
otherwise, of any Person, provided that, after giving effect to such disposition
and acquisition, (A) such Person will be a Controlled Subsidiary, and (B) the
Consolidated Banking Assets of the Guarantor will be at least equal to the
Consolidated Banking Assets of the Guarantor prior thereto.
Section 1108. Limitation on Creation of Liens.
-------------------------------
So long as any of the Securities shall be outstanding, the Guarantor will
not, nor will it permit any Subsidiary to, create, assume, incur or suffer to be
created, assumed or incurred or to exist any pledge, encumbrance or lien, as a
security for indebtedness for borrowed money, upon any shares of, or securities
convertible into or options, warrants or rights to subscribe for or purchase
shares of, Voting Stock of the Company or a Major Constituent Bank, directly or
indirectly, without making effective provision whereby the Securities of all
series shall be equally and ratably secured with any and all such indebtedness
if, treating such pledge, encumbrance or lien as a transfer of the shares of, or
securities convertible into or options, warrants or rights to subscribe for or
purchase shares of, Voting Stock subject thereto to the secured party and to the
issuance of the maximum number of shares of Voting Stock of the Company or such
Major Constituent Bank issuable upon the exercise of all such convertible
securities, options, warrants or rights, the Company or such Major Constituent
Bank would not continue to be a Controlled Subsidiary.
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Section 1109. Corporate Existence.
-------------------
Subject to Article Nine, the Company and the Guarantor will do or cause to
be done all things necessary to preserve and keep in full force and effect their
respective corporate existences and that of each Major Constituent Bank and
their respective rights (charter and statutory) and franchises and those of
each such Major Constituent Bank; provided, however, that neither the Company,
-------- -------
the Guarantor, nor any Major Constituent Bank shall be required to preserve any
such right or franchise if the Company, the Guarantor or such Major Constituent
Bank, as the case may be, shall determine that the preservation thereof is no
longer desirable in the conduct of its business and that the loss thereof is not
disadvantageous in any material respect to the Holders.
Section 1110. Waiver of Certain Covenants.
---------------------------
The Company or the Guarantor, as the case may be, may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 1107, 1108 and 1109 with respect to the Securities of any series if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the Guarantor and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
Section 1201. Applicability of Article.
------------------------
Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and this Article.
Section 1202. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
the Securities of any series, with the same issue date, interest rate and Stated
Maturity, the
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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 of
such series to be redeemed.
Section 1203. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities of any series with the same issue date,
interest rate, Stated Maturity and other terms 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 of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions of the principal amount of Registered Securities of such
series; provided, however, that no such partial redemption shall reduce the
-------- -------
portion of the principal amount of a Registered Security of such series not
redeemed to less than the minimum denomination for a Security of that series
established pursuant to Section 302.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) 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.
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 of such Securities which has been or is to be redeemed.
Section 1204. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided in Section 106,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to the Holders of
Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not such Holder receives the notice.
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All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Securities to be redeemed,
(4) in case any Registered Security is to be redeemed in part only,
the notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the Holder of such
Security will receive, without charge, a new Registered Security or
Registered Securities of authorized denominations for the principal amount
thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed, and, if applicable,
that interest thereon shall cease to accrue on and after said date,
(6) the place or places where such Securities, together, in the case
of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of
the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the case.
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
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 1205. Deposit of Redemption Price.
---------------------------
On or 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 1103) 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 and any Additional
Amounts with respect thereto, all the Securities or portions thereof which are
to be redeemed on that date.
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Section 1206. 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 and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest (and
any Additional Amounts) to the Redemption Date; provided, however, that
-------- -------
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only upon presentation and
surrender of coupons for such interest (at an office or agency located outside
the United States except as otherwise provided in Section 1102), and provided,
--------
further, that installments of interest on Registered Securities 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 Regular Record Dates according to their terms and
the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent any such missing coupon in respect
of which a deduction shall have been made from the Redemption Price, such Holder
shall be entitled to receive the amount so deducted; provided, however, that
-------- -------
interest (and any Additional Amounts) represented by coupons shall be payable
only upon presentation and surrender of those coupons at an office or agency
located outside of the United States except as otherwise provided in Section
1102.
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 prescribed therefor in the
Security.
Section 1207. Securities Redeemed in Part.
---------------------------
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Any Registered Security which is to be redeemed only in part shall be
surrendered at any office or agency of the Company maintained for that purpose
pursuant to Section 1102 (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 Registered Security or Securities of the same series with a Guarantee or
Guarantees endorsed thereon, containing identical terms and provisions, 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. If a Security in global form is so surrendered;
the Company shall execute, and the Trustee shall authenticate and deliver to the
U.S. Depository or other depository for such Security in global form as shall be
specified in the Company Order with respect thereto to the Trustee, without
service charge, a new Security in global form in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Security in global
form so surrendered.
ARTICLE THIRTEEN
SINKING FUNDS
Section 1301. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series, except as otherwise permitted or
required by any form of Security of such series issued pursuant to this
Indenture.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of such series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1302. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of Securities of such
series.
Section 1302. Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such
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series to be made pursuant to the terms of such Securities as provided for by
the terms of such series (1) deliver Outstanding Securities of such series
(other than any of such Securities previously called for redemption or any of
such Securities in respect of which cash shall have been released to the
Company), together in the case of any Bearer Securities of such series with all
unmatured coupons appertaining thereto, and (2) apply as a credit Securities of
such series which have been redeemed either at the election of the Company
pursuant to the terms of such series of Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, provided that such series of Securities have not been previously so
--------
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly. If as a result of the delivery or credit
of Securities of any series in lieu of cash payments pursuant to this Section
1302, the principal amount of Securities of such series to be redeemed in order
to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee
need not call Securities of such series for redemption, except upon Company
Request, and such cash payment shall be held by the Trustee or a Paying Agent
and applied to the next succeeding sinking fund payment, provided, however, that
-------- -------
the Trustee or such Paying Agent shall at the request of the Company from time
to time pay over and deliver to the Company any cash payment so being held by
the Trustee or such Paying Agent upon delivery by the Company to the Trustee of
Securities of that series purchased by the Company having an unpaid principal
amount equal to the cash payment requested to be released to the Company.
Section 1303. Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 1302, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 60 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 1203 and cause notice of the
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redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1204. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1206 and 1207.
ARTICLE FOURTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1401. Applicability of Article.
------------------------
Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount
of Securities pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section 309, shall not
operate as a payment, redemption or satisfaction of the indebtedness represented
by such Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Article
Fourteen, in connection with any repayment of Securities, the Company may
arrange for the purchase of any Securities by an agreement with one or more
investment bankers or other purchasers to purchase such Securities by paying to
the Holders of such Securities on or before the close of business on the
repayment date an amount not less than the repayment price payable by the
Company on repayment of such Securities, and the obligation of the Company to
pay the repayment price of such Securities shall be satisfied and discharged to
the extent such payment is so paid by such purchasers.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May Be Called.
-----------------------------------------
A meeting of Holders of Securities of such series may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
Section 1502. Call, Notice and Place of Meetings.
----------------------------------
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(a) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1501, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or, if
Securities of such series are to be issued as Bearer Securities, in London, as
the Trustee shall determine. Notice of every meeting of Holders of Securities
of any series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 106, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.
(b) In case at any time the Company or the Guarantor, pursuant to Board
Resolutions, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company, the Guarantor or the Holders of Securities of
such series in the amount above specified, as the case may be, may determine the
time and the place in the Borough of Manhattan, The City of New York, or, if
Securities of such series are to be issued as Bearer Securities, in London for
such meeting and may call such meeting for such purposes by giving notice
thereof as provided in subsection (a) of this Section.
Section 1503. Persons Entitled to Vote at Meetings.
------------------------------------
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
Section 1504. Quorum, Action.
--------------
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series: provided, however, that if any action is
-------- -------
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than
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66-2/3% in principal amount of the Outstanding Securities of a series, the
Persons entitled to vote 66-2/3% in principal amount of the Outstanding
Securities of such series shall constitute a quorum. In the absence of a quorum
within 30 minutes after the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 1502(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Except as limited by the proviso to Section 1002, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 1002, any
- -------- -------
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of a series may be adopted at a meeting or
an adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of 66-2/3% in principal amount of
the Outstanding Securities of that series; and provided, further, that, except
-------- -------
as limited by the proviso to Section 1002, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is present
as aforesaid by the affirmative vote of the Holders of such specified percentage
in principal amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
96
<PAGE>
Section 1505. Determination of Voting Rights; Conduct and Adjournment of
----------------------------------------------------------
Meetings.
--------
(a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of such series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company, the Guarantor or the Holders of Securities of the series
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series represented at the
meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of Securities of such
series held or represented by him; provided, however, that no vote shall be cast
-------- -------
or counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote, except as a Holder of a
Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called pursuant
to Section 1502 at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.
Section 1506. Counting Votes and Recording Action of Meetings.
-----------------------------------------------
97
<PAGE>
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and the Guarantor, and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
Section 1601. Securities in Foreign Currencies.
--------------------------------
Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in the form of Security of any particular series, any amount in
respect of any Security denominated in a currency other than United States
dollars shall be treated for any such action or distribution as that amount of
United States dollars that could be obtained for such amount on such reasonable
basis of exchange and as of the record date with respect to Registered
Securities of such series (if any) for such action, determination of rights or
distribution (or, if there shall be no applicable record date, such other date
reasonably proximate to the date of such action, determination of rights or
distribution) as the Company or the Guarantor may specify in a written notice to
the Trustee or, in the absence of such written notice, as the Trustee may
determine.
98
<PAGE>
* * * * *
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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed, all
as of the day and year first above written.
[SEAL] KEYSTONE FINANCIAL MID-ATLANTIC
FUNDING CORP.
Attest: By: ____________________
Name:
Title:
[SEAL] KEYSTONE FINANCIAL, INC.
Attest:
_________________________ By: ____________________
Name:
Title:
[SEAL] BANKERS TRUST COMPANY
Attest:
_________________________ By: ____________________
Name:
Title:
99
<PAGE>
COMMONWEALTH OF PENNSYLVANIA )
: SS.:
COUNTY OF [ ] )
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 KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP., a Pennsylvania
corporation, one of the persons described in and who executed the foregoing
instrument; that he/she knows the seal of said corporation; that the seal
affixed to said instrument is such corporation's 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.
____________________________
Notary Public
[NOTARIAL SEAL]
COMMONWEALTH OF PENNSYLVANIA )
: SS.:
COUNTY OF [ ] )
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 KEYSTONE FINANCIAL, INC., a Pennsylvania corporation, one of the
persons described in and who executed the foregoing instrument; that he/she
knows the seal of said corporation; that the seal affixed to said instrument is
such corporation's 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
____________________________
Notary Public
[NOTARIAL SEAL]
100
<PAGE>
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 BANKERS TRUST COMPANY, a national banking association, one of the
persons described in and who executed the foregoing instrument; that he/she
knows the seal of said corporation; that the seal affixed to said instrument is
such corporation's 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.
____________________________
Notary Public
[NOTARIAL SEAL]
101
<PAGE>
EXHIBIT 4.2
================================================================================
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.,
Issuer
and
KEYSTONE FINANCIAL, INC.,
Guarantor
to
BANKERS TRUST COMPANY,
Trustee
----------------------
SUBORDINATED INDENTURE
----------------------
Dated as of __________, 1997
Subordinated Debt Securities
================================================================================
<PAGE>
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
and
KEYSTONE FINANCIAL, INC.
Reconciliation and tie between Trust Indenture Act of 1939
and Subordinated Indenture dated as of ________, 1997
----------------------------------------------------------
Trust Indenture Act Section Indenture Section
-----------------
(S)310 (a)(1).............................................. 709
(a)(2).............................................. 709
(a)(3).............................................. Not Applicable
(a)(4).............................................. Not Applicable
(b) ................................................ 708, 710
(S)311 (a) ................................................ 713(a), (c)
(b) ................................................ 713(b), (c)
(b)(2) ............................................. 803(a)(2), 803(b)
(S)312 (a) ................................................ 801, 802(a)
(b) ................................................ 802(b)
(c) ................................................ 802(c)
(S)313 (a) ................................................ 803(a)
(b)(1) ............................................. Not Applicable
(b)(2) ............................................. 803(b)
(c) ................................................ 803(c)
(d) ................................................ 803(d)
(S)314 (a) ................................................ 804
(b) ................................................ Not Applicable
(c)(1) ............................................. 102
(c)(2) ............................................. 102
(c)(3) ............................................. Not Applicable
(d) ................................................ Not Applicable
(e) ................................................ 102
(S)315 (a) ................................................ 701(a)
(b) ................................................ 702, 803(a)(6)
(c) ................................................ 701(b)
(d) ................................................ 701(c)
(d)(1) ............................................. 701(a)(1), (c)(1)
(d)(2) ............................................. 701(c)(2)
(d)(3) ............................................. 701(c)(3)
(e) ................................................ 614
(S)316 (a) ................................................ 101
(a)(1)(A) .......................................... 602, 612
(a)(1)(B) .......................................... 613
(a)(2) ............................................. Not Applicable
(b) ................................................ 608
(S)317 (a)(1) ............................................. 603
(a)(2) ............................................. 604
(b) ................................................ 1103
(S)318 (a) ................................................ 108
_____________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of this Subordinated Indenture.
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
RECITALS OF THE COMPANY.............................................. 1
RECITALS OF THE GUARANTOR............................................ 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions............................................ 2
Section 102. Compliance Certificates and Opinions................... 9
Section 103. Form of Documents Delivered to Trustee................. 10
Section 104. Acts of Holders........................................ 11
Section 105. Notices, etc. to Trustee, Company and
Guarantor.............................................. 13
Section 106. Notice to Holders of Securities; Waiver................ 14
Section 107. Language of Notices.................................... 15
Section 108. Conflict with Trust Indenture Act...................... 15
Section 109. Effect of Headings and Table of Contents............... 16
Section 110. Successors and Assigns................................. 16
Section 111. Separability Clause.................................... 16
Section 112. Benefits of Indenture.................................. 16
Section 113. Governing Law.......................................... 16
Section 114. Legal Holidays......................................... 16
ARTICLE TWO
FORMS OF SECURITIES AND GUARANTEES
Section 201. Forms Generally........................................ 17
Section 202. Form of Trustee's Certificate of
Authentication......................................... 17
Section 203. Securities in Global Form.............................. 18
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series................... 18
Section 302. Denominations.......................................... 21
Section 303. Execution, Authentication, Delivery
and Dating............................................. 21
Section 304. Temporary Securities................................... 23
Section 305. Registration, Transfer and Exchange.................... 24
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities............................................. 28
Section 307. Payment of Interest; Interest Rights
Preserved.............................................. 29
Section 308. Persons Deemed Owners.................................. 31
i
<PAGE>
Page
----
Section 309. Cancellation........................................... 32
Section 310. Computation of Interest................................ 32
ARTICLE FOUR
GUARANTEES OF SECURITIES
Section 401. Unconditional Guarantee................................ 33
Section 402. Execution, Authentication and Delivery................. 34
Section 403. Subordination.......................................... 34
ARTICLE FIVE
SATISFACTION AND DISCHARGE
Section 501. Satisfaction and Discharge of Indenture................ 34
Section 502. Application of Trust Money............................. 36
ARTICLE SIX
REMEDIES
Section 601. Events of Default...................................... 36
Section 602. Acceleration of Maturity; Rescission and
Annulment.............................................. 37
Section 603. Collection of Indebtedness and Suits for
Enforcement by Trustee................................. 38
Section 604. Trustee May File Proofs of Claim....................... 39
Section 605. Trustee May Enforce Claims without
Possession of Securities or Coupons.................... 40
Section 606. Application of Money Collected......................... 41
Section 607. Limitation on Suits.................................... 41
Section 608. Unconditional Right of Holders to
Receive Principal, Premium and Interest................ 42
Section 609. Restoration of Rights and Remedies..................... 42
Section 610. Rights and Remedies Cumulative......................... 42
Section 611. Delay or Omission Not Waiver........................... 43
Section 612. Control by Holders of Securities....................... 43
Section 613. Waiver of Past Defaults................................ 43
Section 614. Undertaking for Costs.................................. 44
Section 615. Waiver of Stay or Extension Laws....................... 44
ARTICLE SEVEN
THE TRUSTEE
Section 701. Certain Duties and Responsibilities.................... 45
Section 702. Notice of Defaults..................................... 46
ii
<PAGE>
Page
----
Section 703. Certain Rights of Trustee............................. 46
Section 704. Not Responsible for Recitals or
Issuance of Securities and Guarantees................. 48
Section 705. May Hold Securities................................... 48
Section 706. Money Held in Trust................................... 48
Section 707. Compensation and Reimbursement........................ 48
Section 708. Disqualifications; Conflicting Interests.............. 49
Section 709. Corporate Trustee Required; Eligibility............... 55
Section 710. Resignation and Removal; Appointment of
Successor............................................. 56
Section 711. Acceptance of Appointment by Successor................ 58
Section 712. Merger, Conversion, Consolidation or
Succession to Business................................ 59
Section 713. Preferential Collection of Claims
Against Company and Guarantor......................... 59
Section 714. Appointment of Authenticating Agent................... 64
ARTICLE EIGHT
HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR
Section 801. Company and Guarantor to Furnish Trustee
Names and Addresses of Holders........................ 66
Section 802. Preservation of Information;
Communications to Holders............................. 67
Section 803. Reports by Trustee.................................... 68
Section 804. Reports by Company and Guarantor...................... 70
ARTICLE NINE
CONSOLIDATION, MERGER AND SALES
Section 901. Company May Consolidate, Etc., Only on
Certain Terms......................................... 71
Section 902. Successor Corporation Substituted for
Company............................................... 72
Section 903. Guarantor May Consolidate, Etc., Only On
Certain Terms......................................... 72
Section 904. Successor Corporation Substituted for
Guarantor............................................. 73
Section 905. Assumption by Guarantor............................... 73
ARTICLE TEN
SUPPLEMENTAL INDENTURES
Section 1001. Supplemental Indentures without Consent
of Holders............................................ 76
iii
<PAGE>
Page
----
Section 1002. Supplemental Indentures with Consent of Holders....... 76
Section 1003. Execution of Supplemental Indentures.................. 77
Section 1004. Effect of Supplemental Indentures..................... 77
Section 1005. Conformity with Trust Indenture Act................... 77
Section 1006. Reference in Securities to Supplemental Indentures.... 78
Section 1007. Subordination Unimpaired.............................. 78
ARTICLE ELEVEN
COVENANTS
Section 1101. Payment of Principal, Premium, if any,
and Interest.......................................... 78
Section 1102. Maintenance of Office or Agency....................... 79
Section 1103. Money for Securities Payments to Be Held
in Trust.............................................. 80
Section 1104. Additional Amounts.................................... 82
Section 1105. Company Statement as to Compliance;
Notice of Certain Defaults............................ 83
Section 1106. Guarantor Statement as to Compliance;
Notice of Certain Defaults............................ 83
Section 1107. Reserved.............................................. 84
Section 1108. Limitation on Creation of Liens....................... 84
Section 1109. Corporate Existence....................................84
Section 1110. Waiver of Certain Covenants........................... 85
ARTICLE TWELVE
REDEMPTION OF SECURITIES
Section 1201. Applicability of Article.............................. 85
Section 1202. Election to Redeem; Notice to Trustee................. 85
Section 1203. Selection by Trustee of Securities to be Redeemed..... 85
Section 1204. Notice of Redemption.................................. 86
Section 1205. Deposit of Redemption Price........................... 87
Section 1206. Securities Payable on Redemption Date................. 87
Section 1207. Securities Redeemed in Part........................... 88
ARTICLE THIRTEEN
SINKING FUNDS
Section 1301. Applicability of Article.............................. 89
Section 1302. Satisfaction of Sinking Fund Payments
with Securities....................................... 89
iv
<PAGE>
Page
----
Section 1303. Redemption of Securities for Sinking Fund.............. 90
ARTICLE FOURTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1401. Applicability of Article............................... 91
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May Be Called.............. 91
Section 1502. Call, Notice and Place of Meetings..................... 91
Section 1503. Persons Entitled to Vote at Meetings................... 92
Section 1504. Quorum; Action......................................... 92
Section 1505. Determination of Voting Rights; Conduct
and Adjournment of Meetings............................ 93
Section 1506. Counting Votes and Recording Action of Meetings........ 94
ARTICLE SIXTEEN
SUBORDINATION
Section 1601. Securities Subordinated to Senior Company
Indebtedness........................................... 95
Section 1602. Guarantees Subordinated to Senior
Guarantor Indebtedness................................. 98
Section 1603. Subrogation............................................100
Section 1604. Obligation of Company and Guarantor
Unconditional..........................................101
Section 1605. Payments on Securities Permitted.......................102
Section 1606. Effectuation of Subordination by Trustee...............102
Section 1607. Knowledge of Trustee...................................102
Section 1608. Trustee's Relation to Senior Company
Indebtedness and Senior Guarantor Indebtedness.........103
Section 1609. Rights of Holders of Senior Company
Indebtedness and Senior Guarantor
Indebtedness Not Impaired..............................103
v
<PAGE>
Page
----
ARTICLE SEVENTEEN
MISCELLANEOUS PROVISIONS
Section 1701. Securities in Foreign Currencies......................104
vi
<PAGE>
SUBORDINATED INDENTURE, dated as of ___________, 1997 (the "Indenture"),
among Keystone Financial Mid-Atlantic Funding Corp., a corporation duly
organized and existing under the laws of the Commonwealth of Pennsylvania
(hereinafter called the "Company"), Keystone Financial, Inc., a corporation duly
organized and existing under the laws of the Commonwealth of Pennsylvania
(hereinafter called the "Guarantor"), each having its principal executive office
at Front and Market Streets, P.O. Box 3660, Harrisburg, Pennsylvania 17105-3660,
and Bankers Trust Company, a New York banking corporation (hereinafter called
the "Trustee"), having its Corporate Trust Office at 4 Albany Street, New York,
New York 10006.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured and
subordinated debentures, notes or other evidences of indebtedness (hereinafter
called the "Securities"), unlimited as to principal amount, to bear such rates
of interest, to mature at such time or times, to be issued in one or more series
and to have such other provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this
Indenture and all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
RECITALS OF THE GUARANTOR
The Guarantor has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the Guarantees provided for herein and
the endorsement of such Guarantees on the Securities. All things necessary to
make this Indenture a valid agreement of the Guarantor, in accordance with 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 covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
1
<PAGE>
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.
Certain terms, used principally in Article Seven, are defined in that
Article.
"Act," when used with respect to any Holders, has the meaning specified in
---
Section 104.
"Additional Amounts" means any additional amounts which are required by a
------------------
Security or by or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain taxes imposed on
certain Holders and which are owing to such Holders.
"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 the meanings correlative to
the foregoing.
2
<PAGE>
"Authenticating Agent" means any Person authorized by the Trustee pursuant
--------------------
to Section 714 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Authorized Newspaper" means a newspaper, in an official language of the
--------------------
country of publication or in the English language, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Banking Subsidiary" means a Subsidiary which is organized as a national
------------------
banking association under the laws of the United States or as a bank or trust
company under the laws of any State of the United States.
"Bearer Security" means any Security in the form established pursuant to
---------------
Section 201 which is payable to bearer.
"Board of Directors" means the Board of Directors of the Company or of the
------------------
Guarantor, as the case may be, or any committee of such board duly authorized to
act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
----------------
or an Assistant Secretary of the Company or of the Guarantor, as the case may
be, 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," form of Securities of any particular series pursuant to the
------------
provisions of this Indenture, with respect to the Trustee and any Place of
Payment means each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions or trust companies in Columbus, Ohio and in
that Place of Payment are authorized or obligated by law to close.
"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 corporation shall have become such pursuant to
the applicable provisions of
3
<PAGE>
this Indenture, and thereafter "Company" shall mean such successor corporation,
and any other obligor upon the Securities.
"Company Request," "Company Order," "Guarantor Request" and "Guarantor
--------------- ------------- ----------------- ---------
Order" mean, respectively, a written request or order signed in the name of the
- -----
Company or the Guarantor, as the case may be, by the Chairman of the Board of
Directors, a Vice Chairman, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company or the Guarantor, as the case may be, and delivered to the Trustee.
"Consolidated Banking Assets" means all assets owned directly or indirectly
---------------------------
by any Banking Subsidiary and reflected on the Guarantor's consolidated balance
sheet prepared in accordance with generally accepted accounting principles.
"Controlled Subsidiary" means the Company, American Trust Bank, N.A.,
---------------------
Keystone National Bank and each Major Constituent Bank if at least 80% of the
outstanding shares of its Voting Stock is at the time owned by the Guarantor or
by one or more Controlled Subsidiaries of the Guarantor or by the Guarantor and
one or more Controlled Subsidiaries.
"Corporate Trust Office" means the principal office of the Trustee, at
----------------------
which at any particular time its corporate trust business shall be administered,
which office at the date of original execution of this Indenture is located at 4
Albany Street, New York, New York 10006, Attention: American Trust Bank, N.A.,
Keystone National Bank.
"Corporation" includes corporations, associations, companies and business
-----------
trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
------
"Defaulted Interest" has the meaning specified in Section 307.
------------------
"Dollars" or "$" or any similar reference shall mean the currency of the
------- -
United States, except as may otherwise be provided in the form of Securities of
any particular series pursuant to the provisions of this Indenture.
"Event of Default" has the meaning specified in Section 601.
----------------
"Guarantee" means an unconditional guarantee of the payment of the
---------
Securities by the Guarantor, as more fully described in Article Four.
"Guarantor" means the Person named as the "Guarantor" in the first
---------
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of
4
<PAGE>
this Indenture, and thereafter "Guarantor" shall mean such successor
corporation.
"Holder," when used with respect to any Security, means in the case of a
------
Registered Security, the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security, the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.
"Indenture" means this instrument as defined in the first paragraph hereof
---------
and 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.
"Interest," when used with respect to an Original Issue Discount Security
--------
which by its terms bears interest only after Maturity, means interest payable
after Maturity, and, when used with respect to a Security which provides for the
payment of Additional Amounts pursuant to Section 1104, includes such Additional
Amounts.
"Interest Payment Date" means the Stated Maturity of an installment of
---------------------
interest on the applicable Securities.
"Major Constituent Bank" means any Banking Subsidiary of the Guarantor, the
----------------------
Consolidated Banking Assets of which constitute 20% or more of the Guarantor's
Consolidated Banking Assets.
"Maturity," when used with respect to any Security, means the date on which
--------
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, request for repayment or
otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
---------------------
Board, a Vice Chairman, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company
or the Guarantor, as the case may be, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may (except
------------------
as otherwise expressly provided in this Indenture) be an employee of or counsel
for the Company or the Guarantor, as the case may be, or other counsel who shall
be reasonably acceptable to the Trustee.
"Original Issue Discount Security" means a Security issued pursuant to this
--------------------------------
Indenture which provides for declaration of an amount less than the principal
thereof to be due and payable upon acceleration pursuant to Section 602.
5
<PAGE>
"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 the Security
Registrar or received by the Trustee or the Security Registrar 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 or the Guarantor) in trust or set aside
and segregated in trust by the Company or the Guarantor (if the
Company shall act as its own, or authorize the Guarantor to act as,
Paying Agent) for the Holders of such Securities and any coupons
thereto appertaining, 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 and related Guarantees are
valid obligations of the Company and the Guarantor, respectively;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, the principal amount of
an Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes shall
be equal to the amount of the principal thereof that could be declared to be due
and payable pursuant to the terms of such Original Issue Discount Security at
the time the taking of such action by the Holders of such requisite principal
amount is evidenced to the Trustee as provided in Section 104(a), and, provided
--------
further, that Securities owned by the Company, the Guarantor or any other
- -------
obligor upon the Securities or any Affiliate of the Company, the Guarantor or
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
6
<PAGE>
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, the Guarantor or any other
obligor upon the Securities or any Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person authorized by the Company to pay the
------------
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any series,
----------------
means the place or places where the principal of (and premium, if any) and
interest on the Securities of that series are payable as specified as provided
pursuant to Section 301(8).
"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
lost, destroyed, mutilated or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the lost, destroyed, mutilated or stolen Security or
the Security to which a mutilated, destroyed, lost or stolen coupon appertains.
"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 as determined pursuant to the
provisions of this Indenture.
"Registered Security" means any Security established pursuant to Section
-------------------
201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on a Registered Security on
-------------------
any Interest Payment Date means the date, if any, specified in such Security as
the "Regular Record Date."
"Responsible Officer," when used with respect to the Trustee, means any
-------------------
officer of the Trustee in its Corporate Trust Office and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred
7
<PAGE>
because of his knowledge of and familiarity with the particular subject.
"Security" or "Securities" means any Security or Securities, as the case
-------- ----------
may be, authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
----------------- ------------------
specified in Section 305.
"Senior Company Indebtedness" means the principal of and premium, if any,
---------------------------
and interest on all indebtedness and other obligations of the Company, whether
outstanding at the date hereof or thereafter incurred or created, except such
indebtedness or obligations as are by their terms expressly stated to be
subordinated in right of payment to, or to rank pari passu with, the Securities
---- -----
or are identified in a Board Resolution or any indenture supplemental hereto as
subordinated in right of payment to, or to rank pari passu with, the Securities.
---- -----
"Senior Guarantor Indebtedness" means the principal of and premium, if any,
-----------------------------
and interest on all indebtedness and other obligations of the Guarantor, whether
outstanding at the date hereof or thereafter incurred or created, except such
indebtedness or obligations as are by their terms expressly stated to be
subordinated in right of payment to, or to rank pari passu with, the Guarantees
---- -----
or are identified in a Board Resolution or any indenture supplemental hereto as
subordinated in right of payment to, or to rank pari passu with, the Guarantees.
---- -----
"Special Record Date" for the payment of any Defaulted Interest on the
-------------------
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity," when used with respect to any Security or any
---------------
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means any corporation of which at the time of determination
----------
the Guarantor and/or one or more Subsidiaries owns or controls directly or
indirectly more than 50% of the shares of Voting Stock.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
-------
this instrument until a successor Trustee shall have become such with respect to
one or more series of Securities pursuant to the applicable provisions of this
8
<PAGE>
Indenture, and thereafter "Trustee" shall mean each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, "Trustee"
shall mean each such Person and as used with respect to the Securities of any
series shall mean the Trustee with respect to the Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, as
-------------------
in force at the date as of which this instrument was executed, except as
provided in Section 1005.
"United States" means the United States of America (including the States
-------------
and the District of Columbia), its territories and possessions and other areas
subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
-------------------
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
"U.S. Depository" or "Depository" means, with respect to the Securities of
--------------- ----------
any series issuable or issued in whole or in part in the form of one or more
global Securities, the Person designated as U.S. Depository by the Company
pursuant to Section 301, which must be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and, if so provided pursuant to
Section 301 with respect to the Securities of any series, any successor to such
Person. If at any time there is more than one such Person, "U.S. Depository"
shall mean, with respect to any series of Securities, the qualifying entity
which has been appointed with respect to the Securities of that series.
"Vice President," when used with respect to the Company, the Guarantor 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."
"Voting Stock" means stock of the class or classes having general voting
------------
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such corporation provided that, for the
--------
purposes hereof, stock which carries only the right to vote conditionally on the
happening of an event shall not be considered voting stock whether or not such
event shall have happened.
Section 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company or the Guarantor to the
Trustee to take any action under any provision
9
<PAGE>
of this Indenture, the Company or the Guarantor, as the case may be, shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
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 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 or the Guarantor
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
10
<PAGE>
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 or the
Guarantor, as the case may be, stating that the information with respect to such
factual matters is in the possession of the Company or the Guarantor, as the
case may be, 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.
---------------
(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.
If, but only if, Securities of a series are issuable as Bearer Securities, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders of Securities
of such series may, alternatively, be embodied in and evidenced by the record of
Holders of Securities of such series voting in favor thereof, either in person
or by proxies duly appointed in writing, at any meeting of Holders of Securities
of such series duly called and held in accordance with the provisions of Article
Fifteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company and the Guarantor.
Such instrument or instruments and any such record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments and so voting at any such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agent, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 701)
conclusive in favor of the Trustee and the Company and any agent of the Trustee
or the Company and the Guarantor, if made in the manner provided in this
Section. The record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 1506.
11
<PAGE>
Without limiting the generality of this Section 104, unless otherwise
established in or pursuant to a Board Resolution or set forth or determined in
an Officers' Certificate, or established in one or more indentures supplemental
hereto, pursuant to Section 301, a Holder, including a U.S. Depository that is a
Holder of a global Security, may make, give or take, by a proxy, or proxies,
duly appointed in writing, any request, demand, authorization, direction,
notice, consent, waiver or other action provided in this Indenture to be made,
given or taken by Holders, and a U.S. Depository that is a Holder of a global
Security may provide its proxy or proxies to the beneficial owners of interests
in any such global Security through such U.S. Depository's standing instructions
and customary practices.
The Trustee shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interest in any permanent global Security
held by a U.S. Depository entitled under the procedures of such U.S. Depository
to make, give or take, by a proxy or proxies duly appointed in writing, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided in this Indenture to be made, given or taken by Holders. If
such a record date is fixed, the Holders on such record date or their duly
appointed proxy or proxies, and only such Persons, shall be entitled to make,
give or take such request, demand, authorization direction, notice, consent,
waiver or other action, whether or not such Holders remain Holders after such
record date. No such request, demand, authorization, direction, notice,
consent, waiver or other action shall be valid or effective if made, given or
taken more than 90 days after such record date.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any reasonable manner which the Trustee deems
sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(c) The ownership of Registered Securities and the principal amount and
serial numbers of Registered Securities held by any Person, and the date of
holding the same, shall be proved by the Security Register.
(d) The principal amount and serial numbers of Bearer Securities held by
any Person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary reasonably acceptable to the Company
and the Guarantor, wherever situated, if such certificate shall be deemed by the
Trustee to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the Bearer
Securities therein
12
<PAGE>
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee, the Company and the
Guarantor may assume that such ownership of any Bearer Security continues until
(1) another certificate or affidavit bearing a later date issued in respect of
the same Bearer Security is produced, or (2) such Bearer Security is produced to
the Trustee by some other Person or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding. The Principal amount and serial numbers of Bearer Securities held
by the Person so executing such instrument or writing and the date of holding
the same may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company or the Guarantor shall solicit from the Holders of any
Registered Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company or the Guarantor, as the case may be,
may at their option, by Board Resolutions, fix in advance a record date for the
determination of Holders of Registered Securities entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company or the Guarantor shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only the
Holders of Registered Securities of record at the close of business on such
record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of Outstanding Securities have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six months
after the record date.
(f) Any request, demand, authorization, direction, notice, consent, waiver
or other action by 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 or suffered to be done by the Trustee, any Security Registrar, any
Paying Agent, the Company or the Guarantor in reliance thereon, whether or not
notation of such action is made upon such Security.
Section 105. Notices, etc. to Trustee, Company and
-------------------------------------
Guarantor.
---------
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or
13
<PAGE>
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 or the Guarantor 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, or
(2) the Company or the Guarantor 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 or the Guarantor, as the case may be, addressed to the
attention of its Treasurer 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 or the
Guarantor, as the case may be.
Section 106. Notice to Holders of Securities; Waiver.
---------------------------------------
Except as otherwise expressly provided herein or in the form of Securities
of any particular series pursuant to the provisions of this Indenture, where
this Indenture provides for notice to Holders of Securities of any event.
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each
Holder of a Registered Security affected by such event, at his address as
it appears in the Security Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such
Notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The City of
New York and, if the Securities of such series are then listed on any stock
exchange outside the United States, in an Authorized Newspaper in such city
as the Company shall advise the Trustee that such stock exchange so
requires, on a Business Day at least twice, the first such publication to
be not earlier than the earliest date and not later than the latest date
prescribed for the giving of such notice.
In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Any notice which is mailed in the manner
14
<PAGE>
herein provided shall be conclusively presumed to have been duly given or
provided. In the case 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.
In case of the suspension of publication of any Authorized Newspaper or
Authorized Newspapers or by reason of any other cause it shall be impracticable
to publish any notice to Holders of Bearer Securities as provided above, then
such notification to Holders of Bearer Securities with the approval of the
Trustee shall constitute sufficient notice to such Holders for every purpose
hereunder. Neither failure to give notice by publication to Holders of Bearer
Securities as provided above, nor any defect in any notice so published, shall
affect the sufficiency of any notice mailed to Holders of Registered Securities
as provided above.
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 of Securities 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.
Section 107. Language of Notices.
-------------------
Any request, demand, authorization, direction, notice, consent, election or
waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company or the Guarantor so elects, any published
notice may be in an official language of the country of publication.
Section 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provisions shall
control.
15
<PAGE>
Section 109. 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 110. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and the
Guarantor shall bind their respective successors and assigns, whether so
expressed or not.
Section 111. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities or coupons or
the Guarantees 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.
Section 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities or coupons or the
Guarantees, express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent and their successors hereunder
and the Holders of Securities or coupons, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 113. Governing Law.
-------------
This Indenture and the Securities and coupons and the Guarantees shall be
governed by and construed in accordance with the laws of the State of New York.
Section 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at the Corporate Trust
Office and any Place of Payment, then (notwithstanding any other provision of
this Indenture or the Securities or coupons other than a provision in the
Securities which specifically states that such provision shall apply in lieu of
this Section) payment of interest or any Additional Amounts or principal (and
premium, if any) need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
16
<PAGE>
ARTICLE TWO
FORMS OF SECURITIES AND GUARANTEES
Section 201. Forms Generally.
---------------
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons, if any, the Guarantees
relating thereto, and temporary global Securities, if any, shall be in the form
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, shall have appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture or any
indenture supplemental hereto and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Securities
or Guarantees, as evidenced by their execution of such Securities.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Securities of each series shall be issuable in
registered form without coupons. If so provided as contemplated by Section 301,
the Securities of a series also shall be issuable in bearer form, with or
without interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing such Securities, as
evidenced by their execution of such Securities or coupons.
