As filed with the Securities and Exchange Commission on March 4, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
THE CIT GROUP HOLDINGS, INC. CIT CAPITAL TRUST I
(Exact name of registrant (Exact name of registrant
as specified in its charter ) as specified in its declaration of trust)
DELAWARE DELAWARE
(State or other jurisdiction (State or other jurisdiction
of incorporation or organization) of incorporation or organization)
13-2994534 52-6841645
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
6153 6719
(Primary Standard Industrial (Primary Standard Industrial
Classification Code Number) Classification Code Number)
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1211 Avenue of the Americas
New York, New York 10036
(212) 536-1950
(Address, including zip code, and telephone number,
including area code of registrant's
principal executive offices)
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ERNEST D. STEIN, ESQ.
Executive Vice President General Counsel and Secretary
THE CIT GROUP HOLDINGS, INC.
1211 Avenue of the Americas, New York, New York 10036 (212) 536-1950
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Copies to:
ANDRE WEISS, ESQ.
SCHULTE ROTH & ZABEL LLP
900 THIRD AVENUE NEW YORK, NEW YORK 10022
(Phone) (212) 756-2000
(Fax) (212) 593-5955
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Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Offering Amount of
Securities to be Registered Registered Per Security(1) Price(2) Registration Fee
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.70% Preferred Capital Securities of
CIT Capital Trust I $250,000,000 100% $250,000,000 $75,758.00
- - -------------------------------------------------------------------------------------------------------------------
7.70% Junior Subordinated Debentures of
The CIT Group Holdings, Inc, due
2027(2) -- -- -- N/A
- - -------------------------------------------------------------------------------------------------------------------
The CIT Group Holdings, Inc. Guarantee
with respect to Preferred Capital
Securities(3) -- -- -- N/A
- - -------------------------------------------------------------------------------------------------------------------
Total(4) $250,000,000 100% $250,000,000 $75,758.00
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</TABLE>
(continued on the following page)
<PAGE>
(continued from previous page)
(1) Estimated solely for the purpose of calculating the registration fee.
(2) The Junior Subordinated Debentures (the "Junior Subordinated Debentures")
were originally purchased by CIT Capital Trust I with the proceeds of the
sale of the Preferred Capital Securities (the "Capital Securities"). No
separate consideration will be received for the Junior Subordinated
Debentures distributed upon any liquidation of CIT Capital Trust I.
(3) No separate consideration will be received for The CIT Group Holdings, Inc.
Guarantee.
(4) This Registration Statement is deemed to cover the Junior Subordinated
Debentures of The CIT Group Holdings, Inc., the rights of holders of Junior
Subordinated Debentures of The CIT Group Holdings, Inc. under the
Indenture, the rights of holders of Capital Securities of CIT Capital Trust
I under the Declaration of Trust, the rights of holders of the Capital
Securities under the Guarantee and certain backup undertakings as described
herein.
(5) Such amount represents the initial public offering price of the CIT Capital
Trust I Capital Securities to be exchanged hereunder and the principal
amount of Junior Subordinated Debentures that may be distributed upon any
liquidation of CIT Capital Trust I.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant 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, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION, DATED MARCH 4, 1997
PROSPECTUS
Offer for All Outstanding
7.70% Preferred Capital Securities
in Exchange for
7.70% Preferred Capital Securities
Which Have Been Registered Under the Securities Act of 1933
of
CIT CAPITAL TRUST I
fully and unconditionally guaranteed, as described herein, by
THE CIT GROUP HOLDINGS, INC.
The Exchange Offer and Withdrawal Rights will
expire at 5:00 p.m., New York City time,
on , 1997, unless extended.
----------------
CIT Capital Trust I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust") and The CIT Group Holdings, Inc., a Delaware
corporation, (the "Company"), hereby offer, upon the terms and subject to the
conditions set forth in this Prospectus (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the accompanying Letter
of Transmittal (which together constitute the "Exchange Offer"), to exchange up
to $250,000,000 aggregate liquidation amount of its 7.70% Preferred Capital
Securities (the "New Capital Securities") which have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement (as defined herein) of which this Prospectus constitutes
a part, for a like liquidation amount of its outstanding 7.70% Preferred Capital
Securities (the "Old Capital Securities"), of which $250,000,000 aggregate
liquidation amount is outstanding. Pursuant to the Exchange Offer, the Company
is also exchanging its guarantee of the payment of Distributions (as defined
herein) and payments on liquidation or redemption of the Old Capital Securities
(the "Old Guarantee") for a like guarantee of the New Capital Securities (the
"New Guarantee") and all of its 7.70% Junior Subordinated Debentures (the "Old
Junior Subordinated Debentures"), of which $257,732,000 aggregate principal
amount is outstanding, for like aggregate principal of its 7.70% Junior
Subordinated Debentures (the "New Junior Subordinated Debentures"), which New
Guarantee and New Junior Subordinated Debentures also have been registered under
the Securities Act. The Old Capital Securities, the Old Guarantee and the Old
Junior Subordinated Debentures are collectively referred to herein as the "Old
Securities" and the New Capital Securities, the New Guarantee and the New Junior
Subordinated Debentures are collectively referred to herein as the "New
Securities."
(Continued on Following Page)
----------------
SEE "RISK FACTORS" BEGINNING ON PAGE 17 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY HOLDERS WHO TENDER OLD CAPITAL SECURITIES IN THE EXCHANGE
OFFER.
----------------
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 ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Date of this Prospectus is March , 1997.
<PAGE>
(Cover Page Continued)
The terms of the New Securities will be identical in all material respects
to the respective terms of the Old Securities, except that (i) the New
Securities will have been registered under the Securities Act and therefore will
not be subject to certain restrictions on transfer applicable to the Old
Securities, (ii) the New Capital Securities will not provide for any increase in
the Distribution rate thereon as a consequence of a failure to take certain
actions in connection with their registration under the Securities Act and (iii)
the New Junior Subordinated Debentures will not provide for any increase in the
interest rate thereon as a consequence of a failure to take certain actions in
connection with their registration under the Securities Act.
The New Capital Securities are being offered for exchange in order to
satisfy certain obligations of the Company and the Trust under the Registration
Rights Agreement dated as of February 25, 1997 (the "Registration Rights
Agreement") among the Company, the Trust and the Initial Purchasers (as defined
herein). The New Junior Subordinated Debentures and the New Guarantee are being
offered for exchange under the Registration Rights Agreement. In the event that
the Exchange Offer is consummated, any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer and the New Capital
Securities issued in the Exchange Offer will vote together as a single class for
purposes of determining whether holders of the requisite percentage in
outstanding liquidation amount thereof have taken certain actions or exercised
certain rights under the Declaration of Trust.
The New Capital Securities and the Old Capital Securities (together, the
"Capital Securities") will represent undivided beneficial interests in the
assets of the Trust. The Company is the owner of all of the beneficial interests
represented by common securities of the Trust (the "Common Securities" and,
collectively with the Capital Securities, the "Trust Securities"). The Bank of
New York is the Property Trustee of the Trust. The Trust exists for the sole
purposes of issuing the Trust Securities, investing the proceeds thereof in the
Junior Subordinated Debentures and engaging only in activities necessary or
incidental thereto. The Junior Subordinated Debentures will mature on February
15, 2027 (the "Stated Maturity"). The New Capital Securities will have a
preference under certain circumstances with respect to cash distributions and
amounts payable on liquidation, redemption or otherwise over the Common
Securities. See "Description of New Capital Securities -- Subordination of
Common Securities."
As used herein, (i) the "Indenture" means the Indenture, dated as of
February 25, 1997, between the Company and The Bank of New York as trustee, (ii)
the "Declaration" means the Amended and Restated Declaration of Trust relating
to the Trust among the Company, as Depositor, The Bank of New York as Property
Trustee (the "Property Trustee"), The Bank of New York (Delaware) as Delaware
Trustee (the "Delaware Trustee"), and the Regular Trustees named therein
(collectively, with the Property Trustee and Delaware Trustee, the "Issuer
Trustees"), and (iii) the "Guarantee Agreement" means the Guarantee Agreement,
dated as of February 25, 1997, relating to the Guarantee between the Company and
The Bank of New York, as trustee (the "Guarantee Trustee"). In addition, as the
context may require, unless expressly stated otherwise, (i) "Capital Securities"
means the Old Capital Securities and the New Capital Securities, (ii) "Junior
Subordinated Debentures" means the Old Junior Subordinated Debentures and the
New Junior Subordinated Debentures and (iii) "Guarantee" means the Old Guarantee
and the New Guarantee.
Holders of the New Capital Securities will be entitled to receive
cumulative cash distributions accruing from February 25, 1997 and payable
semi-annually in arrears on the 15th day of February and August of each year,
commencing August 15, 1997, at the annual rate of 7.70% of the liquidation
amount of $1,000 per New Capital Security ("Distribution"). The distribution
rate and the distribution payment dates and other payment dates for the New
Capital Securities will correspond to the interest rate and interest payment
dates and other payment dates on the New Junior Subordinated Debentures, which
will be the sole assets of the Trust. Pursuant to the New Guarantee, the Company
will guarantee the payment of Distributions and payments on liquidation of the
Trust or redemption of the New Capital Securities, but only in each case to the
extent of funds held by the Trust, as described herein. See "Description of New
Guarantee." If the Company does not make interest payments on the Junior
Subordinated Debentures held by the Trust, the Trust will have insufficient
funds to pay Distributions on the New Capital Securities. The Company's
obligations under the New Guarantee, taken together with its obligations under
the New Junior Subordinated Debentures and the Indenture, including its
obligation to pay all costs, expenses and liabilities of the Trust (other than
with respect to the New Capital Securities), will constitute a full and
unconditional guarantee of all of the Trust's obligations under the New Capital
Securities.
2
<PAGE>
(Cover Page Continued)
The obligations of the Company under the New Guarantee and the New Junior
Subordinated Debentures will be subordinate and junior in right of payment to
all Indebtedness (as defined in "Description of New Junior Subordinated
Debentures -- Subordination") of the Company and will be structurally
subordinated to all liabilities and obligations of the Company's subsidiaries.
As of December 31, 1996, the Company had approximately $14.6 billion aggregate
principal amount of Indebtedness outstanding, and the Company's subsidiaries had
approximately $2.1 billion of indebtedness or other liabilities, in addition to
other contractual obligations. The terms of the New Junior Subordinated
Debentures place no limitation on the amount of Indebtedness that may be
incurred by the Company or on the amount of liabilities and obligations that may
be incurred by the Company's subsidiaries. See "Description of New Junior
Subordinated Debentures -- Subordination."
The Company will have the right to defer payment of interest on the New
Junior Subordinated Debentures at any time or from time to time for a period not
exceeding 10 consecutive semi-annual periods with respect to each deferral
period (each, an "Extension Period"), provided that no Extension Period may
extend beyond the Stated Maturity of the New Junior Subordinated Debentures.
Upon the termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date (as defined herein), the Company may elect
to begin a new Extension Period subject to the requirements set forth herein.
Accordingly, there could be multiple Extension Periods of varying lengths
throughout the term of the New Junior Subordinated Debentures. During any
Extension Period distributions on the New Capital Securities will also be
deferred and the Company may not, and may not permit any subsidiary of the
Company to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, the Company's
capital stock or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities that rank pari passu
with or junior to the New Junior Subordinated Debentures or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu with or junior
to the New Junior Subordinated Debentures (other than (a) dividends or
distributions in common stock of the Company, (b) payments under the New
Guarantee, (c) any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, and (d) purchases of common stock related to the issuance of
common stock or rights under any of the Company's benefit plans). During an
Extension Period, interest on the New Junior Subordinated Debentures will
continue to accrue (and the amount of Distributions to which holders of the New
Capital Securities are entitled will accumulate) at the rate of 7.70% per annum,
compounded semi-annually to the extent permitted by applicable law, and holders
of the New Capital Securities will be required to accrue interest income for
United States federal income tax purposes prior to receipt of the cash related
to such interest income. See "Description of New Junior Subordinated Debentures
- - -- Option to Extend Interest Payment Period" and "Certain United States Federal
Income Tax Consequences -- Interest Income and Original Issue Discount."
The New Junior Subordinated Debentures will not be redeemable prior to
February 15, 2007 unless a Special Event (as defined herein) has occurred. The
New Junior Subordinated Debentures will be redeemable prior to maturity at the
option of the Company, subject to the receipt of any necessary prior approval of
the Board of Governors of the Federal Reserve System (the "Federal Reserve") or
the Ministry of Finance of Japan ("MOF" and, together with the Federal Reserve,
the "Regulatory Authorities"), (i) on or after February 15, 2007, in whole or in
part, at a redemption price equal to 103.6220% of the principal amount thereof
on February 15, 2007, declining ratably on each February 15 thereafter to 100%
on or after February 15, 2017, plus the accrued and unpaid interest thereon, or
(ii) at any time, in whole (but not in part), upon the occurrence and
continuation of a Special Event, at a redemption price equal to 100% of the
principal amount thereof plus accrued interest thereon to the date of
prepayment, subject to the further conditions described under "Description of
New Junior Subordinated Debentures -- Redemption." The New Capital Securities
will be subject to mandatory redemption, in whole or in part, upon repayment of
the New Junior Subordinated Debentures at maturity or their earlier redemption,
in an amount equal to the amount of related New Junior Subordinated Debentures
maturing or being redeemed and at a redemption price equal to the redemption
price of such New Junior Subordinated Debentures, in each case plus accumulated
and unpaid Distributions thereon to the date of redemption.