Section 202. Form of Trustee's Certificate of
--------------------------------
Authentication.
--------------
The form of the Trustee's Certificate of Authentication shall be as
follows:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By__________________________
Authorized Signatory
17
<PAGE>
Section 203. Securities in Global Form.
-------------------------
If Securities of a series are issuable in global form, any such Security
may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount or changes
in the rights of Holders of Outstanding Securities represented thereby shall be
made in such manner and by such Person or Persons as shall be specified therein.
Any instructions by the Company with respect to a Security in global form shall
be in writing but need not comply with Section 102.
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto:
(1) the title of the Securities and the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the Securities of
such title or the Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration or transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 304, 305, 306, 1006
or 1207);
(3) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both; any
restrictions applicable to the offer, sale or delivery of Bearer Securities
and the terms upon which Bearer Securities of the series may be exchanged
for Registered Securities of the series and vice versa; and whether any
Securities of the series are to be issuable initially in global form and,
if so, (i) whether beneficial owners of interests in any such global
Security may exchange such interest for Securities of such series and of
like tenor of any authorized form and denomination and
18
<PAGE>
the circumstances under which any such exchanges may occur, if other than
in the manner specified in Section 305 and (ii) the name of the depository
or the U.S. Depository, as the case may be, with respect to any global
Security;
(4) the date as of which any Bearer Securities of the series and any
temporary global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first
Security of the series to be issued;
(5) if Securities of the series are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form (representing all of the Outstanding Bearer
Securities of the series) payable in respect of an Interest Payment Date
prior to the exchange of such temporary Bearer Security for definitive
Securities of the series shall be paid to any clearing organization with
respect to the portion of such temporary Bearer Security held for its
account and, in such event, the terms and conditions (including any
certification requirements) upon which any such interest payment received
by a clearing organization will be credited to the Persons entitled to
interest payable on such Interest Payment Date;
(6) the date or dates on which the principal of such Securities is
payable;
(7) the rate or rates at which such Securities shall bear interest, if
any, or method in which such rate or rates are determined, the date or
dates from which such interest shall accrue, the Interest Payment Dates on
which such interest shall be payable and the Regular Record Date for the
interest payable on Registered Securities on any Interest Payment Date,
whether and under what circumstances Additional Amounts on such securities
shall be payable in respect of specified taxes, assessments or other
governmental charges withheld or deducted and, if so, whether the Company
has the option to redeem the affected Securities rather than pay such
Additional Amounts, and the basis upon which interest shall be calculated
if other than that of a 360-day year of twelve 30-day months;
(8) the place or places, if any, in addition to or other than the
Borough of Manhattan, The City of New York, where the principal of (and
premium, if any) and interest on or Additional Amounts, if any, payable in
respect of such Securities shall be payable;
(9) the period or periods within which, the price or prices at which
and the terms and conditions upon which such
19
<PAGE>
Securities may be redeemed, in whole or in part, at the option of the
Company;
(10) the obligation, if any, of the Company to redeem or purchase such
Securities pursuant to any sinking fund or at the option of a Holder
thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which such Securities shall be
redeemed or purchased, in whole or in part, pursuant to such obligation,
and any provisions for the remarketing of such Securities;
(11) the denominations in which Registered Securities of the series,
if any, shall be issuable if other than denominations of $1,000 and any
integral multiple thereof, and the denominations in which Bearer Securities
of the series, if any, shall be issuable if other than the denomination of
$5,000;
(12) if other than the principal amount thereof, the portion of the
principal amount of such Securities which shall be payable upon declaration
of acceleration of the Maturity thereof pursuant to Section 602;
(13) if other than such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public or
private debts, the coin or currency, including composite currencies, in
which payment of the principal of (and premium, if any) or interest, if
any, on any Additional Amounts in respect of such Securities shall be
payable;
(14) if the principal of (and premium, if any) or interest, if any, on
any Additional Amounts in respect of such Securities are to be payable, at
the election of the Company or a Holder thereof, in a coin or currency,
including composite currencies, other than that in which the Securities are
stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(15) if the amount of payments of principal of (and premium, if any)
or interest, if any, on any Additional Amounts in respect of such
Securities may be determined with reference to an index, formula or other
method based on a coin or currency other than that in which the Securities
are stated to be payable, the manner in which such amounts shall be
determined;
(16) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other
documents or
20
<PAGE>
satisfaction of other conditions, then the form and terms of such
certificates, documents or conditions;
(17) any Events of Default with respect to the Securities of such
series, and the remedies with respect thereto, if not set forth herein; and
(18) any other terms of such Securities (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except as to
denomination and the rate or rates of interest, if any, and Stated Maturity, the
date from which interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to such Board Resolution and set forth in such Officers'
Certificate or in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and, unless otherwise provided, a
series may be reopened for issuances of additional Securities of such series.
If any of the terms of the Securities of any series were established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of such series.
Section 302. Denominations.
-------------
Unless other denominations and amounts may from time to time be fixed by or
pursuant to a Board Resolution, the Registered Securities of each series if any,
shall be issuable in registered form without coupons in denominations of $1,000
and any integral multiple thereof, and the Bearer Securities of each series, if
any, shall be issuable in the denomination of $5,000, or in such other
denominations and amounts as may from time to time be fixed by or pursuant to a
Board Resolution.
Section 303. Execution, Authentication, Delivery
-----------------------------------
and Dating.
----------
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, one of its Vice Chairmen, its President or one of its Vice
Presidents under its corporate seal reproduced thereon and 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. Coupons shall bear the
facsimile signature of the Treasurer or any Assistant Treasurer of the Company.
21
<PAGE>
Securities and coupons 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 of any series, together with any
coupons appertaining thereto, executed by the Company, with Guarantees endorsed
thereon executed by the Guarantor, to the Trustee for authentication, together
with the Board Resolution and Officers' Certificate or supplemental indenture
with respect to such Securities referred to in Section 301 and a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order and subject to the provisions hereof shall
authenticate and deliver such Securities. In authenticating such Securities,
and accepting the additional responsibilities under this Indenture in relation
to such Securities, the Trustee shall be entitled to receive, and (subject to
Section 701) shall be fully protected in relying upon, an Opinion of Counsel
stating:
(a) that the form and terms of such Securities and coupons, if any, have
been established in conformity with the provisions of this Indenture;
(b) that all conditions precedent to the authentication and delivery of
such Securities together with the coupons, if any, appertaining thereto, have
been complied with and that such Securities, and coupons, when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute legally
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally, and subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law); such Opinion of
Counsel need express no opinion as to the availability of equitable remedies;
(c) that all laws and requirements in respect of the execution and delivery
by the Company of such Securities and coupons, if any, have been complied with;
and
(d) such other matters as the Trustee may reasonably request.
The Trustee shall not be required to authenticate such Securities if the
issue of such Securities pursuant to this
22
<PAGE>
Indenture will affect the Trustee's own rights, duties or immunities under the
Securities and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee or if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any temporary Bearer Security in global form shall be
dated as of the date specified as contemplated by Section 301.
No Security or coupon appertaining thereto 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 in Section 202 or 714 executed by or on behalf of the Trustee
by the manual signature of one of its authorized signatories, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Except as permitted by Section 306 or 307, the Trustee shall not
authenticate and deliver any Bearer Security unless all appurtenant coupons for
interest then matured have been detached and cancelled.
Section 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities of any series, the Company
may execute and deliver to the Trustee, and upon Company Order the Trustee shall
authenticate and deliver, in the manner provided in Section 303, temporary
Securities (having Guarantees duly endorsed thereon) of such series 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, in registered form, or, if authorized, in
bearer form with one or more coupons or without coupons and with such
appropriate insertions, omissions, substitutions and other variations as the
officers of the Company executing such Securities may determine, as evidenced by
their execution of such Securities. In the case of Bearer Securities of any
series, such temporary Securities may be in global form, representing all of the
Outstanding Bearer Securities of such series.
Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities of
any series are issued, the Company will cause definitive Securities of that
series to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities of such series shall be
exchangeable upon request for definitive Securities of such series containing
identical terms and provisions upon surrender of the temporary Securities of
such series at an office
23
<PAGE>
or agency of the Company or the Guarantor maintained for such purpose pursuant
to Section 1102, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Securities of any series (accompanied by any
unmatured coupons appertaining thereto) the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities (having Guarantees duly endorsed thereon) of
authorized denominations of the same series containing identical terms and
provisions; provided, however, that no definitive Bearer Security, except as
-------- -------
provided pursuant to Section 301, shall be delivered in exchange for a temporary
Registered Security; and provided, further, that a definitive Bearer Security
-------- -------
shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth therein. Unless otherwise specified as
contemplated by Section 301 with respect to a temporary global Security, until
so exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. Registration, Transfer and Exchange.
-----------------------------------
With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept, at an office or agency of the Company or the
Guarantor maintained pursuant to Section 1102, a register (herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company or the Guarantor shall provide for
the registration of the Registered Securities of each series and of transfers of
the Registered Securities of each series. Unless otherwise specified in or
pursuant to this Indenture or the Securities, the Trustee shall be the initial
Security Registrar for each series of Securities. The Issuer shall have the
right to remove and replace from time to time the Security Registrar for any
series of Securities; provided that no such removal or replacement shall be
effective until a successor Security Registrar with respect to such series of
Securities shall have been appointed by the Issuer and shall have accepted such
appointment by the Issuer. In the event that the Trustee shall not be or shall
cease to be Security Registrar with respect to a series of Securities, it shall
have the right to examine the Security Register for such series at all
reasonable times. There shall be only one Security Register for each series of
Securities.
Upon surrender for registration of transfer of any Registered Security of
any series at any office or agency of the Company or the Guarantor maintained
for that series pursuant to Section 1102, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Registered Securities (having Guarantees duly
endorsed thereon) of the same series of
24
<PAGE>
any authorized denominations, of a like aggregate principal amount bearing a
number not contemporaneously outstanding and containing identical terms and
provisions.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any such office or agency. Whenever any Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities (having Guarantees duly
endorsed thereon) which the Holder making the exchange is entitled to receive.
If so provided with respect to Securities of a series, at the option of the
Holder, Bearer Securities of any such series may be exchanged for Registered
Securities of the same series containing identical terms and provisions, of any
authorized denominations and aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company and the Trustee in an amount equal to the face amount of such
missing coupon or coupons, or the surrender of such missing coupon or coupons
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
any Paying Agent any such missing coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that, except as otherwise provided in Section
-------- -------
1102, interest represented by coupons shall be payable only upon presentation
and surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series and like tenor after the close of business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the coupon relating to such Interest
Payment Date or proposed date of payment, as the case may be (or, if such coupon
is so surrendered with such Bearer Security, such coupon shall be returned to
the person so surrendering the Bearer Security), and interest or
25
<PAGE>
Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
provisions of this Indenture.
If expressly provided with respect to the Securities of any series, at the
option of the Holder, Registered Securities of such series may be exchanged for
Bearer Securities upon such terms and conditions as may be provided with respect
to such series.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities (having
Guarantees duly endorsed thereon) which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any global Security shall be exchangeable only if
(i) the Securities Depository is at any time unwilling or unable to continue as
Securities Depository and a successor depository is not appointed by the Company
within 60 days, (ii) the Company executes and delivers to the Trustee a Company
Order to the effect that such global Security shall be so exchangeable, or (iii)
an Event of Default has occurred and is continuing with respect to the
Securities. If the beneficial owners of interests in a global Security are
entitled to exchange such interests for Securities of such series and of like
tenor and principal amount of any authorized form and denomination, as specified
as contemplated by Section 301, then without unnecessary delay but in any event
not later than the earliest date on which such interests may be so exchanged,
the Company shall deliver to the Trustee definitive Securities of that series
(having Guarantees duly endorsed thereon) in aggregate principal amount equal to
the principal amount of such global Security, executed by the Company. On or
after the earliest date on which such interests may be so exchanged, such global
Securities shall be surrendered from time to time by the U.S. Depository or such
other depository as shall be specified in the Company Order with respect
thereto, and in accordance with instructions given to the Trustee and the U.S.
Depository or such depository, as the case may be, which instructions shall be
in writing but need not comply with Section 102 or be accompanied by an Opinion
of Counsel), as shall be specified in the Company Order with respect thereto to
the Trustee, as the Company's agent for such purpose, to be exchanged, in whole
or in part, for definitive Securities of the same series without charge. The
Trustee shall authenticate and make available for delivery, in exchange for each
portion of such surrendered global Security, a like aggregate principal amount
of definitive Securities of the same series of authorized denominations and of
like tenor as the
26
<PAGE>
portion of such global Security to be exchanged which (unless the Securities of
the series are not issuable both as Bearer Securities and as Registered
Securities, in which case the definitive Securities exchanged for the global
Security shall be issuable only in the form in which the Securities are
issuable, as specified as contemplated by Section 301) shall be in the form of
Bearer Securities or Registered Securities, or any combination thereof, as shall
be specified by the beneficial owner thereof; provided, however, that no such
-------- -------
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities of that series is to be redeemed and ending
on the relevant Redemption Date; and provided, further, that (unless otherwise
-------- -------
specified as contemplated by Section 301) no Bearer Security delivered in
exchange for a portion of a global Security shall be mailed or otherwise
delivered to any location in the United States. Promptly following any such
exchange in part, such global Security shall be returned by the Trustee to such
depository or the U.S. Depository, as the case may he, or such other depository
or U.S. Depository referred to above in accordance with the instructions of the
Company referred to above. If a Registered Security is issued in exchange for
any portion of a global Security after the close of business at the office or
agency where such exchange occurs on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of interest or
Defaulted Interest, as the case may be, interest will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Registered Security, but will be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such global Security is
payable in accordance with the provisions of this Indenture.
All Securities and the Guarantees endorsed thereon issued upon any
registration of transfer or exchange of Securities shall be the valid
obligations of the Company and the Guarantor, respectively, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
and the Guarantees endorsed thereon surrendered upon such registration of
transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar for such series of Security presented) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and such Security Registrar duly executed by the Holder thereof or
his attorney duly authorized in writing.
27
<PAGE>
No service charge shall be made for any registration of transfer or
exchange, or redemption 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, 1006 or 1207 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange any Securities of any series during a period beginning at the opening
of business 15 days before the day of the selection for redemption of Securities
of that series under Section 1203 and ending at the close of business on the day
of such selection, or (ii) to register the transfer of or exchange any
Registered Security so selected for redemption in whole or in part, except in
the case of any Security to be redeemed in part, the portion thereof not to be
redeemed, or (iii) to exchange any Bearer Security so selected for redemption
except, to the extent provided with respect to Securities of a series, that such
a Bearer Security may be exchanged for a Registered Security of that series,
provided that such Registered Security shall be immediately surrendered for
- --------
redemption with written instruction for payment consistent with the provisions
of this Indenture.
Section 306. Mutilated, Destroyed, Lost and Stolen
-------------------------------------
Securities.
----------
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
(having a Guarantee duly endorsed thereon) of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to the surrendered Security.
If there be delivered to the Company, the Guarantor and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon, 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, the Guarantor or the Trustee that such Security or
coupon has been acquired by a bona fide purchaser, the Company shall execute and
upon its request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Security or in exchange
for the Security to which a destroyed, lost or stolen coupon appertains with all
appurtenant coupons not destroyed, lost or stolen), a new Security (having a
Guarantee duly endorsed thereon) of the same series containing identical terms
and of like principal amount and bearing a number not contemporaneously
28
<PAGE>
outstanding, with coupons corresponding to the coupons, if any, appertaining to
such destroyed, lost or stolen Security or to the Security to which such
destroyed, lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon
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 or coupon; provided,
--------
however, that payment of principal of (and premium, if any) and any interest on
- -------
Bearer Securities shall, except as otherwise provided in Section 1102, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
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 of any series, with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon 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 of that
series, their coupons, if any, and Guarantees duly issued hereunder.
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 or coupons.
Section 307. Payment of Interest; Interest Rights
------------------------------------
Preserved.
---------
Interest on any Registered Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall, if so provided in
such Security, be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered as of the close of business on the Regular
Record Date for such interest. In case a Bearer Security of any series is
surrendered in exchange for a Registered Security of such series after the close
of business (at an office or agency in a Place of Payment for such series) on
any Regular Record Date and before the opening of business (at such office or
agency) on the next succeeding Interest Payment Date, such Bearer Security shall
be surrendered without the coupon relating to such
29
<PAGE>
Interest Payment Date and interest will not be payable on such Interest Payment
Date in respect of the Registered Security issued in exchange of such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
Any interest on any Registered Security of any series which is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date for
such Registered Security (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 or the Guarantor, at its election in each case, as provided in Clause
(1) or (2) below:
(1) The Company or the Guarantor may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered Securities
affected (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 or the Guarantor shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each such Registered Security
and the date of the proposed payment, and at the same time the Company or
the Guarantor, as the case may be, 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 and the
Company shall provide or cause to be provided to the Trustee a current list
of the names and addresses of the Holders of the Registered Securities.
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 or the Guarantor,
as the case may be, of such Special Record Date and, in the name and at the
expense of the Company or the Guarantor, as the case may be, 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 of such Registered Securities at his address as it appears in the
Security Register not less than 10 days prior to such Special Record Date.
The Trustee may, in its discretion, in the name and at the expense of the
Company or the Guarantor, as the case may be, cause a similar notice to be
published at least once in
30
<PAGE>
an Authorized Newspaper, customarily published in the English language on
each Business Day and of general circulation in the Borough of Manhattan,
The City of New York, but such publication shall not be a condition
precedent to the establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names such Registered 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). In case a Bearer Security of any series is
surrendered at the office or agency in a Place of Payment for such series
in exchange for a Registered Security of such series after the close of
business at such office or agency on any Special Record Date and before the
opening of business at such office or agency on the related proposed date
for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of payment
and Defaulted Interest will not be payable on such proposed date of payment
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
(2) The Company or the Guarantor may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given by
the Company or the Guarantor to the Trustee of the proposed payment
pursuant to this Clause, such payment shall be deemed practicable by the
Trustee.
At the option of the Company, interest on Registered Securities of any
series that bear interest may be paid by mailing a check to the address of the
person entitled thereto as such address shall appear in the Security Register.
Subject to the foregoing provisions of this Section and Section 305, 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 Registered Security for registration of
transfer, the Company, the Guarantor, the Trustee and any agent of the Company
or the Guarantor or the Trustee may
31
<PAGE>
treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any), and (subject to Sections 305 and 307)
interest on and Additional Amounts with respect to, such Registered Security and
for all other purposes whatsoever, whether or not such Registered Security be
overdue, and neither the Company, the Guarantor, the Trustee nor any agent of
the Company or the Guarantor or the Trustee shall be affected by notice to the
contrary.
The Company, the Guarantor, the Trustee and any agent of the Company or the
Guarantor or the Trustee may treat the bearer of any Bearer Security and the
bearer of any coupon as the absolute owner of such Security or coupon for the
purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security or coupon be overdue, and
neither the Company, the Guarantor, the Trustee nor any agent of the Company or
the Guarantor or the Trustee shall be affected by notice to the contrary.
Section 309. Cancellation.
------------
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee or the
Security Registrar, be delivered to the Trustee or the Security Registrar, and
any such Securities and coupons and Securities and coupons surrendered directly
to the Trustee or the Security Registrar for any such purpose shall be promptly
cancelled by the Trustee or the Security Registrar, as the case may be. The
Company or the Guarantor may at any time deliver to the Trustee or the Security
Registrar for cancellation any Securities previously authenticated and delivered
hereunder which the Company or the Guarantor may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee or the Security Registrar, as the case may be. 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 and coupons held by the Trustee or the Security Registrar shall be
destroyed by the Trustee or the Security Registrar, as the case may be, unless
by a Company Order or a Guarantor Order the Company or the Guarantor, as the
case may be, directs their return to it.
Section 310. Computation of Interest.
-----------------------
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
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ARTICLE FOUR
GUARANTEES OF SECURITIES
Section 401. Unconditional Guarantee.
-----------------------
The Guarantor hereby unconditionally guarantees to each Holder of a
Security authenticated and delivered by the Trustee the due and punctual payment
of the principal of and premium, if any, and any interest on or Additional
Amounts in respect of such Security and the due and punctual payment of the
sinking fund payments, if any, provided for pursuant to the terms of such
Security, when and as the same shall become due and payable, whether at
maturity, by acceleration, redemption, repayment or otherwise, in accordance
with the terms of such Security and of this Indenture. In case of the failure
of the Company punctually to pay any such principal, premium, interest,
Additional Amounts or sinking fund payment, the Guarantor hereby agrees to cause
any such payment to be made punctually when as the same shall become due and
payable, whether at maturity, upon acceleration, redemption, repayment or
otherwise, and as if such payment were made by the Company.
The Guarantor hereby agrees that its obligations hereunder shall be as
principal and not merely as surety, and shall be absolute and unconditional,
irrespective of, and shall be unaffected by, any invalidity, irregularity or
unenforceability of such Security or this Indenture, any failure to enforce the
provisions of any such Security or this Indenture, or any waiver, modification,
consent or indulgence granted to the Company with respect thereto by the Holder
of such Security or the Trustee, the recovery of any judgment against the
Company or any action to enforce the same, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or guarantor.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger, insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest or
notice with respect to any such Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that the Guarantees will not be
discharged except by payment in full of the principal of and premium, if any,
and interest on, and any Additional Amounts and sinking fund payments required
with respect to, the Securities and the complete performance of all other
obligations contained in the Securities.
The Guarantor shall be subrogated to all rights of the Holder of any
Security against the Company in respect of any amounts paid to such Holder by
the Guarantor pursuant to the provisions of the Guarantees; provided, however,
-------- -------
that the Guarantor shall not be entitled to enforce, or to receive any
33
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payments arising out of or based upon, such right of subrogation until the
principal of and premium, if any, and interest on, and any Additional Amounts
and sinking fund payments required with respect to, all Securities of the same
series shall have been paid in full.
Section 402. Execution, Authentication and Delivery. To evidence the
--------------------------------------
Guarantees to the Holders specified in Section 401, the Guarantor hereby agrees
to execute a Guarantee on each Security authenticated and delivered by the
Trustee. The Guarantees shall be executed on behalf of the Guarantor by its
Chairman of the Board, one of its Vice Chairmen, its President or one of its
Vice Presidents, under its corporate seal reproduced thereon, and attested by
its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Guarantees may be manual or facsimile.
Guarantees bearing the manual or facsimile signatures of individuals who
were at any time the proper officer of the Guarantor shall bind the Guarantor
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Guarantees or did not
hold such offices at the date of such Guarantees. The delivery by the Trustee
of a Security with such a Guarantee endorsed thereon shall, after the
authentication of such Security hereunder, constitute due delivery of such
Guarantee on behalf of the Guarantor.
No Guarantee endorsed on any Security shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose unless there
appears on the Security on which such Guarantee is endorsed a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature.
Section 403. Subordination.
-------------
The rights and claims of the Trustee and the Holders of Securities against
the Guarantor under Section 401 will be subordinated to the extent provided in
Section 1602.
ARTICLE FIVE
SATISFACTION AND DISCHARGE
Section 501. Satisfaction and Discharge of Indenture.
---------------------------------------
Upon the direction of the Company by a Company Order or of the Guarantor by
a Guarantor Order, this Indenture shall cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Securities
herein
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expressly provided for and any right to receive Additional Amounts, as provided
in Section 1104), and the Trustee, on demand of and at the expense of the
Company and the Guarantor, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered and all
coupons appertaining thereto (other than (i) coupons appertaining to Bearer
Securities surrendered for exchange for Registered Securities and maturing
after such exchange, whose surrender is not required or has been waived as
provided in Section 305, (ii) Securities and coupons which have been
destroyed, lost or stolen and which have been replaced or paid as provided
in Section 306, (iii) coupons appertaining to Securities called for
redemption and maturing after the relevant Redemption Date, whose surrender
has been waived as provided in Section 1207, and (iv) Securities and
coupons 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 1103) have
been delivered to the Trustee for cancellation; or
(B) all such Securities and, in the case of (i) or (ii) below, any
such coupons appertaining thereto 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) if redeemable at the option of the Company, 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 Guarantor,
and the Company or the Guarantor, in the case of (i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee, or has made such
other arrangements as are satisfactory to the Trustee, as trust funds in an
amount sufficient to pay and discharge the entire indebtedness on such
Securities and coupons not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest, and any
Additional Amounts with respect thereto, 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;
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(2) the Company or the Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and the Guarantor; and
(3) the Company and the Guarantor have 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.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of all series as to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then
the effectiveness of any such instrument shall be conditioned upon receipt of
such instruments from all Trustee hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company and the Guarantor to the Trustee under Section 707
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
502 and the last paragraph of Section 1103 shall survive.
Section 502. Application of Trust Money.
---------------------------
Subject to the provisions of the last paragraph of Section 1103, all money
deposited with the Trustee or in such other manner as is satisfactory to the
Trustee, pursuant to Section 501 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons 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 any interest and Additional Amounts for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
ARTICLE SIX
REMEDIES
Section 601. Events of Default.
-----------------
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or be effected by operation
of law pursuant to
36
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any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(1) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company, the Guarantor or any Major
Constituent Bank in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, adjudging it
bankrupt or insolvent or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Company, the Guarantor or any
Major Constituent Bank, as the case may be, or for any substantial part of its
property, ordering the winding-up or liquidation of its affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(2) The Company, the Guarantor or any Major Constituent Bank shall commence
a voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in any involuntary case under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or similar official) of the Company, the
Guarantor or any Major Constituent Bank, as the case may be, or for any
substantial part of its property.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons 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 602. Acceleration of Maturity; Rescission and
----------------------------------------
Annulment.
---------
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of that series
may declare the principal of all the Securities of that series, or such lesser
amount as may be provided for in the Securities of that series, to be due and
payable immediately, by a notice in writing to the Company and the Guarantor
(and to the Trustee if given by the Holders), and upon any such declaration such
principal or such lesser amount shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a
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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 of that series, by written notice to the
Company, the Guarantor and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the Company or the Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue installments of interest on and any Additional
Amounts payable in respect of all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates borne by or
provided for in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and Additional Amounts
at the rate or rates borne by or provided for in such 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 as provided in Section 707 hereof; and
(2) all Events of Default with respect to Securities of that series
have been cured or waived as provided in Section 613.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 603. Collection of Indebtedness and Suits for
----------------------------------------
Enforcement by Trustee.
----------------------
The Company and the Guarantor covenant that if
(1) default is made in the payment of any installment of interest on
or any Additional Amounts payable in respect of any Security when such
interest or Additional Amounts shall have become 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 its Maturity, the Company or the Guarantor will,
upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities
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and coupons, the whole amount then due and payable on such Securities and
coupons for principal (and premium, if any) and interest and Additional
Amounts, if any, with interest upon the overdue principal (and premium, if
any) and, to the extent that payment of such interest shall be legally
enforceable, upon overdue installments of interest or any Additional
Amounts, at the rate or rates borne by or provided for in such 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 the Company or the Guarantor fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or the Guarantor or any other obligor upon
such Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or the Guarantor or
any other obligor upon such Securities, wherever situated.
If a default (as defined in Section 613) 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 judicial proceedings as the Trustee shall deem
appropriate to protect and enforce any such rights, whether for the specific
performance of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein or to enforce any other remedy at law or in
equity.
Section 604. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, the Guarantor or any other obligor
upon the Securities or the property of the Company, the Guarantor or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Company or the Guarantor for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount or such lesser
amount as may be provided for in the Securities of that series, of
principal (and premium, if any) and interest and any Additional Amounts
owing and unpaid in
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respect of the Securities and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents or counsel) and of
the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each Holder of
Securities and coupons 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 of Securities and coupons, to pay to the Trustee any amount due to 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 707.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
Section 605. Trustee May Enforce Claims without
----------------------------------
Possession of Securities or Coupons.
-----------------------------------
All rights of action and claims under this Indenture or any of the
Securities or coupons or the Guarantees may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or coupons 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 or 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 and coupons in respect of which such judgment has been
recovered.
Section 606. 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 (and premium,
if any), interest or any Additional Amounts, upon presentation of the Securities
or
40
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coupons, or both, as the case may be, 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
707;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and interest and
any Additional Amounts payable 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 aggregate amounts due and payable on
such Securities and coupons for principal (and premium, if any), interest
and Additional Amounts, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
Section 607. Limitation on Suits.
-------------------
No Holder of any Security of any series or any related coupons 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
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series 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 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 of that series;
41
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it being understood and intended that no one or more of such 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 such
Holders or Holders of any other series, 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 such Holders.
Section 608. Unconditional Right of Holders to
---------------------------------
Receive Principal, Premium and Interest.
---------------------------------------
Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Sections 305 and 307) interest on and any Additional Amounts in respect of such
Security or payment of such coupon on the respective Stated Maturity or
Maturities expressed in such Security or coupon (or, in the case of redemption,
on the Redemption Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.
Section 609. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder of a Security or coupon 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 the Company, the Guarantor, the Trustee and the Holders of Securities and
coupons shall, subject to any determination in such proceeding, 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.
Section 610. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities or coupons 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.
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Section 611. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any default (as defined in
Section 613 hereof) under this Indenture shall impair any such right or remedy
or constitute a waiver of any such default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Trustee or to the
Holders of Securities or coupons may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders of Securities
or coupons, as the case may be.
Section 612. Control by Holders of Securities.
--------------------------------
The Holders of a majority in principal amount of the Outstanding Securities
of any series 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 with respect to the Securities of
such series, provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) such direction is not unduly prejudicial to the rights of other
Holders of Securities of such series.
Section 613. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past default (as
defined below) hereunder with respect to such series and its consequences,
except a default
(1) in the payment of the principal of (and premium, if any) or
interest on or Additional Amounts payable in respect of any Security of
such series, or
(2) in respect of a covenant or provision hereof which under Article
Ten cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any default
arising therefrom shall be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall
43
<PAGE>
extend to any subsequent or other default or impair any right consequent
thereon. For purposes of this Indenture the term "default" for a series of
Securities shall mean (a) any Event of Default; (b) any default in the payment
of any interest upon or any Additional Amounts payable in respect of any
Security of such series; (c) any default in the payment of the principal of (and
premium, if any, on) any Security of such Series when it becomes due and payable
at Maturity; (d) any default in the deposit of any sinking fund payment when and
as due by the terms of the Securities of such series; or (e) any default in the
performance, or breach, of any covenant or warranty of the Company or the
Guarantor in this Indenture or the Securities or the Guarantees after notice in
writing by the Trustee to the Company and the Guarantor specifying such default
or breach.
Section 614. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security or
coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, 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, the filing by any party litigant in
such suit, other than the Trustee, of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
including the Trustee, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Company, the Guarantor,
the Trustee or by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series, or to
any suit instituted by any Holder of any Security or coupon for the enforcement
of the payment of the principal of (and premium, if any) or interest on or any
Additional Amounts in respect of any Security or the payment of any coupon on or
after the respective Stated Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date) or interest on any overdue
principal of any Security.
Section 615. Waiver of Stay or Extension Laws.
--------------------------------
The Company and the Guarantor covenant (to the extent that they may
lawfully do so) that they 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 and
the Guarantor (to the extent that they may lawfully do so) hereby expressly
waive all benefit or advantage of any such law and covenant that they will not
hinder, delay or impede
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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 SEVEN
THE TRUSTEE
Section 701. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of a default under this Indenture,
(1) the Trustee undertakes to perform such duties, and only such
duties, as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case a default under this Indenture has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
------
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a
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majority in principal amount of the Outstanding Securities of any series,
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Securities of
such series; and
(4) 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 indemnity against such risk or
liability is not reasonably assured to it.
(d) 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 702. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default with respect to the
Securities of any series, the Trustee shall transmit notice of such default
hereunder known to the Trustee, by mail to all Holders of Securities of such
series entitled to receive reports pursuant to Section 803(c), unless such
default shall have been cured or waived; provided, however, that, except in the
-------- -------
case of a default in the payment of the principal of (and premium, if any) or
interest on, or any Additional Amounts with respect to, any Security of such
series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interests of the
Holders of Securities and coupons of such series.
Section 703. Certain Rights of Trustee.
-------------------------
Except as otherwise provided in Section 701:
(a) the Trustee may 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, or other paper or document reasonably believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
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(b) any request or direction of the Company or the Guarantor mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order or Guarantor Request or Guarantor Order (other than delivery of any
Security to the Trustee for authentication and delivery pursuant to Section
303 which shall be sufficiently evidenced as provided therein) 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) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written 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 of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(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 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 and the Guarantor, 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.
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Section 704. Not Responsible for Recitals or
-------------------------------
Issuance of Securities and Guarantees.
-------------------------------------
The recitals contained herein and in the Securities and Guarantees, except
the Trustee's certificate of authentication, and in any coupons shall be taken
as the statements of the Company or the Guarantor, as the case may be, and the
Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities or coupons or the Guarantees.
The Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company or by the Guarantor of Securities or the proceeds
thereof.
Section 705. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company or the Guarantor, in its individual
or any other capacity, may become the owner or pledgee of Securities and coupons
and, subject to Sections 708 and 713, may otherwise deal with the Company and
the Guarantor with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
Section 706. 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 with the Company or the Guarantor.
Section 707. Compensation and Reimbursement.
------------------------------
(a) The Company and the Guarantor agree to pay to the Trustee from time to
time reasonable compensation 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).
(b) Except as otherwise expressly provided herein, the Company and the
Guarantor agree 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.
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(c) The Company and the Guarantor agree to indemnify the Trustee and its
agents for, and to hold them harmless against, any loss, liability or expense
incurred without negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending themselves against any
claim or liability in connection with the exercise or performance of any of
their powers or duties hereunder.
The Trustee shall give the Company and the Guarantor written notice of any
pending or threatened litigation of any such claim or liability promptly after
the Trustee shall have knowledge thereof, but failure by the Trustee to give
such notice shall not affect the Trustee's right or the obligations of the
Company and the Guarantor to indemnity hereunder.
While maintaining absolute control over its own defense, the Trustee shall
cooperate and consult with the Company and the Guarantor in preparing such
defense. The Trustee may have separate counsel and the Company and the
Guarantor agree to pay the reasonable fees and expenses of such counsel.
Notwithstanding anything to the contrary in this Section 707(c), neither the
Company nor the Guarantor shall be liable for settlement of any such claim by
the Trustee entered into without the prior consent of the Company and the
Guarantor, which consent shall not be unreasonably withheld.
(d) As security for the performance of the obligations of the Company and
the Guarantor under this Section, the Trustee shall have a lien prior to the
Securities of any series upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the payment of principal of (or
premium, if any) or interest on a particular series Securities.
(e) When the Trustee incurs expenses or renders services after an Event of
Default occurs, the expenses and compensation for the services of the Trustee
are intended to constitute expenses of administration under any bankruptcy law
or any similar federal or state law for the relief of debtors.
Section 708. Disqualifications; Conflicting Interests.
----------------------------------------
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Securities of any series, it shall,
within 90 days after ascertaining that it has such conflicting interest, either
eliminate such conflicting interest or resign with respect to the Securities of
that series, in the manner and with the effect hereinafter specified in this
Article.
(b) In the event that the Trustee shall fail to comply with the provisions
of Subsection (a) of this Section with respect to
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the Securities of any series, the Trustee shall, within ten days after the
expiration of such 90-day period, transmit, in the manner and to the extent
provided in Section 803(c) to all Holders of Securities of that series, notice
of such failure.