Upon the occurrence and continuation of a Special Event, the Company will
have the right, subject to the receipt of any necessary prior approval of the
Regulatory Authorities, to dissolve the Trust and cause the New Junior
Subordinated Debentures to be distributed to the holders of the New Capital
3
<PAGE>
(Cover Page Continued)
Securities and the Common Securities in liquidation of the Trust. See
"Description of New Capital Securities -- Redemption -- Special Event Redemption
or Distribution of New Junior Subordinated Debentures."
In the event of the liquidation of the Trust, after satisfaction of the
claims of creditors of the Trust, if any, as provided by applicable law, the
holders of the New Capital Securities will be entitled to receive a liquidation
amount of $1,000 per New Capital Security plus accumulated and unpaid
Distributions thereon to the date of payment, which may be in the form of a
distribution of such amount in New Junior Subordinated Debentures as described
above. If such liquidation amount can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate liquidation amount,
then the amounts payable directly by the Trust on the New Capital Securities
shall be paid on a pro rata basis. The holder(s) of the Common Securities will
be entitled to receive distributions upon any such liquidation pro rata with the
holders of the New Capital Securities, except that if an Indenture Event of
Default (as defined herein) has occurred and is continuing, the New Capital
Securities will have a priority over the Common Securities. See "Description of
New Capital Securities -- Liquidation Distribution Upon Dissolution."
The Company and the Trust are making the Exchange Offer of the New Capital
Securities in reliance on the position of the staff of the Division of
Corporation Finance of the Securities and Exchange Commission (the "Commission")
as set forth in certain interpretive letters addressed to third parties in other
transactions. However, neither the Company nor the Trust has sought its own
interpretive letter and there can be no assurance that the staff of the Division
of Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of the Division of
Corporation Finance, and subject to the two immediately following sentences, the
Company and the Trust believe that New Capital Securities issued pursuant to
this Exchange Offer in exchange for Old Capital Securities may be offered for
resale, resold and otherwise transferred by a holder thereof (other than a
holder who is a broker-dealer) without further compliance with the registration
and prospectus delivery requirements of the Securities Act of 1933, as amended
(the "Securities Act"), provided that such New Capital Securities are acquired
in the ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate" of the Company or the Trust or who intends to participate in
the Exchange Offer for the purpose of distributing New Capital Securities, or
any broker-dealer who purchased Old Capital Securities from the Trust to resell
pursuant to Rule 144A under the Securities Act ("Rule 144A") or any other
available exemption under the Securities Act, (a) will not be able to rely on
the interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (b) will not
be permitted or entitled to tender such Old Capital Securities in the Exchange
Offer and (c) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other transfer
of such Old Capital Securities unless such sale is made pursuant to an exemption
from such requirements. In addition, as described below, if any broker-dealer
holds Old Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Old Capital
Securities for New Capital Securities, then such broker-dealer must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of such New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an "affiliate" of the Company or the Trust, (ii)
any New Capital Securities to be received by it are being acquired in the
ordinary course of its business, (iii) it has no arrangement or understanding
with any person to participate in a distribution (within the meaning of the
Securities Act) of such New Capital Securities, and (iv) if such holder is not a
broker-dealer, such holder is not engaged in, and does not intend to engage in,
a distribution (within the meaning of the Securities Act) of such New Capital
Securities. In addition, the Company and the Trust may require such holder, as a
condition to such holder's eligibility to participate in the Exchange Offer, to
furnish to the Company and the Trust (or an agent thereof) in writing
information as to the number of "beneficial owners" (within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended) on behalf of whom
such holder holds the Capital Securities to be exchanged in the Exchange Offer.
Each broker-dealer that receives New Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it acquired the Old Capital
Securities for its own account as the result of market-making activities or
4
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(Cover Page Continued)
other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the positions taken by the staff of the Division of Corporation Finance
of the Commission in the interpretive letters referred to above, the Company and
the Trust believe that broker-dealers who acquired Old Capital Securities for
their own accounts, as a result of market-making activities or other trading
activities ("Participating Broker-Dealers") may fulfill their prospectus
delivery requirements with respect to the New Capital Securities received upon
exchange of such Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the resale of
such New Capital Securities. Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating Broker-Dealer
during the period referred to below in connection with resales of New Capital
Securities received in exchange for Old Capital Securities where such Old
Capital Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
certain provisions set forth in the Registration Rights Agreement, the Company
and the Trust have agreed that this Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer in
connection with resales of such New Capital Securities for a period ending 180
days after the Registration Statement of which this Prospectus constitutes a
part is declared effective. See "Plan of Distribution." Any Participating
Broker-Dealer who is an "affiliate" of the Company or the Trust may not rely on
such interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. See "The Exchange Offer -- Resales of New Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal, that, upon receipt of notice from the
Company or the Trust of the occurrence of any event or the discovery of any fact
which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or which causes this Prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain other
events specified in the Registration Rights Agreements, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Company or the Trust has amended or supplemented this
Prospectus to correct such misstatement or omission and has furnished copies of
the amended or supplemented Prospectus to such Participating Broker-Dealer or
the Company or the Trust has given notice that the sale of the New Capital
Securities (or the New Guarantee or the New Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be.
Prior to the Exchange Offer, there has been no public market for the Old
Capital Securities. The New Capital Securities will be a new issue of securities
for which there currently is no market. Although the Initial Purchasers have
informed the Company and the Trust that they each currently intend to make a
market in the New Capital Securities, they are not obligated to do so, and any
such market making may be discontinued at any time without notice. Accordingly,
there can be no assurance as to the development or liquidity of any market for
the New Capital Securities. Neither the Company nor the Trust currently intends
to apply for listing of the New Capital Securities on any securities exchange or
for quotation through the National Association of Securities Dealers Automated
Quotation System.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to all the same rights and will be
subject to the same limitations applicable thereto under the Declaration of
Trust (except for those rights which terminate upon consummation of the Exchange
Offer). Following consummation of the Exchange Offer, the holders of Old Capital
Securities will continue to be subject to all of the existing restrictions upon
transfer thereof and neither the Company nor the Trust will have any further
obligation to such holders (other than under certain limited circumstances) to
provide for registration under the Securities Act of the Old Capital Securities
held by them. To the extent that Old Capital Securities are tendered and
accepted in the Exchange Offer, a holder's ability to sell untendered Old
Capital Securities could be adversely affected. See "Risk Factors --
Consequences of a Failure to Exchange Old Capital Securities."
5
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THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on_____________, 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is extended
by the Company and the Trust (in which case the term "Expiration Date" shall
mean the latest date and time to which the Exchange Offer is extended). Tenders
of Old Capital Securities may be withdrawn at any time on or prior to the
Expiration Date. The Exchange Offer is not conditioned upon any minimum
liquidation amount of Old Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain events and conditions which
may be waived by the Company or the Trust and to the terms and provisions of the
Registration Rights Agreement. The Company has agreed to pay all expenses of the
Exchange Offer. See "The Exchange Offer -- Fees and Expenses." Each New Capital
Security will pay cumulative Distributions from the most recent Distribution
Date on the Old Capital Securities surrendered in exchange for such New Capital
Securities or, if no Distributions have been paid on such Old Capital
Securities, from February 25, 1997. Holders of the Old Capital Securities whose
Old Capital Securities are accepted for exchange will not receive accumulated
Distributions on such Old Capital Securities for any period from and after the
last Distribution Date on such Old Capital Securities prior to the original
issue date of the New Capital Securities or, if no such Distributions have been
paid, will not receive any accumulated Distributions on such Old Capital
Securities, and will be deemed to have waived the right to receive any
Distributions on such Old Capital Securities accumulated from and after such
Distribution Date or, if no such interest has been paid or duly provided for,
from and after February 25, 1997. This Prospectus, together with the Letter of
Transmittal, is being sent to all registered holders of Old Capital Securities
as of March___, 1997.
Neither the Company nor the Trust will receive any cash proceeds from the
issuance of the New Capital Securities offered hereby. No dealer-manager is
being used in connection with this Exchange Offer. See "Use of Proceeds" and
"Plan of Distribution."
------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE TRUST. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY
PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF.
-----------------------
NOTICE TO BENEFIT PLANS
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN. MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ENTITLED TO THE EXEMPTIVE RELIEF
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
96-23, 95-60, 91-38, 90-1 OR 84-14 OR OTHER APPLICABLE EXEMPTION WITH RESPECT TO
SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR
6
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ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING THEREOF THAT IT EITHER (A) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS
NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN OR
(B) IS ENTITLED TO THE EXEMPTIVE RELIEF UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR
84-14 OR OTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports and other information with the Commission. Such reports
and other information can be inspected and copied at the offices of the
Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549; Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and Seven 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 Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Certain of the Company's securities are listed on
the New York Stock Exchange and reports and other information concerning the
Company can also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005. The Commission also maintains a
Web site (http://www.sec.gov) that contains reports and other information
regarding the Company.
No separate financial statements of the Trust have been included or
incorporated by reference herein. The Company does not believe such financial
statements would be material to holders of the Capital Securities because (i)
all of the voting securities of the Trust will be owned, directly or indirectly,
by the Company, a reporting company under the Exchange Act, (ii) the Trust has
no independent operations but exists for the sole purpose of issuing securities
representing undivided beneficial interests in its assets and investing the
proceeds thereof in Junior Subordinated Debentures issued by the Company, and
(iii) the obligations of the Trust under the Capital Securities are guaranteed
by the Company to the extent described herein. See "Relationship Among the New
Capital Securities, the New Junior Subordinated Debentures and the New
Guarantee."
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Company and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the New
Securities. Any statements contained herein concerning the provisions of any
document are not necessarily complete, and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated by reference in this Prospectus:
(a) The Company's Annual Reports on Form 10-K for the year ended
December 31, 1995, together with the report of KPMG Peat Marwick LLP,
independent certified public accountants, which report refers to a change
in the method of accounting for postretirement benefits other than pensions
in 1993;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996; and
(c) The Company's Current Reports on Form 8-K dated January 18, 1996,
April 11, 1996, April 12, 1996, July 16, 1996, August 14, 1996, October 17,
1996, December 24, 1996, January 23, 1997 (as amended by Form 8-K/A dated
February 14, 1997) and February 13, 1997.
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All documents filed by the Company pursuant to Sections 13(a) and (c), 14,
or 15(d) of the Exchange Act after the date hereof and prior to the termination
of the offering of the securities offered hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the foregoing
documents described above which have been or may be incorporated by reference in
this Prospectus other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Such request should
be directed to:
Corporate Secretary
The CIT Group Holdings, Inc.
1211 Avenue of the Americas
New York, New York 10036
(212) 536-1950
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SUMMARY
This summary is qualified by the more detailed information and financial
statements appearing elsewhere, or incorporated by reference, in this
Prospectus. Prospective investors are urged to read this Prospectus in its
entirety.
CIT Capital Trust I
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Declaration of Trust executed by the Company, The Bank of New York,
as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, and
the Regular Trustees named therein, and (ii) the filing of a certificate of
trust with the Delaware Secretary of State on February 19, 1997. The Trust's
business and affairs are conducted by the Trustees: The Bank of New York, as
Property Trustee, The Bank of New York (Delaware) as Delaware Trustee, and three
individual Regular Trustees who are employees or officers of or affiliated with
the Company. The Trust exists for the exclusive purposes of (i) issuing and
selling the Trust Securities and effecting the Exchange Offer for the New
Capital Securities, (ii) using the proceeds from the sale of the Trust
Securities to acquire the Old Junior Subordinated Debentures issued by the
Company, (iii) exchanging the Old Junior Subordinated Debentures for the New
Subordinated Debentures in the Exchange Offer and (iv) engaging in only those
other activities necessary or incidental thereto (such as registering the
transfer of the Trust Securities). Accordingly, the New Junior Subordinated
Debentures will be the sole assets of the Trust, and payments under the New
Junior Subordinated Debentures will be the sole revenues of the Trust. All of
the Common Securities of the Trust are and will be owned by the Company.
The Company
The CIT Group Holdings, Inc. (the "Company"), a Delaware corporation, is a
successor to a company founded in St. Louis, Missouri on February 11, 1908. It
has its principal executive offices at 1211 Avenue of the Americas, New York,
New York 10036, and its telephone number is (212) 536-1950. The Company,
operating directly or through its subsidiaries primarily in the United States,
engages in financial services activities through a nationwide distribution
network. The Company provides financing primarily on a secured basis to
commercial borrowers, ranging from middle-market to larger companies, and to a
lesser extent to consumers. While these secured lending activities reduce the
risk of losses from extending credit, the Company's results of operations can
also be affected by other factors, including general economic conditions,
competitive conditions, the level and volatility of interest rates,
concentrations of credit risk, and government regulation and supervision. The
Company does not finance the development or construction of commercial real
estate. The Company has eight strategic business units which offer commercial
and consumer financing, and factoring products and services to clients.