(c) For the purposes of this Section, the Trustee shall be deemed to have a
conflicting interest with respect to the Securities of any series, if
(1) the Trustee is trustee under this Indenture with respect to the
Outstanding Securities of any series other than that series or is trustee
under another indenture under which any other securities, or certificates
of interest or participation in any other securities, of the Company or the
Guarantor are outstanding, unless such other indenture is a collateral
trust indenture under which the only collateral consists of Securities
issued under this Indenture, provided that there shall be excluded from the
--------
operation of this paragraph (A) this Indenture with respect to the
Securities of any series other than that series, and (B) any indenture or
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company or the Guarantor are
outstanding, if
(i) this Indenture and such other indenture or indentures are
wholly unsecured and such other indenture or indentures are hereafter
qualified under the Trust Indenture Act, unless the Commission shall
have found and declared by order pursuant to Section 305(b) or Section
307(c) of the Trust Indenture Act that differences exist between the
provisions of this Indenture with respect to Securities of that series
and one or more other series or the provisions of such other indenture
or indentures which are so likely to involve a material conflict of
interest as to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from acting as such
under this Indenture with respect to the Securities of that series and
such other series or under such other indenture or indentures, or
(ii) the Company or the Guarantor shall have sustained the burden
of proving, on application to the Commission and after opportunity for
hearing thereon, that trusteeship under this Indenture with respect to
the Securities of that series and such other series or such other
indenture or indentures is not so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under this Indenture with respect to the
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Securities of that series and such other series under such other
indenture or indentures;
(2) the Trustee or any of its directors or executive officers is an
obligor upon the Securities or an underwriter for the Company or the
Guarantor;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
the Company or the Guarantor or an underwriter for the Company or the
Guarantor;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company or the Guarantor, or of an underwriter (other than the Trustee
itself) for the Company or the Guarantor who is currently engaged in the
business of underwriting, except that (i) one individual may be a director
or an executive officer, or both, of the Trustee and a director or an
executive officer, or both, of the Company or the Guarantor but may not be
at the same time an executive officer of both the Trustee and the Company
or the Guarantor; (ii) if and so long as the number of directors of the
Trustee in office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and a director of
the Company or the Guarantor; and (iii) the Trustee may be designated by
the Company or the Guarantor or by any underwriter for the Company or the
Guarantor to act in the capacity of transfer agent, registrar, custodian,
paying agent, fiscal agent, escrow agent, or depositary, or in any other
similar capacity, or, subject to the provisions of paragraph (1) of this
Subsection, to act as trustee, whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned by the Company or the Guarantor or by any director,
partner, or executive officer thereof, or 20% or more of such voting
securities is beneficially owned, collectively, by any two or more of such
persons; or 10% or more of the voting securities of the Trustee is
beneficially owned by an underwriter for the Company or the Guarantor or by
any director, partner or executive officer thereof, or is beneficially
owned, collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), (i) 5% or more of the voting securities, or 10% or
more of any other class of security, of the Company or the Guarantor not
including the Securities issued under this Indenture and securities
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issued under any other indenture under which the Trustee is also trustee,
or (ii) 10% or more of any class of security of an underwriter for the
Company or the Guarantor;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 5% or more of the voting securities of any person who,
to the knowledge of the Trustee, owns 10% or more of the voting securities
of, or controls directly or indirectly or is under direct or indirect
common control with, the Company or the Guarantor;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 10% or more of any class of security of any person
who, to the knowledge of the Trustee, owns 50% or more of the voting
securities of the Company or the Guarantor; or
(9) the Trustee owns, on May 15 in any calendar year, in the capacity
of executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an aggregate of
25% or more of the voting securities, or of any class of security, of any
person, the beneficial ownership of a specified percentage of which would
have constituted a conflicting interest under paragraph (6), (7) or (8) of
this Subsection. As to any such securities of which the Trustee acquired
ownership through becoming executor, administrator, or testamentary trustee
of an estate which included them, the provisions of the preceding sentence
shall not apply, for a period of two years from the date of such
acquisition, to the extent that such securities included in such estate do
not exceed 25% of such voting securities or 25% of any such class of
security. Promptly after May 15 in each calendar year, the Trustee shall
make a check of its holdings of such securities in any of the above-
mentioned capacities as of such May 15. If the Company or the Guarantor
fails to make payment in full of the principal of (or premium, if any) or
interest on any of the Securities when and as the same becomes due and
payable, and such failure continues for 30 days thereafter, the Trustee
shall make a prompt check of its holdings of such securities in any of the
above-mentioned capacities as of the date of the expiration of such 30-day
period, and after such date, notwithstanding the foregoing provisions of
this paragraph, all such securities so held by the Trustee, with sole or
joint control over such securities vested in it, shall, but only so long as
such failure shall continue, be considered as though beneficially owned by
the Trustee for the purposes of paragraphs (6), (7) and (8) of this
Subsection.
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The specification of percentages in paragraphs (5) to (9), inclusive, of
this Subsection shall not be construed as indicating that the ownership of such
percentages of the securities of a person is or is not necessary or sufficient
to constitute direct or indirect control for the purposes of paragraph (3) or
(7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this Subsection
only, (i) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any such note or
evidence of indebtedness; (ii) an obligation shall be deemed to be "in default"
when a default in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (iii) the Trustee shall not be deemed to be
the owner or holder of (A) any security which it holds as collateral security,
as trustee or otherwise, for an obligation which is not in default as defined in
clause (ii) above, or (B) any security which it holds as collateral security
under this Indenture, irrespective of any default hereunder, or (C) any security
which it holds as agent for collection, or as custodian, escrow agent, or
depositary, or in any similar representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter," when used with reference to the Company or
the Guarantor, means every person who, within three years prior to the time
as of which the determination is made, has purchased from the Company or
the Guarantor with a view to, or has offered or sold for the Company or the
Guarantor in connection with, the distribution of any security of the
Company or the Guarantor outstanding at such time, or has participated or
has had a direct or indirect participation in any such undertaking, or has
participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not include a
person whose interest was limited to a commission from an underwriter or
dealer not in excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" means any director of a corporation, or any
individual performing similar functions with respect to any organization,
whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock
53
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company, a trust, an unincorporated organization, or a government or
political subdivision thereof. As used in this paragraph, the term "trust"
shall include only a trust where the interest or interests of the
beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" means any security presently entitling
the owner or holder thereof to vote in the direction or management of the
affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents
for the owner or holder of such security are presently entitled to vote in
the direction or management of the affairs of a person.
(5) The terms "Company" and "Guarantor" mean any obligor upon the
Securities.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company, the Guarantor or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means such
amount of the outstanding voting securities of such person as entitles the
holder or holders thereof to cast such specified percentage of the
aggregate votes which the holders of all the outstanding voting securities
of such person are entitled to cast in the direction or management of the
affairs of such person.
(2) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(3) The term "amount," when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares, and the number of units if relating
to any other kind of security.
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(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or interest or
otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer
thereof;
provided, however, that any voting securities of an issuer shall be deemed
-------- -------
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in
-------- -------
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series as different classes; and provided, further, that,
-------- -------
in the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
Section 709. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State or the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by Federal or State
authority. If such corporation 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
55
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such corporation 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.
Section 710. 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 711.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company and the
Guarantor. If the instrument of acceptance by a successor Trustee required by
Section 711 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 with
respect to such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company and the Guarantor.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 708(a) after written
request therefor by the Company or the Guarantor or by any Holder of a
Security 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 709 and shall
fail to resign after written request therefor by the Company or the
Guarantor, or by any such Holder of a Security, 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 or the Guarantor, by Board Resolutions,
may remove the Trustee with respect to all Securities, or (ii) subject to
Section 614, any Holder of a Security who has been a bona fide Holder of a
Security of any
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series 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 with respect to all Securities of such series and the appointment
of a successor Trustee or Trustees.
(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, with respect
to the Securities of one or more series, the Company or the Guarantor, by Board
Resolutions, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 711. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company, the Guarantor,
the retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment in accordance with the applicable
requirements of Section 711, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Company or the Guarantor. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Guarantor or the Holders of Securities and accepted appointment in the
manner required by Section 711, any Holder of a Security who has been a bona
fide Holder of a Security of such series 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 with respect to the
Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of-Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issued as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
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Section 711. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company, the Guarantor and 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 the
request of the Company, the Guarantor and/or the successor Trustee, such
retiring Trustee shall, upon payment of its charges as provided in Section 707,
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.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
Guarantor, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
cotrustees of the same trust, that each such Trustee shall be trustee of a trust
or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and that no Trustee shall be responsible
for any notice given to, or received by, or any act or failure to act on the
part of any other Trustee hereunder, and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein, such retiring Trustee shall
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates have no further
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responsibility for the exercise of rights and powers or for the performance of
the duties and obligations vested in the Trustee under this Indenture other than
as hereinafter expressly set forth, and each 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 with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates; but, on request of the Company, the Guarantor or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee, to the extent contemplated by such supplemental indenture, the property
and money held by such retiring Trustee hereunder with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates.
(c) Upon request of any such successor Trustee, the Company and the
Guarantor 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 referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) 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 712. 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 of 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.
Section 713. Preferential Collection of Claims Against
-----------------------------------------
Company and Guarantor.
---------------------
(a) Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company or the Guarantor within four months prior to a default, as defined in
Subsection
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(c) of this Section, or subsequent to such a default, then, unless, and until
such default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and coupons and the holders of other indenture securities (as defined
in Subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such four-month period and valid as against
the Company or the Guarantor and their other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of any
right of set-off which the Trustee could have exercised if a petition in
bankruptcy had been filed by or against the Company or the Guarantor upon
the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
the Guarantor and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company and the Guarantor) who is
liable thereon, and (ii) the proceeds of the bona fide sale of any such
claim by the Trustee to a third Person, and (iii) distributions made in
cash, securities or other property in respect of claims filed against the
Company or the Guarantor in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Code or applicable
State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such four-
month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee
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shall sustain the burden of proving that at the time such property was so
received the Trustee had no reasonable cause to believe that a default, as
defined in Subsection (c) of this Section, would occur within four months;
or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim as
provided in paragraph (B) or (C), as the case may be, to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such four-month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned between the
Trustee, the Holders of Securities and the holders of other indenture securities
in such manner that the Trustee, the Holders of Securities and the holders of
other indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company or the
Guarantor in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Code or applicable State law, the same
percentage of their respective claims, figured before crediting to the claim of
the Trustee anything on account of the receipt by it from the Company or the
Guarantor of the funds and property in such special account and before crediting
to the respective claims of the Trustee and the Holders of Securities and the
holders of other indenture securities dividends on claims filed against the
Company or the Guarantor in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Code or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, whether such distribution is made in cash, securities or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or
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proceedings for reorganization is pending shall have jurisdiction (i) to
apportion among the Trustee and the Holders of Securities and the holders of
other indenture securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and proceeds thereof, or
(ii) in lieu of such apportionment, in whole or in part, to give to the
provisions of this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee and the Holders of Securities and
the holders of other indenture securities with respect to their respective
claims, in which event it shall not be necessary to liquidate or to appraise the
value of any securities or other property held in such special account or as
security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such
four-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four-month period, it
shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such four-month period: and
(ii) such receipt of property or reduction of claim occurred within
four months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders of Securities at the time and in
the manner provided in this Indenture;
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(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in Subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
which is organized under the provisions of Section 25(a) of the Federal
Reserve Act, as amended, and which is directly or indirectly a creditor of
the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in Subsection (c) of
this Section;
(c) For the purpose of this Section only:
(1) the term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable;
(2) the term "other indenture securities" means securities upon which
the Company or the Guarantor is an obligor outstanding under any other
indenture (i) under which indenture and as to which securities the Trustee
is also trustee, (ii) which contains provisions substantially similar to
the provisions of this Section, and (iii) under which a default exists at
the time of the apportionment of the funds and property held in such
special account;
(3) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company or the Guarantor for the purpose of financing the
purchase, processing, manufacture, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing title to,
possession of, or lien upon, the goods, wares or merchandise or the
receivables or proceeds arising
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from the sale of the goods, wares or merchandise previously constituting
the security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the
Company or the Guarantor arising from the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or obligation; and
(5) the terms "Company" and "Guarantor" mean any obligor upon the
Securities.
Section 714. Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
or exchange, registration of transfer or partial redemption thereof 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 the
Guarantor 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
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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 and the Guarantor. 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 and the
Guarantor. 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 shall be acceptable to the
Company and the Guarantor and shall (i) mail written notice of such appointment
by first-class mail, postage prepaid, to all Holders of Registered Securities,
if any, of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register, and (ii) if
Securities of the series are issued as Bearer Securities, publish notice of such
appointment at least once in an Authorized Newspaper in the place where such
successor Authenticating Agent has its principal office if such office is
located outside the United States. 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 Company and the Guarantor agree to pay each Authenticating Agent from
time to time reasonable compensation for its services under this Section. If
the Trustee makes such payments, it shall be entitled to be reimbursed for such
payments, subject to the provisions of Section 707.
The provisions of Sections 308, 704 and 705 shall be applicable to each
Authenticating Agent.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
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This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By_______________________
as Authenticating Agent
By_______________________
Authorized Signatory
If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not comply
with Section 102) by the Company, shall appoint in accordance with this Section
714 an Authenticating Agent having an office in a Place of Payment designated by
the Company with respect to such series of Securities.
ARTICLE EIGHT
HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR
Section 801. Company and Guarantor to Furnish Trustee Names
----------------------------------------------
and Addresses of Holders.
------------------------
The Company and Guarantor will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not later than 15 days after the Regular Record Date for
interest for each series of Securities, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Registered
Securities of such series as of such Regular Record Date, or if there is no
Regular Record Date for interest for such series of Securities, semi-annually,
upon such dates as are set forth in the Board Resolution or indenture
supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company or the Guarantor 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,
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provided, however, that so long as the Trustee is the Security Registrar no
- -------- -------
such list shall be required to be furnished.
Section 802. 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 of Securities (i) contained in
the most recent list furnished to the Trustee for each series as provided in
Section 801, (ii) received by the Trustee for each series in the capacity of
Security Registrar if the Trustee is then acting in such capacity and (iii)
filed with it within the two preceding years pursuant to Section 803(c)(2). The
Trustee may destroy any list furnished to it as provided in Section 801 upon
receipt of a new list so furnished, and destroy not earlier than two years after
filing, any information filed with it pursuant to Section 803(c)(2).
(b) If three or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series with respect to
their rights under this Indenture or under the Securities of such series or the
Guarantees and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five business days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 802(a), or
(ii) inform such applicants as to the approximate number of Holders of
Securities whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 802(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of Securities of such series whose name and address appears
in the information preserved at the time by the Trustee in accordance with
Section 802(a), a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of
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payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Securities of such series or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such Holders of
Securities of such series with reasonable promptness after the entry of such
order and the renewal of such tender.
(c) Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company, the Guarantor and the Trustee that neither the
Company, the Guarantor nor the Trustee nor any Paying Agent nor any Security
Registrar shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Securities in
accordance with Section 802(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 802(b).
Section 803. Reports by Trustee.
------------------
(a) Within 60 days after September 15 of each year commencing with the year
following the first issuance of Securities pursuant to Section 301, the Trustee
shall transmit by mail to all Holders of Securities, as their names and
addresses appear in the Security Register, a brief report dated as of such
September 15 with respect to:
(1) its eligibility under Section 709 and its qualifications under
Section 708, or in lieu thereof, if to the best of its knowledge it has
continued to be eligible and qualified under said Sections, a written
statement to such effect;
(2) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Securities or the Guarantees relating thereto, on any
property or funds held or collected
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by it as Trustee, except that the Trustee shall not be required (but may
elect) to report such advances if such advances so remaining unpaid
aggregate not more than 1/2 of 1% of the principal amount of the Securities
Outstanding on the date of such report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company or the Guarantor (or by any other obligor
on the Securities) to the Trustee in its individual capacity, on the date
of such report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 713(b)(2),(3),(4)
or (6);
(4) the property and funds, if any, physically in the possession of
the Trustee as such on the date of such report;
(5) any additional issue of Securities which the Trustee has not
previously reported; and
(6) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities or the Guarantees relating thereto,
except action in respect of a default, notice of which has been or is to be
withheld by the Trustee in accordance with Section 702.
(b) The Trustee shall transmit by mail to all Holders of Securities, as
provided in Subsection (c) of this Section, a brief report with respect to the
character and amount of any advances (and if the Trustee elects so to state, the
circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities or the Guarantees
relating thereto, on property or funds collected by it as Trustee, and which it
has not previously reported pursuant to this subsection, except that the Trustee
shall not be required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal amount of
the Securities Outstanding at such time, such report to be transmitted within 90
days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail:
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(1) to all Holders of Registered Securities, as the names and
addresses of such Holders appear in the Security Register;
(2) to such Holders of Bearer Securities as have, within the two years
preceding such transmission, filed their names and addresses with the
Trustee for that purpose; and
(3) except in the case of reports pursuant to Subsection (b) of this
Section, to each Holder of a Security whose name and address is preserved
at the time by the Trustee, as provided in Section 802(a).
(d) A copy of each such report shall, at the time of such transmission to
Holders of Securities, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company and
the Guarantor. The Company or the Guarantor will notify the Trustee when any
Securities are listed on any stock exchange.
Section 804. Reports by Company and Guarantor.
--------------------------------
The Company and the Guarantor shall:
(1) file with the Trustee, within 15 days after the Company or the
Guarantor is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company or the
Guarantor may be required to file with the Commission pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the
Company or the Guarantor is not required to file information, documents or
reports pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of
a security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company and the Guarantor with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
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(3) transmit within 30 days after the filing thereof with the Trustee,
in the manner and to the extent provided in Section 803(c) with respect to
reports pursuant to Section 803(a), such summaries of any information,
documents and reports required to be filed by the Company or the Guarantor
pursuant to paragraphs (l) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission.
ARTICLE NINE
CONSOLIDATION, MERGER AND SALES
Section 901. Company May Consolidate, Etc., Only on Certain
----------------------------------------------
Terms.
-----
Nothing contained in this Indenture or in any of the Securities or
Guarantees shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any
conveyance, transfer or lease of the property of the Company as an entirety or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Company); provided, however, that:
-------- -------
(1) in case the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by an
indenture (or indentures, if at such time there is more than one Trustee)
supplemental hereto, executed and delivered by the successor corporation
and the Guarantor 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 and Additional Amounts in respect of all the Securities and the
performance 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 Guarantor, Company or a
Subsidiary as a result of such transaction as having been incurred by the
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Guarantor, the Company or such Subsidiary at the time of such transaction,
no default, and no event which, after notice or lapse of time or both,
would become a default, shall have happened and be continuing;
(3) 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 such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with; and
(4) The Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that the Guarantees
remain in full force and effect.
Section 902. Successor Corporation Substituted for Company.
---------------------------------------------
Upon any consolidation or merger or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 901, the successor corporation 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 corporation had been named as the Company
herein, and thereafter, except in the case of a lease to another Person, the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Securities.
Section 903. Guarantor May Consolidate, Etc., Only On
----------------------------------------
Certain Terms.
-------------
Nothing contained in this Indenture or in any of the Securities or
Guarantees shall prevent any consolidation or merger of the Guarantor with or
into any other corporation or corporations (whether or not affiliated with the
Guarantor), or successive consolidations or mergers in which the Guarantor or
its successor or successors shall be a party or parties, or shall prevent any
conveyance, transfer or lease of the property of the Guarantor as an entirety or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Guarantor); provided, however, that:
-------- -------
(1) in case the Guarantor shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Guarantor is merged or the Person which
acquires by conveyance or transfer, or which leases, the
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properties and assets of the Guarantor substantially as an entirety shall
be a corporation organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture (or indentures, if at such time there is
more than one Trustee) supplemental hereto, executed and delivered by the
Guarantor and the Company to the Trustee, in form satisfactory to the
Trustee, the Guarantees endorsed on the Securities and the performance of
every covenant of this Indenture on the part of the Guarantor to be
performed or observed:
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Guarantor or a
Subsidiary as a result of such transaction as having been incurred by the
Guarantor or such Subsidiary at the time of such transaction, no default,
and no event which, after notice of lapse of time or both, would become a
default, shall have happened and be continuing; and
(3) the Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Section 904. Successor Corporation Substituted for
-------------------------------------
Guarantor.
---------
Upon any consolidation or merger or any conveyance, transfer or lease of
the properties and assets of the Guarantor substantially as an entirety to any
Person in accordance with Section 903, the successor corporation formed by such
consolidation or into which the Guarantor 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 Guarantor under this Indenture with the
same effect as if such successor corporation had been named as the Guarantor
herein, and thereafter, except in the case of a lease to another Person, the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Guarantees.
Section 905. Assumption by Guarantor.
-----------------------
The Guarantor, or a Subsidiary thereof, may directly 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
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interest on and Additional Amounts in respect of all the Securities and the
performance of every covenant of this Indenture on the part of the Company to be
performed or observed. Upon any such assumption, the Guarantor or such
Subsidiary 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
Guarantor or such Subsidiary had been named as the Company herein and the
Company shall be released from its liability as obligor on the Securities. No
such assumption shall be permitted unless the Guarantor has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such assumption and supplemental indenture comply with this Article, and that
all conditions precedent herein provided for relating to such transaction have
been complied with and that, in the event of assumption by a Subsidiary, the
Guarantees remain in full force and effect.
ARTICLE TEN
SUPPLEMENTAL INDENTURES
Section 1001. Supplemental Indentures without Consent
---------------------------------------
of Holders.
----------
Without the consent of any Holders of Securities or coupons, the Company
and the Guarantor, when authorized by Board Resolutions, 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:
(1) to evidence the succession of another Person to the Company or the
Guarantor, and the assumption by any such successor of the covenants of the
Company or the Guarantor herein and in the Securities or the Guarantees, as
the case may be; or
(2) to add to the covenants of the Company or the Guarantor for the
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein conferred
upon the Company or the Guarantor; or
(3) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal (or
premium, if any) on Registered Securities or of principal (or premium, if
any) or any interest on Bearer Securities, to permit
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Registered Securities to be exchanged for Bearer Securities or to permit
the issuance of Securities in uncertificated form, provided any such action
--------
shall not adversely affect the interests of the Holders of Securities of
any series or any related coupons in any material respect; or
(4) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 711(b); or
(6) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or 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 and which shall not adversely affect the
interest of the Holders of Securities of any series or any related coupons
in any material respect; or
(7) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth; or
(8) to add any additional Events of Default; or
(9) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act or under any similar federal
statute hereafter enacted and to add to this Indenture such other
provisions as may be expressly required under the Trust Indenture Act; or
(10) to effect the assumption by the Guarantor or a Subsidiary thereof
pursuant to Section 905.
The Trustee shall be entitled to receive an Opinion of Counsel in
connection with any supplemental indenture purporting to comply with the
provisions of this Section 1001 which states that no consent is necessary under
Article Ten of this Indenture in order to enter into such supplemental
indenture.
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Section 1002. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company, the
Guarantor and the Trustee, the Company and the Guarantor, when authorized by
Board Resolutions, 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 of Securities of such series
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 installment
of interest on, any Security, or reduce the principal amount thereof or the
rate of interest thereon or any Additional Amounts payable in respect
thereof, or any premium payable upon the redemption thereof, or change the
obligation of the Company and the Guarantor to pay Additional Amounts
pursuant to Section 1104 (except as contemplated by Section 901(1) and
permitted by Section 1001(1)), or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
602, or change the Place of Payment, coin or currency in which any Security
or any premium or the 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
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, 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 reduce the requirements of Section 1504 for quorum or voting,
or
(3) modify any of the provisions of this Section, or Section 613, or
Section 107, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, or
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(4) modify or affect in any manner adverse to the Holders the terms
and conditions of the obligations of the Guarantor in respect of the due
and punctual payments of principal of, or premium, if any, interest or
sinking fund requirements, if any, on, or Additional Amounts in respect of,
the Securities, or
(5) modify the provisions of this Indenture with respect to the
subordination of the Securities or the Guarantees in a manner adverse to
the Holders.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders of Securities 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 1003. 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 trust created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 701) 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 1004. 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
and of any coupons appertaining thereto shall be bound thereby.
Section 1005. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
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Section 1006. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series 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 of any series 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 of such series.
Section 1007. Subordination Unimpaired.
------------------------
No supplemental indenture entered into under this Article shall modify,
directly or indirectly, the provisions of Article Sixteen or the definition of
Senior Company Indebtedness or Senior Guarantor Indebtedness, respectively, in
Section 101 in any manner that might alter or impair the subordination of the
Securities with respect to Senior Company Indebtedness then outstanding or the
subordination of the Guarantees with respect to Senior Guarantor Indebtedness
then outstanding, unless each holder of such Senior Company Indebtedness or
Senior Guarantor Indebtedness, as the case may be, has consented thereto in
writing.
ARTICLE ELEVEN
COVENANTS
Section 1101. Payment of Principal, Premium, if any,
--------------------------------------
and Interest.
------------
The Company covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any), interest on and any Additional Amounts payable in respect of
the Securities of that series in accordance with the terms of such series of
Securities, any coupons appertaining thereto and this Indenture. Any interest
due on and any Additional Amounts payable in respect of Bearer Securities on or
before Maturity, other than Additional Amounts, if any, payable as provided in
Section 1104 in respect of principal of (or premium, if any, on) such a
Security, shall be payable only upon presentation and surrender of the several
coupons for such interest installments as are evidenced thereby as they
severally mature.
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Section 1102. Maintenance of Office or Agency.
-------------------------------
The Company or the Guarantor will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series (but
not Bearer Securities, except as otherwise provided below, unless such Place of
Payment is located outside the United States) may be presented or surrendered
for payment, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company or
the Guarantor in respect of the Securities of that series and the Guarantees
relating thereto and this Indenture may be served. If Securities of a series
are issuable as Bearer Securities, the Company or the Guarantor will maintain,
subject to any laws or regulations applicable thereto, an office or agency in a
Place of Payment for such Series which is located outside the United States
where Securities of such series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Securities of such series pursuant to Section 1104); provided, however, that if
-------- -------
the Securities of such series are listed on The Stock Exchange of the United
Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company or the Guarantor will maintain a Paying Agent in
London, Luxembourg or any other required city located outside the United States,
as the case may be, so long as the Securities of such series are listed on such
exchange. The Company or the Guarantor 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 or the Guarantor 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, except that Bearer
Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Bearer Securities of that series pursuant to Section 1104) at the place
specified for the purpose pursuant to Section 301, and the Company and the
Guarantor each hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
Except as otherwise provided in the form of Bearer Security of any
particular series pursuant to the provisions of this Indenture, no payment of
principal, premium or interest on Bearer Securities shall be made at any office
or agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank located
in the United States; provided, however, payment of principal of and any premium
-------- -------
and interest in U.S. dollars (including Additional Amounts payable in respect
thereof) on any Bearer Security may be made at the Corporate Trust Office or any
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office or agency designated by the Company in the Borough of Manhattan, The City
of New York if (but only if) payment of the full amount of such principal,
premium, interest or Additional Amounts at all offices outside the United States
maintained for the purpose by the Company in accordance with this Indenture is
illegal or effectively precluded by exchange controls or other similar
restrictions.
The Company or the Guarantor may also from time to time designate one or
more other offices or agencies where the Securities of one or more series 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 or the Guarantor of their
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company or the Guarantor 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. Unless
otherwise set forth in a Board Resolution or indenture supplemental hereto with
respect to a series of Securities, the Company and the Guarantor each hereby
designates as the Place of Payment for each series the City of New York, and
initially appoints an office or agency of the Company or the Guarantor for such
purpose. Pursuant to Section 3.01(8) of this Indenture, the Company or the
Guarantor may subsequently appoint a place or places in the Borough of
Manhattan, The City of New York, where such Securities may be payable.
Section 1103. Money for Securities Payments to Be Held
----------------------------------------
in Trust.
--------
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any), or interest on, any of the Securities of
that series, segregate and hold in trust for the benefit of the Person entitled
thereto a sum sufficient to pay the principal (and premium, if any) 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 for any series of
Securities, it will, on or prior to each due date of the principal of (and
premium, if any), or interest on, any Securities of that series, deposit with
any Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
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The Company will cause each Paying Agent for any series of Securities 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:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company or the
Guarantor (or any other obligor upon the Securities of that series) in the
making of any payment of principal (and premium, if any) or interest on the
Securities of that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company or the Guarantor 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 or Guarantor 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 terms 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.
Except as otherwise provided in the form of Securities of any particular
series pursuant to the provisions of this Indenture, 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) or interest on any Security of
any series and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Company on Company Request (or if deposited by the Guarantor, paid to the
Guarantor on Guarantor Request), or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security or any coupon
appertaining thereto shall thereafter, as an unsecured general creditor, look
only to the Company and the Guarantor 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
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Company cause to be published once, in an Authorized Newspaper in each Place of
Payment or to be mailed to Holders of Registered Securities, or both, 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 or
mailing nor shall it be later than two years after such principal (and premium,
if any) or interest has become due and payable, any unclaimed balance of such
money then remaining will be repaid to the Company or the Guarantor, as the case
may be.
Section 1104. Additional Amounts.
------------------
If the Securities of a series provide for the payment of Additional
Amounts, the Company and the Guarantor agree to pay to the Holder of any
Security of any such series or any coupon appertaining thereto Additional
Amounts as provided therein. Whenever in this Indenture there is mentioned, in
any context, the payment of the principal of (or premium, if any) or interest
on, or in respect of, any Security of any series or any related coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided for in this Section to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section and express mention of the payment of Additional
Amounts (if applicable) in any provisions hereof shall not be construed as
excluding Additional Amounts in those provisions hereof where such express
mention is not made.
If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal (and
premium, if any) is made), and at least 10 days prior to each date of payment of
principal (and premium, if any) or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
the Company or the Guarantor, as the case may be, will furnish the Trustee and
the principal Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether such payment of principal (and premium, if any) or interest on
the Securities of that series shall be made to Holders of Securities of that
series or the related coupons who are United States Aliens without withholding
for or on account of any tax, assessment or other governmental charge described
in the Securities of that series. If any such withholding shall be required,
then such Officers' Certificate shall specify by country the amount, if any,
required to be withheld on such payments to such Holders of Securities or
coupons and the Company and the Guarantor agree to pay to the Trustee or such
Paying Agent the Additional Amounts required by
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this Section. The Company and the Guarantor each covenant to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officers' Certificate furnished pursuant to this
Section.
Section 1105. Company Statement as to Compliance;
------------------------------------
Notice of Certain Defaults.
--------------------------
(a) The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year a written statement, which need not comply with Section 102,
signed by the Chairman of the Board, a Vice Chairman, the President or a Vice
President and by the Treasurer or an Assistant Treasurer of the Company,
stating, as to each signer thereof, that
(1) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision, and
(2) to the best of his knowledge, based on such review, (a) the
Company has fulfilled all of its obligations under this Indenture
throughout such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to him and the
nature and status thereof, and (b) no event has occurred and is continuing
which is, or after notice or lapse of time or both would become, a default
or an Event of Default, or, if such an event has occurred and is
continuing, specifying each such event known to him and the nature and
status thereof.
(b) The Company will deliver to the Trustee, within five days after the
occurrence thereof, written notice of any event which constitutes, or which
after notice or lapse of time or both would become, a default or an Event of
Default.
Section 1106. Guarantor Statement as to Compliance;
-------------------------------------
Notice of Certain Defaults.
--------------------------
The Guarantor will deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement, which need not comply with Section 102,
signed by the Chairman of the Board, a Vice Chairman, the President or a Vice
President and by the Treasurer or an Assistant Treasurer of the Guarantor,
stating, as to each signer thereof, that
(1) a review of the activities of the Guarantor during such year and
of performance under this Indenture has been made under his supervision,
and
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(2) to the best of his knowledge, based on such review, (a) the
Guarantor has fulfilled all its obligations under this Indenture throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to him and the nature and
status thereof, and (b) no event has occurred and is continuing which is,
or after notice or lapse of time or both would become, a default or an
Event of Default, or, if such an event has occurred and is continuing,
specifying each such event known to him and the nature and status thereof
.
(b) The Guarantor will deliver to the Trustee, within five days after the
occurrence thereof, written notice of any event which constitutes, or which
after notice or lapse of time or both would become, a default or an Event of
Default.
Section 1107. Reserved.
--------
Section 1108. Limitation on Creation of Liens.
-------------------------------
So long as any of the Securities shall be outstanding, the Guarantor will
not, nor will it permit any Subsidiary to, create, assume, incur or suffer to be
created, assumed or incurred or to exist any pledge, encumbrance or lien, as a
security for indebtedness for borrowed money, upon any shares of, or securities
convertible into or options, warrants or rights to subscribe for or purchase
shares of, Voting Stock of the Company or a Major Constituent Bank, directly or
indirectly, without making effective provision whereby the Securities of all
series shall be equally and ratably secured with any and all such indebtedness
if, treating such pledge, encumbrance or lien as a transfer of the shares of, or
securities convertible into or options, warrants or rights to subscribe for or
purchase shares of, Voting Stock subject thereto to the secured party and to the
issuance of the maximum number of shares of Voting Stock of the Company or such
Major Constituent Bank issuable upon the exercise of all such convertible
securities, options, warrants or rights, the Company or such Major Constituent
Bank would not continue to be a Controlled Subsidiary.
Section 1109. Corporate Existence.
-------------------
Subject to Article Nine, the Company and the Guarantor will do or cause to
be done all things necessary to preserve and keep in full force and effect their
respective corporate existences and that of each Major
Constituent Bank and their respective rights (charter and statutory) and
franchises and those of each such Major Constituent Bank; provided, however,
-------- -------
that neither the Company, the Guarantor nor any Major Constituent Bank shall be
required to preserve any such right or franchise if the Company, the Guarantor
or
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such Major Constituent Bank, as the case may be, shall determine that the
preservation thereof is no longer desirable in the conduct of its business and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 1110. Waiver of Certain Covenants.
---------------------------
The Company or the Guarantor, as the case may be, may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 1108, and 1109 with respect to the Securities of any series if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities of such series shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the Guarantor and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
Section 1201. Applicability of Article.
------------------------
Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and this Article.
Section 1202. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
the Securities of any series, with the same issue date, interest rate and Stated
Maturity, 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 of such series to be redeemed.
Section 1203. Selection by Trustee of Securities to be Redeemed.
-------------------------------------------------
If less than all the Securities of any series with the same issue date,
interest rate, Stated Maturity and other terms are to be redeemed, the
particular Securities to be redeemed shall be
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selected not more than 60 days prior to the Redemption Date by the Trustee from
the Outstanding Securities of such series not previously called for redemption,
by such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions of the principal amount of
Registered Securities of such series: provided, however, that no such partial
redemption shall reduce the portion of the principal amount of a Registered
Security of such series not redeemed to less than the minimum denomination for a
Security of that series established pursuant to Section 302.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) 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.
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 of such Securities which has been or is to be redeemed.
Section 1204. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided in Section 106,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to the Holders of
Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Securities to be redeemed.
(4) in case any Registered Security is to be redeemed in part only,
the notice which relates to such Security
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shall state that on and after the Redemption Date, upon surrender of such
Security, the Holder of such Security will receive, without charge, a new
Registered Security or Registered Securities of authorized denominations
for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed, and, if applicable,
that interest thereon shall cease to accrue on and after said date.
(6) the place or places where such Securities, together, in the case
of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of
the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the case.
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
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 1205. Deposit of Redemption Price.
---------------------------
On or 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 1103) 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 and any Additional
Amounts with respect thereto, all the Securities or portions thereof which are
to be redeemed on that date.
Section 1206. 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 and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining
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thereto maturing after the Redemption Date, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest (and any
Additional Amounts) to the Redemption Date; provided, however, that installments
-------- -------
of interest on Bearer Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable only upon presentation and surrender of coupons
for such interest (at an office or agency located outside the United States
except as otherwise provided in Section 1102), and provided, further, that
-------- -------
installments of interest on Registered Securities 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 Regular Record Dates according to their terms and the provisions
of Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent any such missing coupon in respect
of which a deduction shall have been made from the Redemption Price, such Holder
shall be entitled to receive the amount so deducted; provided, however, that
-------- -------
interest (and any Additional Amounts) represented by coupons shall be payable
only upon presentation and surrender of those coupons at an office or agency
located outside of the United States except as otherwise provided in Section
1102.
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 prescribed therefor in the
Security.
Section 1207. Securities Redeemed in Part.
---------------------------
Any Registered Security which is to be redeemed only in part shall be
surrendered at any office or agency of the Company maintained for that purpose
pursuant to Section 1102 (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 Registered Security or Securities of the same series with a Guarantee or
Guarantees endorsed thereon, containing identical terms and provisions, of any
authorized denomination as requested by such
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Holder in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered. If a Security in
global form is so surrendered, the Company shall execute, and the Trustee shall
authenticate and deliver to the U.S. Depository or other depository for such
Security in global form as shall be specified in the Company Order with respect
thereto to the Trustee, without service charge, a new Security in global form in
a denomination equal to and in exchange for the unredeemed portion of the
principal of the Security in global form so surrendered.
ARTICLE THIRTEEN
SINKING FUNDS
Section 1301. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series, except as otherwise permitted or
required by any form of Security of such series issued pursuant to this
Indenture.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of such series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1302. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of Securities of such
series.
Section 1302. Satisfaction of Sinking Fund Payments
--------------------------------------
with Securities.
---------------
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series to be made pursuant to the
terms of such Securities as provided for by the terms of such series (1) deliver
Outstanding Securities of such series (other than any of such Securities
previously called for redemption or any of such Securities in respect of which
cash shall have been released to the Company), together in the case of any
Bearer Securities of such series with all unmatured coupons appertaining
thereto, and (2) apply as a credit Securities of such series which have been
redeemed either at the election of the Company pursuant to the terms of such
series of Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities, provided that such
--------
series of Securities have not been
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previously so credited. Such Securities shall be received and credited for such
purpose by the Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly. If as a result of the delivery or
credit of Securities of any series in lieu of cash payments pursuant to this
Section 1302, the principal amount of Securities of such series to be redeemed
in order to exhaust the aforesaid cash payment shall be less than $100,000, the
Trustee need not call Securities of such series for redemption, except upon
Company Request, and such cash payment shall be held by the Trustee or a Paying
Agent and applied to the next succeeding sinking fund payment, provided,
however, that the Trustee or such Paying Agent shall at the request of the
Company from time to time pay over and deliver to the Company any cash payment
so being held by the Trustee or such Paying Agent upon delivery by the Company
to the Trustee of Securities of that series purchased by the Company having an
unpaid principal amount equal to the cash payment requested to be released to
the Company.
Section 1303. Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 1302, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 60 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 1203 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 1204. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1206 and 1207.
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ARTICLE FOURTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1401. Applicability of Article.
------------------------
Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount
of Securities pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section 309, shall not
operate as a payment, redemption or satisfaction of the indebtedness represented
by such Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Article
Fourteen, in connection with any repayment of Securities, the Company may
arrange for the purchase of any Securities by an agreement with one or more
investment bankers or other purchasers to purchase such Securities by paying to
the Holders of such Securities on or before the close of business on the
repayment date an amount not less than the repayment price payable by the
Company on repayment of such Securities, and the obligation of the Company to
pay the repayment price of such Securities shall be satisfied and discharged to
the extent such payment is so paid by such purchasers.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May
-------------------------------
Be Called.
---------
A meeting of Holders of Securities of such series may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series
Section 1502. Call, Notice and Place of Meetings.
----------------------------------
(a) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1501, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or, if
Securities of such series are to be issued as Bearer Securities, in London, as
the Trustee shall determine. Notice of every meeting of Holders of
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Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 106, not less than 21 nor more than 180
days prior to the date fixed for the meeting.
(b) In case at any time the Company or the Guarantor, pursuant to Board
Resolutions, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company, the Guarantor or the Holders of Securities of
such series in the amount above specified, as the case may be, may determine the
time and the place in the Borough of Manhattan, The City of New York, or, if
Securities of such series are to be issued as Bearer Securities, in London for
such meeting and may call such meeting for such purposes by giving notice
thereof as provided in subsection (a) of this section.