The Dai-Ichi Kangyo Bank, Limited ("DKB") owns eighty percent (80%) of the
issued and outstanding shares of common stock of the Company. DKB purchased a
sixty percent (60%) common stock interest in the Company from Manufacturers
Hanover Corporation ("MHC") at year-end 1989 and acquired an additional twenty
percent (20%) common stock interest in the Company on December 15, 1995 from CBC
Holding (Delaware) Inc. (formerly known as MHC Holdings (Delaware) Inc.) ("CBC
Holding"). DKB has an option, expiring December 15, 2000, to purchase the
remaining twenty percent (20%) common stock interest from CBC Holding and its
parent.
CBC Holding became a direct, wholly owned subsidiary of Chemical Banking
Corporation ("CBC") after the merger between MHC and CBC on December 31, 1991.
On March 31, 1996, CBC was merged into The Chase Manhattan Corporation ("CMC"),
and CMC became the sole stockholder of CBC Holding.
DKB is registered as a bank holding company with the Board of Governors of
the Federal Reserve System (the "Federal Reserve") and is also regulated by
governmental authorities in Japan, including the Ministry of Finance of Japan
("MOF" and, together with the Federal Reserve, the "Regulatory Authorities"). As
a subsidiary of DKB, the Company is also subject to examination and regulation
by the Regulatory Authorities.
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The Exchange Offer
The Exchange Offer ............. Up to $250,000,000 aggregate liquidation
amount of New Capital Securities are being
offered in exchange for a like aggregate
liquidation amount of Old Capital Securities.
The Company will issue, promptly after the
Expiration Date, $1,000 liquidation amount of
New Capital Securities in exchange for each
$1,000 liquidation amount of outstanding Old
Capital Securities tendered and accepted in
connection with the Exchange Offer. The
Company and the Trust are making the Exchange
Offer in order to satisfy obligations under
the Registration Rights Agreement relating to
the Old Capital Securities. For a description
of the procedures for tendering Old Capital
Securities, see "The Exchange Offer--
Procedures for Tendering Old Capital
Securities."
Expiration Date ................ 5:00 p.m., New York City time, on __________,
1997 (such time on such date being
hereinafter called the "Expiration Date")
unless the Exchange Offer is extended by the
Company and the Trust (in which case the term
"Expiration Date" shall mean the latest date
and time to which the Exchange Offer is
extended). See "The Exchange Offer --
Expiration Date; Extensions; Amendments."
Conditions to the
Exchange Offer .............. The Exchange Offer is subject to certain
conditions, which may be waived by the
Company and the Trust in their sole
discretion. The Exchange Offer is not
conditioned upon any minimum liquidation
amount of Old Capital Securities being
tendered. See "The Exchange Offer--
Conditions to the Exchange Offer." The
Company and the Trust reserve the right in
their sole and absolute discretion, subject
to applicable law, at any time and from time
to time, (i) to delay the acceptance of the
Old Capital Securities for exchange, (ii) to
terminate the Exchange Offer if certain
specified conditions have not been satisfied,
(iii) to extend the Expiration Date of the
Exchange Offer and retain all Old Capital
Securities tendered pursuant to the Exchange
Offer, subject, however, to the right of
holders of Old Capital Securities to withdraw
their tendered Old Capital Securities, or
(iv) to waive any condition or otherwise
amend the terms of the Exchange Offer in any
respect. See "The Exchange Offer-- Expiration
Date; Extensions; Amendments."
Withdrawal Rights .............. Tenders of Old Capital Securities may be
withdrawn at any time on or prior to the
Expiration Date by delivering a written
notice of such withdrawal to the Exchange
Agent in conformity with certain procedures
set forth below under "The Exchange Offer --
Withdrawal Rights."
Procedures for Tendering
Old Capital Securities ...... Tendering holders of Old Capital Securities
must complete and sign a Letter of
Transmittal in accordance with the
instructions contained therein and forward
the same by mail, facsimile or hand delivery,
together with any other required documents,
to the Exchange Agent, together with the Old
Capital Securities to be tendered or in
compliance with the specified procedures for
guaranteed delivery of Old Capital
Securities. Certain brokers, dealers,
commercial banks, trust companies and other
nominees may also effect tenders by
book-entry transfer. Holders of Old Capital
Securities registered in the name of a
broker, dealer, commercial bank, trust
company or other nominee are urged to contact
such person promptly if they wish to tender
Old Capital Securities pursuant to the
Exchange Offer. See "The Exchange Offer --
Procedures for Tendering Old Capital
Securities." Letters of Transmittal and
certificates representing Old Capital
Securities should not be sent to the Company
or to the Trust. Such documents should only
- - --------------------------------------------------------------------------------
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be sent to the Exchange Agent. Questions
regarding how to tender and requests for
information should be directed to the
Exchange Agent. See "The Exchange Offer--
Exchange Agent."
Resales of
New Capital Securities ...... The Company and the Trust are making the
Exchange Offer in reliance on the position of
the staff of the Division of Corporation
Finance of the Commission as set forth in
certain interpretive letters addressed to
third parties in other transactions. However,
neither the Company nor the Trust has sought
its own interpretive letter and there can be
no assurance that the staff of the Division
of Corporation Finance of the Commission
would make a similar determination with
respect to the Exchange Offer as it has in
such interpretive letters to third parties.
Based on these interpretations by the staff
of the Division of Corporation Finance, and
subject to the two immediately following
sentences, the Company and the Trust believe
that New Capital Securities issued pursuant
to this Exchange Offer in exchange for Old
Capital Securities may be offered for resale,
resold and otherwise transferred by a holder
thereof (other than a holder who is a
broker-dealer) without further compliance
with the registration and prospectus delivery
requirements of the Securities Act, provided
that such New Capital Securities are acquired
in the ordinary course of such holder's
business and that such holder is not
participating, and has no arrangement or
understanding with any person to participate,
in a distribution (within the meaning of the
Securities Act) of such New Capital
Securities. However, any holder of Old
Capital Securities who is an "affiliate" of
the Company or the Trust or who intends to
participate in the Exchange Offer for the
purpose of distributing the New Capital
Securities, or any broker-dealer who
purchased the Old Capital Securities from the
Trust to resell pursuant to Rule 144A or any
other available exemption under the
Securities Act, (a) will not be able to rely
on the interpretations of the staff of the
Division of Corporation Finance of the
Commission set forth in the above-mentioned
interpretive letters, (b) will not be
permitted or entitled to tender such Old
Capital Securities in the Exchange Offer and
(c) must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any sale or
other transfer of such Old Capital Securities
unless such sale is made pursuant to an
exemption from such requirements. In
addition, as described below, if any
broker-dealer holds Old Capital Securities
acquired for its own account as a result of
market-making or other trading activities and
exchanges such Old Capital Securities for New
Capital Securities, then such broker-dealer
must deliver a prospectus meeting the
requirements of the Securities Act in
connection with any resales of such New
Capital Securities.