Section 1503. Persons Entitled to Vote at Meetings.
------------------------------------
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
Section 1504. Quorum; Action.
--------------
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
-------- -------
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than 66-
2/3% in principal amount of the Outstanding Securities of a series, the Persons
entitled to vote 66-2/3% in principal amount of the Outstanding Securities of
such series shall constitute a quorum. In the absence of a quorum within 30
minutes after the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series,
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be dissolved. In any other case the meeting may be adjourned for a period of
not less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 1502(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Except as limited by the proviso to Section 1002, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 1002, any
- -------- -------
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of a series may be adopted at a meeting or
an adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of 66-2/3% in principal amount of
the Outstanding Securities of that series; and provided, further, that, except
-------- -------
as limited by the proviso to Section 1002, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is present
as aforesaid by the affirmative vote of the Holders of such specified percentage
in principal amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Section 1505. Determination of Voting Rights; Conduct
---------------------------------------
and Adjournment of Meetings.
---------------------------
(a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of such series
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in regard to proof of the holding of Securities of such series and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall be proved in
the manner specified in Section 104 and the appointment of any proxy shall be
proved in the manner specified in Section 104 or by having the signature of the
person executing the proxy witnessed or guaranteed by any trust company, bank or
banker authorized by Section 104 to certify to the holding of Bearer Securities.
Such regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the proof
specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company, the Guarantor or the Holders of Securities of the series
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series represented at the
meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of Securities of such
series held or represented by him; provided, however, that no vote shall be cast
-------- -------
or counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote, except as a Holder of a
Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called pursuant
to Section 1502 at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.
Section 1506. Counting Votes and Recording Action of Meetings.
-----------------------------------------------
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding
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Securities of such series held or represented by them. The permanent chairman
of the meeting shall appoint two inspectors of votes who shall count all votes
cast at the meeting for or against any resolution and who shall make and file
with the secretary of the meeting their verified written reports in triplicate
of all votes cast at the meeting. A record, at least in triplicate, of the
proceedings of each meeting of Holders of Securities of any series shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 1502 and, if applicable, Section 1504.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Company and the Guarantor, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
ARTICLE SIXTEEN
SUBORDINATION
Section 1601. Securities Subordinated to Senior Company Indebtedness.
------------------------------------------------------
The Company covenants and agrees, and each Holder of Securities, by his
acceptance thereof, likewise covenants and agrees, that the indebtedness
evidenced by the Securities and the payment of the principal of (and premium, if
any) and interest on and any Additional Amounts payable in respect thereof is
hereby expressly subordinated, to the extent and in the manner hereinafter set
forth, in right of payment to the prior payment in full of Senior Company
Indebtedness.
Anything in this Indenture or in the Securities of any series to the
contrary notwithstanding, the indebtedness evidenced by the Securities shall be
subordinate and junior in right of payment, to the extent and in the manner
hereinafter set forth, to all Senior Company Indebtedness:
(a) In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization, arrangement or other similar
proceedings in connection therewith, relative to the Company or to its property,
and in the event of any proceedings for voluntary liquidation, dissolution or
other winding-up of the Company, whether or not involving insolvency or
bankruptcy, then the holders of Senior Company Indebtedness shall
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be entitled to receive payment in full of all principal, premium and interest on
all Senior Company Indebtedness before the Holders of the Securities are
entitled to receive any payment on account of principal or interest upon the
Securities, and to that end (but subject to the power of a court of competent
jurisdiction to make other equitable provisions reflecting the rights conferred
in the Securities upon Senior Company Indebtedness and the Holders thereof with
respect to the subordinated indebtedness represented by the Securities and the
Holders hereof by a lawful plan of reorganization under applicable bankruptcy
law) the holders of Senior Company Indebtedness shall be entitled to receive for
application in payment thereof any payment or distribution of any kind or
character, whether in cash or property or securities, which may be payable or
deliverable in any such proceedings in respect of the Securities after giving
effect to any concurrent payment or distribution in respect of such Senior
Company Indebtedness, except securities which are subordinate and junior in
right of payment to the payment of all Senior Company Indebtedness then
outstanding;
(b) In the event that any Security of any series is declared or otherwise
becomes due and payable before its expressed maturity because of the occurrence
of an Event of Default hereunder (under circumstances when the provisions of the
foregoing clause (a) or the following clause (c) shall not be applicable), the
holders of Senior Company Indebtedness outstanding at the time such Security so
becomes due and payable because of such occurrence of an Event of Default
hereunder shall, so long as such declaration has not been rescinded and annulled
pursuant to Section 602, be entitled to receive payment in full of all principal
of, and premium and interest on, all such Senior Company Indebtedness before the
Holders of the Securities of such series are entitled to receive any payment on
account of principal of or interest on the Securities of such series; provided,
that, nothing herein shall prevent the holders of Securities from seeking any
remedy allowed at law or at equity so long as any judgment or decree obtained
thereby makes provision for enforcing this clause; and
(c) In the event that any default shall occur and be continuing with
respect to any Senior Company Indebtedness permitting the holders of such Senior
Company Indebtedness to accelerate the maturity thereof, if either (a) notice of
such default, in writing, shall have been given to the Company and to the
Trustee, provided that judicial proceedings shall be commenced in respect of
--------
such default within 180 days in the case of a default in payment of principal or
interest and within 90 days in the case of any other default after the giving of
such notice, and provided further that only one such notice shall be given
pursuant to this Section 1601(c) in any twelve months period, or (b) judicial
proceedings shall be pending in respect
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of such default, the Holders of the Securities and the Trustee for their benefit
shall not be entitled to receive any payment on account of principal or interest
thereon (including any such payment which would cause such default) unless
payment in full of all principal of, and premium and interest on, such Senior
Company Indebtedness shall have been made or provided for. The Trustee,
forthwith upon receipt of any notice received by it pursuant to this Section
1601(c), shall, as soon as practicable, send a notice thereof to each Holder of
Securities at the time outstanding as the names and addresses of such Holders
appear on the registry books of the Company.
In case despite the foregoing provisions, any payment or distribution
shall, in any such event, be paid or delivered to any Holder of the Securities
or to the Trustee for their benefit before all Senior Company Indebtedness shall
have been paid in full, such payment or distribution shall be held in trust for
and so paid and delivered to the holders of Senior Company Indebtedness (or
their duly authorized representatives) until all Senior Company Indebtedness
shall have been paid in full.
The Company shall give written notice to the Trustee within five days after
the occurrence of any insolvency, bankruptcy, receivership, liquidation,
reorganization, arrangement or similar proceeding of the Company within the
meaning of this Section 1601. Upon any payment or distribution of assets of the
Company referred to in this Article Sixteen, the Trustee, subject to the
provisions of Section 701, and the Holders of the Securities shall be, entitled
to rely upon a certificate of the trustee in bankruptcy, receiver, assignee for
the benefit of creditors or other liquidating agent making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Company Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Sixteen.
In the event that the Trustee determines, in good faith, that further
evidence is required with respect to the right of any person as a holder of
Senior Company Indebtedness to participate in any payment or distribution
pursuant to this Section 1601, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Company Indebtedness held by such person, as to the extent to which such
person is entitled to participate in such payment or distribution, and as to
other facts pertinent to the rights of such person under this Section 1601, and
if such evidence is not furnished, the Trustee may defer any payment to such
person pending judicial determination as to the right of such person to receive
such payment.
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Section 1602. Guarantees Subordinated to Senior
---------------------------------
Guarantor Indebtedness.
----------------------
The Guarantor covenants and agrees, and each Holder of Guarantees endorsed
on the Securities, by his acceptance thereof, likewise covenants and agrees,
that the indebtedness evidenced by the Guarantees and the payment of the
principal of (and premium, if any) and interest on and any Additional Amounts
payable in respect of the Securities under the Guarantees is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of Senior Guarantor Indebtedness.
Anything in this Indenture or in the Securities and related Guarantees of
any series to the contrary notwithstanding, the indebtedness evidenced by the
Guarantees endorsed on the Securities shall be subordinate and junior in right
of payment, to the extent and in the manner hereinafter set forth, to all Senior
Guarantor Indebtedness:
(a) In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization, arrangement or other similar
proceedings in connection therewith, relative to the Guarantor or to its
property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding-up of the Guarantor, whether or not involving
insolvency or bankruptcy, then the holders of Senior Guarantor Indebtedness
shall be entitled to receive payment in full of all principal, premium and
interest on all Senior Guarantor Indebtedness before the Holders of the
Guarantees endorsed on the Securities are entitled to receive any payment on
account of principal or interest upon the Securities, and to that end (but
subject to the power of a court of competent jurisdiction to make other
equitable provisions reflecting the rights conferred in the Guarantees upon
Senior Guarantor Indebtedness and the Holders thereof with respect to the
subordinated indebtedness represented by the Guarantees and the Holders thereof
by a lawful plan of reorganization under applicable bankruptcy law) the holders
of Senior Guarantor Indebtedness shall be entitled to receive for application in
payment thereof any payment or distribution of any kind or character, whether in
cash or property or securities, which may be payable or deliverable in any such
proceedings in respect of the Guarantees after giving effect to any concurrent
payment or distribution in respect of such Senior Guarantor Indebtedness, except
securities which are subordinate and junior in right of payment to the payment
of all Senior Guarantor Indebtedness then outstanding;
(b) In the event that any Security of any series is declared or otherwise
becomes due and payable before its expressed maturity because of the occurrence
of an Event of Default hereunder (under circumstances when the provisions of the
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foregoing clause (a) or the following clause (c) shall not be applicable), the
holders of Senior Guarantor Indebtedness outstanding at the time such Security
so becomes due and payable because of such occurrence of an Event of Default
hereunder shall, so long as such declaration has not been rescinded and annulled
pursuant to Section 602, be entitled to receive payment in full of all principal
of, and premium and interest on, all such Senior Guarantor Indebtedness before
the Holders of Securities of such series are entitled to receive any payment on
account of principal of or interest on the Securities of such series; provided,
that nothing herein shall prevent the Holders of Securities from seeking any
remedy allowed at law or at equity so long as any judgment or decree obtained
thereby makes provision for enforcing this clause: and
(c) In the event that any default shall occur and be continuing with
respect to any Senior Guarantor Indebtedness permitting the holders of such
Senior Guarantor Indebtedness to accelerate the maturity thereof, if either (a)
notice of such default, in writing, shall have been given to the Guarantor and
by the Guarantor to the Trustee hereunder, provided that judicial proceedings
--------
shall be commenced in respect of such default within 180 days in the case of a
default in payment of principal or interest and within 90 days in the case of
any other default after the giving of such notice, and provided further that
-------- -------
only one such notice shall be given pursuant to this Section 1602(c) in any
twelve months period, or (b) judicial proceedings shall be pending in respect of
such default, the Holders of the Guarantees endorsed on the Securities and the
Trustee for their benefit shall not be entitled to receive any payment on
account of principal or interest thereon (including any such payment which would
cause such default) under the Guarantees unless payment in full of all principal
of, and premium and interest on, such Senior Guarantor Indebtedness shall have
been made or provided for. The Trustee, forthwith upon receipt of any notice
received by it pursuant to this Section 1602(c) from the Guarantor, shall
promptly send a notice thereof to each Holder of Securities at the time
outstanding as the names and addresses of such Holders appear on the registry
books of the Company.
In case despite the foregoing provisions, any payment or distribution
shall, in any such event, be paid or delivered to any Holder of the Guarantees
endorsed on the Securities or to the Trustee for their benefit before all Senior
Guarantor Indebtedness shall have been paid in full, such payment or
distribution shall be held in trust for and so paid and delivered to the holders
of Senior Guarantor Indebtedness (or their duly authorized representatives)
until all Senior Guarantor Indebtedness shall have been paid in full.
The Guarantor shall give written notice to the Trustee within five days
after the occurrence of any insolvency,
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bankruptcy, receivership, liquidation, reorganization, arrangement or similar
proceeding of the Guarantor within the meaning of this Section 1602. Upon any
payment or distribution of assets of the Guarantor referred to in this Article
Sixteen, the Trustee, subject to the provisions of Section 701, and the Holders
of the Guarantees endorsed on the Securities shall be entitled to rely upon a
certificate of the trustee in bankruptcy, receiver, assignee for the benefit of
creditors or other liquidating agent making such payment or distribution,
delivered to the Trustee or to the Holders of Guarantees endorsed on the
Securities, for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Guarantor Indebtedness and other
indebtedness of the Guarantor, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Sixteen.
In the event that the Trustee determines, in good faith, that further
evidence is required with respect to the right of any person as a holder of
Senior Guarantor Indebtedness to participate in any payment or distribution
pursuant to this Section 1602, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Guarantor Indebtedness held by such person, as to the extent to which
such person is entitled to participate in such payment or distribution, and as
to other facts pertinent to the rights of such person under this Section 1602,
and if such evidence is not furnished, the Trustee may defer any payment to such
person pending judicial determination as to the right of such person to receive
such payment.
Section 1603. Subrogation.
-----------
Subject to the payment in full of all Senior Company Indebtedness to which
the indebtedness evidenced by the Securities is in the circumstances
Subordinated as provided in Section 1601, the Holders of the Securities shall be
subrogated to the rights of the holders of such Senior Company Indebtedness to
receive payments or distributions of cash, property or securities of the Company
applicable to such Senior Company Indebtedness until all amounts owing on the
Securities shall be paid in full, and, as between the Company, its creditors
other than holders of such Senior Company Indebtedness, and the Holders of the
Securities, no such payment or distribution made to the holders of such Senior
Company Indebtedness by virtue of this Article which otherwise would have been
made to the Holders of the Securities shall be deemed to be a payment by the
Company on account of such Senior Company Indebtedness, it being understood that
the provisions of this Article Sixteen are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand, and the holders of the Senior Company Indebtedness, on the other hand.
100
<PAGE>
Subject to the payment in full of all Senior Guarantor Indebtedness to
which the indebtedness evidenced by the Guarantees endorsed on the Securities is
in the circumstances subordinated as provided in Section 1602, the Holders of
the Guarantees endorsed on the Securities shall be subrogated to the rights of
the holders of such Senior Guarantor Indebtedness to receive payments or
distributions of cash, property or securities of the Guarantor applicable to
such Senior Guarantor Indebtedness until all amounts owing on the Guarantees
endorsed on the Securities shall be paid in full, and, as between the Guarantor,
its creditors other than holders of such Senior Guarantor Indebtedness, and the
Holders of the Guarantees endorsed on the Securities, no such payment or
distribution made to the holders of such Senior Guarantor Indebtedness by virtue
of this Article which otherwise would have been made to the Holders of the
Guarantees endorsed on the Securities shall be deemed to be a payment by the
Guarantor on account of such Senior Guarantor Indebtedness, it being understood
that the provisions of this Article Sixteen are and are intended solely for the
purpose of defining the relative rights of the Holders of the Guarantees
endorsed on the Securities on the one hand, and the holders of the Senior
Guarantor Indebtedness, on the other hand.
Section 1604. Obligation of Company and Guarantor Unconditional.
-------------------------------------------------
Nothing contained in this Article Sixteen or elsewhere in this Indenture or
in the Securities or the Guarantees is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior Company Indebtedness
and the Holders of the Securities, or as between the Guarantor, its creditors
other than the holders of Senior Guarantor Indebtedness and the Holders of the
Guarantees endorsed on the Securities, the obligation of the Company or the
Guarantor, as the case may be, which is absolute and unconditional, to pay to
the Holders of the Securities and the Guarantees endorsed thereon the principal
of (and premium, if any), interest and any Additional Amounts on the Securities
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders of
the Securities and the Guarantees endorsed thereon and creditors of the Company
other than the holders of Senior Company Indebtedness and creditors of the
Guarantor other than holders of Senior Guarantor Indebtedness, as applicable,
nor shall anything herein or therein prevent the Trustee or the Holder of any
Security and the Guarantee endorsed thereon from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article Sixteen of the holders of Senior
Company Indebtedness or Senior Guarantor Indebtedness in respect of cash,
property or securities of the Company or the Guarantor, as the case may be,
received upon the exercise of any such remedy.
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Upon any payment or distribution of assets of the Company or the Guarantor,
as the case may be, referred to in this Article Sixteen, the Trustee and the
Holders of the Securities and the Guarantees endorsed thereon shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in
which any such dissolution, winding up, liquidation or reorganization proceeding
affecting the affairs of the Company or the Guarantor, as the case may be, is
pending or upon a certificate of the trustee in bankruptcy, receiver, assignee
for the benefit of creditors, liquidating trustee or agent or other person
making any payment or distribution, delivered to the Trustee or to the Holders
of the Securities and the Guarantees endorsed thereon, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Company Indebtedness and other
indebtedness of the Company or the holders of the Senior Guarantor Indebtedness
and other indebtedness of the Guarantor, as the case may be, the amount thereof
or payable thereon, the amount paid or distributed thereon and all other facts
pertinent thereto or to this Article Sixteen.
Section 1605. Payments on Securities Permitted.
--------------------------------
Nothing contained in this Article Sixteen or elsewhere in this Indenture,
or in any of the Securities or the Guarantees, shall affect the obligation of
the Company or the Guarantor, as the case may be, to make, or prevent the
Company or the Guarantor from making payment of the principal of (or premium, if
any), interest or any Additional Amounts on the Securities in accordance with
the provisions hereof and thereof, except as otherwise provided in this Article
Sixteen.
Section 1606. Effectuation of Subordination by Trustee.
----------------------------------------
Each Holder of Securities and the Guarantees endorsed thereon, by his
acceptance thereof, authorizes and directs the Trustee in his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article Sixteen and appoints the Trustee his attorney-in-fact
for any and all such purposes.
Section 1607. Knowledge of Trustee.
--------------------
Notwithstanding the provisions of this Article Sixteen or any other
provisions of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee, or the taking of any other action by the Trustee,
unless and until the Trustee shall have received written notice thereof from the
Company or the Guarantor, any Holder of the Securities and the Guarantees
endorsed thereon, any paying or conversion
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agent of the Company or the Guarantor or the holder or representative of any
class of Senior Company Indebtedness.
Section 1608. Trustee's Relation to Senior Company Indebtedness and Senior
------------------------------------------------------------
Guarantor Indebtedness.
----------------------
The Trustee shall be entitled to all the rights set forth in this Article
with respect to any Senior Company Indebtedness or Senior Guarantor Indebtedness
at the time held by it, to the same extent as any other holder of Senior Company
Indebtedness or Senior Guarantor Indebtedness, and nothing in Section 713 or
elsewhere in this Indenture shall deprive the Trustee of any of its rights as
such holder. Notwithstanding anything in this Indenture or in the Securities of
any series, nothing in this Article Sixteen shall apply to claims of or payment
to the Trustee under or pursuant to Sections 606 and 707.
With respect to holders of Senior Company Indebtedness or Senior Guarantor
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article Sixteen,
and no implied covenants or obligations with respect to the holders of Senior
Company Indebtedness or Senior Guarantor Indebtedness shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Company Indebtedness or Senior Guarantor
Indebtedness and the Trustee shall not be liable to any holder of Senior Company
Indebtedness or Senior Guarantor Indebtedness if it shall pay over or deliver to
Holders, the Company, the Guarantor or any other Person monies or assets to
which any holder of Senior Company Indebtedness or Senior Guarantor Indebtedness
shall be entitled by virtue of this Article Sixteen or otherwise.
Section 1609. Rights of Holders of Senior Company
-----------------------------------
Indebtedness and Senior Guarantor
---------------------------------
Indebtedness Not Impaired.
-------------------------
No right of any present or future holder of any Senior Company Indebtedness
or Senior Guarantor Indebtedness to enforce the subordination herein shall at
any time or in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or the Guarantor, as the case may be, or by any
noncompliance by the Company or the Guarantor, as the case may be, with the
terms, provisions or covenants of this Indenture, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
103
<PAGE>
ARTICLE SEVENTEEN
MISCELLANEOUS PROVISIONS
Section 1701. Securities in Foreign Currencies.
--------------------------------
Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in the form of Security of any particular series, any amount in
respect of any Security denominated in a currency other than United States
dollars shall be treated for any such action or distribution as that amount of
United States dollars that could be obtained for such amount on such reasonable
basis of exchange and as of the record date with respect to Registered
Securities of such series (if any) for such action, determination of rights or
distribution (or, if there shall be no applicable record date, such other date
reasonably proximate to the date of such action, determination of rights or
distribution) as the Company or the Guarantor may specify in a written notice to
the Trustee or, in the absence of such written notice, as the Trustee may
determine.
* * * * *
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.
104
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed, all
as of the day and year first above written.
[SEAL] KEYSTONE FINANCIAL MID-ATLANTIC
FUNDING CORP.
Attest:
By______________________
Name:
_______________________ Title:
[SEAL] KEYSTONE FINANCIAL, INC.
Attest:
By______________________
Name:
_______________________ Title:
[SEAL] BANKERS TRUST COMPANY
Attest:
By______________________
Name:
_______________________ Title:
105
<PAGE>
COMMONWEALTH OF PENNSYLVANIA )
: SS:
COUNTY OF [ ] )
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 a
[ ] of KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP., a Pennsylvania
corporation, one of the persons described in and who executed the foregoing
instrument; that he/she knows the seal of said corporation; that the seal
affixed to said instrument is such corporation's 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.
_________________________
Notary Public
[NOTARIAL SEAL]
COMMONWEALTH OF PENNSYLVANIA )
: SS:
COUNTY OF [ ] )
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 a
[ ] of KEYSTONE FINANCIAL, INC., a Pennsylvania corporation, one of the
persons described in and who executed the foregoing instrument; that he/she
knows the seal of said corporation; that the seal affixed to said instrument is
such corporation's 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.
_________________________
Notary Public
[NOTARIAL SEAL]
106
<PAGE>
STATE OF [ ] )
: SS:
COUNTY OF [ ] )
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 BANKERS TRUST COMPANY, a [ ], one of the persons
described in and who executed the foregoing instrument; that he/she knows the
seal of said corporation; that the seal affixed to said instrument is such
corporation's 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.
_________________________
Notary Public
[NOTARIAL SEAL]
107
<PAGE>
EXHIBIT 4.3
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITORY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
REGISTERED CUSIP No.: PRINCIPAL AMOUNT
FXR-______ __________ $_________
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
MEDIUM-TERM NOTE
(Senior Fixed Rate)
Payment of Principal, Premium, if any, and Interest, if any,
Guaranteed by
KEYSTONE FINANCIAL, INC.
ORIGINAL ISSUE DATE: INTEREST RATE: % STATED MATURITY
DATE:
INTEREST PAYMENT DA TE(S) DEFAULT RATE: %
[ ] January 15 and July 15
[ ] Other:
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE
REDUCTION: %
OPTIONAL REPAYMENT [ ] CHECK IF AN ORIGINAL
DATE(S): ISSUE DISCOUNT NOTE
Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION: EXCHANGE RATE
[ ] United States dollars [ ] $100,000 and integral AGENT:
[ ] Other: multiples of $1,000
in excess thereof
[ ] Other:
ADDENDUM ATTACHED OTHER/ADDITIONAL PROVISIONS:
[ ] Yes
[ ] No
<PAGE>
Keystone Financial Mid-Atlantic Funding Corp., a Pennsylvania corporation
(the "Company"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the Principal sum of ____________________________ DOLLARS on
the Stated Maturity Date specified above (except to the extent redeemed or
repaid prior to the Stated Maturity Date), and to pay interest thereon at the
Interest Rate per annum specified above, until the principal hereof is paid or
duly made available for payment, semiannually on January 15 and June 15 (each,
an "Interest Payment Date") in each year commencing on the first Interest
Payment Date next succeeding the Original Issue Date specified above, unless the
Original Issue Date occurs between a Regular Record Date (as defined below) and
the next succeeding Interest Payment Date, in which case commencing on the
second Interest Payment Date succeeding the Original Issue Date, to the Holder
(as defined below) of such Note on the Regular Record Date with respect to such
Interest Payment Date, and on the Stated Maturity Date shown above (or any
Redemption Date as defined on the reverse hereof or any Holder's Optional
Repayment Date with respect to which such option has been exercised, each such
Stated Maturity Date, Redemption Date and Optional Repayment Date being herein
referred to as a "Maturity Date" with respect to the principal repayable on such
date). Interest on this Note will accrue from the most recent Interest Payment
Date to which interest has been paid or duly provided for or, if no interest has
been paid, from the Original Issue Date specified above, until the principal
hereof has been paid or duly made available for payment. If the Maturity Date
or an Interest Payment Date falls on a day which is not a Business Day (as
defined below), principal, premium, if any, and interest, if any, payable with
respect to such Maturity Date or Interest Payment Date will be paid on the next
succeeding Business Day with the same force and effect as if made on such
Maturity Date or Interest Payment Date, as the case may be, and no interest on
each payment shall accrue for the period from and after such Maturity Date or
Interest Payment Date. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions,
be paid to the Person (the "Holder") in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the Regular Record
Date, which shall be the January 1 or June 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date; provided, however,
-------- -------
that interest payable on the Maturity Date will be payable to the Person to whom
the principal hereof shall be payable. Any such interest not so punctually paid
or duly provided for ("Defaulted Interest") 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 Note (or one or more predecessor Notes) 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 referred to on the reverse hereof, notice
whereof shall be given to the Holder of this Note not less than 10 days prior to
such Special Record Date, or be paid
2
<PAGE>
at any time in any other lawful manner, all as more fully provided in the
Indenture (as defined on the reverse hereof).
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in The
City of New York or the Commonwealth of Pennsylvania; provided, however, that if
-------- -------
the Specified Currency is other than United States dollars and any payment is to
be made in the Specified Currency in accordance with the provisions hereof, such
day is also not a day on which banking institutions are authorized or required
by law, regulation or executive order to close in the Principal Financial Center
(as defined below) of the country issuing the Specified Currency (or, in the
case of European Currency Units ("ECU"), is not a day that appears as an ECU
non-settlement day on the display designated as "ISDE" on the Reuter Monitor
Money Rates Service (or a day so designated by the ECU Banking Association) or,
if ECU non-settlement days do not appear on that page (and are not so
designated), is not a day on which payments in ECU cannot be settled in the
international interbank market). "Principal Financial Center" means the capital
city of the country issuing the Specified Currency, except that with respect to
United States dollars, Australian dollars, Deutsche marks, Dutch guilders,
Italian lire, Swiss francs and ECU, the "Principal Financial Center" shall be
The City of New York, Sydney, Frankfurt, Amsterdam, Milan, Zurich and
Luxembourg, respectively.
Payment of the principal of, premium, if any, and interest, if any, on this
Note will be made in immediately available funds at the corporate trust office
of Bankers Trust Company (the "Paying Agent") in the Borough of Manhattan, The
City of New York, or at such other agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, provided, however,
-------- -------
that if the Specified Currency specified above is other than United States
dollars and such payment is to be made in the Specified Currency in accordance
with the provisions set forth below, such payment will be made by wire transfer
of immediately available funds to an account with a bank designated by the
holder hereof at least 15 calendar days prior to the Maturity Date, provided
that such bank has appropriate facilities therefor and that this Note (and, if
applicable, a duly completed repayment election form) is presented and
surrendered at the aforementioned office of the Trustee in time for the Trustee
to make such payment in such funds in accordance with its normal procedures.
Payment of interest on any Interest Payment Date other than the Maturity Date
may be made at the option of the Company by check mailed to the address of the
Holder as such address shall appear in the Security Register; provided, however,
-------- -------
that a Holder of not less than $10,000,000 aggregate principal amount (or, if
the Specified Currency is other than United States dollars, the equivalent
thereof in the Specified Currency) of the Notes (whether having identical or
different terms
3
<PAGE>
and provisions) may, by written notice to the Paying Agent at its corporate
trust office in The City of New York (or at such other address as the Company
shall give notice in writing) on or before the Regular Record Date preceding an
Interest Payment Date, arrange to have the interest payable on all Notes held by
such Holder on such Interest Payment Date, and all subsequent Interest Payment
Dates until written notice to the contrary is given to the Paying Agent, made by
wire transfer of immediately available funds to an account maintained at a bank
in The City of New York (or other bank consented to by the Company, which
consent may not be unreasonably withheld) as such Holder shall have designated;
provided that such bank has appropriate facilities therefor. Notwithstanding
the preceding sentence, payments of principal of, and premiums, if any, and
interest, if any, on any Maturity Date will be made by wire transfer of
immediately available funds to a designated account maintained in the United
States upon (i) receipt of written notice by the Paying Agent from the Holder
hereof not less than one Business Day prior to such Maturity Date and (ii)
presentation of this Note at the corporate trust office of the Paying Agent in
the Borough of Manhattan, The City of New York or at such other agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York.
The Company is obligated to make payment of principal, premium, if any, and
interest in respect of this Note in the Specified Currency (or, if the Specified
Currency is not at the time of such payment legal tender for the payment of
public and private debts, in such other coin or currency of the country which
issued the Specified Currency as at the time of such payment is legal tender for
the payment of such debts). If the Specified Currency is other than United
States dollars, except as otherwise provided below, any such amounts so payable
by the Company will be converted by the Exchange Rate Agent specified above into
United States dollars for payment to the holder of this Note.
If the Specified Currency is other than United States dollars, the holder
of this Note may elect to receive such amounts in such Specified Currency. If
the holder of this Note shall not have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest
in respect of this Note in the Specified Currency, any United States dollar
amount to be received by the holder of this Note will be based on the highest
bid quotation in The City of New York received by the Exchange Rate Agent at
approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on such payment
date in the aggregate amount of the Specified Currency payable to all holders of
Notes scheduled to receive United States dollar payments and at which the
applicable dealer
4
<PAGE>
commits to execute a contract. All currency exchange costs will be borne by the
holder of this Note by deductions from such payments. If three such bid
quotations are not available, payments on this Note will be made in the
Specified Currency.
If the Specified Currency is other than United States dollars, the holder
of this Note may elect to receive all or a specified portion of any payment of
principal, premium, if any, and/or interest in respect of this Note in the
Specified Currency by submitting a written request for such payment to the
Trustee at its corporate trust office in The City of New York on or prior to the
applicable Record Date or at least 15 calendar days prior to the Maturity Date,
as the case may be. Such written request may be mailed or hand delivered or
sent by cable, telex or other form of facsimile transmission. The holder of
this Note may elect to receive all or a specified portion of all future payments
in the Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any such revocation must be received by the Trustee on or
prior to the applicable Record Date or at least 15 calendar days prior to the
Maturity Date, as the case may be.
If the Specified Currency is other than United States dollars or a
composite currency and the holder of this Note shall have duly made an election
to receive all or a specified portion of any payment of principal, premium, if
any, and/or interest in respect of this Note in the Specified Currency and if
the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to the holder of this Note by making
such payment in United States dollars on the basis of the Market Exchange Rate
(as defined below) on the second Business Day prior to such payment date or, if
such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. The "Market Exchange Rate" for the Specified Currency means the noon
dollar buying rate in The City of New York for cable transfers for the Specified
Currency as certified for customs purposes by (or if not so certified, as
otherwise determined by) the Federal Reserve Bank of New York. Any payment made
under such circumstances in United States dollars will not constitute an Event
of Default (as defined in the Indenture).
If the Specified Currency is a composite currency and the holder of this
Note shall have duly made an election to receive all or a specified portion of
any payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency and if such composite currency is unavailable due
to the imposition of exchange controls or other circumstances beyond the control
of the Company, then the Company will be entitled to
5
<PAGE>
satisfy its obligations to the holder of this Note by making such payment in
United States dollars. The amount of each payment in United States dollars
shall be computed by the Exchange Rate Agent on the basis of the equivalent of
the composite currency in United States dollars. The component currencies of
the composite currency for this purpose (collectively, the "Component
Currencies" and each, a "Component Currency") shall be the currency amounts that
were components of the composite currency as of the last day on which the
composite currency was used. The equivalent of the composite currency in United
States dollars shall be calculated by aggregating the United States dollar
equivalents of the Component Currencies. The United States dollar equivalent of
each of the Component Currencies shall be determined by the Exchange Rate Agent
on the basis of the most recently available Market Exchange Rate for each such
Component Currency, or as otherwise specified on the face hereof.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holder of this Note.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions."
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
6
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
[SEAL] KEYSTONE FINANCIAL MID-ATLANTIC FUNDING
CORP.
By: _________________________
Name:
Title:
Attest:
By: ___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated herein, issued under the Indenture
described herein.
BANKERS TRUST COMPANY,
as Trustee
By: _______________________
Authorized Signatory
7
<PAGE>
[REVERSE OF NOTE]
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
MEDIUM-TERM NOTE
(Senior Fixed Rate)
This Medium-Term Note is one of a duly authorized series of Securities (the
"Securities") of the Company issued and to be issued under a Senior Indenture,
dated as of April __, 1997 (the "Indenture"), among the Company, the Guarantor
(as defined below) and Bankers Trust Company, as Trustee (the "Trustee", which
term shall include 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 thereunder of the Company, the Guarantor, the
Trustee and the Holders of the Notes and the terms upon which the Notes are, and
are to be, authenticated and delivered. The Medium-Term Notes (the "Notes") may
bear different dates, mature at different times, bear interest at different
rates and vary in such other ways as are provided in the Indenture.
This Note may be subject to repayment at the option of the Holder on the
Optional Repayment Date(s), if any, indicated on the face hereof. If no
Optional Repayment Dates are set forth on the face hereof, this Note may not be
so repaid at the option of the Holder hereof prior to the Stated Maturity Date.
On any Optional Repayment Date, this Note shall be repayable in whole or in part
in increments of $1,000 (provided that any remaining principal hereof shall be
at least $100,000) at the option of the Holder hereof at a repayment price equal
to 100% of the principal amount to be repaid together with accrued interest
thereon payable to the applicable Optional Repayment Date. For this Note to be
repaid in whole or in part at the option of the Holder hereof, this Note must be
received, with the form entitled "Option to Elect Repayment" below duly
completed, by the Paying Agent at its corporate trust office in The City of New
York, or at such other place or places as the Company shall from time to time
notify the Holders of the Notes, not more than 60 nor less than 30 days prior to
the applicable Optional Repayment Date. Exercise of such repayment option by
the Holder hereof shall be irrevocable.
This Note may be redeemed at the option of the Company on any date on and
after the Initial Redemption Date, if any, specified on the face hereof (each
such date fixed for redemption, a "Redemption Date"). If no Initial Redemption
Date is set forth on the face hereof, this Note may not be redeemed at the
option of the Company prior to the Stated Maturity Date. On and after the
Initial Redemption Date, if any, this Note may be redeemed at any time in whole
or from time to time in part in increments of $1,000 (provided that any
remaining principal hereof shall be at least $100,000) at the option of the
Company at the applicable Redemption
8
<PAGE>
Price referred to below together with accrued interest thereon payable to the
Redemption Date, on notice given not more than 60 nor less than 30 days prior to
the Redemption Date. In the event of redemption of this Note in part only, a
new Note for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the surrender hereof.
If this Note is redeemable at the option of the Company, the "Redemption
Price" shall initially be the Initial Redemption Percentage, specified on the
face hereof, of the principal amount of this Note to be redeemed and shall
decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
If this Note is an Original Issue Discount Note as specified on the face
hereof, the amount payable to the holder of this Note in the event of
redemption, repayment or acceleration of maturity will be equal to the sum of
(1) the Issue Price specified on the face hereof (increased by any accruals of
the Discount, as defined below) and, in the event of any redemption of this Note
(if applicable), multiplied by the Initial Redemption Percentage (as adjusted by
the Annual Redemption Percentage Reduction, if applicable) and (2) any unpaid
interest on this Note accrued from the Original Issue Date to the Redemption
Date, Repayment Date or date of acceleration of maturity, as the case may be.
The difference between the Issue Price and 100% of the principal amount of this
Note is referred to herein as the "Discount."
For purposes of determining the amount of Discount that has accrued as of
any Redemption Date, Repayment Date or date of acceleration of maturity of this
Note, such Discount will be accrued so as to cause the yield on the Note to be
constant. The constant yield will be calculated using a 30-day month, 360-day
year convention, a compounding period that, except for the Initial Period (as
defined below), corresponds to the shortest period between Interest Payment
Dates (with ratable accruals within a compounding period) and an assumption that
the maturity of this Note will not be accelerated. If the period from the
Original Issue Date to the initial Interest Payment Date (the "Initial Period")
is shorter than the compounding period for this Note, a proportionate amount of
the yield for an entire compounding period will be accrued. If the Initial
Period is longer than the compounding period, then such period will be divided
into a regular compounding period and a short period, with the short period
being treated as provided in the preceding sentence.
Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Date or the Maturity Date, as
9
<PAGE>
the case may be. Interest payments for this Note will be computed and paid on
the basis of a 360-day year of twelve 30-day months.
Except as may be provided in the Indenture, if an Event of Default with
respect to the Notes shall occur and be continuing, the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Notes may declare
the principal of all the Notes 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 Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor, and the Trustee with the consent of the Holders of not less than 66
2/3% in aggregate principal amount of the Securities at the time Outstanding of
each series affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of each series, to waive compliance by the Company or the
Guarantor 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 Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note 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 Note.
The Guarantor, or a Subsidiary (as defined in the Indenture) thereof, may
directly assume, by a supplemental indenture, the due and punctual payment of
the principal of, and premium, if any, and interest, if any, on, all of the
Securities, in which case the Company shall be released from its liability as
obligor on the Securities.
The Indenture provides that the Company and the Guarantor, at their option,
(a) will be discharged from any and all obligations in respect of the Notes
(except for certain obligations to register the transfer of or exchange Notes,
replace stolen, lost or mutilated Notes and maintain paying agencies) or (b)
need not comply with certain provisions of the Indenture, in each case if the
Company or the Guarantor deposits, in trust, with the Trustee money or U.S.