Each holder of Old Capital Securities who
wishes to exchange Old Capital Securities for
New Capital Securities in the Exchange Offer
will be required to represent that (i) it is
not an "affiliate" of the Company or the
Trust, (ii) any New Capital Securities to be
received by it are being acquired in the
ordinary course of its business, (iii) it has
no arrangement or understanding with any
person to participate in a distribution
(within the meaning of the Securities Act) of
such New Capital Securities, and (iv) if such
holder is not a broker-dealer, such holder is
not engaged in, and does not intend to engage
in, a distribution (within the meaning of the
Securities Act) of such New Capital
Securities.
Each broker-dealer that receives New Capital
Securities for its own account pursuant to
the Exchange Offer must acknowledge that it
acquired the Old Capital Securities for its
own account as the result of market-making
activities or other trading activities and
must agree that it will deliver a prospectus
meeting the requirements of the Securities
- - --------------------------------------------------------------------------------
11
<PAGE>
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Act in connection with any resale of such New
Capital Securities. The Letter of Transmittal
states that by so acknowledging and by
delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. Based on the position taken
by the staff of the Division of Corporation
Finance of the Commission in the interpretive
letters referred to above, the Company and
the Trust believe that broker-dealers who
acquired Old Capital Securities for their own
accounts as a result of market-making
activities or other trading activities
("Participating Broker-Dealers") may fulfill
their prospectus delivery requirements with
respect to the New Capital Securities
received upon exchange of such Old Capital
Securities (other than Old Capital Securities
which represent an unsold allotment from the
original sale of the Old Capital Securities)
with a prospectus meeting the requirements of
the Securities Act, which may be the
prospectus prepared for an exchange offer so
long as it contains a description of the plan
of distribution with respect to the resale of
such New Capital Securities. Accordingly,
this Prospectus, as it may be amended or
supplemented from time to time, may be used
by a Participating Broker-Dealer in
connection with resales of New Capital
Securities received in exchange for Old
Capital Securities where such Old Capital
Securities were acquired by such
Participating Broker-Dealer for its own
account as a result of market-making or other
trading activities. Subject to certain
provisions set forth in the Registration
Rights Agreement and to the limitations
described below under "The Exchange Offer--
Resale of New Capital Securities," the
Company and the Trust have agreed that this
Prospectus, as it may be amended or
supplemented from time to time, may be used
by a Participating Broker-Dealer in
connection with resales of such New Capital
Securities for a period ending 180 days after
the Registration Statement of which this
Prospectus constitutes a part is declared
effective. See "Plan of Distribution." Any
Participating Broker-Dealer who is an
"affiliate" of the Company or the Trust may
not rely on such interpretive letters and
must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any resale
transaction. See "The Exchange Offer--
Resales of New Capital Securities."
Exchange Agent ................. The exchange agent with respect to the
Exchange Offer is The Bank of New York (the
"Exchange Agent"). The addresses, and
telephone and facsimile numbers of the
Exchange Agent are set forth in "The Exchange
Offer -- Exchange Agent" and in the Letter of
Transmittal.
Use of Proceeds ................ Neither the Company nor the Trust will
receive any cash proceeds from the issuance
of the New Capital Securities offered hereby.
See "Use of Proceeds."
Certain United States Federal
Income Tax Consequences;
ERISA Considerations ......... Holders of Old Capital Securities should
review the information set forth under
"Certain United States Federal Income Tax
Consequences" and "ERISA Considerations"
prior to tendering Old Capital Securities in
the Exchange Offer.
The New Capital Securities
Securities Offered ............. Up to $250,000,000 aggregate liquidation
amount of the Trust's 7.70% Preferred Capital
Securities which have been registered under
the Securities Act (liquidation amount of
$1,000 per Capital Security). The terms of
the New Capital Securities will be identical
- - --------------------------------------------------------------------------------
12
<PAGE>
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in all material respects to the terms of the
Old Capital Securities, except that the New
Capital Securities will have been registered
under the Securities Act and therefore will
not be subject to certain restrictions on
transfer applicable to the Old Capital
Securities and will not provide for any
increase in the Distribution rate thereon.
See "The Exchange Offer -- Purpose and
Effect," "Description of the New Capital
Securities" and "Description of the Old
Securities." The Holders of the New Capital
Securities will be entitled to a preference
in certain circumstances with respect to
Distributions and amounts payable on
redemption, liquidation or otherwise over the
Common Securities.
Distributions .................. Holders of the New Capital Securities will be
entitled to receive cumulative cash
distributions at an annual rate of 7.70% of
the liquidation amount of $1,000 per New
Capital Security, accruing from February 25,
1997 and payable semi-annually in arrears on
the 15th day of February and August of each
year commencing on August 15, 1997. The
distribution rate and the distribution and
other payment dates for the New Capital
Securities will correspond to the interest
rate and interest and other payment dates on
the Junior Subordinated Debentures. See
"Description of New Capital Securities."
The New Junior
Subordinated Debentures ..... The Trust invested the proceeds from the
issuance of the Old Capital Securities and
Common Securities in an equivalent amount of
Old Junior Subordinated Debentures of the
Company. In connection with the Exchange
Offer, the Trust will exchange its Old Junior
Subordinated Debentures for the New Junior
Subordinated Debentures having identical
terms in all material respects to the Old
Junior Subordinated Debentures. The New
Junior Subordinated Debentures will mature on
February 15, 2027. The New Junior
Subordinated Debentures will rank subordinate
and junior in right of payment to all
Indebtedness of the Company. In addition, the
Company's obligations under the New Junior
Subordinated Debentures will be structurally
subordinated to all existing and future
liabilities and obligations of its
subsidiaries. See "Risk Factors-- Ranking of
Subordinate Obligations Under the New
Guarantee and the New Junior Subordinated
Debentures", "Risk Factors-- Status of
Company as Holding Company" and "Description
of New Junior Subordinated Debentures--
Subordination."