Government Obligations (as defined in the Indenture) which, with respect to U.S.
Government Obligations, through the payment of interest thereon and principal
thereof in accordance with their terms will provide money, in an amount in cash
sufficient to pay all the principal of and interest, if any, on the Securities
on the dates such payments are due in accordance with the terms of such Notes,
and certain other conditions are satisfied.
10
<PAGE>
No reference herein to the Indenture and no provision of this Note 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, and
interest, if any, on, this Note at the times, places 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 Note may be registered on the Security Register
of the Company upon surrender of this Note for registration of transfer at the
corporate trust office of Bankers Trust Company, as Security Registrar, in the
Borough of Manhattan, The City of New York or at such other agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company, and this Note duly executed by, the Holder
hereof or by his attorney duly authorized in writing and thereupon one or more
new Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in minimum
denominations of $100,000 or any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture, and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes in authorized denominations, as requested by the
Holder surrendering the same.
No service charge will 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 Note for registration of transfer or
exchange, the Company, the Guarantor, the Trustee and any agent of the Company,
the Guarantor or the Trustee may treat the Holder as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Guarantor, the Trustee nor any agent thereof shall be affected by notice to the
contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made
and to be performed in such State.
All terms used but not defined herein shall have the meanings assigned to
such terms in the Indenture.
11
<PAGE>
GUARANTEE OF KEYSTONE FINANCIAL, INC.
For value received, Keystone Financial, Inc., a Pennsylvania corporation
(the "Guarantor"), hereby unconditionally guarantees to the Holder of this Note
the due and punctual payment of the principal of, and premium, if any, and
interest, if any, on (including any Additional Amounts payable in respect
thereof), this Note when and as the same shall become due and payable, whether
at the Stated Maturity Date or upon acceleration, redemption, repayment or
otherwise, according to the terms of the Indenture. In case of the failure of
the Company punctually to make any such payment of principal, premium, if any,
or interest, the Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at the
Stated Maturity Date or upon acceleration, redemption, repayment or otherwise,
and as if such payment were made by the Company.
The Guarantor hereby agrees that its obligations under this Guarantee shall
be as principal and not merely as surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of this Note or the Indenture, any failure to
enforce the provisions of this Note or the Indenture, or any waiver,
modification, consent or indulgence granted to the Company with respect thereto
by the Holder of this Note or the Trustee, the recovery of any judgment against
the Company or any action to enforce the same, or any other circumstance which
may otherwise constitute a legal or equitable discharge of a surety or
guarantor. The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a proceeding first against the Company,
protest or notice with respect to this Note or the indebtedness evidenced hereby
and all demands whatsoever, and covenants that this Guarantee will not be
discharged except by payment in full of the principal of, and premium, if any,
and interest, if any, on, this Note and the complete performance of all other
obligations contained herein.
The Guarantor shall be subrogated to all rights of the Holder of this Note
against the Company in respect of any amounts paid to such Holder by the
Guarantor pursuant to the provisions of this Guarantee; provided, however, that
-------- -------
the Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until payment in full of
the principal of, and premium, if any, and interest, if any, on, the Note and
the complete performance of all other obligations contained herein.
Subject to the next following paragraph, the Guarantor hereby certifies and
warrants that all acts, conditions and things required to be done and performed
and to have happened precedent to the creation and issuance of this Guarantee
and to constitute the
12
<PAGE>
same the valid obligation of the Guarantor have been done and performed and have
happened in due compliance with all applicable laws.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Guarantee shall not be valid or obligatory for any purposes.
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
13
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed in facsimile by its duly authorized officer under its corporate seal.
Dated:___________________
[SEAL]
KEYSTONE FINANCIAL, INC.
By: _______________________
Name:
Title:
Attest:
By: ________________________
Name:
Title:
14
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to the principal amount hereof together with interest to the
repayment date, to the undersigned, at _________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Paying Agent must receive at its corporate
trust office in The City of New York, or at such other place or places of which
the Company shall from time to time notify the Holder of this Note, not more
than 60 nor less than 30 days prior to an Optional Repayment Date, if any, shown
on the face of this Note, this Note with this "Option to Elect Repayment" form
duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in increments of $1,000) which the
Holder elects to have repaid and specify the denomination or denominations
(which shall be $100,000 or an integral multiple of $1,000 in excess thereof
(or, if the Specified Currency is other than United States dollars, the minimum
Authorized Denomination specified on the face hereof) of the Notes to be issued
to the Holder for the portion of this Note not being repaid (in the absence of
any such specification, one such Note will be issued for the portion not being
repaid): $______________.
Dated: ---------------- -------------------------------------------------
NOTICE: The signature on this Option to Elect
Repayment must correspond with the name as
written upon the face of this Note in every
particular, without alteration or enlargement or
any change whatever.
15
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_________________________
in common (State)
Additional abbreviations may also be used though not in the above list.
__________________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------
| |
|______________________________|______________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
______________________________________________________________________________
this Note and all rights thereunder hereby irrevocably constituting and
appointing
____________________________________________________________________ Attorney to
transfer this Note on the books of the Trustee, with full power of substitution
in the premises.
Dated:_____________________ _______________________________________
_______________________________________
Notice: The signature(s) on this Assignment
must correspond with the name(s) as written
upon the face of this Note in every
particular, without alteration or
enlargement or any change whatsoever.
16
<PAGE>
EXHIBIT 4.4
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITORY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
REGISTERED CUSIP No.: PRINCIPAL AMOUNT
No. FLR-________ __________ $_________
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
MEDIUM-TERM NOTE
(Senior Floating Rate)
Payment of Principal, Premium, if any, and Interest, if any,
Guaranteed by
KEYSTONE FINANCIAL, INC.
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
IF LIBOR:: IF CMT RATE:
[ ] LIBOR Reuters Designated CMT Telerate
[ ] LIBOR Telerate Page:
Designated CMT Maturity
INDEX CURRENCY: Index:
INDEX MATURITY: INITIAL INTEREST RATE: % INTEREST PAYMENT:
DATE(S)
SPREAD (PLUS OR SPREAD MULTIPLIER: INITIAL INTEREST RESET
MINUS): DATE:
<PAGE>
MINIMUM INTEREST RATE: % MAXIMUM INTEREST RATE: % INTEREST RESET DATE(S):
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE REDUCTION: %
OPTIONAL REPAYMENT CALCULATION AGENT:
DATE(S):
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note from to .
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: % from to .
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: % from to .
[ ] Original Issue Discount Note Applicable Interest Rate Basis:
Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION:
[ ] United States dollars [ ] U.S.$100,000 and integral multiples
of U.S.$1,000 in excess thereof
[ ] Other: [ ] Other:
EXCHANGE RATE AGENT:
DEFAULT RATE: %
ADDENDUM ATTACHED
[ ] Yes
[ ] No
OTHER/ADDITIONAL PROVISIONS:
2
<PAGE>
Keystone Financial Mid-Atlantic Funding Corp., a corporation duly organized
and validly existing under the laws of the Commonwealth of Pennsylvania (the
"Company"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of _____________________________________
________________________________________ DOLLARS on the Stated Maturity Date
specified above (except to the extent redeemed or repaid prior to the Stated
Maturity Date), and to pay interest thereon at a rate per annum equal to the
Initial Interest Rate specified above until the Initial Interest Reset Date
specified above and thereafter at a rate determined in accordance with the
provisions on the reverse hereof, depending upon the Interest Rate Basis
specified above, until the principal hereof is paid or duly made available for
payment. The Company will pay interest on Interest Payment Dates specified
above, commencing with the first Interest Payment Date next succeeding the
Original Issue Date specified above, and on the Stated Maturity Date (or any
Redemption Date as defined on the reverse hereof or any Holder's Optional
Repayment Date with respect to which such option has been exercised, each such
Stated Maturity Date, Redemption Date and Optional Repayment Date being
hereinafter referred to as a "Maturity Date" with respect to the principal
repayable on such date); provided, however, that if the original Issue Date
-------- -------
occurs between a Regular Record Date (as defined below) and the next succeeding
Interest Payment Date, interest payments will commence on the second Interest
Payment Date next succeeding the Original Issue Date, to the Holder (as defined
below) of this Note on the Regular Record Date with respect to such Interest
Payment Date Regular Record Date; and provided, further, that if an Interest
-------- -------
Payment Date would fall on a day that is not a Business Day (as defined on the
reverse hereof) such Interest Payment Date shall be the following day that is a
Business Day, except that in the case the Interest Rate Basis is LIBOR, if such
next Business Day falls in the next succeeding calendar month, such Interest
Payment Date will be the preceding day that is a Business Day.
Interest payable on this Note on any Interest Payment Date will include
interest accrued from the Original Issue Date, or the most recent date for which
interest has been paid, to, but excluding, such Interest Payment Date; provided,
--------
however, that if the Interest Rate Reset period with respect to this Note is
- -------
daily or weekly, interest payable on any Interest Payment Date will include
interest accrued to and including the Regular Record Date next preceding such
Interest Payment Date, except that interest payable on any such Maturity Date
will include interest accrued to, but excluding, such Maturity Date. If any
Maturity Date falls on a day which is not a Business Day, principal, premium, if
any, or interest, if any, payable with respect to such Maturity Date will be
paid on the next succeeding Business Day with the same force and effect as if
made on such Maturity Date, and no interest on such payment shall accrue for the
period from and after such Maturity
3
<PAGE>
Date. The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, subject to certain exceptions, be paid to the Person
(the "Holder") in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the date 15 calendar days prior to an
Interest Payment Date (whether or not a Business Day) (the "Regular Record
Date"); provided, however, that interest payable on any Maturity Date will be
-------- -------
payable to the Person to whom the principal hereof shall be payable. Any such
interest not so punctually paid or duly provided for ("Defaulted Interest") 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 Note (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 referred to on
the reverse hereof, notice whereof shall be given to the Holder of this Note not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner, all as more fully provided in the Indenture (as defined
on the reverse hereof).
Payment of the principal of, and premium, if any, and interest, if any, on
this Note will be made in immediately available funds at the corporate trust
office of Bankers Trust Company (the "Paying Agent") in the Borough of
Manhattan, The City of New York, or at such other agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
provided, however, that if the Specified Currency specified above is other than
- -------- -------
United States dollars and such payment is to be made in the Specified Currency
in accordance with the provisions set forth below, such payment will be made by
wire transfer of immediately available funds to an account with a bank
designated by the holder hereof at least 15 calendar days prior to the Maturity
Date, provided that such bank has appropriate facilities therefor and that this
Note (and, if applicable, a duly completed repayment election form) is presented
and surrendered at the aforementioned office of the Trustee in time for the
Trustee to make such payment in such funds in accordance with its normal
procedures. Payment of interest on any Interest Payment Date other than the
Maturity Date may be made at the option of the Company by check mailed to the
address of the Holder as such address shall appear in the Security Register;
provided, however, that a Holder of not less than $10,000,000 aggregate
- -------- -------
principal amount (or, if the Specified Currency is other than United States
dollars, the equivalent thereof in the Specified Currency) of the Notes (whether
having identical or different terms and provisions) may, by written notice to
the Paying Agent at its corporate trust office in The City of New York (or at
such other address as the Company shall give notice in writing) on or before the
Regular Record Date preceding an Interest Payment Date, arrange to have the
interest payable on all Notes held by such Holder on such Interest Payment Date,
and all
4
<PAGE>
subsequent Interest Payment Dates until written notice to the contrary is given
to the Paying Agent, made by wire transfer of immediately available funds to an
account maintained at a bank in The City of New York (or other bank consented to
by the Company, which consent may not be unreasonably withheld) as such Holder
shall have designated; provided that such bank has appropriate facilities
therefor. Notwithstanding the preceding sentence, payments of principal of, and
premiums, if any, and interest, if any, on, any Maturity Date will be made by
wire transfer of immediately available funds to a designated account maintained
in the United States upon (i) receipt of written notice by the Paying Agent from
the Holder hereof not less than one Business Day prior to such Maturity Date and
(ii) presentation of this Note at the corporate trust office of the Paying Agent
in the Borough of Manhattan, The City of New York or at such other agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York.
The Company is obligated to make payment of principal, premium, if any, and
interest in respect of this Note in the Specified Currency (or, if the Specified
Currency is not at the time of such payment legal tender for the payment of
public and private debts, in such other coin or currency of the country which
issued the Specified Currency as at the time of such payment is legal tender for
the payment of such debts). If the Specified Currency is other than United
States dollars, except as otherwise provided below, any such amounts so payable
by the Company will be converted by the Exchange Rate Agent specified above into
United States dollars for payment to the holder of this Note.
If the Specified Currency is other than United States dollars, the holder
of this Note may elect to receive such amounts in such Specified Currency. If
the holder of this Note shall not have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest
in respect of this Note in the Specified Currency, any United States dollar
amount to be received by the holder of this Note will be based on the highest
bid quotation in The City of New York received by the Exchange Rate Agent at
approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on such payment
date in the aggregate amount of the Specified Currency payable to all holders of
Notes scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments.
5
<PAGE>
If three such bid quotations are not available, payments on this Note will be
made in the Specified Currency.
If the Specified Currency is other than United States dollars, the holder
of this Note may elect to receive all or a specified portion of any payment of
principal, premium, if any, and/or interest in respect of this Note in the
Specified Currency by submitting a written request for such payment to the
Trustee at its corporate trust office in The City of New York on or prior to the
applicable Record Date or at least 15 calendar days prior to the Maturity Date,
as the case may be. Such written request may be mailed or hand delivered or
sent by cable, telex or other form of facsimile transmission. The holder of
this Note may elect to receive all or a specified portion of all future payments
in the Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any such revocation must be received by the Trustee on or
prior to the applicable Record Date or at least 15 calendar days prior to the
Maturity Date, as the case may be.
If the Specified Currency is other than United States dollars or a
composite currency and the holder of this Note shall have duly made an election
to receive all or a specified portion of any payment of principal, premium, if
any, and/or interest in respect of this Note in the Specified Currency and if
the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to the holder of this Note by making
such payment in United States dollars on the basis of the Market Exchange Rate
(as defined below) on the second Business Day prior to such payment date or, if
such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. The "Market Exchange Rate" for the Specified Currency means the noon
dollar buying rate in The City of New York for cable transfers for the Specified
Currency as certified for customs purposes by (or if not so certified, as
otherwise determined by) the Federal Reserve Bank of New York. Any payment made
under such circumstances in United States dollars will not constitute an Event
of Default (as defined in the Indenture).
If the Specified Currency is a composite currency and the holder of this
Note shall have duly made an election to receive all or a specified portion of
any payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency and if such composite currency is unavailable due
to the imposition of exchange controls or other circumstances beyond the control
of the Company, then the Company will be entitled to
6
<PAGE>
satisfy its obligations to the holder of this Note by making such payment in
United States dollars. The amount of each payment in United States dollars
shall be computed by the Exchange Rate Agent on the basis of the equivalent of
the composite currency in United States dollars. The component currencies of
the composite currency for this purpose (collectively, the "Component
Currencies" and each, a "Component Currency") shall be the currency amounts that
were components of the composite currency as of the last day on which the
composite currency was used. The equivalent of the composite currency in United
States dollars shall be calculated by aggregating the United States dollar
equivalents of the Component Currencies. The United States dollar equivalent of
each of the Component Currencies shall be determined by the Exchange Rate Agent
on the basis of the most recently available Market Exchange Rate for each such
Component Currency, or as otherwise specified on the face hereof.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holder of this Note.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply, this Note shall be subject to the terms set
forth in such Addendum or such "Other/Additional Provisions."
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Note shall not be entitled
7
<PAGE>
to any benefit under the Indenture or be valid or obligatory for any purpose.
8
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
[SEAL] KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
By: ______________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of
the series designated therein referred
to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By____________________________
Authorized Signatory
9
<PAGE>
[REVERSE OF NOTE]
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
MEDIUM-TERM NOTE
(Senior Floating Rate)
This Medium-Term Note is one of a duly authorized series of Securities (the
"Securities") of the Company issued and to be issued under a Senior Indenture,
dated as of April __, 1997 (the "Indenture"), among the Company, the Guarantor
(as defined below) and Bankers Trust Company, as Trustee (the "Trustee", which
term shall include 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 thereunder of the Company, the Guarantor, the
Trustee and the Holders of the Notes and the terms upon which the Notes are, and
are to be, authenticated and delivered. The Medium-Term Notes (the "Notes") may
bear different dates, mature at different times, bear interest at different
rates and vary in such other ways as are provided in the Indenture.
This Note may be subject to repayment at the option of the Holder on the
Optional Repayment Date(s), if any, indicated on the face hereof. If no
Optional Repayment Dates are set forth on the face hereof, this Note may not be
so repaid at the option of the Holder hereof prior to the Stated Maturity Date.
On any Optional Repayment Date, this Note shall be repayable in whole or in part
in increments of $1,000 (provided that any remaining principal hereof shall be
at least $100,000) at the option of the Holder hereof at a repayment price equal
to 100% of the principal amount to be repaid together with accrued interest
thereon payable to the applicable Optional Repayment Date. For this Note to be
repaid in whole or in part at the option of the Holder hereof, this Note must be
received, with the form entitled "Option to Elect Repayment" below duly
completed, by the Paying Agent at its corporate trust office in the Borough of
Manhattan, The City of New York, or at such other place or places as the Company
shall from time to time notify the Holders of the Notes, not more than 60 nor
less than 30 days prior to the applicable Optional Repayment Date. Exercise of
such repayment option by the Holder hereof shall be irrevocable.
This Note may be redeemed at the option of the Company on any date on and
after the Initial Redemption Date, if any, specified on the face hereof (each
such date fixed for redemption, a "Redemption Date"). If no Initial Redemption
Date is set forth on the face hereof, this Note may not be redeemed at the
option of the Company prior to the Stated Maturity Date. On and after the
Initial Redemption Date, if any, this Note may be redeemed at any time in
10
<PAGE>
whole or from time to time in part in increments of $1,000 (provided that any
remaining principal hereof shall be at least $100,000) at the option of the
Company at the applicable Redemption Price referred to below together with
accrued interest thereon payable to the Redemption Date, on notice given not
more than 60 nor less than 30 days prior to the Redemption Date. In the event
of redemption of this Note in part only, a new Note for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the surrender
hereof.
If this Note is redeemable at the option of the Company, the "Redemption
Price" shall initially be the Initial Redemption Percentage, specified on the
face hereof, of the principal amount of this Note to be redeemed and shall
decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
If the Interest Category of this Note is specified on the face hereof as an
Original Issue Discount Note, the amount payable to the holder of this Note in
the event of redemption, repayment or acceleration of maturity of this Note will
be equal to the sum of (1) the Issue Price specified on the face hereof
(increased by any accruals of the Discount, as defined below) and, in the event
of any redemption of this Note (if applicable), multiplied by the Initial
Redemption Percentage (as adjusted by the Annual Redemption Percentage
Reduction, if applicable) and (2) any unpaid interest on this Note accrued from
the Original Issue Date to the Redemption Date, Repayment Date or date of
acceleration of maturity, as the case may be. The difference between the Issue
Price and 100% of the principal amount of this Note is referred to herein as the
"Discount."
For purposes of determining the amount of Discount that has accrued as of
any Redemption Date, Repayment Date or date of acceleration of maturity of this
Note, such Discount will be accrued so as to cause an assumed yield on the Note
to be constant. The assumed constant yield will be calculated using a 30-day
month, 360-day year convention, a compounding period that, except for the
Initial Period (as defined below), corresponds to the shortest period between
Interest Payment Dates (with ratable accruals within a compounding period), a
constant coupon rate equal to the initial interest rate applicable to this Note
and an assumption that the maturity of this Note will not be accelerated. If
the period from the Original Issue Date to the initial Interest Payment Date
(the "Initial Period") is shorter than the compounding period for this Note, a
proportionate amount of the yield for an entire compounding period will be
accrued. If the Initial Period is longer than the compounding period, then such
period will be divided into a regular
11
<PAGE>
compounding period and a short period, with the short period being treated as
provided in the preceding sentence.
Except as described below, this Note will bear interest at the rate
determined by reference to the Interest Rate Basis shown on the face hereof (i)
plus or minus the Spread, if any, or (ii) multiplied by the Spread Multiplier,
if any, specified on the face hereof. The interest rate in effect on each day
shall be (a) if such day is an Interest Reset Date, the interest rate with
respect to the Interest Determination Date referred to below pertaining to such
Interest Reset Date or (b) if such day is not an Interest Reset Date, the
interest rate with respect to the Interest Determination Date pertaining to the
next preceding Interest Reset Date, provided that (i) the interest rate in
effect from the Original Issue Date to the first Interest Reset Date shall be
the Initial Interest Rate specified on the face hereof, and (ii) the interest
rate in effect for the ten days immediately prior to the Maturity Date shall be
the rate in effect on the tenth day preceding the Maturity Date. If any
Interest Reset Date would otherwise be a day that is not a Business Day, such
Interest Reset Date shall be postponed to the next day that is a Business Day,
except that if the Interest Rate Basis specified on the face hereof is LIBOR, if
such Business Day is in the next succeeding calendar month, such Interest Reset
Date shall be the immediately preceding Business Day.
Accrued interest hereon shall be an amount calculated by multiplying the
face amount hereof by an accrued interest factor. Such accrued interest factor
shall be computed by adding the interest factor calculated for each day from the
Original Issue Date or from the day succeeding the last date for which interest
shall have been paid, as the case may be, to the date for which accrued interest
is being calculated. The interest factor for each such day shall be computed by
dividing the interest rate applicable to such day by 360 or, in the case of
Notes having the Treasury Rate as their Interest Rate Basis, by the actual
number of days in the year.
The Interest Determination Date with respect to the Certificate of Deposit
Rate, Commercial Paper Rate, Federal Funds Rate, Prime Rate and the J.J. Kenny
Rate will be the second Business Day preceding the Interest Reset Date. The
Interest Determination Date with respect to the Eleventh District Cost of Funds
Rate will be the last working day of the month immediately preceding such
Interest Rate Reset Date on which the Federal Home Loan Bank of San Francisco
(the "FHLB of San Francisco") publishes the Index (as defined below). The
Interest Determination Date with respect to LIBOR shall be the second London
Banking Day (as defined below) preceding an Interest Reset Date. The Interest
Determination Date with respect to the Treasury Rate shall be the
12
<PAGE>
day of the week in which such Interest Reset Date falls on which Treasury bills
normally would be auctioned; provided, however, that if as a result of a legal
-------- -------
holiday an auction is held on the Friday of the week preceding the Interest
Reset Date, the related Interest Determination Date shall be such preceding
Friday; and provided, further, that if an auction shall fall on any Interest
-------- -------
Reset Date then the Interest Reset Date shall instead be the first Business Day
following such auction.
The "Calculation Date" pertaining to any Interest Determination Date shall
be the tenth calendar day after such Interest Determination Date or, if such day
is not a Business Day, the next succeeding Business Day.
All percentages resulting from any calculation on the Notes will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward, and all
dollar amounts used in or resulting from such calculation on the Notes will be
rounded to the nearest cent or, in the case of a Specified Currency other than
United States dollars, to the nearest unit (with one-half cent being rounded
upward).
The interest rate borne by this Note will be determined as follows:
(i) Unless the Interest Category of this Note is specified on
the face hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse
Floating Rate Note" or as otherwise specified as Other/Additional
Provisions on the face hereof or in an Addendum hereto, this Note shall be
designated as a "Regular Floating Rate Note" and, except as set forth below
or specified on the face hereof or in an Addendum hereto, shall bear
interest at the rate determined by reference to the applicable Interest
Rate Basis or Bases (a) plus or minus the Spread, if any, and/or (b)
multiplied by the Spread Multiplier, if any, in each case as specified on
the face hereof. Commencing on the Initial Interest Reset Date, the rate
at which interest on this Note shall be payable shall be reset as of each
Interest Reset Date specified on the face hereof; provided, however, that
-------- -------
the interest rate in effect for the period, if any, from the Original Issue
Date to the Initial Interest Reset Date shall be the Initial Interest Rate.
(ii) If the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note," then, except as set forth
below or specified on the face hereof or in an Addendum hereto, this Note
shall bear interest at the
13
<PAGE>
rate determined by reference to the applicable Interest Rate Basis or Bases
(a) plus or minus the Spread, if any, and/or (b) multiplied by the Spread
Multiplier, if any. Commencing on the Initial Interest Reset Date, the
rate at which interest on this Note shall be payable shall be reset as of
each Interest Reset Date; provided, however, that (y) the interest rate in
-------- -------
effect for the period, if any, from the Original Issue Date to the Initial
Interest Reset Date shall be the Initial Interest Rate and (z) the interest
rate in effect for the period commencing on the Fixed Rate Commencement
Date specified on the face hereof to the Maturity Date shall be the Fixed
Interest Rate specified on the face hereof or, if no such Fixed Interest
Rate is specified, the interest rate in effect hereon on the day
immediately preceding the Fixed Rate Commencement Date.
(iii) If the Interest Category of this Note is specified on
the face hereof as an "Inverse Floating Rate Note," then, except as set
forth below or specified on the face hereof or in an Addendum hereto, this
Note shall bear interest at the Fixed Interest Rate minus the rate
determined by reference to the applicable Interest Rate Basis or Bases (a)
plus or minus the Spread, if any, and/or (b) multiplied by the Spread
Multiplier, if any; provided, however, that, unless otherwise specified on
-------- -------
the face hereof or in an Addendum hereto, the interest rate hereon shall
not be less than zero. Commencing on the Initial Interest Reset Date, the
rate at which interest on this Note shall be payable shall be reset as of
each Interest Reset Date; provided, however, that the interest rate in
-------- -------
effect for the period, if any, from the Original Issue Date to the Initial
Interest Reset Date shall be the Initial Interest Rate.
Except as set forth above or specified on the face hereof or in an Addendum
hereto, the interest rate in effect on each day shall be (i) if such day is an
Interest Reset Date, the interest rate determined as of the Interest
Determination Date (as defined below) immediately preceding such Interest Reset
Date or (ii) if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately preceding the most
recent Interest Reset Date. If any Interest Reset Date would otherwise be a day
that is not a Business Day, such Interest Reset Date shall be postponed to the
next succeeding Business Day, except that if LIBOR is an applicable Interest
Rate Basis and such Business Day falls in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding Business Day. In
addition, if the Treasury Rate is an applicable Interest Rate Basis and the
Interest Determination Date would otherwise fall on an Interest Reset Date, then
such Interest Reset Date will be postponed to the next succeeding Business Day.
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<PAGE>
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in The
City of New York or the Commonwealth of Pennsylvania; provided, however, that if
-------- -------
the Specified Currency is other than United States dollars, such day is also not
a day on which banking institutions are authorized or required by law,
regulation or executive order to close in the Principal Financial Center (as
defined below) of the country issuing the Specified Currency (or, in the case of
European Currency Units ("ECU"), is not a day that appears as an ECU non-
settlement day on the display designated as "ISDE" on the Reuter Monitor Money
Rates Service (or a day so designated by the ECU Banking Association) or, if ECU
non-settlement days do not appear on that page (and are not so designated), is
not a day on which payments in ECU cannot be settled in the international
interbank market); provided, further, that if LIBOR is an applicable Interest
-------- -------
Rate Basis, such day is also a London Business Day (as defined below). "London
Business Day" means (i) if the Index Currency (as defined below) is other than
ECU, any day on which dealings in such Index Currency are transacted in the
London interbank market or (ii) if the Index Currency is ECU, any day that does
not appear as an ECU non-settlement day on the display designated as "ISDE" on
the Reuter Monitor Money Rates Service (or a day so designated by the ECU
Banking Association) or, if ECU non-settlement days do not appear on that page
(and are not so designated), is not a day on which payments in ECU cannot be
settled in the international interbank market. "Principal Financial Center"
means the capital city of the country issuing the Specified Currency, or solely
with respect to the calculation of LIBOR, the Index Currency, except that with
respect to United States dollars, Australian dollars, Deutsche marks, Dutch
guilders, Italian lire, Swiss francs and ECU, the "Principal Financial Center"
shall be The City of New York, Sydney, Frankfurt, Amsterdam, Milan, Zurich and
Luxembourg, respectively.
The interest rate applicable to each Interest Reset Period commencing on
the related Interest Reset Date will be determined by the Calculation Agent as
of the applicable Interest Determination Date and will be calculated by the
Calculation Agent on or prior to the Calculation Date (as defined below), except
with respect to the LIBOR, which will be calculated as of such Interest
Determination Date. The "Interest Determination Date" with respect to the CD
Rate, the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and the
Prime Rate will be the second Business Day immediately preceding the applicable
Interest Reset Date; and the "Interest Determination Date" with respect to LIBOR
shall be the second London Business Day immediately preceding the applicable
Interest Reset Date, unless the Index Currency is British pounds sterling, in
which case the "Interest Determination Date" will be the
15
<PAGE>
applicable Interest Reset Date. The "Interest Determination Date" with respect
to the Treasury Rate shall be the day in the week in which the applicable
Interest Reset Date falls on which day Treasury Bills (as defined below) are
normally auctioned (Treasury Bills are normally sold at an auction held on
Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that such auction may
be held on the preceding Friday); provided, however, that if an auction is held
-------- -------
on the Friday of the week preceding the applicable Interest Reset Date, the
"Interest Determination Date" shall be such preceding Friday. If the interest
rate of this Note is determined with reference to two or more Interest Rate
Bases specified on the face hereof, the "Interest Determination Date" pertaining
to this Note shall be the most recent Business Day which is at least two
Business Days prior to the applicable Interest Reset Date on which each Interest
Rate Basis is determinable. Each Interest Rate Basis shall be determined as of
such date, and the applicable interest rate shall take effect on the related
Interest Reset Date.
Unless otherwise specified on the face hereof or in an Addendum hereto, the
rate with respect to each Interest Rate Basis will be determined in accordance
with the applicable provisions below.
CD Rate. If an Interest Rate Basis for this Note is specified on the face
-------
hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published by the Board
of Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication of the Board of Governors
of the Federal Reserve System ("H.15(519)") under the heading "CDs (Secondary
Market)." If such rate is not published in H.15(519) by 9:00 A.M., New York
City time, on the related Calculation Date, then the CD Rate on such CD Rate
Interest Determination Date will be calculated by the Calculation Agent
specified on the face hereof and will be the arithmetic mean of the secondary
market offered rates as of 10:00 A.M., New York City time, on such CD Rate
Interest Determination Date, of three leading nonbank dealers in negotiable
United States dollar certificates of deposit in The City of New York selected by
the Calculation Agent for negotiable certificates of deposit of major United
States money market banks for negotiable United States dollar certificates of
deposit with a remaining maturity closest to the Index Maturity in a
denomination of U.S.$5,000,000; provided, however, that if fewer than three
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dealers so selected by the Calculation Agent are quoting as mentioned in this
sentence, the CD Rate determined as of such CD Rate Interest Determination Date
will
16
<PAGE>
be the CD Rate in effect on such CD Rate Interest Determination Date.
CMT Rate. If an Interest Rate Basis for this Note is specified on the face
--------
hereof as the CMT Rate, the CMT Rate shall be determined as of the applicable
Interest Determination Date (a "CMT Rate Interest Determination Date") as the
rate displayed on the Designated CMT Telerate Page (as defined below) under the
caption "...Treasury Constant Maturities...Federal Reserve Board Release
H.15...Mondays Approximately 3:45 P.M.," under the column for the Designated CMT
Maturity Index (as defined below) for (i) if the Designated CMT Telerate Page is
7055, the rate on such CMT Rate Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, the week or month, as applicable, ended
immediately preceding the week in which the related CMT Rate Interest
Determination Date occurs. If such rate is no longer displayed on the relevant
page or is not displayed by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index as published in H.15(519). If such rate is no longer published
or is not published by 3:00 P.M., New York City time, on the related Calculation
Date, then the CMT Rate on such CMT Rate Interest Determination Date will be
such treasury constant maturity rate for the Designated CMT Maturity Index (or
other United States Treasury rate for the Designated CMT Maturity Index) for the
CMT Rate Interest Determination Date with respect to such Interest Reset Date as
may then be published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519). If such information is
not provided by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate on the CMT Rate Interest Determination Date will be calculated
by the Calculation Agent and will be a yield to maturity, based on the
arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 P.M., New York City time, on such CMT Rate Interest
Determination Date reported, according to their written records, by three
leading primary United States government securities dealers (each, a "Reference
Dealer") in The City of New York selected by the Calculation Agent (from five
such Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for the
most recently issued direct noncallable fixed rate obligations of the United
States ("Treasury Notes") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the Calculation Agent is
unable to obtain three such Treasury Note
17
<PAGE>
quotations, the CMT Rate on such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity based on the
arithmetic mean of the secondary market offer side prices as of approximately
3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of
three Reference Dealers in The City of New York (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least U.S.$100 million. If
three or four (and not five) of such Reference Dealers are quoting as described
above, then the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor the lowest of such quotes will be
eliminated; provided, however, that if fewer than three Reference Dealers
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selected by the Calculation Agent are quoting as mentioned herein, the CMT Rate
determined as of such CMT Rate Interest Determination Date will be the CMT Rate
in effect on such CMT Rate Interest Determination Date. If two Treasury Notes
with an original maturity as described in the second preceding sentence have
remaining terms to maturity equally close to the Designated CMT Maturity Index,
the Calculation Agent will obtain from the five Reference Dealers quotations for
the Treasury Note with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service (or any successor service) on the page specified on the face hereof (or
any other page as may replace such page on such service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)) for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified on the face hereof, the Designated CMT Telerate Page
shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the Designated
CMT Maturity Index shall be 2 years.
Commercial Paper Rate. If an Interest Rate Basis for this Note is
---------------------
specified on the face hereof as the Commercial Paper Rate, the Commercial Paper
Rate shall be determined as of the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date") as the Money Market Yield
(as defined below) on such date of the per annum rate (quoted on a bank discount
basis) for commercial paper having the Index Maturity as published
18
<PAGE>
in H.15(519) under the heading "Commercial Paper." If such rate is not
published in H.15(519) by 3:00 P.M., New York City time, on such Calculation
Date, then the Commercial Paper Rate on such Commercial Paper Rate Interest
Determination Date will be calculated by the Calculation Agent and shall be the
Money Market Yield of the arithmetic mean of the per annum offered rates (quoted
on a bank discount basis) as of 11:00 A.M., New York City time, on such
Commercial Paper Rate Interest Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent for
commercial paper having the Index Maturity placed for an industrial issuer whose
bond rating is "AA," or the equivalent, from a nationally recognized rating
agency; provided, however, that if fewer than three dealers selected by the
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Calculation Agent are quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper Rate Interest Determination
Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
D x 360
Money Market Yield = --------------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the period
from the Interest Reset Date to but excluding the day that numerically
corresponds to such Interest Reset Date (or, if there is not any numerically
corresponding day, the last day) in the calendar month that is the number of
months corresponding to the specified Index Maturity after the month in which
such Interest Reset Date falls.
Eleventh District Cost of Funds Rate. If an Interest Rate basis for this
------------------------------------
Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on Telerate Page 7058 (as defined
below) as of 11:00 A.M., San Francisco time, on such Eleventh District Cost of
Funds Rate Interest Determination Date. If such rate does not appear on
Telerate Page 7058 on any related Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh
District Cost of Funds Rate Interest Determination Date shall be the monthly
weighted average
19
<PAGE>
cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding the
date of such announcement. If the FHLB of San Francisco fails to announce such
rate for the calendar month immediately preceding such Eleventh District Cost of
Funds Rate Interest Determination Date, then the Eleventh District Cost of Funds
Rate determined as of such Eleventh District Cost of Funds Rate Interest
Determination Date shall be the Eleventh District Cost of Funds Rate in effect
on such Eleventh District Cost of Funds Rate Interest Determination Date.
"Telerate Page 7058" means the display designated as page "7058" on the Dow
Jones Telerate Service (or such other page as may replace the 7058 page on that
service for the purpose of displaying the monthly weighted average cost of funds
paid by member institutions of the Eleventh Federal Home Loan Bank District).
Federal Funds Rate. If an Interest Rate Basis for this Note is specified
------------------
on the face hereof as the Federal Funds Rate, the Federal Funds Rate shall be
determined as of the applicable Interest Determination Date (a "Federal Funds
Rate Interest Determination Date") as the rate on such date for United States
dollar federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)." If such rate is not published in H.15(519) by 3:00 P.M., New York
City time, on the related Calculation Date, then the Federal Funds Rate on such
Federal Funds Interest Determination Date shall be calculated by the Calculation
Agent and will be the arithmetic mean of the rates, as of 9:00 A.M., New York
City time, on such Federal Funds Rate Interest Determination Date, for the last
transaction in overnight federal funds arranged by three leading brokers of
federal funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if fewer than three brokers so selected by the
-------- -------
Calculation Agent are quoting as mentioned in this sentence, the Federal Funds
Rate determined as of such Federal Funds Rate Interest Determination Date will
be the Federal Funds Rate in effect on such Federal Funds Rate Interest
Determination Date.
J.J. Kenny Rate. If an Interest Rate Basis for this Note is specified on
---------------
the face hereof as the J.J. Kenny Rate, the J.J. Kenny Rate shall be determined
as of the applicable Interest Determination Date (a "J.J. Kenny Interest
Determination Date") as the rate specified in the high grade weekly index (the
"Weekly Index") on such J.J. Kenny Interest Determination Date made available by
Kenny Information Systems ("Kenny") to the Calculation Agent. The Weekly Index
is based on 30-day yield evaluations at par of bonds, the interest of which is
exempt from federal income taxation under the Internal Revenue Code of 1986, as
amended (the
20
<PAGE>
"Code"), of not less than five high grade component issuers selected by Kenny,
which shall include, without limitation, issuers of general obligation bonds.