New Guarantee ................. Payment of distributions out of moneys held
by the Trust, and payments on liquidation of
the Trust or the redemption of New Capital
Securities, are guaranteed by the Company to
the extent the Trust has funds available
therefor. If the Company does not make
principal or interest payments on the New
Junior Subordinated Debentures, the Trust
will not have sufficient funds to make
Distributions on the New Capital Securities,
in which event the New Guarantee shall not
apply to such Distributions. The Company's
obligations under the New Guarantee, taken
together with its obligations under the New
Junior Subordinated Debentures and the
Indenture, including its obligation to pay
all costs, expenses and liabilities of the
Trust (other than with respect to the New
Capital Securities), will constitute a full
and unconditional guarantee of all of the
Trust's obligations under the New Capital
Securities. See "Description of New
Guarantee" and "Relationship Among the New
Capital Securities, the New Junior
Subordinated Debentures and the New
Guarantee." The obligations of the Company
under the New Guarantee will be subordinate
and junior in right of payment to all
Indebtedness of the Company. See "Risk
Factors -- Ranking of Subordinated
Obligations Under the New Guarantee and the
New Junior Subordinated Debentures" and
"Description of New Guarantee."
Right to Defer Interest........ The Company will have the right to defer
payment of interest on the New Junior
Subordinated Debentures by extending the
interest payment period on the New Junior
Subordinated Debentures, from time to time,
for up to 10 consecutive semi-annual periods,
provided that no such deferral may extend
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13
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beyond the Stated Maturity of the New Junior
Subordinated Debentures. There could be
multiple Extension Periods of varying lengths
throughout the term of the New Junior
Subordinated Debentures, which in the
aggregate may exceed 10 semi-annual periods.
During an Extension Period distributions on
the New Capital Securities will also be
deferred and the Company may not, and may not
permit any subsidiary of the Company to, (i)
declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, the
Company's capital stock or (ii) make any
payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any
debt securities that rank pari passu with or
junior to the New Junior Subordinated
Debentures or make any guarantee payments
with respect to any guarantee by the Company
of the debt securities of any subsidiary of
the Company if such guarantee ranks pari
passu with or junior to the New Junior
Subordinated Debentures (other than (a)
dividends or distributions in common stock of
the Company, (b) payments under the New
Guarantee, (c) any declaration of a dividend
in connection with the implementation of a
shareholders' rights plan, or the issuance of
stock under any such plan in the future, or
the redemption or repurchase of any such
rights pursuant thereto, and (d) purchases of
common stock related to the issuance of
common stock or rights under any of the
Company's benefit plans). During an Extension
Period, interest on the New Junior
Subordinated Debentures will continue to
accrue (and the amount of Distributions to
which holders of the New Capital Securities
are entitled will accumulate) at the rate of
7.70% per annum, compounded semiannually to
the extent permitted by applicable law.
During an Extension Period, holders of New
Capital Securities will be required to
include the interest on their pro rata share
of the New Junior Subordinated Debentures in
their gross income as original issue discount
("OID") even though the cash payments
attributable thereto have not been made. See
"Description of New Junior Subordinated
Debentures-- Option to Extend Interest
Payment Period" and "Certain United States
Federal Income Tax Consequences -- Interest
Income and Original Issue Discount."
Redemption ..................... The New Junior Subordinated Debentures will
be redeemable by the Company in whole or in
part on or after February 15, 2007, or at any
time, in whole but not in part, upon the
occurrence of a Special Event, in either case
subject to any necessary prior approval of
the Regulatory Authorities and the further
conditions described under "Description of
New Junior Subordinated
Debentures--Redemption." The redemption price
for New Junior Subordinated Debentures
redeemed as a result of a Special Event will
be 100% of the principal amount of such New
Junior Subordinated Debentures plus accrued
and unpaid interest thereon. If the New
Junior Subordinated Debentures are redeemed,
the Trust must redeem New Capital Securities
having an aggregate liquidation amount equal
to the aggregate principal amount of the New
Junior Subordinated Debentures so redeemed.
The New Capital Securities will also be
redeemed upon maturity of the New Junior
Subordinated Debentures. See "Description of
New Capital Securities -- Redemption."
Liquidation of the Trust ...... Upon the occurrence and continuation of a
Special Event, the Company will have the
right, subject to any necessary prior
approval of the Regulatory Authorities, to
dissolve the Trust and cause the New Junior
Subordinated Debentures to be distributed to
the holders of the New Capital Securities and
the Common Securities in liquidation of the
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14
<PAGE>
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Trust. See "Description of New Capital
Securities-- Redemption-- Special Event
Redemption or Distribution of New Junior
Subordinated Debentures."
In the event of the liquidation of the Trust,
after satisfaction of the claims of creditors
of the Trust, if any, as provided by
applicable law, the holders of the New
Capital Securities will be entitled to
receive a liquidation amount of $1,000 per
New Capital Security plus accumulated and
unpaid Distributions thereon to the date of
payment, which may be in the form of a
distribution of such amount in New Junior
Subordinated Debentures as described above.
If such Liquidation Distribution (as defined
herein) can be paid only in part because the
Trust has insufficient assets available to
pay in full the aggregate Liquidation
Distribution, then the amounts payable
directly by the Trust on the New Capital
Securities shall be paid on a pro rata basis.
The holder(s) of the Common Securities will
be entitled to receive distributions upon any
such liquidation pro rata with the holders of
the New Capital Securities, except that if an
Indenture Event of Default has occurred and
is continuing, the New Capital Securities
shall have a priority over the Common
Securities. See "Description of New Capital
Securities -- Liquidation Distribution Upon
Dissolution."
Ratings ........................ It is expected that the New Capital
Securities will be rated aa3 by Moody's
Investors Service, Inc. ("Moody's"), A by
Standard & Poor's Ratings Services ("Standard
& Poor's") and A by Duff & Phelps Credit
Rating Co. ("Duff & Phelps"). There can be no
assurance that any rating will remain in
effect for any given period of time or that a
rating will not be lowered or withdrawn by
the assigning rating agency if, in its
judgment, circumstances so warrant. There can
be no assurance whether any other rating
agency will rate the New Capital Securities,
or if one does, what rating would be assigned
by such other rating agency. A security
rating is not a recommendation to buy, sell
or hold securities and may be subject to
revision or withdrawal at any time by the
assigning rating organization.
Absence of Market for the
New Capital Securities ....... The New Capital Securities will be a new
issue of securities for which there currently
is no market. Although Lehman Brothers Inc.,
Chase Securities Inc., Salomon Brothers Inc
and UBS Securities LLC, the initial
purchasers of the Old Capital Securities (the
"Initial Purchasers"), have informed the
Company and the Trust that they each
currently intend to make a market in the New
Capital Securities, they are not obligated to
do so, and any such market making may be
discontinued at any time without notice.