The specific issuers to be included among the component issuers may be changed
from time to time by Kenny at its discretion. The bonds on which the Weekly
Index is based do not include any bonds on which the interest is subject to a
minimum tax or similar tax under the Code unless all tax-exempt bonds are
subject to such tax. In the event Kenny ceases to make available such Weekly
Index, a successor indexing agent will be selected by the Calculation Agent,
such index to reflect the prevailing rate for bonds rated in the highest short-
term rating category by Moody's Investors Service, Inc. and Standard & Poor's
Ratings Group in respect of issuers most closely resembling the high grade
component issuers selected by Kenny for its Weekly Index, the interest on which
is (a) variable on a weekly basis, (b) exempt from federal income taxation under
the Code and (c) not subject to a minimum tax or similar tax under the Code,
unless all tax-exempt bonds are subject to such tax. If such a successor
indexing agent is not available, the rate for any J.J. Kenny Interest
Determination Date will equal 67% of the rate calculated using methodology set
forth below under "Treasury Rate." The Calculation Agent shall calculate the
J.J. Kenny Rate in accordance with the foregoing. At the request of a holder of
a Floating Rate Note bearing interest at the J.J. Kenny Rate, the Calculation
Agent will provide such holder with the interest rate that will become effective
as of the next Interest Reset Date.
LIBOR. If an Interest Rate Basis for this Note is specified on the face
-----
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination Date")
in accordance with the following provisions:
(i) the Calculation Agent will determine either (a) the arithmetic
mean of the offered rates for deposits in the Index Currency for the period of
the applicable Index Maturity which appear on the Reuters Screen LIBO Page at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date
if at least two such offered rates appear on the Reuters Screen LIBO Page"
("LIBOR Reuters"), or (b) the rate for deposits in the Index Currency for the
period of the applicable Index Maturity that appears on the Telerate Page 3750
as of 11:00 A.M., London time, on such LIBOR Interest Determination Date ("LIBOR
Telerate"). "Reuters Screen LIBO Page" means the display designated as Page
"LIBO" on the Reuters Monitor Money Rate Service (or such other page as may
replace the LIBO page on the service for the purpose of displaying London
interbank offered rates of major banks). "Telerate Page 3750" means the display
designated as page "3750" on the Telerate Service (or such other page as may
replace the 3750 page on that service or such other service or services as may
be
21
<PAGE>
nominated by the British Bankers' Association for the purpose of displaying
London Interbank offered rates for deposits in the Index Currency). If neither
LIBOR Reuters nor LIBOR Telerate is specified on the face hereof, LIBOR will be
determined as if LIBOR Telerate is specified. If fewer than two offered rates
appear on the Reuters Screen LIBO Page, or if no rate appears on the Telerate
Page 3750, as applicable, LIBOR in respect of that LIBOR Interest Determination
Date will be determined as if the parties had specified the rates described in
(ii) below.
(ii) If fewer than two offered rates appear on the Reuters Screen
LIBO page or no rate appears on Telerate Page 3750, as applicable, the
Calculation Agent will request the principal London offices of four major banks
in the London interbank market, as selected by the Calculation Agent, to provide
the Calculation Agent with its offered quotations for deposits in the Index
Currency for the period of the applicable Index Maturity to prime banks in the
London interbank market at approximately 11:00 A.M., London time, commencing on
the second London Business Day immediately following such LIBOR Interest
Determination Date and in a principal amount that is representative of a single
transaction in such Index Currency in such market at such time. If at least two
such quotations are provided, LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of such quotations. If fewer than two quotations
are provided, LIBOR on such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M. in the
applicable Principal Financial Center by three major banks in such Principal
Financial Center for loans in the Index Currency to leading European Banks,
having the Index Maturity and in a principal amount that is representative for a
single transaction in such Index Currency in such market at such time; provided,
however, that if fewer than three banks selected as aforesaid by the Calculation
Agent are quoting rates as mentioned in this sentence, the rate of interest in
effect for the applicable period will be the LIBOR in effect on such LIBOR
Interest Determination Date.
"Index Currency" means the currency or composite currency specified on the
face hereof as to which LIBOR shall be calculated. If no such currency or
composite currency is specified on the face hereof, the Index Currency shall be
United States dollars.
Prime Rate. If an Interest Rate Basis for this Note is specified on the
----------
face hereto as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under the
heading "Bank Prime Loan." If such rate is not published prior to 9:00 A.M.,
New York City time, on the related Calculation Date, then the Prime Rate shall
be the arithmetic mean of the rates of interest
22
<PAGE>
publicly announced by each bank that appears on the Reuters Screen US Prime 1
Page (as defined below) as such bank's prime rate or base lending rate as in
effect for such Prime Rate Interest Determination Date. If fewer than four such
rates appear on the Reuters Screen US Prime 1 Page for such Prime Rate Interest
Determination Date, the Prime Rate shall be the arithmetic mean of the prime
rates quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Prime Rate Interest
Determination Date by three major banks in The City of New York selected by the
Calculation Agent. If fewer than three such quotations are so provided, the
Prime Rate shall be the Prime Rate in effect on such Prime Rate Interest
Determination Date.
"Reuters Screen US Prime 1 Page" means the display designated as page "US
Prime 1" on the Reuter Money Market Rates Service (or any successor service) (or
such other page as may replace the US Prime 1 Page on such service (or any
successor service) for the purpose of displaying prime rates or base lending
rates of major United States banks).
Treasury Rate. If an Interest Rate Basis for this Note is specified on the
-------------
face hereof as the Treasury Rate, the Treasury Rate shall be determined as of
the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity, as such rate is published
in H.15(519) under the heading "U.S. Government Securities/Treasury
Bills/Auction Average (Investment)" or, if not published by 9:00 A.M., New York
City time, on the related Calculation Date, the auction average rate of such
Treasury Bills (expressed as a bond equivalent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) as otherwise announced by
the United States Department of the Treasury. In the event that the results of
the Auction of Treasury Bills having the Index Maturity are not reported as
provided by 3:00 P.M., New York City time, on the related Calculation Date, or
if no such auction is held, then the Treasury Rate will be the rate set forth in
H.15(519) for the relevant Treasury Interest Determination Date for the
specified Index Maturity under the heading "U.S. Government Securities/Treasury
Bills/Secondary market." If such rate is not published by 3:00 P.M. New York
City time on the relevant Calculation Date, the Treasury Rate will be calculated
by the Calculation Agent and will be a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) of the arithmetic mean of the secondary market bid rates, as
of approximately 3:30 P.M., New York City time, on such Treasury Rate Interest
Determination Date, of three primary United States government securities dealers
in The
23
<PAGE>
City of New York selected by the Calculation Agent, for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity; provided,
however, that if fewer than three dealers so selected by the Calculation Agent
are quoting as mentioned in this sentence, the Treasury Rate determined as of
such Treasury Rate Interest Determination Date will be the Treasury Rate in
effect on such Treasury Rate Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing on or
before each Calculation Date. The interest rate on this Note will in no event
be higher than the maximum rate permitted by New York law, as the same may be
modified by United States law of general application.
At the request of the Holder hereof, the Calculation Agent will provide to
the Holder hereof the interest rate hereon then in effect and, if determined,
the interest rate which will become effective as of the next Interest Reset
Date.
Except as may be provided in the Indenture, if an Event of Default with
respect to the Notes shall occur and be continuing, the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Notes may declare
the principal of all the Notes 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 Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor, and the Trustee with the consent of the Holders of not less than 66
2/3% in aggregate principal amount of the Securities at the time Outstanding of
each series affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of each series, to waive compliance by the Company or the
Guarantor 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 Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note 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 Note.
24
<PAGE>
The Guarantor, or a Subsidiary (as defined in the Indenture) thereof, may
directly assume, by a supplemental indenture, the due and punctual payment of
the principal of, and premium, if any, and interest on, all of the Securities,
in which case the Company shall be released from its liability as obligor on the
Securities.
The Indenture provides that the Company and the Guarantor, at their option,
(a) will be discharged from any and all obligations in respect of the Notes
(except for certain obligations to register the transfer of or exchange Notes,
replace stolen, lost or mutilated Notes and maintain paying agencies) or (b)
need not comply with certain provisions of the Indenture, in each case if the
Company or the Guarantor deposits, in trust, with the Trustee money or U.S.
Government Obligations (as defined in the Indenture) which, with respect to U.S.
Government Obligations, through the payment of interest thereon and principal
thereof in accordance with their terms will provide money, in an amount in cash
sufficient to pay all the principal of and interest on the Securities on the
dates such payments are due in accordance with the terms of such Notes, and
certain other conditions are satisfied.
No reference herein to the Indenture and no provision of this Note 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, and
interest on, this Note at the times, places 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 Note may be registered on the Security Register
of the Company upon surrender of this Note for registration of transfer at the
corporate trust office of Bankers Trust Company, as Security Registrar, in the
Borough of Manhattan, The City of New York or at such other agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company, and this Note duly executed by, the Holder
hereof or by his attorney duly authorized in writing and thereupon one or more
new Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in minimum
denominations of $100,000 or any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture, and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal
25
<PAGE>
amount of Notes in authorized denominations, as requested by the Holder
surrendering the same.
No service charge will 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 Note for registration of transfer or
exchange, the Company, the Guarantor, the Trustee and any agent of the Company,
the Guarantor or the Trustee may treat the Holder as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Guarantor, the Trustee nor any agent thereof shall be affected by notice to the
contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made
and to be performed in such State.
All terms used but not defined herein shall have the meanings assigned to
such terms in the Indenture.
GUARANTEE OF KEYSTONE FINANCIAL, INC.
For value received, Keystone Financial, Inc., a Pennsylvania corporation
(the "Guarantor"), hereby unconditionally guarantees to the Holder of this Note
the due and punctual payment of the principal of, and premium, if any, and
interest on (including any Additional Amounts payable in respect thereof), this
Note when and as the same shall become due and payable, whether at the Stated
Maturity Date or upon acceleration, redemption, repayment or otherwise,
according to the terms of the Indenture. In case of the failure of the Company
punctually to make any such payment of principal, premium, if any, or interest,
the Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at the Stated Maturity
Date or upon acceleration, redemption, repayment or otherwise, and as if such
payment were made by the Company.
The Guarantor hereby agrees that its obligations under this Guarantee shall
be as principal and not merely as surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of this Note or the Indenture, any failure to
enforce the provisions of this Note or the Indenture, or any waiver,
modification, consent or indulgence granted to the Company with respect thereto
by the Holder of this Note or the Trustee, the recovery of any judgment against
the Company or any action to enforce the same, or any other circumstance which
may otherwise constitute a legal or equitable
26
<PAGE>
discharge of a surety or guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
merger or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest or notice with respect to this Note or the
indebtedness evidenced hereby and all demands whatsoever, and covenants that
this Guarantee will not be discharged except by payment in full of the principal
of, and premium, if any, and interest on, this Note and the complete performance
of all other obligations contained herein.
The Guarantor shall be subrogated to all rights of the Holder of this Note
against the Company in respect of any amounts paid to such Holder by the
Guarantor pursuant to the provisions of this Guarantee; provided, however, that
-------- -------
the Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until payment in full of
the principal of, and premium, if any, and interest on, the Note and the
complete performance of all other obligations contained herein.
Subject to the next following paragraph, the Guarantor hereby certifies and
warrants that all acts, conditions and things required to be done and performed
and to have happened precedent to the creation and issuance of this Guarantee
and to constitute the same the valid obligation of the Guarantor have been done
and performed and have happened in due compliance with all applicable laws.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Guarantee shall not be valid or obligatory for any purposes.
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
27
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed in facsimile by its duly authorized officer under its corporate seal.
Dated:
[SEAL]
KEYSTONE FINANCIAL, INC.
By:_______________________
Name:
Title:
Attest:
By:________________________
Name:
Title:
28
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instructs the Company to
repay this Note (or portion hereof specified below) pursuant to its terms at a
price equal to the principal amount hereof together with interest to the
repayment date, to the undersigned, at
________________________________________________________________________________
_________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Paying Agent must receive at its corporate
trust office in The City of New York, or at such other place or places of which
the Company shall from time to time notify the Holder of this Note, not more
than 60 nor less than 30 days prior to an Optional Repayment Date, if any, shown
on the face of this Note, this Note with this "Option to Elect Repayment" form
duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in increments of $1,000) which the
Holder elects to have repaid and specify the denomination or denominations
(which shall be $___________ or an integral multiple of $1,000 in excess
thereof(or, if the Specified Currency is other than United States dollars, the
minimum Authorized Denomination specified on the face hereof)) of the Notes to
be issued to the Holder for the portion of this Note not being repaid (in the
absence of any such specification, one such Note will be issued for the portion
not being repaid): $ ____________.
Date ______________________ ___________________________________
NOTICE: The signature on this Option to Elect
Repayment must correspond with the name as written
upon the face of this Note in every particular,
without alteration or enlargement or any change
whatever.
29
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
Additional abbreviations may also be used though not in the above list.
__________________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------
| |
|______________________________|______________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
______________________________________________________________________________
this Note and all rights thereunder hereby irrevocably constituting and
appointing
____________________________________________________________________ Attorney to
transfer this Note on the books of the Trustee, with full power of substitution
in the premises.
Dated:_____________________ _______________________________________
_______________________________________
Notice: The signature(s) on this Assignment
must correspond with the name(s) as written
upon the face of this Note in every
particular, with out alteration or
enlargement or any change whatsoever.
30
<PAGE>
EXHIBIT 4.5
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITORY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
REGISTERED CUSIP NO.: PRINCIPAL AMOUNT
No. FXR-_____ __________ $____________
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
MEDIUM-TERM NOTE
(Subordinated Fixed Rate)
Payment of Principal, Premium, if any, and Interest Guaranteed by
KEYSTONE FINANCIAL,INC.
ORIGINAL ISSUE DATE: INTEREST RATE: % STATED MATURITY DATE
INTEREST PAYMENT DATE(S) DEFAULT RATE: %
[ ] January 15 and July 15
[ ] Other
INITIAL REDEMPTION DATE: INITIAL REDEMPTION ANNUAL REDEMPTION
PERCENTAGE: % PERCENTAGE
REDUCTION: %
OPTIONAL REPAYMENT DATE(S): [ ] CHECK IF AN
ORIGINAL ISSUE
DISCOUNT NOTE
Issue Price: %
DENOMINATION: SPECIFIED CURRENCY: AUTHORIZED EXCHANGE
[ ] United States dollars [ ] $100,000 and RATE AGENT:
[ ] Other: integral
multiples of
$1,000 in excess
thereof
[ ] Other:
<PAGE>
ADDENDUM ATTACHED OTHER/ADDITIONAL
[ ] Yes PROVISIONS:
[ ] No
Keystone Financial Mid-Atlantic Funding Corp., a Pennsylvania corporation
(the "Company"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the Principal sum of ___________________________________
________________________________________ DOLLARS on the Stated Maturity Date
specified above (except to the extent redeemed or repaid prior to the Stated
Maturity Date), and to pay interest thereon at the Interest Rate per annum
specified above, until the principal hereof is paid or duly made available for
payment, semiannually on January 15 and June 15 (each, an "Interest Payment
Date") in each year commencing on the first Interest Payment Date next
succeeding the Original Issue Date specified above, unless the Original Issue
Date occurs between a Regular Record Date (as defined below) and the next
succeeding Interest Payment Date, in which case commencing on the second
Interest Payment Date succeeding the Original Issue Date, to the Holder (as
defined below) of such Note on the Regular Record Date with respect to such
Interest Payment Date, and on the Stated Maturity Date shown above (or any
Redemption Date as defined on the reverse hereof or any Holder's Optional
Repayment Date with respect to which such option has been exercised, each such
Stated Maturity Date, Redemption Date and Optional Repayment Date being herein
referred to as a "Maturity-Date" with respect to the principal repayable on such
date). Interest on this Note will accrue from the most recent Interest Payment
Date to which interest has been paid or duly provided for or, if no interest has
been paid, from the Original Issue Date specified above, until the principal
hereof has been paid or duly made available for payment. If the Maturity Date
or an Interest Payment Date falls on a day which is not a Business Day (as
defined below), principal, premium, if any, and interest, if any, payable with
respect to such Maturity Date or Interest Payment Date will be paid on the next
succeeding Business Day with the same force and effect as if made on such
Maturity Date or Interest Payment Date, as the case may be, and no interest on
each payment shall accrue for the period from and after such Maturity Date or
Interest Payment Date. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions,
be paid to the Person (the "Holder") in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the Regular Record
Date, which shall be the January 1 or June 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date; provided, however,
-------- -------
that interest payable on the Maturity Date will be payable to the Person to whom
the principal hereof shall be payable. Any such interest not so punctually paid
or duly provided for ("Defaulted Interest") will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to
2
<PAGE>
the Person in whose name this Note (or one or more predecessor Notes) 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 referred to on the reverse
hereof, notice whereof shall be given to the Holder of this Note not less than
10 days prior to such Special Record Date, or be paid at any time in any other
lawful manner, all as more fully provided in the Indenture (as defined on the
reverse hereof).
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in The
City of New York or the Commonwealth of Pennsylvania; provided, however, that if
-------- -------
the Specified Currency is other than United States dollars and any payment is to
be made in the Specified Currency in accordance with the provisions hereof, such
day is also not a day on which banking institutions are authorized or required
by law, regulation or executive order to close in the Principal Financial Center
(as defined below) of the country issuing the Specified Currency (or, in the
case of European Currency Units ("ECU"), is not a day that appears as an ECU
non-settlement day on the display designated as "ISDE" on the Reuter Monitor
Money Rates Service (or a day so designated by the ECU Banking Association) or,
if ECU non-settlement days do not appear on that page (and are not so
designated), is not a day on which payments in ECU cannot be settled in the
international interbank market). "Principal Financial Center" means the capital
city of the country issuing the Specified Currency, except that with respect to
United States dollars, Australian dollars, Deutsche marks, Dutch guilders,
Italian lire, Swiss francs and ECU, the "Principal Financial Center" shall be
The City of New York, Sydney, Frankfurt, Amsterdam, Milan, Zurich and
Luxembourg, respectively.
Payment of the principal of, premium, if any, and interest, if any, on,
this Note will be made in immediately available funds at the corporate trust
office of Bankers Trust Company (the "Paying Agent") in the Borough of
Manhattan, The City of New York, or at such other agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York;
provided, however, that if the Specified Currency specified above is other than
- -------- -------
United States dollars and such payment is to be made in the Specified Currency
in accordance with the provisions set forth below, such payment will be made by
wire transfer of immediately available funds to an account with a bank
designated by the holder hereof at least 15 calendar days prior to the Maturity
Date, provided that such bank has appropriate facilities therefor and that this
Note (and, if applicable, a duly completed repayment election form) is presented
and surrendered at the aforementioned office of the Trustee in time for the
Trustee to make such payment in such funds
3
<PAGE>
in accordance with its normal procedures. Payment of interest on any Interest
Payment Date other than the Maturity Date may be made at the option of the
Company by check mailed to the address of the Holder as such address shall
appear in the Security Register; provided, however, that a Holder of not less
-------- -------
than $10,000,000 aggregate principal amount (or, if the Specified Currency is
other than United States dollars, the equivalent thereof in the Specified
Currency) of the Notes (whether having identical or different terms and
provisions) may, by written notice to the Paying Agent at its corporate trust
office in The City of New York (or at such other address as the Company shall
give notice in writing) on or before the Regular Record Date preceding an
Interest Payment Date, arrange to have the interest payable on all Notes held by
such Holder on such Interest Payment Date, and all subsequent Interest Payment
Dates until written notice to the contrary is given to the Paying Agent, made by
wire transfer of immediately available funds to an account maintained at a bank
in The City of New York (or other bank consented to by the Company, which
consent may not be unreasonably withheld) as such Holder shall have designated;
provided that such bank has appropriate facilities therefor. Notwithstanding
the preceding sentence, payments of principal of, and premiums, if any, and
interest, if any, on, any Maturity Date will be made by wire transfer of
immediately available funds to a designated account maintained in the United
States upon (i) receipt of written notice by the Paying Agent from the Holder
hereof not less than one Business Day prior to such Maturity Date and (ii)
presentation of this Note at the corporate trust office of the Paying Agent in
the Borough of Manhattan, The City of New York or at such other office or agency
of the Company maintained for that purpose in the Borough of Manhattan, The City
of New York.
The Company is obligated to make payment of principal, premium, if any, and
interest in respect of this Note in the Specified Currency (or, if the Specified
Currency is not at the time of such payment legal tender for the payment of
public and private debts, in such other coin or currency of the country which
issued the Specified Currency as at the time of such payment is legal tender for
the payment of such debts). If the Specified Currency is other than United
States dollars, except as otherwise provided below, any such amounts so payable
by the Company will be converted by the Exchange Rate Agent specified above into
United States dollars for payment to the holder of this Note.
If the Specified Currency is other than United States dollars, the holder
of this Note may elect to receive such amounts in such Specified Currency. If
the holder of this Note shall not have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest
in respect of this Note in the Specified Currency, any United States dollar
amount to be received by the holder of this Note will be based on
4
<PAGE>
the highest bid quotation in The City of New York received by the Exchange Rate
Agent at approximately 11:00 A.M., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on such payment
date in the aggregate amount of the Specified Currency payable to all holders of
Notes scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments. If
three such bid quotations are not available, payments on this Note will be made
in the Specified Currency.
If the Specified Currency is other than United States dollars, the holder
of this Note may elect to receive all or a specified portion of any payment of
principal, premium, if any, and/or interest in respect of this Note in the
Specified Currency by submitting a written request for such payment to the
Trustee at its corporate trust office in The City of New York on or prior to the
applicable Record Date or at least 15 calendar days prior to the Maturity Date,
as the case may be. Such written request may be mailed or hand delivered or
sent by cable, telex or other form of facsimile transmission. The holder of
this Note may elect to receive all or a specified portion of all future payments
in the Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any such revocation must be received by the Trustee on or
prior to the applicable Record Date or at least 15 calendar days prior to the
Maturity Date, as the case may be.
If the Specified Currency is other than United States dollars or a
composite currency and the holder of this Note shall have duly made an election
to receive all or a specified portion of any payment of principal, premium, if
any, and/or interest in respect of this Note in the Specified Currency and if
the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to the holder of this Note by making
such payment in United States dollars on the basis of the Market Exchange Rate
(as defined below) on the second Business Day prior to such payment date or, if
such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. The "Market Exchange Rate" for the Specified Currency means the noon
dollar buying rate in The City of New York for cable transfers for the Specified
Currency as certified for
5
<PAGE>
customs purposes by (or if not so certified, as otherwise determined by) the
Federal Reserve Bank of New York. Any payment made under such circumstances in
United States dollars will not constitute an Event of Default (as defined in the
Indenture).
If the Specified Currency is a composite currency and the holder of this
Note shall have duly made an election to receive all or a specified portion of
any payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency and if such composite currency is unavailable due
to the imposition of exchange controls or other circumstances beyond the control
of the Company, then the Company will be entitled to satisfy its obligations to
the holder of this Note by making such payment in United States dollars. The
amount of each payment in United States dollars shall be computed by the
Exchange Rate Agent on the basis of the equivalent of the composite currency in
United States dollars. The component currencies of the composite currency for
this purpose (collectively, the "Component Currencies" and each, a "Component
Currency") shall be the currency amounts that were components of the composite
currency as of the last day on which the composite currency was used. The
equivalent of the composite currency in United States dollars shall be
calculated by aggregating the United States dollar equivalents of the Component
Currencies. The United States dollar equivalent of each of the Component
Currencies shall be determined by the Exchange Rate Agent on the basis of the
most recently available Market Exchange Rate for each such Component Currency,
or as otherwise specified on the face hereof.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holder of this Note.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions
6
<PAGE>
shall for all purposes have the same effect as if set forth at this place.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions."
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Note 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, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
[SEAL] KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
By: _________________________
Name:
Title:
Attest:
By: ___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated herein, issued under the Indenture
described herein.
BANKERS TRUST COMPANY,
as Trustee
By: ________________________
Authorized Signatory
7
<PAGE>
[REVERSE OF NOTE]
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
MEDIUM-TERM NOTE
(Subordinated Fixed Rate)
This Medium-Term Note is one of a duly authorized series of Securities (the
"Securities") of the Company issued and to be issued under a Subordinated
Indenture, dated as of April __, 1997 (the "Indenture"), among the Company, the
Guarantor (as defined below) and Bankers Trust Company, as Trustee (the
"Trustee", which term shall include 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 thereunder of the Company, the
Guarantor, the Trustee and the Holders of the Notes and the terms upon which the
Notes are, and are to be, authenticated and delivered. The Medium-Term Notes
(the "Notes") may bear different dates, mature at different times, bear interest
at different rates and vary in such other ways as are provided in the Indenture.
The payment of principal of and premium, if any, and interest (including
any Additional Amounts payable in respect thereof) on this Note is expressly
subordinated and subject in right of payment, as provided in the Indenture, to
the prior payment of any and all Senior Company Indebtedness, as defined in the
Indenture, and this Note is subject to such provisions, and each Holder of this
Note, by accepting the same, agrees, expressly for the benefit of present and
future holders of Senior Company Indebtedness, whether now or hereafter
outstanding, to and shall be bound by such provisions.
This Note may be subject to repayment at the option of the Holder on the
Optional Repayment Date(s), if any, indicated on the face hereof. If no
Optional Repayment Dates are set forth on the face hereof, this Note may not be
so repaid at the option of the Holder hereof prior to the Stated Maturity Date.
On any Optional Repayment Date, this Note shall be repayable in whole or in part
in increments of $1,000 (provided that any remaining principal hereof shall be
at least $100,000) at the option of the Holder hereof at a repayment price equal
to 100% of the principal amount to be repaid together with accrued interest
thereon payable to the applicable Optional Repayment Date. For this Note to be
repaid in whole or in part at the option of the Holder hereof, this Note must be
received, with the form entitled "Option to Elect Repayment" below duly
completed, by the Paying Agent at its corporate trust office in the Borough of
Manhattan, The City of New York, or at such other place or places as the Company
shall from time to time notify the Holders of the Notes, not more than 60 nor
less than 30
8
<PAGE>
days prior to the applicable Optional Repayment Date. Exercise of such
repayment option by the Holder hereof shall be irrevocable.
This Note may be redeemed at the option of the Company on any date on and
after the Initial Redemption Date, if any, specified on the face hereof (each
such date fixed for redemption, a "Redemption Date"). If no Initial Redemption
Date is set forth on the face hereof, this Note may not be redeemed at the
option of the Company prior to the Stated Maturity Date. On and after the
Initial Redemption Date, if any, this Note may be redeemed at any time in whole
or from time to time in part in increments of $1,000 (provided that any
remaining principal hereof shall be at least $100,000) at the option of the
Company at the applicable Redemption Price referred to below together with
accrued interest thereon payable to the Redemption Date, on notice given not
more than 60 nor less than 30 days prior to the Redemption Date. In the event
of redemption of this Note in part only, a new Note for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the surrender
hereof.
If this Note is redeemable at the option of the Company, the "Redemption
Price" shall initially be the Initial Redemption Percentage, specified on the
face hereof, of the principal amount of this Note to be redeemed and shall
decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
If this Note is an Original Issue Discount Note as specified on the face
hereof, the amount payable to the holder of this Note in the event of
redemption, repayment or acceleration of maturity will be equal to the sum of
(1) the Issue Price specified on the face hereof (increased by any accruals of
the Discount, as defined below) and, in the event of any redemption of this Note
(if applicable), multiplied by the Initial Redemption Percentage (as adjusted by
the Annual Redemption Percentage Reduction, if applicable) and (2) any unpaid
interest on this Note accrued from the Original Issue Date to the Redemption
Date, Repayment Date or date of acceleration of maturity, as the case may be.
The difference between the Issue Price and 100% of the principal amount of this
Note is referred to herein as the "Discount."
For purposes of determining the amount of Discount that has accrued as of
any Redemption Date, Repayment Date or date of acceleration of maturity of this
Note, such Discount will be accrued so as to cause the yield on the Note to be
constant. The constant yield will be calculated using a 30-day month, 360-day
year convention, a compounding period that, except for the Initial Period (as
defined below), corresponds to the shortest period
9
<PAGE>
between Interest Payment Dates (with ratable accruals within a compounding
period) and an assumption that the maturity of this Note will not be
accelerated. If the period from the Original Issue Date to the initial Interest
Payment Date (the "Initial Period") is shorter than the compounding period for
this Note, a proportionate amount of the yield for an entire compounding period
will be accrued. If the Initial Period is longer than the compounding period,
then such period will be divided into a regular compounding period and a short
period, with the short period being treated as provided in the preceding
sentence.
Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Date or the Maturity Date, as the case may be.
Interest payments for this Note will be computed and paid on the basis of a 360-
day year of twelve 30-day months.
Except as may be provided in the Indenture, if an Event of Default with
respect to the Notes shall occur and be continuing, the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Notes may declare
the principal of all the Notes 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 Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor, and the Trustee with the consent of the Holders of not less than 66
2/3% in aggregate principal amount of the Securities at the time Outstanding of
each series affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of each series, to waive compliance by the Company or the
Guarantor 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 Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note 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 Note.
The Guarantor, or a Subsidiary (as defined in the Indenture) thereof, may
directly assume, by a supplemental indenture, the due and punctual payment of
the principal of, and premium, if any, and interest, if any, on, all of the
Securities, in which case the Company shall be released from its liability as
obligor on the Securities.
10
<PAGE>
No reference herein to the Indenture and no provision of this Note 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, and
interest on, this Note at the times, places 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 Note may be registered on the Security Register
of the Company upon surrender of this Note for registration of transfer at the
corporate trust office of Bankers Trust Company, as Security Registrar, in the
Borough of Manhattan, The City of New York or at such other agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company, and this Note duly executed by, the Holder
hereof or by his attorney duly authorized in writing and thereupon one or more
new Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in minimum
denominations of $100,000 or any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture, and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes in authorized denominations, as requested by the
Holder surrendering the same.
No service charge will 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 Note for registration of transfer or
exchange, the Company, the Guarantor, the Trustee and any agent of the Company,
the Guarantor or the Trustee may treat the Holder as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Guarantor, the Trustee nor any agent thereof shall be affected by notice to the
contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made
and to be performed in such State.
All terms used but not defined herein shall have the meanings assigned to
such terms in the Indenture.
11
<PAGE>
GUARANTEE OF KEYSTONE FINANCIAL, INC.
For value received, Keystone Financial, Inc., a Pennsylvania corporation
(the "Guarantor"), hereby unconditionally guarantees to the Holder of this Note
the due and punctual payment of the principal of, and premium, if any, and
interest, if any, on (including any Additional Amounts payable in respect
thereof), this Note when and as the same shall become due and payable, whether
at the Stated Maturity Date or upon acceleration, redemption, repayment or
otherwise, according to the terms of the Indenture. In case of the failure of
the Company punctually to make any such payment of principal, premium, if any,
or interest, the Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at the
Stated Maturity Date or upon acceleration, redemption, repayment or otherwise,
and as if such payment were made by the Company.
The payment of principal of and premium, if any, and interest (including
any Additional Amounts payable in respect thereof) on the Notes under the
Guarantee is expressly subordinated and subject in right of payment, as provided
in the Indenture, to the prior payment of any and all Senior Guarantor
Indebtedness, as defined in the Indenture, and this Guarantee and the related
Note are subject to such provisions, and each Holder of the Notes, by accepting
the same, agrees, expressly for the benefit of present and future holders of
Senior Guarantor Indebtedness, whether now or hereafter outstanding, to and
shall be bound by such provisions.
The Guarantor hereby agrees that its obligations under this Guarantee shall
be as principal and not merely as surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of this Note or the Indenture, any failure to
enforce the provisions of this Note or the Indenture, or any waiver,
modification, consent or indulgence granted to the Company with respect thereto
by the Holder of this Note or the Trustee, the recovery of any judgment against
the Company or any action to enforce the same, or any other circumstance which
may otherwise constitute a legal or equitable discharge of a surety or
guarantor. The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a proceeding first against the Company,
protest or notice with respect to this Note or the indebtedness evidenced hereby
and all demands whatsoever, and covenants that this Guarantee will not be
discharged except by payment in full of the principal of, and premium, if any,
and interest, if any, on, this Note and the complete performance of all other
obligations contained herein.
12
<PAGE>
The Guarantor shall be subrogated to all rights of the Holder of this Note
against the Company in respect of any amounts paid to such Holder by the
Guarantor pursuant to the provisions of this Guarantee; provided, however, that
-------- -------
the Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until payment in full of
the principal of, and premium, if any, and interest, if any, on, the Note and
the complete performance of all other obligations contained herein.
Subject to the next following paragraph, the Guarantor hereby certifies and
warrants that all acts, conditions and things required to be done and performed
and to have happened precedent to the creation and issuance of this Guarantee
and to constitute the same the valid obligation of the Guarantor have been done
and performed and have happened in due compliance with all applicable laws.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Guarantee shall not be valid or obligatory for any purposes.
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed in facsimile by its duly authorized officer under its corporate seal.
Dated:___________________
[SEAL]
KEYSTONE FINANCIAL, INC.
By: _______________________
Name:
Title:
Attest:
By: ________________________
Name:
Title:
13
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to the principal amount hereof together with interest to the
repayment date, to the undersigned, at_______________________________________
_______________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Paying Agent must receive at its corporate
trust office in The City of New York, or at such other place or places of which
the Company shall from time to time notify the Holder of this Note, not more
than 60 nor less than 30 days prior to an Optional Repayment Date, if any, shown
on the face of this Note, this Note with this "Option to Elect Repayment" form
duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in increments of $1,000) which the
Holder elects to have repaid and specify the denomination or denominations
(which shall be $100,000 or an integral multiple of $1,000 in excess thereof
(or, if the Specified Currency is other than United States dollars, the minimum
Authorized Denomination specified on the face hereof)) of the Notes to be issued
to the Holder for the portion of this Note not being repaid (in the absence of
any such specification, one such Note will be issued for the portion not being
repaid): $ __________________.
Dated: _____________ _______________________________________
NOTICE: The signature on this Option to Elect Repayment
must correspond with the name as written upon the face
of this Note in every particular, without alteration or
enlargement or any change whatever.
14
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
Additional abbreviations may also be used though not in the above list.
__________________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------
| |
|______________________________|______________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
______________________________________________________________________________
this Note and all rights thereunder hereby irrevocably constituting and
appointing
____________________________________________________________________ Attorney to
transfer this Note on the books of the Trustee, with full power of substitution
in the premises.
Dated:_____________________ _______________________________________
_______________________________________
Notice: The signature(s) on this Assignment
must correspond with the name(s) as written
upon the face of this Note in every
particular, with out alteration or
enlargement or any change whatsoever.
15
<PAGE>
EXHIBIT 4.6
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITORY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
REGISTERED CUSIP NO.: PRINCIPAL AMOUNT
FLR-____ __________ $_________
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
MEDIUM-TERM NOTE
(Subordinated Floating Rate)
Payment of Principal, Premium, if any, and Interest,
if any, Guaranteed by
KEYSTONE FINANCIAL, INC.
INTEREST RATE BASIS OR ORIGINAL ISSUE DATE: STATED MATURITY DATE:
BASES:
IF LIBOR: IF CMT RATE:
[ ] LIBOR Reuters Designated CMT Telerate
[ ] LIBOR Telerate Page:
INDEX CURRENCY: Designated CMT Maturity
Index:
INDEX MATURITY: INITIAL INTEREST RATE: % INTEREST PAYMENT
DATE(S):
SPREAD (PLUS OR MINUS): SPREAD MULTIPLIER: INITIAL INTEREST RESET
DATE:
MINIMUM INTEREST MAXIMUM INTEREST RATE: % INTEREST RESET DATE(S):
RATE: %
INITIAL REDEMPTION DATE: INITIAL REDEMPTION ANNUAL REDEMPTION
% PERCENTAGE: % PERCENTAGE REDUCTION:
<PAGE>
OPTIONAL REPAYMENT CALCULATION AGENT:
DATE(S):
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
from to
[ ] Floating Rate/Fixed Rate Note [ ] Actual/360 for the
Fixed Rate Commencement Date: period from to
Fixed Interest Rate: [ ] Actual/Actual for the
[ ] Inverse Floating Rate Note period from to
Fixed Interest Rate: Applicable Interest Rate Basis:
[ ] Original Issue Discount Note
Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION:
[ ] United States dollars [ ] U.S. $100,000 and integral
multiples of U.S.$1,000 in
[ ] Other excess thereof
[ ] Other:
EXCHANGE RATE AGENT:
DEFAULT RATE: %
ADDENDUM ATTACHED
[ ] Yes
[ ] No
OTHER/ADDITIONAL PROVISIONS:
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Keystone Financial Mid-Atlantic Funding Corp., a corporation duly
organized and validly existing under the laws of the Commonwealth of
Pennsylvania (the "Company"), for value received, hereby promises to pay to Cede
& Co., or registered assigns, the principal sum of
_____________________________
DOLLARS on the Stated Maturity Date specified above (except to the extent
redeemed or repaid prior to the Stated Maturity Date), and to pay interest
thereon at a rate per annum equal to the Initial Interest Rate specified above
until the Initial Interest Reset Date specified above and thereafter at a rate
determined in accordan ce with the provisions on the reverse hereof, depending
upon the sInterest Rate Basis specified above, until the principal hereof is
paid or duly made available for payment. The Company will pay interest on
Interest Payment D ates specified above, commencing with the first Interest
Payment Date next succeeding the Original Issue Date specified above, and on the
Stated Maturity Date (or any Redemption Date as defined on the reverse hereof or
any Holder's Optional Repayment Date with respect to which such option has been
exercised, each such Stated Maturity Date, Redemption Date and Optional
Repayment Date being hereinafter referred to as a "Maturity Date" with respect
to the principal repayable on such date); provided, however, that if the
-------- -------
if an Interest Original Issue Date occurs between a Regular Record Date (as
defined below) and the next succeeding Interest Payment Date, interest payments
will commence on the second Interest Payment Date next succeeding the Original
Issue Date, to the Holder (as defined below) of this Note on the Regular Record
Date with respect to such Interest Payment Date Regular Record Date; and
provided, further, that Payment Date would fall on a day that is not a Business
- -------- -------
(as defined on the reverse hereof) such Interest Payment Date shall be the
following day that is a Business Day, except that in the case the Interest Rate
Basis is LIBOR, if such next Business Day falls in the next succeeding calendar
month, such Interest Payment Date will be the preceding day that is a Business
Day.
Interest payable on this Note on any Interest Payment Date will
include interest accrued from the Original Issue Date, or the most recent date
for which interest has been paid, to, but excluding, such Interest Payment Date;
provided, however, that if the Interest Rate Reset period with respect to this
- -------- -------
Note is daily or weekly, interest payable on any Interest Payment Date will
include interest accrued to and including the Regular Record Date next preceding
such Interest Payment Date, except that interest payable on any such Maturity
Date will include interest accrued to, but excluding, such Maturity Date. If
any Maturity Date falls on a day which is not a Business Day, principal,
premium, if any, or interest, if any, payable with respect to such Maturity Date
will be paid on the next succeeding Business Day with the same force and effect
as if made on such Maturity Date, and no interest on such payment shall accrue
for the period from and after such Maturity
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<PAGE>
Date. The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, subject to certain exceptions, be paid to the Person
(the "Holder") in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the date 15 calendar days prior to an
Interest Payment Date (whether or not a Business Day) (the "Regular Record
Date"); provided, however, that interest payable on any Maturity Date will be
-------- -------
payable to the Person to whom the principal hereof shall be payable. Any such
interest not so punctually paid or duly provided for ("Defaulted Interest") 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 Note (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 referred to on
the reverse hereof, notice whereof shall be given to the Holder of this Note not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner, all as more fully provided in the Indenture (as defined
on the reverse hereof).
Payment of the principal of, and premium, if any, and interest, if
any, on this Note will be made in immediately available funds at the corporate
trust office of Bankers Trust Company (the "Paying Agent") in the Borough of
Manhattan, The City of New York, or at such other agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
provided, however, that if the Specified Currency specified above is other than
- -------- -------
United States dollars and such payment is to be made in the Specified Currency
in accordance with the provisions set forth below, such payment will be made by
wire transfer of immediately available funds to an account with a bank
designated by the holder hereof at least 15 calendar days prior to the Maturity
Date, provided that such bank has appropriate facilities therefor and that this
Note (and, if applicable, a duly completed repayment election form) is presented
and surrendered at the aforementioned office of the Trustee in time for the
Trustee to make such payment in such funds in accordance with its normal
procedures. Payment of interest on any Interest Payment Date other than the
Maturity Date may be made at the option of the Company by check mailed to the
address of the Holder as such address shall appear in the Security Register;
provided, however, that a Holder of not less than $10,000,000 aggregate
- -------- -------
principal amount (or, if the Specified Currency is other than United States
dollars, the equivalent thereof in the Specified Currency) of the Notes (whether
having identical or different terms and provisions) may, by written notice to
the Paying Agent at its corporate trust office in The City of New York (or at
such other address as the Company shall give notice in writing) on or before the
Regular Record Date preceding an Interest Payment Date, arrange to have the
interest payable on all Notes held by such Holder on such Interest Payment Date,
and all subsequent Interest Payment Dates until written notice to the contrary
is given to the Paying Agent, made by wire transfer of
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<PAGE>
immediately available funds to an account maintained at a bank in The City of
New York (or other bank consented to by the Company, which consent may not be
unreasonably withheld) as such Holder shall have designated; provided that such
bank has appropriate facilities therefor. Notwithstanding the preceding
sentence, payments of principal of, and premiums, if any, and interest, if any,
on, any Maturity Date will be made by wire transfer of immediately available
funds to a designated account maintained in the United States upon (i) receipt
of written notice by the Paying Agent from the Holder hereof not less than one
Business Day prior to such Maturity Date and (ii) presentation of this Note at
the corporate trust office of the Paying Agent in the Borough of Manhattan, The
City of New York or at such other agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York.
The Company is obligated to make payment of principal, premium, if
any, and interest in respect of this Note in the Specified Currency (or, if the
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued the Specified Currency as at the time of such payment is
legal tender for the payment of such debts). If the Specified Currency is other
than United States dollars, except as otherwise provided below, any such amounts
so payable by the Company will be converted by the Exchange Rate Agent specified
above into United States dollars for payment to the holder of this Note.
If the Specified Currency is other than United States dollars, the
holder of this Note may elect to receive such amounts in such Specified
Currency. If the holder of this Note shall not have duly made an election to
receive all or a specified portion of any payment of principal, premium, if any,
and/or interest in respect of this Note in the Specified Currency, any United
States dollar amount to be received by the holder of this Note will be based on
the highest bid quotation in The City of New York received by the Exchange Rate
Agent at approximately 11:00 A.M., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on such payment
date in the aggregate amount of the Specified Currency payable to all holders of
Notes scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments. If
three such bid quotations are not available, payments on this Note will be made
in the Specified Currency.
If the Specified Currency is other than United States dollars, the
holder of this Note may elect to receive all or a specified
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<PAGE>
portion of any payment of principal, premium, if any, and/or interest in respect
of this Note in the Specified Currency by submitting a written request for such
payment to the Trustee at its corporate trust office in The City of New York on
or prior to the applicable Record Date or at least 15 calendar days prior to the
Maturity Date, as the case may be. Such written request may be mailed or hand
delivered or sent by cable, telex or other form of facsimile transmission. The
holder of this Note may elect to receive all or a specified portion of all
future payments in the Specified Currency in respect of such principal, premium,
if any, and/or interest and need not file a separate election for each payment.
Such election will remain in effect until revoked by written notice to the
Trustee, but written notice of any such revocation must be received by the
Trustee on or prior to the applicable Record Date or at least 15 calendar days
prior to the Maturity Date, as the case may be.
If the Specified Currency is other than United States dollars or a
composite currency and the holder of this Note shall have duly made an election
to receive all or a specified portion of any payment of principal, premium, if
any, and/or interest in respect of this Note in the Specified Currency and if
the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to the holder of this Note by making
such payment in United States dollars on the basis of the Market Exchange Rate
(as defined below) on the second Business Day prior to such payment date or, if
such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. The "Market Exchange Rate" for the Specified Currency means the noon
dollar buying rate in The City of New York for cable transfers for the Specified
Currency as certified for customs purposes by (or if not so certified, as
otherwise determined by) the Federal Reserve Bank of New York. Any payment made
under such circumstances in United States dollars will not constitute an Event
of Default (as defined in the Indenture).
If the Specified Currency is a composite currency and the holder of
this Note shall have duly made an election to receive all or a specified portion
of any payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency and if such composite currency is unavailable due
to the imposition of exchange controls or other circumstances beyond the control
of the Company, then the Company will be entitled to satisfy its obligations to
the holder of this Note by making such payment in United States dollars. The
amount of each payment in United States dollars shall be computed by the
Exchange Rate Agent on the basis of the equivalent of the composite currency in
United States dollars. The component currencies of the composite currency for
this purpose (collectively, the "Component Currencies" and each, a "Component
Currency") shall be the currency amounts that
6
<PAGE>
were components of the composite currency as of the last day on which the
composite currency was used. The equivalent of the composite currency in United
States dollars shall be calculated by aggregating the United States dollar
equivalents of the Component Currencies. The United States dollar equivalent of
each of the Component Currencies shall be determined by the Exchange Rate Agent
on the basis of the most recently available Market Exchange Rate for each such
Component Currency, or as otherwise specified on the face hereof.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holder of this Note.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Notwithstanding any provisions to the contrary contained herein, if
the face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply, this Note shall be subject to the terms set
forth in such Addendum or such "Other/Additional Provisions."
Unless the Certificate of Authentication hereon has been executed by
the Trustee under the Indenture by the manual signature of one of its authorized
officers, this Note 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, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
[SEAL] KEYSTONE FINANCIAL MID-ATLANTIC
FUNDING CORP.
7
<PAGE>
By:
_________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of
the series designated therein referred
to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By: ____________________________
Authorized Signatory
8
<PAGE>
[REVERSE OF NOTE]
KEYSTONE FINANCIAL MID-ATLANTIC FUNDING CORP.
MEDIUM-TERM NOTE
(Subordinated Floating Rate)
This Medium-Term Note is one of a duly authorized series of Securities
(the "Securities") of the Company issued and to be issued under a Subordinated
Indenture, dated as of April __, 1997 (the "Indenture"), among the Company, the
Guarantor (as defined below) and Bankers Trust Company, as Trustee (the
"Trustee," which term shall include 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 thereunder of the Company, the
Guarantor, the Trustee and the Holders of the Notes and the terms upon which the
Notes are, and are to be, authenticated and delivered. The Medium-Term Notes
(the "Notes") may bear different dates, mature at different times, bear interest
at different rates and vary in such other ways as are provided in the Indenture.
The payment of principal of and premium, if any, and interest
(including any Additional Amounts payable in respect thereof) on this Note is
expressly subordinated and subject in right of payment, as provided in the
Indenture, to the prior payment of any and all Senior Company Indebtedness, as
defined in the Indenture, and this Note is subject to such provisions, and each
Holder of this Note, by accepting the same, agrees, expressly for the benefit of
present and future holders of Senior Company Indebtedness, whether now or
hereafter outstanding, to and shall be bound by such provisions.
This Note may be subject to repayment at the option of the Holder on
the Optional Repayment Date(s), if any, indicated on the face hereof. If no
Optional Repayment Dates are set forth on the face hereof, this Note may not be
so repaid at the option of the Holder hereof prior to the Stated Maturity Date.
On any Optional Repayment Date, this Note shall be repayable in whole or in part
in increments of $1,000 (provided that any remaining principal hereof shall be
at least $100,000) at the option of the Holder hereof at a repayment price equal
to 100% of the principal amount to be repaid together with accrued interest
thereon payable to the applicable Optional Repayment Date. For this Note to be
repaid in whole or in part at the option of the Holder hereof, this Note must be
received, with the form entitled "Option to Elect Repayment" below duly
completed, by the Paying Agent at its corporate trust office in the Borough of
Manhattan, The City of New York, or at such other place or places as the Company
shall from time to time notify the Holders of the Notes, not more than 60 nor
less than 30 days prior to the applicable Optional Repayment Date. Exercise of
such repayment option by the Holder hereof shall be irrevocable.
9
<PAGE>
This Note may be redeemed at the option of the Company on any date on
and after the Initial Redemption Date, if any, specified on the face hereof
(each such date fixed for redemption, a "Redemption Date"). If no Initial
Redemption Date is set forth on the face hereof, this Note may not be redeemed
at the option of the Company prior to the Stated Maturity Date. On and after
the Initial Redemption Date, if any, this Note may be redeemed at any time in
whole or from time to time in part in increments of $1,000 (provided that any
remaining principal hereof shall be at least $100,000) at the option of the
Company at the applicable Redemption Price referred to below together with
accrued interest thereon payable to the Redemption Date, on notice given not
more than 60 nor less than 30 days prior to the Redemption Date. In the event
of redemption of this Note in part only, a new Note for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the surrender
hereof.
If this Note is redeemable at the option of the Company, the
"Redemption Price" shall initially be the Initial Redemption Percentage,
specified on the face hereof, of the principal amount of this Note to be
redeemed and shall decline at each anniversary of the Initial Redemption Date by
the Annual Redemption Percentage Reduction, if any, specified on the face
hereof, of the principal amount to be redeemed until the Redemption Price is
100% of such principal amount.
If the Interest Category of this Note is specified on the face hereof
as an Original Issue Discount Note, the amount payable to the holder of this
Note in the event of redemption, repayment or acceleration of maturity of this
Note will be equal to the sum of (1) the Issue Price specified on the face
hereof (increased by any accruals of the Discount, as defined below) and, in the
event of any redemption of this Note (if applicable), multiplied by the Initial
Redemption Percentage (as adjusted by the Annual Redemption Percentage
Reduction, if applicable) and (2) any unpaid interest on this Note accrued from
the Original Issue Date to the Redemption Date, Repayment Date or date of
acceleration of maturity, as the case may be. The difference between the Issue
Price and 100% of the principal amount of this Note is referred to herein as the
"Discount."
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued so as to cause an assumed yield on the
Note to be constant. The assumed constant yield will be calculated using a 30-
day month, 360-day year convention, a compounding period that, except for the
Initial Period (as defined below), corresponds to the shortest period between
Interest Payment Dates (with ratable accruals within a compounding period), a
constant coupon rate equal to the initial interest rate applicable to this Note
and an assumption that the maturity of this Note will not be accelerated. If
the period from
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<PAGE>
the Original Issue Date to the initial Interest Payment Date (the "Initial
Period") is shorter than the compounding period for this Note, a proportionate
amount of the yield for an entire compounding period will be accrued. If the
Initial Period is longer than the compounding period, then such period will be
divided into a regular compounding period and a short period, with the short
period being treated as provided in the preceding sentence.
Except as described below, this Note will bear interest at the rate
determined by reference to the Interest Rate Basis shown on the face hereof (i)
plus or minus the Spread, if any, or (ii) multiplied by the Spread Multiplier,
if any, specified on the face hereof. The interest rate in effect on each day
shall be (a) if such day is an Interest Reset Date, the interest rate with
respect to the Interest Determination Date referred to below pertaining to such
Interest Reset Date or (b) if such day is not an Interest Reset Date, the
interest rate with respect to the Interest Determination Date pertaining to the
next preceding Interest Reset Date, provided that (i) the interest rate in
effect from the Original Issue Date to the first Interest Reset Date shall be
the Initial Interest Rate specified on the face hereof, and (ii) the interest
rate in effect for the ten days immediately prior to the Maturity Date shall be
the rate in effect on the tenth day preceding the Maturity Date. If any
Interest Reset Date would otherwise be a day that is not a Business Day, such
Interest Reset Date shall be postponed to the next day that is a Business Day,
except that if the Interest Rate Basis specified on the face hereof is LIBOR, if
such Business Day is in the next succeeding calendar month, such Interest Reset
Date shall be the immediately preceding Business Day.
Accrued interest hereon shall be an amount calculated by multiplying
the face amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each day
from the Original Issue Date or from the day succeeding the last date for which
interest shall have been paid, as the case may be, to the date for which accrued
interest is being calculated. The interest factor for each such day shall be
computed by dividing the interest rate applicable to such day by 360 or, in the
case of Notes having the Treasury Rate as their Interest Rate Basis, by the
actual number of days in the year.
The Interest Determination Date with respect to the Certificate of
Deposit Rate, Commercial Paper Rate, Federal Funds Rate, Prime Rate and the J.J.
Kenny Rate will be the second Business Day preceding the Interest Reset Date.
The Interest Determination Date with respect to the Eleventh District Cost of
Funds Rate will be the last working day of the month immediately preceding such
Interest Rate Reset Date on which the Federal Home Loan Bank of San Francisco
(the "FHLB of San Francisco") publishes the Index (as defined below). The
Interest Determination Date with
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<PAGE>
respect to LIBOR shall be the second London Banking Day (as defined below)
preceding an Interest Reset Date. The Interest Determination Date with respect
to the Treasury Rate shall be the day of the week in which such Interest Reset
Date falls on which Treasury bills normally would be auctioned; provided,
--------
however, that if as a result of a legal holiday an auction is held on the Friday
- -------
of the week preceding the Interest Reset Date, the related Interest
Determination Date shall be such preceding Friday; and provided, further, that
-------- -------
if an auction shall fall on any Interest Reset Date then the Interest Reset Date
shall instead be the first Business Day following such auction.
The "Calculation Date" pertaining to any Interest Determination Date
shall be the tenth calendar day after such Interest Determination Date or, if
such day is not a Business Day, the next succeeding Business Day.
All percentages resulting from any calculation on the Notes will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward, and all
dollar amounts used in or resulting from such calculation on the Notes will be
rounded to the nearest cent or, in the case of a Specified Currency other than
United States dollars, to the nearest unit (with one-half cent being rounded
upward).
The interest rate borne by this Note will be determined as follows:
(i) Unless the Interest Category of this Note is specified on
the face hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse
Floating Rate Note" or as otherwise specified as Other/Additional
Provisions on the face hereof or in an Addendum hereto, this Note shall
be designated as a "Regular Floating Rate Note" and, except as set forth
below or specified on the face hereof or in an Addendum hereto, shall
bear interest at the rate determined by reference to the applicable
Interest Rate Basis or Bases (a) plus or minus the Spread, if any,
and/or (b) multiplied by the Spread Multiplier, if any, in each case as
specified on the face hereof. Commencing on the Initial Interest Reset
Date, the rate at which interest on this Note shall be payable shall be
reset as of each Interest Reset Date specified on the face hereof;
provided, however, that the interest rate in effect for the period, if
-------- -------
any , from the Original Issue Date to the Initial Interest Reset Date
shall be the Initial Interest Rate.
(ii) If the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note," then, except as set
forth below or specified on the face hereof or in an Addendum hereto,
this Note shall bear interest at the
12
<PAGE>
rate determined by reference to the applicable Interest Rate Basis or
Bases (a) plus or minus the Spread, if any, and/or (b) multiplied by the
Spread Multiplier, if any. Commencing on the Initial Interest Reset
Date, the rate at which interest on this Note shall be payable shall be
reset as of each Interest Reset Date; provided, however, that (y) the
-----------------
interest rate in effect for the period, if any, from the
Original Issue Date to the Initial Interest Reset Date shall be the
Initial Interest Rate and (z) the interest rate in effect for the period
commencing on the Fixed Rate Commencement Date specified on the face
hereof to the Maturity Date shall be the Fixed Interest Rate specified
on the face hereof or, if no such Fixed Interest Rate is specified, the
interest rate in effect hereon on the day immediately preceding the
Fixed Rate Commencement Date.
(iii) If the Interest Category of this Note is specified on the
face hereof a s an "Inverse Floating Rate Note," then, except as set
forth below or specified on the face hereof or in an Addendum hereto,
this Note shall bear interest at the Fixed Interest Rate minus the rate
determined by reference to the applicable Interest Rate Basis or Bases
(a) plus or minus the Spread, if any, and/or (b) multiplied by the
Spread Multiplier, if any; provided, however, that, unless otherwise
-----------------
specified on the face hereof or in an Addendum hereto,
the interest rate hereon shall not be less than zero. Commencing on the
Initial Interest Reset Date, the rate at which interest on this Note
shall be payable shall be reset as of each Interest Reset Date;
provided, however, that the interest rate in effect for the period, if
-------- -------
any, from the Original Issue Date to the Initial Interest Reset Date
shall be the Initial Interest Rate.
Except as set forth above or specified on the face hereof or in an Addendum
hereto, the interest rate in effect on each day shall be (i) if such day is an
Interest Reset Date, the interest rate determined as of the Interest
Determination Date (as defined below) immediately preceding such Interest Reset
Date or (ii) if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately preceding the most
recent Interest Reset Date. If any Interest Reset Date would otherwise be a day
that is not a Business Day, such Interest Reset Date shall be postponed to the
next succeeding Business Day, except that if LIBOR is an applicable Interest
Rate Basis and such Business Day falls in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding Business Day. In
addition, if the Treasury Rate is an applicable Interest Rate Basis and the
Interest Determination Date would otherwise fall on an Interest Reset Date, then
such Interest Reset Date will be postponed to the next succeeding Business Day.
13
<PAGE>
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in The
City of New York or the Commonwealth of Pennsylvania; provided, however, that if
-------- -------
the Specified Currency is other than United States dollars, such day is also not
a day on which banking institutions are authorized or required by law,
regulation or executive order to close in the Principal Financial Center (as
defined below) of the country issuing the Specified Currency (or, in the case of
European Currency Units ("ECU"), is not a day that appears as an ECU non-
settlement day on the display designated as "ISDE" on the Reuter Monitor Money
Rates Service (or a day so designated by the ECU Banking Association) or, if ECU
non-settlement days do not appear on that page (and are not so designated), is
not a day on which payments in ECU cannot be settled in the international
interbank market); provided, further, that if LIBOR is an applicable Interest
-------- -------
Rate Basis, such day is also a London Business Day (as defined below). "London
Business Day" means (i) if the Index Currency (as defined below) is other than
ECU, any day on which dealings in such Index Currency are transacted in the
London interbank market or (ii) if the Index Currency is ECU, any day that does
not appear as an ECU non-settlement day on the display designated as "ISDE" on
the Reuter Monitor Money Rates Service (or a day so designated by the ECU
Banking Association) or, if ECU non-settlement days do not appear on that page
(and are not so designated), is not a day on which payments in ECU cannot be
settled in the international interbank market. "Principal Financial Center"
means the capital city of the country issuing the Specified Currency, or solely
with respect to the calculation of LIBOR, the Index Currency, except that with
respect to United States dollars, Australian dollars, Deutsche marks, Dutch
guilders, Italian lire, Swiss francs and ECU, the "Principal Financial Center"
shall be The City of New York, Sydney, Frankfurt, Amsterdam, Milan, Zurich and
Luxembourg, respectively.
The interest rate applicable to each Interest Reset Period commencing on
the related Interest Reset Date will be determined by the Calculation Agent as
of the applicable Interest Determination Date and will be calculated by the
Calculation Agent on or prior to the Calculation Date (as defined below), except
with respect to the LIBOR, which will be calculated as of such Interest
Determination Date. The "Interest Determination Date" with respect to the CD
Rate, the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and the
Prime Rate will be the second Business Day immediately preceding the applicable
Interest Reset Date; and the "Interest Determination Date" with respect to LIBOR
shall be the second London Business Day immediately preceding the applicable
Interest Reset Date, unless the Index Currency is British pounds sterling, in
which case the "Interest Determination Date" will be the applicable Interest
Reset Date. The "Interest Determination Date" with respect to the Treasury Rate
shall be the day in the week in
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<PAGE>
which the applicable Interest Reset Date falls on which day Treasury Bills (as
defined below) are normally auctioned (Treasury Bills are normally sold at an
auction held on Monday of each week, unless that day is a legal holiday, in
which case the auction is normally held on the following Tuesday, except that
such auction may be held on the preceding Friday); provided, however, that if an
-------- -------
auction is held on the Friday of the week preceding the applicable Interest
Reset Date, the "Interest Determination Date" shall be such preceding Friday.
If the interest rate of this Note is determined with reference to two or more
Interest Rate Bases specified on the face hereof, the "Interest Determination
Date" pertaining to this Note shall be the most recent Business Day which is at
least two Business Days prior to the applicable Interest Reset Date on which
each Interest Rate Basis is determinable. Each Interest Rate Basis shall be
determined as of such date, and the applicable interest rate shall take effect
on the related Interest Reset Date.
Unless otherwise specified on the face hereof or in an Addendum hereto, the
rate with respect to each Interest Rate Basis will be determined in accordance
with the applicable provisions below.
CD Rate. If an Interest Rate Basis for this Note is specified on the face
-------
hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published by the Board
of Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication of the Board of Governors
of the Federal Reserve System ("H.15(519)") under the heading "CDs (Secondary
Market)." If such rate is not published in H.15(519) by 9:00 A.M., New York
City time, on the related Calculation Date, then the CD Rate on such CD Rate
Interest Determination Date will be calculated by the Calculation Agent
specified on the face hereof and will be the arithmetic mean of the secondary
market offered rates as of 10:00 A.M., New York City time, on such CD Rate
Interest Determination Date, of three leading nonbank dealers in negotiable
United States dollar certificates of deposit in The City of New York selected by
the Calculation Agent for negotiable certificates of deposit of major United
States money market banks for negotiable United States dollar certificates of
deposit with a remaining maturity closest to the Index Maturity in a
denomination of U.S.$5,000,000; provided, however, that if fewer than three
-------- -------
dealers so selected by the Calculation Agent are quoting as mentioned in this
sentence, the CD Rate determined as of such CD Rate Interest Determination Date
will be the CD Rate in effect on such CD Rate Interest Determination Date.
15
<PAGE>
CMT Rate. If an Interest Rate Basis for this Note is specified on the face
--------
hereof as the CMT Rate, the CMT Rate shall be determined as of the applicable
Interest Determination Date (a "CMT Rate Interest Determination Date") as the
rate displayed on the Designated CMT Telerate Page (as defined below) under the
caption "...Treasury Constant Maturities...Federal Reserve Board Release
H.15...Mondays Approximately 3:45 P.M.," under the column for the Designated CMT
Maturity Index (as defined below) for (i) if the Designated CMT Telerate Page is
7055, the rate on such CMT Rate Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, the week or month, as applicable, ended
immediately preceding the week in which the related CMT Rate Interest
Determination Date occurs. If such rate is no longer displayed on the relevant
page or is not displayed by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index as published in H.15(519). If such rate is no longer published
or is not published by 3:00 P.M., New York City time, on the related Calculation
Date, then the CMT Rate on such CMT Rate Interest Determination Date will be
such treasury constant maturity rate for the Designated CMT Maturity Index (or
other United States Treasury rate for the Designated CMT Maturity Index) for the
CMT Rate Interest Determination Date with respect to such Interest Reset Date as
may then be published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519). If such information is
not provided by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate on the CMT Rate Interest Determination Date will be calculated
by the Calculation Agent and will be a yield to maturity, based on the
arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 P.M., New York City time, on such CMT Rate Interest
Determination Date reported, according to their written records, by three
leading primary United States government securities dealers (each, a "Reference
Dealer") in The City of New York selected by the Calculation Agent (from five
such Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for the
most recently issued direct noncallable fixed rate obligations of the United
States ("Treasury Notes") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the Calculation Agent is
unable to obtain three such Treasury Note quotations, the CMT Rate on such CMT
Rate Interest Determination Date will be calculated by the Calculation Agent and
will be a yield to maturity based on the arithmetic mean of the secondary market
offer side prices as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date of three
16
<PAGE>
Reference Dealers in The City of New York (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for Treasury Notes with an original
maturity of the number of years that is the next highest to the Designated CMT
Maturity Index and a remaining term to maturity closest to the Designated CMT
Maturity Index and in an amount of at least U.S.$100 million. If three or four
(and not five) of such Reference Dealers are quoting as described above, then
the CMT Rate will be based on the arithmetic mean of the offer prices obtained
and neither the highest nor the lowest of such quotes will be eliminated;
provided, however, that if fewer than three Reference Dealers selected by the
- -------- -------
Calculation Agent are quoting as mentioned herein, the CMT Rate determined as of
such CMT Rate Interest Determination Date will be the CMT Rate in effect on such
CMT Rate Interest Determination Date. If two Treasury Notes with an original
maturity as described in the second preceding sentence have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the Calculation
Agent will obtain from the five Reference Dealers quotations for the Treasury
Note with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service (or any successor service) on the page specified on the face hereof (or
any other page as may replace such page on such service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)) for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified on the face hereof, the Designated CMT Telerate Page
shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the Designated
CMT Maturity Index shall be 2 years.
Commercial Paper Rate. If an Interest Rate Basis for this Note is
---------------------
specified on the face hereof as the Commercial Paper Rate, the Commercial Paper
Rate shall be determined as of the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date") as the Money Market Yield
(as defined below) on such date of the per annum rate (quoted on a bank discount
basis) for commercial paper having the Index Maturity as published in H.15(519)
under the heading "Commercial Paper." If such rate is not published in
H.15(519) by 3:00 P.M., New York City time, on such Calculation Date, then the
Commercial Paper Rate on such Commercial Paper Rate Interest Determination Date
will be calculated by the Calculation Agent and shall be the Money Market Yield
of the arithmetic mean of the per annum offered rates (quoted on a bank discount
basis) as of 11:00 A.M., New York City time, on
17
<PAGE>
such Commercial Paper Rate Interest Determination Date of three leading dealers
of commercial paper in The City of New York selected by the Calculation Agent
for commercial paper having the Index Maturity placed for an industrial issuer
whose bond rating is "AA," or the equivalent, from a nationally recognized
rating agency; provided, however, that if fewer than three dealers selected by
-------- -------
the Calculation Agent are quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper Rate Interest Determination
Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
Money Market Yield = D x 360 x 100
---------------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the period
from the Interest Reset Date to but excluding the day that numerically
corresponds to such Interest Reset Date (or, if there is not any numerically
corresponding day, the last day) in the calendar month that is the number of
months corresponding to the specified Index Maturity after the month in which
such Interest Reset Date falls.
Eleventh District Cost of Funds Rate. If an Interest Rate Basis for this
------------------------------------
Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on Telerate Page 7058 (as defined
below) as of 11:00 A.M., San Francisco time, on such Eleventh District Cost of
Funds Rate Interest Determination Date. If such rate does not appear on
Telerate Page 7058 on any related Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh
District Cost of Funds Rate Interest Determination Date shall be the monthly
weighted average cost of funds paid by member institutions of the Eleventh
Federal Home Loan Bank District that was most recently announced (the "Index")
by the FHLB of San Francisco as such cost of funds for the calendar month
immediately preceding the date of such announcement. If the FHLB of San
Francisco fails to announce such rate for the calendar month immediately
preceding such Eleventh District Cost of Funds Rate Interest Determination Date,
then the Eleventh District Cost of Funds Rate determined as of such Eleventh
District Cost of Funds Rate Interest Determination Date shall be the Eleventh
18
<PAGE>
District Cost of Funds Rate in effect on such Eleventh District Cost of Funds
Rate Interest Determination Date.
"Telerate Page 7058" means the display designated as page "7058" on the Dow
Jones Telerate Service (or such other page as may replace the 7058 page on that
service for the purpose of displaying the monthly weighted average cost of funds
paid by member institutions of the Eleventh Federal Home Loan Bank District).
Federal Funds Rate. If an Interest Rate Basis for this Note is specified
------------------
on the face hereof as the Federal Funds Rate, the Federal Funds Rate shall be
determined as of the applicable Interest Determination Date (a "Federal Funds
Rate Interest Determination Date") as the rate on such date for United States
dollar federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)." If such rate is not published in H.15(519) by 3:00 P.M., New York
City time, on the related Calculation Date, then the Federal Funds Rate on such
Federal Funds Interest Determination Date shall be calculated by the Calculation
Agent and will be the arithmetic mean of the rates, as of 9:00 A.M., New York
City time, on such Federal Funds Rate Interest Determination Date, for the last
transaction in overnight federal funds arranged by three leading brokers of
federal funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if fewer than three brokers so selected by the
-------- -------
Calculation Agent are quoting as mentioned in this sentence, the Federal Funds
Rate determined as of such Federal Funds Rate Interest Determination Date will
be the Federal Funds Rate in effect on such Federal Funds Rate Interest
Determination Date.
J.J. Kenny Rate. If an Interest Rate Basis for this Note is specified on
---------------
the face hereof as the J.J. Kenny Rate, the J.J. Kenny Rate shall be determined
as of the applicable Interest Determination Date (a "J.J. Kenny Interest
Determination Date") as the rate specified in the high grade weekly index (the
"Weekly Index") on such J.J. Kenny Interest Determination Date made available by
Kenny Information Systems ("Kenny") to the Calculation Agent. The Weekly Index
is based on 30-day yield evaluations at par of bonds, the interest of which is
exempt from federal income taxation under the Internal Revenue Code of 1986, as
amended (the "Code"), of not less than five high grade component issuers
selected by Kenny, which shall include, without limitation, issuers of general
obligation bonds. The specific issuers to be included among the component
issuers may be changed from time to time by Kenny at its discretion. The bonds
on which the Weekly Index is based do not include any bonds on which the
interest is subject to a minimum tax or similar tax under the Code unless all
tax-exempt bonds are subject to such tax. In the event Kenny ceases to make
available such Weekly Index, a successor indexing agent will be selected by the
Calculation Agent, such index to reflect the prevailing rate for bonds rated in
the highest short-term rating
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<PAGE>
category by Moody's Investors Service, Inc. and Standard & Poor's Ratings Group
in respect of issuers most closely resembling the high grade component issuers
selected by Kenny for its Weekly Index, the interest on which is (a) variable on
a weekly basis, (b) exempt from federal income taxation under the Code and (c)
not subject to a minimum tax or similar tax under the Code, unless all tax-
exempt bonds are subject to such tax. If such a successor indexing agent is not
available, the rate for any J.J. Kenny Interest Determination Date will equal
67% of the rate calculated using methodology set forth below under "Treasury
Rate." The Calculation Agent shall calculate the J.J. Kenny Rate in accordance
with the foregoing. At the request of a holder of a Floating Rate Note bearing
interest at the J.J. Kenny Rate, the Calculation Agent will provide such holder
with the interest rate that will become effective as of the next Interest Reset
Date.
LIBOR. If an Interest Rate Basis for this Note is specified on the face
-----
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination Date")
in accordance with the following provisions:
(i) the Calculation Agent will determine either (a) the arithmetic mean of
the offered rates for deposits in the Index Currency for the period of the
applicable Index Maturity which appear on the Reuters Screen LIBO Page at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date
if at least two such offered rates appear on the Reuters Screen LIBO Page"
("LIBOR Reuters"), or (b) the rate for deposits in the Index Currency for the
period of the applicable Index Maturity that appears on the Telerate Page 3750
as of 11:00 A.M., London time, on such LIBOR Interest Determination Date ("LIBOR
Telerate"). "Reuters Screen LIBO Page" means the display designated as Page
"LIBO" on the Reuters Monitor Money Rate Service (or such other page as may
replace the LIBO page on the service for the purpose of displaying London
interbank offered rates of major banks). "Telerate Page 3750" means the display
designated as page "3750" on the Telerate Service (or such other page as may
replace the 3750 page on that service or such other service or services as may
be nominated by the British Bankers' Association for the purpose of displaying
London Interbank offered rates for deposits in the Index Currency). If neither
LIBOR Reuters nor LIBOR Telerate is specified on the face hereof, LIBOR will be
determined as if LIBOR Telerate is specified. If fewer than two offered rates
appear on the Reuters Screen LIBO Page, or if no rate appears on the Telerate
Page 3750, as applicable, LIBOR in respect of that LIBOR Interest Determination
Date will be determined as if the parties had specified the rates described in
(ii) below.
(ii) If fewer than two offered rates appear on the Reuters Screen LIBO page
or no rate appears on Telerate Page 3750, as applicable, the Calculation Agent
will request the principal London
20
<PAGE>
offices of four major banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered quotations
for deposits in the Index Currency for the period of the applicable Index
Maturity to prime banks in the London interbank market at approximately 11:00
A.M., London time, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date and in a principal amount that
is representative of a single transaction in such Index Currency in such market
at such time. If at least two such quotations are provided, LIBOR on such LIBOR
Interest Determination Date will be the arithmetic mean of such quotations. If
fewer than two quotations are provided, LIBOR on such LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M. in the applicable Principal Financial Center by three
major banks in such Principal Financial Center for loans in the Index Currency
to leading European Banks, having the Index Maturity and in a principal amount
that is representative for a single transaction in such Index Currency in such
market at such time; provided, however, that if fewer than three banks selected
as aforesaid by the Calculation Agent are quoting rates as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
LIBOR in effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency or composite currency specified on the
--------------
face hereof as to which LIBOR shall be calculated. If no such currency or
composite currency is specified on the face hereof, the Index Currency shall be
United States dollars.
Prime Rate. If an Interest Rate Basis for this Note is specified on the
----------
face hereto as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under the
heading "Bank Prime Loan." If such rate is not published prior to 9:00 A.M.,
New York City time, on the related Calculation Date, then the Prime Rate shall
be the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen US Prime 1 Page (as defined below) as such
bank's prime rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates appear on the Reuters Screen
US Prime 1 Page for such Prime Rate Interest Determination Date, the Prime Rate
shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by a 360-day year as of the close of
business on such Prime Rate Interest Determination Date by three major banks in
The City of New York selected by the Calculation Agent. If fewer than three
such quotations are so provided, the Prime Rate shall be the Prime Rate in
effect on such Prime Rate Interest Determination Date.
21
<PAGE>
"Reuters Screen US Prime 1 Page" means the display designated as page "US
------------------------------
Prime 1" on the Reuter Money Market Rates Service (or any successor service) (or
such other page as may replace the US Prime 1 Page on such service (or any
successor service) for the purpose of displaying prime rates or base lending
rates of major United States banks).
Treasury Rate. If an Interest Rate Basis for this Note is specified on the
-------------
face hereof as the Treasury Rate, the Treasury Rate shall be determined as of
the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity, as such rate is published
in H.15(519) under the heading "U.S. Government Securities/Treasury
Bills/Auction Average (Investment)" or, if not published by 9:00 A.M., New York
City time, on the related Calculation Date, the auction average rate of such
Treasury Bills (expressed as a bond equivalent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) as otherwise announced by
the United States Department of the Treasury. In the event that the results of
the Auction of Treasury Bills having the Index Maturity are not reported as
provided by 3:00 P.M., New York City time, on the related Calculation Date, or
if no such auction is held, then the Treasury Rate will be the rate set forth in
H.15(519) for the relevant Treasury Interest Determination Date for the
specified Index Maturity under the heading "U.S. Government Securities/Treasury
Bills/Secondary market." If such rate is not published by 3:00 P.M. New York
City time on the relevant Calculation Date, the Treasury Rate will be calculated
by the Calculation Agent and will be a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) of the arithmetic mean of the secondary market bid rates, as
of approximately 3:30 P.M., New York City time, on such Treasury Rate Interest
Determination Date, of three primary United States government securities dealers
in The City of New York selected by the Calculation Agent, for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity;
provided, however, that if fewer than three dealers so selected by the
Calculation Agent are quoting as mentioned in this sentence, the Treasury Rate
determined as of such Treasury Rate Interest Determination Date will be the
Treasury Rate in effect on such Treasury Rate Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing on or
before each Calculation Date. The interest rate on this Note will in no event
be higher than the maximum rate permitted by New York law, as the same may be
modified by United States law of general application.
22
<PAGE>
At the request of the Holder hereof, the Calculation Agent will provide to
the Holder hereof the interest rate hereon then in effect and, if determined,
the interest rate which will become effective as of the next Interest Reset
Date.
Except as may be provided in the Indenture, if an Event of Default with
respect to the Notes shall occur and be continuing, the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Notes may declare
the principal of all the Notes 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 Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor, and the Trustee with the consent of the Holders of not less than 66
2/3% in aggregate principal amount of the Securities at the time Outstanding of
each series affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of each series, to waive compliance by the Company or the
Guarantor 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 Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note 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 Note.
The Guarantor, or a Subsidiary (as defined in the Indenture) thereof, may
directly assume, by a supplemental indenture, the due and punctual payment of
the principal of, and premium, if any, and interest on, all of the Securities,
in which case the Company shall be released from its liability as obligor on the
Securities.
No reference herein to the Indenture and no provision of this Note 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, and
interest on, this Note at the times, places 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 Note may be registered on the Security Register
of the Company upon surrender of this Note for registration of transfer at the
corporate trust office of Bankers Trust Company, as Security Registrar, in the
Borough of Manhattan, The City of New York or at such other agency of the
Company maintained for that purpose in the Borough of
23
<PAGE>
Manhattan, The City of New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company, and this Note duly
executed by, the Holder hereof or by his attorney duly authorized in writing and
thereupon one or more new Notes, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Notes are issuable only in registered form without coupons in minimum
denominations of $100,000 or any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture, and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes in authorized denominations, as requested by the
Holder surrendering the same.
No service charge will 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 Note for registration of transfer or
exchange, the Company, the Guarantor, the Trustee and any agent of the Company,
the Guarantor or the Trustee may treat the Holder as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Guarantor, the Trustee nor any agent thereof shall be affected by notice to the
contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made
and to be performed in such State.
All terms used but not defined herein shall have the meanings assigned to
such terms in the Indenture.
GUARANTEE OF KEYSTONE FINANCIAL, INC.
For value received, Keystone Financial, Inc., a Pennsylvania corporation
(the "Guarantor"), hereby unconditionally guarantees to the Holder of this Note
the due and punctual payment of the principal of, and premium, if any, and
interest on (including any Additional Amounts payable in respect thereof), this
Note when and as the same shall become due and payable, whether at the Stated
Maturity Date or upon acceleration, redemption, repayment or otherwise,
according to the terms of the Indenture. In case of the failure of the Company
punctually to make any such payment of principal, premium, if any, or interest,
the Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at the Stated Maturity
Date or upon acceleration, redemption, repayment or otherwise, and as if such
payment were made by the Company.
24
<PAGE>
The payment of the principal of and premium, if any, and interest
(including any Additional Amounts payable in respect thereof) on the Notes under
the Guarantee is expressly subordinated and subject in right of payment, as
provided in the Indenture, to the prior payment of any and all Senior Guarantor
Indebtedness, as defined in the Indenture, and this Guarantee and the related
Note are subject to such provisions, and each Holder of the Notes, by accepting
the same, agrees, expressly for the benefit of present and future holders of
Senior Guarantor Indebtedness, whether now or hereafter outstanding, to and
shall be bound by such provisions.
The Guarantor hereby agrees that its obligations under this Guarantee shall
be as principal and not merely as surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of this Note or the Indenture, any failure to
enforce the provisions of this Note or the Indenture, or any waiver,
modification, consent or indulgence granted to the Company with respect thereto
by the Holder of this Note or the Trustee, the recovery of any judgment against
the Company or any action to enforce the same, or any other circumstance which
may otherwise constitute a legal or equitable discharge of a surety or
guarantor. The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a proceeding first against the Company,
protest or notice with respect to this Note or the indebtedness evidenced hereby
and all demands whatsoever, and covenants that this Guarantee will not be
discharged except by payment in full of the principal of, and premium, if any,
and interest on, this Note and the complete performance of all other obligations
contained herein.
The Guarantor shall be subrogated to all rights of the Holder of this Note
against the Company in respect of any amounts paid to such Holder by the
Guarantor pursuant to the provisions of this Guarantee; provided, however, that
-------- -------
the Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until payment in full of
the principal of, and premium, if any, and interest on, the Note and the
complete performance of all other obligations contained herein.
Subject to the next following paragraph, the Guarantor hereby certifies and
warrants that all acts, conditions and things required to be done and performed
and to have happened precedent to the creation and issuance of this Guarantee
and to constitute the same the valid obligation of the Guarantor have been done
and performed and have happened in due compliance with all applicable laws.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers, this Guarantee shall not be valid or obligatory for any purposes.
25
<PAGE>
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
26
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed in facsimile by its duly authorized officer under its corporate seal.
Dated:
[SEAL]
KEYSTONE FINANCIAL, INC.
By: _______________________
Name:
Title:
Attest:
By: ________________________
Name:
Title:
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<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to the principal amount hereof together with interest to the
repayment date, to the undersigned, at _______________________________________
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Paying Agent must receive at its corporate
trust office in the City of Philadelphia, or at such other place or places of
which the Company shall from time to time notify the Holder of this Note, not
more than 60 nor less than 30 days prior to an Optional Repayment Date, if any,
shown on the face of this Note, this Note with this "Option to Elect Repayment"
form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in increments of $1,000) which the
Holder elects to have repaid and specify the denomination or denominations
(which shall be $100,000 or an integral multiple of $1,000 in excess thereof
(or, if the Specified Currency is other than United States dollars, the minimum
Authorized Denomination specified on the face hereof)) of the Notes to be issued
to the Holder for the portion of this Note not being repaid (in the absence of
any such specification, one such Note will be issued for the portion not being
repaid): $______________.
_____________________________________
Date:___________ NOTICE: The signature on this Option to Elect
Repayment must correspond with the name as written
upon the face of this Note in every particular,
without alteration or enlargement or any change
whatever.
28
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
Additional abbreviations may also be used though not in the above list.
__________________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
______________________________________________________________________________
this Note and all rights thereunder hereby irrevocably constituting and
appointing
____________________________________________________________________ Attorney to
transfer this Note on the books of the Trustee, with full power of substitution
in the premises.
Dated:_____________________ _______________________________________
_______________________________________
Notice: The signature(s) on this Assignment
must correspond with the name(s) as written
upon the face of this Note in every
particular, without alteration or
enlargement or any change whatsoever.
29
<PAGE>
EXHIBIT 5
[LETTERHEAD APPEARS HERE]
Reed Smith Shaw & McClay
435 SIXTH AVENUE
PITTSBURGH, PENNSYLVANIA 15219-1886
412-288-3131
FAX 412-288-3063
April 17, 1997
Keystone Financial, Inc.
One Keystone Plaza
Front and Market Streets
P.O. Box 3660
Harrisburg,PA 17105-3660
RE: Keystone Financial Mid-Atlantic Funding
Corp. and Keystone Financial, Inc.
Registration Statement on Form S-3 re
Senior and Subordinated Medium Term
Notes
Gentlemen:
We are acting as counsel to Keystone Financial Mid-Atlantic Funding
Corp. (the "Issuer") and Keystone Financial, Inc. (the "Guarantor") in
connection with the Registration Statement on Form S-3 (the "Registration
Statement") to be filed by the Issuer and the Guarantor with the Securities and
Exchange Commission for the purpose of registering under the Securities Act of
1933, as amended, $400,000,000 aggregate principal amount of debt securities to
be issued from time to time by the Issuer (the "Debt Securities") and guaranteed
as to payment of principal, premium, if any, and interest, if any, by the
Guarantor (the "Guarantees"). The Debt Securities will constitute either senior
indebtedness of the Issuer (the "Senior Debt Securities") or subordinated
indebtedness of the Issuer (the "Subordinated Debt Securities"). The Senior Debt
Securities and related Guarantees will be issued under a proposed Senior
Indenture dated as of , 1997 (the "Senior Indenture"), among the
---------
Issuer, the Guarantor and Bankers Trust Company, as Trustee. The Subordinated
Debt Securities and related Guarantees will be issued under a proposed
Subordinated Indenture dated as of , 1997 (the "Subordinated Indenture"),
------
among the Issuer, the Guarantor and Bankers Trust Company, as Trustee. This
opinion is being furnished to you for the purpose of being filed as an Exhibit
to the Registration Statement.
In connection with this opinion we have examined, among other
things:
(1) the Registration Statement and the prospectus included therein
and the exhibits thereto;
(2) a copy certified to our satisfaction of the Articles of
Incorporation and by-laws of the Issuer as in effect on the date
hereof;
(3) a copy certified to our satisfaction of the Restated Articles of
Incorporation and by-laws of the Guarantor as in effect on the
date hereof;
1
<PAGE>
[LETTERHEAD APPEARS HERE]
Keystone Financial, Inc. -2- April 17, 1997
(4) copies certified to our satisfaction of resolutions adopted by
the Board of Directors of the Issuer on April __, 1997,
including resolutions authorizing the issuance and sale of Debt
Securities:
(5) copies certified to our satisfaction of resolutions adopted by
the Board of Directors of the Guarantor on March 27, 1997,
including resolutions authorizing the Guarantees;
(6) the form of Senior Indenture;
(7) the form of Subordinated Indenture; and
(8) such other documents, corporate proceedings, statutes and
decisions as we considered necessary to enable us to furnish
this opinion.
We have assumed for the purposes of this opinion that:
(1) the Senior Indenture will be executed and delivered by
authorized officers of each of the parties thereto and will be
in substantially the form heretofore furnished to us;
(2) the Subordinated Indenture will be executed and delivered by
authorized officers of each of the parties thereto and will be
in substantially the form heretofore furnished to us; and
(3) the genuiness of all signatures, the authenticity of all
documents submitted as originals and the conformity to original
documents of all documents submitted as certified or other
copies.
Based upon the foregoing, we are pleased to advise you that, in
our opinion:
(1) The Debt Securities, when (i) the terms thereof have been duly
authorized and such instruments have been duly executed and
authenticated pursuant to the Senior Indenture or the
Subordinated Indenture, as the case may be, and (ii) issued,
sold and delivered against payment therefor, will constitute
valid and legally binding obligations of the Issuer; and
(2) The Guarantees, when endorsed on duly executed, authenticated
and issued Debt Securities and duly executed by the Guarantor,
will constitute valid and legally binding obligations of the
Guarantor.
2
<PAGE>
Keystone Financial, Inc. -3- April 17, 1997
The opinions set forth herein are qualified to the extent that the
obligations of the Issuer and the Guarantor may be limited by bankruptcy,
receivership, moratorium, insolvency, reorganization or other laws of general
applicability including those generally applicable to financial institutions
relating to or affecting the enforcement of creditors' rights and by general
principles of equity.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to us under the caption "Validity of
the Debt Securities" in the Prospectus forming a part of the Registration
Statement.
Very truly yours,
/s/ Reed Smith Shaw & McClay
REED SMITH SHAW & McCLAY
<PAGE>
Exhibit 12
Computation of Ratio of Earnings to Fixed Charges
Keystone Financial, Inc. (a)
<TABLE>
<CAPTION>
(dollar amounts in thousands) Year Ended December 31,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1. Income before taxes $100,019 $ 89,180 $ 71,840 $ 72,386 $ 62,310
2. Fixed charges:
a. Interest expense $174,758 $166,579 $124,784 $125,245 $152,718
b. Interest component of 2,229 1,925 1,931 1,817 1,620
rent expense ----------------------------------------------------
c. Total fixed charges (line 176,987 168,504 126,715 127,062 154,338
2a + line 2b)
d. Interest on deposits 153,132 145,090 111,171 114,801 145,902
----------------------------------------------------
e. Fixed charges excluding $ 23,855 $ 23,414 $ 15,544 $ 12,261 $ 8,436
interest on deposits (line
2c - line 2d)
3. Income before taxes plus
fixed charges:
a. Including interest on $277,006 $257,684 $198,555 $199,448 $216,648
deposits (line 1 + line 2c)
b. Excluding interest on 123,874 112,594 87,384 84,647 70,746
deposits (line 1 + line 2e)
4. Ratio of earnings to fixed
charges:
a. Excluding interest on 5.19 4.81 5.62 6.90 8.39
deposits (line 3b divided
by line 2e)
b. Including interest on 1.57 1.53 1.57 1.57 1.40
deposits (line 3a divided
by line 2c)
</TABLE>
(a) The consolidated ratio of earnings to fixed charges has been computed by
dividing income, before taxes and fixed charges, by fixed charges. Fixed
charges, excluding interest on deposits, include interest expense and the
portion of rental expense deemed representative of interest that would be
incurred if facilities and equipment currently under rental were financed
as an asset acquisition. Interest expense includes interest on federal
funds purchased, securities sold under agreements to repurchase, borrowings
from Federal Home Loan Banks, and other short and long term borrowings. The
ratio of earnings to fixed charges designated as "including interest on
deposits" has been appropriately adjusted to include interest on deposits.
Because the Issuer is solely a financing entity for the Guarantor and its
subsidiaries, the ratios above have calculated on a consolidated basis.
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) of Keystone Financial, Inc. for
the registration of $400,000,000 of debt securities and to the
incorporation by reference therein of our report dated January 31, 1997
with respect to the consolidated financial statements of Keystone
Financial, Inc. and subsidiaries included in its Annual Report
(Form 10-K) for the year ended December 31, 1996, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
April 16, 1997
<PAGE>
EXHIBIT 25.1
-----------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) ___________
------------------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
---------------------------------
KEYSTONE FINANCIAL KEYSTONE FINANCIAL, INC.
MID-ATLANTIC FUNDING CORP.
(Exact name of Registrants as specified in its charter)
PENNSYLVANIA PENNSYLVANIA
(State or other jurissdiction of Incorporation or organization)
BEING APPLIED FOR 23-2289209
(I.R.S. Employer Indentification No.)
ONE KEYSTONE PLAZA ONE KEYSTONE PLAZA
FRONT & MARKET STREETS FRONT & MARKET STREETS
HARRISBURG, PA 17105 HARRISBURG, PA 17105
(Address, including zip code
of principal executive offices)
SENIOR & SUBORDINATED DEBT SECURITIES
(Title of the indenture securities)
1
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority
to which it is subject.
NAME ADDRESS
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
ITEM 3. -15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of Bankers
Trust Company dated August 7, 1990, Certificate of
Amendment of the Organization Certificate of
Bankers Trust Company dated June 21, 1995 -
Incorporated herein by reference to Exhibit 1 filed
with Form T-1 Statement, Registration No. 33-65171,
and Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated March
20, 1996, copy attached.
EXHIBIT 2 - Certificate of Authority to commence
business Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement,
Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise
corporate trust powers - Incorporated herein by
reference to Exhibit 2 filed with Form T-1
Statement, Registration No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust Company,
as amended on February 18, 1997, copy attached.
-2-
2
<PAGE>
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company required by
Section 321(b) of the Act. - Incorporated herein by
reference to Exhibit 4 filed with Form T-1
Statement, Registration No. 22-18864.
EXHIBIT 7 - A copy of the latest report of condition of
Bankers Trust Company dated as of December 31, 1996.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 9th day
of April, 1997.
BANKERS TRUST COMPANY
By: s Louis Bodi
----------------------
Louis Bodi
Vice President
-4-
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 9th day
of April, 1997.
BANKERS TRUST COMPANY
By: sLouis Bodi
-------------------------
Louis Bodi
Vice President
-5-
5
<PAGE>
Legal Title of Bank: Bankers Trust Company
Address: 130 Liberty Street
City, State ZIP: New York, NY 10006
Call Date: 123196 ST-BK: 36-4840 FFIEC 031
Vendor ID: D CERT: 00623 Page RC-1
11
FDIC Certificate No.: 0 0 6 2 3
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS DECEMBER 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
Dollar Amounts in Thousands RCFD Bil Mil Thou
..................................................................................................................................
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1) ............................... 0081 1,545,000 1.a.
b. Interest-bearing balances(2) ........................................................ 0071 2,494,000 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) .......................... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)......................... 1773 4,368,000 2.b.
3 Federal funds sold and securities purchased under agreements to resell in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds sold ................................................................... 0276 3,651,000 3.a.
b. Securities purchased under agreements to resell ...................................... 0277 3,230,000 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 27,239,000 4.a.
b. LESS: Allowance for loan and lease losses........................RCFD 3123 917,000 4.b.
c. LESS: Allocated transfer risk reserve ...........................RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) .................................. 2125 28,889,000 4.d.
5. Assets held in trading accounts ............................................................ 3545 38,272,000 5.
6. Premises and fixed assets (including capitalized leases) ................................... 2145 914,000 6.
7. Other real estate owned (from Schedule RC-M) ............................................... 2150 213,000 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) 2130 184,000 8.
9. Customers' liability to this bank on acceptances outstanding ............................... 2155 597,000 9.
10. Intangible assets (from Schedule RC-M) ...................................................... 2143 17,000 10.
11. Other assets (from Schedule RC-F) ........................................................... 2160 6,056,000 11.
12. Total assets (sum of items 1 through 11) .................................................... 2170 90,430,000 12.
</TABLE>
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
6
<PAGE>
BY-LAWS
FEBRUARY 18, 1997
BANKERS TRUST COMPANY
NEW YORK
7
<PAGE>
BY-LAWS
OF
BANKERS TRUST COMPANY
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this Company shall be held
at the office of the Company in the Borough of Manhattan, City of New York, on
the third Tuesday in January of each year, for the election of directors and
such other business as may properly come before said meeting.
SECTION 2. Special meetings of stockholders other than those regulated by
statute may be called at any time by a majority of the directors. It shall be
the duty of the Chairman of the Board, the Chief Executive Officer or the
President to call such meetings whenever requested in writing to do so by
stockholders owning a majority of the capital stock.
SECTION 3. At all meetings of stockholders, there shall be present, either in
person or by proxy, stockholders owning a majority of the capital stock of the
Company, in order to constitute a quorum, except at special elections of
directors, as provided by law, but less than a quorum shall have power to
adjourn any meeting.
SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive
Officer or, in his absence, the President or, in their absence, the senior
officer present, shall preside at meetings of the stockholders and shall direct
the proceedings and the order of business. The Secretary shall act as secretary
of such meetings and record the proceedings.
ARTICLE II
DIRECTORS
SECTION 1. The affairs of the Company shall be managed and its corporate powers
exercised by a Board of Directors consisting of such number of directors, but
not less than ten nor more than twenty-five, as may from time to time be fixed
by resolution adopted by a majority of the directors then in office, or by the
stockholders. In the event of any increase in the number of directors,
additional directors may be elected within the limitations so fixed, either by
the stockholders or within the limitations imposed by law, by a majority of
directors then in office. One-third of the number of directors, as fixed from
time to time, shall constitute a quorum. Any one or more members of the Board of
Directors or any Committee thereof may participate in a meeting of the Board of
Directors or Committee thereof by means of a conference telephone or similar
communications equipment which allows all persons participating in the meeting
to hear each other at the same time. Participation by such means shall
constitute presence in person at such a meeting.
8
<PAGE>
All directors hereafter elected shall hold office until the next annual meeting
of the stockholders and until their successors are elected and have qualified.
No person who shall have attained age 72 shall be eligible to be elected or
re-elected a director. Such director may, however, remain a director of the
Company until the next annual meeting of the stockholders of Bankers Trust New
York Corporation (the Company's parent) so that such director's retirement will
coincide with the retirement date from Bankers Trust New York Corporation.
No Officer-Director who shall have attained age 65, or earlier relinquishes his
responsibilities and title, shall be eligible to serve as a director.
SECTION 2. Vacancies not exceeding one-third of the whole number of the Board of
Directors may be filled by the affirmative vote of a majority of the directors
then in office, and the directors so elected shall hold office for the balance
of the unexpired term.
SECTION 3. The Chairman of the Board shall preside at meetings of the Board of
Directors. In his absence, the Chief Executive Officer or, in his absence, such
other director as the Board of Directors from time to time may designate shall
preside at such meetings.
SECTION 4. The Board of Directors may adopt such Rules and Regulations for the
conduct of its meetings and the management of the affairs of the Company as it
may deem proper, not inconsistent with the laws of the State of New York, or
these By-Laws, and all officers and employees shall strictly adhere to, and be
bound by, such Rules and Regulations.
SECTION 5. Regular meetings of the Board of Directors shall be held from time to
time on the third Tuesday of the month. If the day appointed for holding such
regular meetings shall be a legal holiday, the regular meeting to be held on
such day shall be held on the next business day thereafter. Special meetings of
the Board of Directors may be called upon at least two day's notice whenever it
may be deemed proper by the Chairman of the Board or, the Chief Executive
Officer or, in their absence, by such other director as the Board of Directors
may have designated pursuant to Section 3 of this Article, and shall be called
upon like notice whenever any three of the directors so request in writing.
SECTION 6. The compensation of directors as such or as members of committees
shall be fixed from time to time by resolution of the Board of Directors.
ARTICLE III
COMMITTEES
SECTION 1. There shall be an Executive Committee of the Board consisting of not
less than five directors who shall be appointed annually by the Board of
Directors. The Chairman of the Board shall preside at meetings of the Executive
Committee. In his absence, the Chief Executive Officer or, in his absence, such
other member of the
9
<PAGE>
Committee as the Committee from time to time may designate shall preside at such
meetings.
The Executive Committee shall possess and exercise to the extent permitted by
law all of the powers of the Board of Directors, except when the latter is in
session, and shall keep minutes of its proceedings, which shall be presented to
the Board of Directors at its next subsequent meeting. All acts done and powers
and authority conferred by the Executive Committee from time to time shall be
and be deemed to be, and may be certified as being, the act and under the
authority of the Board of Directors.
A majority of the Committee shall constitute a quorum, but the Committee may act
only by the concurrent vote of not less than one-third of its members, at least
one of whom must be a director other than an officer. Any one or more directors,
even though not members of the Executive Committee, may attend any meeting of
the Committee, and the member or members of the Committee present, even though
less than a quorum, may designate any one or more of such directors as a
substitute or substitutes for any absent member or members of the Committee, and
each such substitute or substitutes shall be counted for quorum, voting, and all
other purposes as a member or members of the Committee.
SECTION 2. There shall be an Audit Committee appointed annually by resolution
adopted by a majority of the entire Board of Directors which shall consist of
such number of directors, who are not also officers of the Company, as may from
time to time be fixed by resolution adopted by the Board of Directors. The
Chairman shall be designated by the Board of Directors, who shall also from time
to time fix a quorum for meetings of the Committee. Such Committee shall conduct
the annual directors' examinations of the Company as required by the New York
State Banking Law; shall review the reports of all examinations made of the
Company by public authorities and report thereon to the Board of Directors; and
shall report to the Board of Directors such other matters as it deems advisable
with respect to the Company, its various departments and the conduct of its
operations.
In the performance of its duties, the Audit Committee may employ or retain, from
time to time, expert assistants, independent of the officers or personnel of the
Company, to make studies of the Company's assets and liabilities as the
Committee may request and to make an examination of the accounting and auditing
methods of the Company and its system of internal protective controls to the
extent considered necessary or advisable in order to determine that the
operations of the Company, including its fiduciary departments, are being
audited by the General Auditor in such a manner as to provide prudent and
adequate protection. The Committee also may direct the General Auditor to make
such investigation as it deems necessary or advisable with respect to the
Company, its various departments and the conduct of its operations. The
Committee shall hold regular quarterly meetings and during the intervals thereof
shall meet at other times on call of the Chairman.
SECTION 3. The Board of Directors shall have the power to appoint any other
Committees as may seem necessary, and from time to time to suspend or continue
the powers and duties of such Committees. Each Committee appointed pursuant to
this Article shall serve at the pleasure of the Board of Directors.
10
<PAGE>
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall elect from among their number a Chairman
of the Board and a Chief Executive Officer, and shall also elect a President, a
Senior Vice Chairman, one or more Vice Chairmen, one or more Executive Vice
Presidents, one or more Senior Managing Directors, one or more Managing
Directors, one or more Senior Vice Presidents, one or more Vice Presidents, one
or more General Managers, a Secretary, a Controller, a Treasurer, a General
Counsel, one or more Associate General Counsels, a General Auditor, a General
Credit Auditor, and one or more Deputy Auditors, who need not be directors. The
officers of the corporation may also include such other officers or assistant
officers as shall from time to time be elected or appointed by the Board. The
Chairman of the Board or the Chief Executive Officer or, in their absence, the
President, the Senior Vice Chairman or any Vice Chairman, may from time to time
appoint assistant officers. All officers elected or appointed by the Board of
Directors shall hold their respective offices during the pleasure of the Board
of Directors, and all assistant officers shall hold office at the pleasure of
the Board or the Chairman of the Board or the Chief Executive Officer or, in
their absence, the President, the Senior Vice Chairman or any Vice Chairman. The
Board of Directors may require any and all officers and employees to give
security for the faithful performance of their duties.
SECTION 2. The Board of Directors shall designate the Chief Executive Officer of
the Company who may also hold the additional title of Chairman of the Board,
President, Senior Vice Chairman or Vice Chairman and such person shall have,
subject to the supervision and direction of the Board of Directors or the
Executive Committee, all of the powers vested in such Chief Executive Officer by
law or by these By-Laws, or which usually attach or pertain to such office. The
other officers shall have, subject to the supervision and direction of the Board
of Directors or the Executive Committee or the Chairman of the Board or, the
Chief Executive Officer, the powers vested by law or by these By-Laws in them as
holders of their respective offices and, in addition, shall perform such other
duties as shall be assigned to them by the Board of Directors or the Executive
Committee or the Chairman of the Board or the Chief Executive Officer.
The General Auditor shall be responsible, through the Audit Committee to the
Board of Directors for the determination of the program of the internal audit
function and the evaluation of the adequacy of the system of internal controls.
Subject to the Board of Directors, the General Auditor shall have and may
exercise all the powers and shall perform all the duties usual to such office
and shall have such other powers as may be prescribed or assigned to him from
time to time by the Board of Directors or vested in him by law or by these
By-Laws. He shall perform such other duties and shall make such investigations,
examinations and reports as may be prescribed or required by the Audit
Committee. The General Auditor shall have unrestricted access to all records and
premises of the Company and shall delegate such authority to his subordinates.
He shall have the duty to report to the Audit Committee on all matters
concerning the internal audit program and the adequacy of the system of internal
controls of the Company which he deems advisable or which the Audit Committee
may request. Additionally, the General Auditor shall have the duty of reporting
independently of all officers of the Company to the Audit Committee at least
quarterly on any matters concerning the internal audit program and the adequacy
of the system of internal controls of the Company that should be brought to the
attention of the
11
<PAGE>
directors except those matters responsibility for which has been vested in the
General Credit Auditor. Should the General Auditor deem any matter to be of
special importance, he shall report thereon forthwith to the Audit Committee.
The General Auditor shall report to the Chief Financial Officer only for
administrative purposes.
The General Credit Auditor shall be responsible to the Chief Executive Officer
and, through the Audit Committee, to the Board of Directors for the systems of
internal credit audit, shall perform such other duties as the Chief Executive
Officer may prescribe, and shall make such examinations and reports as may be
required by the Audit Committee. The General Credit Auditor shall have
unrestricted access to all records and may delegate such authority to
subordinates.
SECTION 3. The compensation of all officers shall be fixed under such plan or
plans of position evaluation and salary administration as shall be approved from
time to time by resolution of the Board of Directors.
SECTION 4. The Board of Directors, the Executive Committee, the Chairman of the
Board, the Chief Executive Officer or any person authorized for this purpose by
the Chief Executive Officer, shall appoint or engage all other employees and
agents and fix their compensation. The employment of all such employees and
agents shall continue during the pleasure of the Board of Directors or the
Executive Committee or the Chairman of the Board or the Chief Executive Officer
or any such authorized person; and the Board of Directors, the Executive
Committee, the Chairman of the Board, the Chief Executive Officer or any such
authorized person may discharge any such employees and agents at will.
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 1. The Company shall, to the fullest extent permitted by Section 7018 of
the New York Banking Law, indemnify any person who is or was made, or threatened
to be made, a party to an action or proceeding, whether civil or criminal,
whether involving any actual or alleged breach of duty, neglect or error, any
accountability, or any actual or alleged misstatement, misleading statement or
other act or omission and whether brought or threatened in any court or
administrative or legislative body or agency, including an action by or in the
right of the Company to procure a judgment in its favor and an action by or in
the right of any other corporation of any type or kind, domestic or foreign, or
any partnership, joint venture, trust, employee benefit plan or other
enterprise, which any director or officer of the Company is servicing or served
in any capacity at the request of the Company by reason of the fact that he, his
testator or intestate, is or was a director or officer of the Company, or is
serving or served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, amounts paid in settlement, and costs, charges and expenses, including
attorneys' fees, or any appeal therein; provided, however, that no
indemnification shall be provided to any such person if a judgment or other
final adjudication adverse to the director or officer establishes that (i) his
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or
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<PAGE>
(ii) he personally gained in fact a financial profit or other advantage to which
he was not legally entitled.
SECTION 2. The Company may indemnify any other person to whom the Company is
permitted to provide indemnification or the advancement of expenses by
applicable law, whether pursuant to rights granted pursuant to, or provided by,
the New York Banking Law or other rights created by (i) a resolution of
stockholders, (ii) a resolution of directors, or (iii) an agreement providing
for such indemnification, it being expressly intended that these By-Laws
authorize the creation of other rights in any such manner.
SECTION 3. The Company shall, from time to time, reimburse or advance to any
person referred to in Section 1 the funds necessary for payment of expenses,
including attorneys' fees, incurred in connection with any action or proceeding
referred to in Section 1, upon receipt of a written undertaking by or on behalf
of such person to repay such amount(s) if a judgment or other final adjudication
adverse to the director or officer establishes that (i) his acts were committed
in bad faith or were the result of active and deliberate dishonesty and, in
either case, were material to the cause of action so adjudicated, or (ii) he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled.
SECTION 4. Any director or officer of the Company serving (i) another
corporation, of which a majority of the shares entitled to vote in the election
of its directors is held by the Company, or (ii) any employee benefit plan of
the Company or any corporation referred to in clause (i) in any capacity shall
be deemed to be doing so at the request of the Company. In all other cases, the
provisions of this Article V will apply (i) only if the person serving another
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise so served at the specific request of the Company, evidenced by
a written communication signed by the Chairman of the Board, the Chief Executive
Officer or the President, and (ii) only if and to the extent that, after making
such efforts as the Chairman of the Board, the Chief Executive Officer or the
President shall deem adequate in the circumstances, such person shall be unable
to obtain indemnification from such other enterprise or its insurer.
SECTION 5. Any person entitled to be indemnified or to the reimbursement or
advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect at
the time indemnification is sought.
SECTION 6. The right to be indemnified or to the reimbursement or advancement of
expense pursuant to this Article V (i) is a contract right pursuant to which the
person entitled thereto may bring suit as if the provisions hereof were set
forth in a separate written contract between the Company and the director or
officer, (ii) is intended to be retroactive and shall be available with respect
to events occurring prior to the adoption hereof, and (iii) shall continue to
exist after the rescission or restrictive modification hereof with respect to
events occurring prior thereto.
SECTION 7. If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the Company
within thirty days after a written claim has been received by the Company, the
claimant may at any time
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<PAGE>
thereafter bring suit against the Company to recover the unpaid amount of the
claim and, if successful in whole or in part, the claimant shall be entitled
also to be paid the expenses of prosecuting such claim. Neither the failure of
the Company (including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of or reimbursement or advancement of expenses to
the claimant is proper in the circumstance, nor an actual determination by the
Company (including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant is not entitled to indemnification or to the
reimbursement or advancement of expenses, shall be a defense to the action or
create a presumption that the claimant is not so entitled.
SECTION 8. A person who has been successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding of the character described
in Section 1 shall be entitled to indemnification only as provided in Sections 1
and 3, notwithstanding any provision of the New York Banking Law to the
contrary.
ARTICLE VI
SEAL
SECTION 1. The Board of Directors shall provide a seal for the Company, the
counterpart dies of which shall be in the charge of the Secretary of the Company
and such officers as the Chairman of the Board, the Chief Executive Officer or
the Secretary may from time to time direct in writing, to be affixed to
certificates of stock and other documents in accordance with the directions of
the Board of Directors or the Executive Committee.
SECTION 2. The Board of Directors may provide, in proper cases on a specified
occasion and for a specified transaction or transactions, for the use of a
printed or engraved facsimile seal of the Company.
ARTICLE VII
CAPITAL STOCK
SECTION 1. Registration of transfer of shares shall only be made upon the books
of the Company by the registered holder in person, or by power of attorney, duly
executed, witnessed and filed with the Secretary or other proper officer of the
Company, on the surrender of the certificate or certificates of such shares
properly assigned for transfer.
ARTICLE VIII
CONSTRUCTION
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<PAGE>
SECTION 1. The masculine gender, when appearing in these By-Laws, shall be
deemed to include the feminine gender.
ARTICLE IX
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or added to by the Board of
Directors at any meeting, or by the stockholders at any annual or special
meeting, provided notice thereof has been given.
I, _____________________________________, Assistant Secretary of Bankers Trust
Company, New York, New York, hereby certify that the foregoing is a complete,
true and correct copy of the By-Laws of Bankers Trust Company, and that the same
are in full force and effect at this date.
-------------------------------------
ASSISTANT SECRETARY
DATED: ____________________________________
15
<PAGE>
Legal Title of Bank: Bankers Trust Company
Address: 130 Liberty Street
City, State Zip: New York, NY 10006
FDIC Certificate No.: 0 0 6 2 3
Call Date: 123196 ST-BK: 36-4840 FFIEC 031
Vendor ID: D CERT: 00623 Page RC-2
12
<TABLE>
<CAPTION>
SCHEDULE RC--CONTINUED
Dollar Amounts in Thousands Bil Mil Thou
..................................................................................................................
LIABILITIES
<S> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) RCON 2200 11,985,000 13.a.
(1) Noninterest-bearing(1) .............................RCON 6631 2,734,000.......... 13.a.(1)
(2) Interest-bearing ...................................RCON 6636 6,657,000.......... 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E
part II) RCFN 2200 21,619,000 13.b.
(1) Noninterest-bearing ...............................RCFN 6631 654,000 13.b.(1)
(2) Interest-bearing ..................................RCFN 6636 22,731,000 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased............................................................ RCFD 0278 6,560,000 14.a.
b. Securities sold under agreements to repurchase .................................... RCFD 0279 120,000 14.b.
15. a. Demand notes issued to the U.S. Treasury .......................................... RCON 2840 0 15.a.
b. Trading liabilities................................................................ RCFD 3548 19,172,000 15.b.
16. Other borrowed money:
a. With original maturity of one year or less ........................................ RCFD 2332 15,909,000 16.a.
b. With original maturity of more than one year ...................................... RCFD 2333 3,097,000 16.b.
17. Mortgage indebtedness and obligations under capitalized leases ........................... RCFD 2910 31,000 17.
18. Bank's liability on acceptances executed and outstanding ................................. RCFD 2920 597,000 18.
19. Subordinated notes and debentures ........................................................ RCFD 3200 1,229,000 19.
20. Other liabilities (from Schedule RC-G) ................................................... RCFD 2930 5,235,000 20.
21. Total liabilities (sum of items 13 through 20) ........................................... RCFD 2948 85,554,000 21.
22. Limited-life preferred stock and related surplus ......................................... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ............................................ RCFD 3838 600,000 23.
24. Common stock.............................................................................. RCFD 3230 1,001,000 24.
25. Surplus (exclude all surplus related to preferred stock) ................................. RCFD 3839 540,000 25.
26. a. Undivided profits and capital reserves ............................................ RCFD 3632 3,131,000 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ............ RCFD 8434 (14,000)26.b.
27. Cumulative foreign currency translation adjustments ...................................... RCFD 3284 (382,000)27.
28. Total equity capital (sum of items 23 through 27) ........................................ RCFD 3210 4,876,000 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22,
and 28)................................................................................... RCFD 3300 90,430,000 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external Number auditors as of any date Number
during 1995.................................................................................RCFD 6724 N/A M.1
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
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<PAGE>
State of New York,
Banking Department
I, PETER M. PHILBIN, Deputy Superintendent of Bank of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION
8005 OF THE BANKING LAW," dated March 20, 1996, providing for an increase in
authorized capital stock from $1,351,666,670 consisting of 85,166,667 shares
with a par value of $10 each designated as Common Stock and 500 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$1,501,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department
at the City of New York,
this 21ST day of MARCH in the Year of our Lord one
thousand nine hundred and NINETY-SIX.
Peter M. Philbin
------------------------------
Deputy Superintendent of Banks
17
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-----------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of march, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Three Hundred Fifty One Million, Six Hundred
Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,351,666,670),
divided into Eighty-Five Million, One Hundred Sixty-Six Thousand, Six
Hundred Sixty-Seven (85,166,667) shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Five Hundred One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,501,666,670), divided into One
Hundred Million, One Hundred Sixty Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 500 shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred Stock."
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<PAGE>
6. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this
20th day of March , 1996.
James T. Byrne, Jr.
------------------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
------------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows the
contents thereof, and that the statements herein contained are true.
Lea Lahtinen
------------------------------
Lea Lahtinen
Sworn to before me this 20th day
of March, 1996.
Sandra L. West
- ------------------------
Notary Public
SANDRA L. WEST
Notary Public State of New York
No. 31-4942101 Counterpart filed in the
Qualified in New York County Office of the Superintendent of
Commission Expires September 19, 1996 Banks, State of New York,
This 21st day of March, 1996
19