Accordingly, there can be no assurance as to
the development or liquidity of any market
for the New Capital Securities. The Trust and
the Company do not intend to apply for
listing of the New Capital Securities on any
securities exchange or for quotation through
the National Association of Securities
Dealers Automated Quotation System.
- - --------------------------------------------------------------------------------
15
<PAGE>
- - --------------------------------------------------------------------------------
THE CIT GROUP HOLDINGS, INC.
SUMMARY CONSOLIDATED FINANCIAL DATA
This summary is qualified in its entirety by the detailed information and
financial statements included in the documents incorporated herein by reference.
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Dollar amounts in millions
<S> <C> <C> <C> <C> <C>
Finance income ................. $ 1,646.2 $ 1,529.2 $ 1,263.8 $ 1,111.9 $ 1,091.5
Interest expense ............... 848.3 831.5 614.0 508.0 552.0
---------- ---------- ---------- ---------- ----------
Net finance income .......... 797.9 697.7 649.8 603.9 539.5
Fees and other income .......... 244.1 184.7 174.4 133.8 113.8
---------- ---------- ---------- ---------- ----------
Operating revenue ........... 1,042.0 882.4 824.2 737.7 653.3
---------- ---------- ---------- ---------- ----------
Salaries and general operating
expenses .................... 393.1 345.7 337.9 282.2 261.6
Provision for credit
losses ...................... 111.4 91.9 96.9 104.9 103.2
Depreciation on operating lease
equipment ................... 121.7 79.7 64.4 39.8 16.7
---------- ---------- ---------- ---------- ----------
Operating expenses .......... 626.2 517.3 499.2 426.9 381.5
---------- ---------- ---------- ---------- ----------
Income before provision for
income taxes and extraordinary
item ......................... 415.8 365.1 325.0 310.8 271.8
Provision for income taxes ..... 155.7 139.8 123.9 128.5 105.3
---------- ---------- ---------- ---------- ----------
Income before extraordinary
item ..................... $ 260.1 $ 225.3 $ 201.1 $ 182.3 $ 166.5
Extraordinary item-loss
on early extinguishment
of debt, net of income
tax benefit .................. -- -- -- -- (4.2)
---------- ---------- ---------- ---------- ----------
Net Income .................. $ 260.1 $ 225.3 $ 201.1 $ 182.3 $ 162.3
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Dollar amounts in millions
<S> <C> <C> <C> <C> <C>
Finance receivables .............. $16,996.6 $15,795.5 $14,794.4 $12,624.1 $11.771.5
Reserve for credit losses ........ (220.8) (206.0) (192.4) (169.4) (158.5)
Net finance receivables .......... 16,775.8 15,589.5 14,602.0 12,454.7 11,613.0
Operating lease equipment, net ... 1,402.1 1,113.0 867.9 751.9 462.8
Total assets ..................... 18,932.5 17,420.3 15,959.7 13,725.0 13,026.1
Capitalization:
Commercial paper ............... 5,827.0 6,105.6 5,660.2 6,516.1 6,173.5
Variable rate senior notes ..... 3,717.5 3,827.5 3,812.5 1,686.5 1,477.8
Fixed rate senior notes ........ 4,761.2 3,337.0 2,619.4 2,389.0 2,476.6
Subordinated fixed rate notes .. 300.0 300.0 300.0 200.0 200.0
Stockholders' equity ........... 2,075.4 1,914.2 1,793.0 1,692.2 1,601.1
Ratio of total debt to
stockholders' equity .......... 7.04-1 7.09-1 6.91-1 6.38-1 6.45-1
</TABLE>
- - --------------------------------------------------------------------------------
16
<PAGE>
RISK FACTORS
Holders of the Old Capital Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters. Unless as otherwise stated or the context
otherwise requires in the Risk Factors set forth below, the New Capital
Securities and the Old Capital Securities will be referred to as the "Capital
Securities," the New Junior Subordinate Debentures and the Old Junior
Subordinate Debentures will be referred to as the "Junior Subordinated
Debentures," and the Old Guarantee and the New Guarantee will be referred to as
the "Guarantee." To the extent any of the information contained or incorporated
by reference in this Offering Memorandum constitutes a "forward-looking
statement" as defined in Section 27A of the Securities Act or Section 21E of the
Exchange Act, the risk factors set forth below are cautionary statements
identifying important factors that could cause actual results to differ
materially from those in the forward-looking statement.
Ranking of Subordinated Obligations under the New Guarantee and the New Junior
Subordinated Debentures
The obligations of the Company under the Guarantee issued by the Company
for the benefit of the holders of Capital Securities and under the Junior
Subordinated Debentures will be unsecured and rank subordinate and junior in
right of payment to all Indebtedness of the Company. At December 31, 1996, the
Indebtedness of the Company aggregated approximately $14.6 billion. Neither the
Indenture, the Guarantee nor the Declaration (as defined herein) places any
limitation on the amount of secured or unsecured Indebtedness that may be
incurred by the Company. See "Description of Guarantee -- Status of the
Guarantee" and "Description of Junior Subordinated Debentures -- Subordination."
Status of Company as Holding Company
As a holding company, the ability of the Company to make payments of
interest and principal on the Junior Subordinated Debentures will be dependent
primarily upon the receipt of dividends and other distributions from the
Company's subsidiaries. The right of the Company to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Capital
Securities to benefit indirectly from such distribution), will be subject to the
prior claims of creditors of that subsidiary, except to the extent that any
claims of the Company as a creditor of such subsidiary may be recognized as
such. Accordingly, the Capital Securities will effectively be subordinated to
all existing and future liabilities and obligations of the Company's
subsidiaries, and holders of the Capital Securities should look only to the
assets of the Company for payments on the Capital Securities. As of December 31,
1996, the Company's subsidiaries had approximately $2.1 billion of indebtedness
or other liabilities, in addition to other contractual obligations.
Enforcement of Certain Rights by Holders of Capital Securities
If a Trust Enforcement Event (as defined herein) occurs and is continuing,
then the holders of Capital Securities would rely on the enforcement by the
Property Trustee (as defined herein) of its rights as a holder of the Junior
Subordinated Debentures against the Company. The holders of a majority in
liquidation amount of the Capital Securities will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Property Trustee or to direct the exercise of any trust or power conferred
upon the Property Trustee under the Declaration, including the right to direct
the Property Trustee to exercise the remedies available to it as a holder of the
Junior Subordinated Debentures. If the Property Trustee fails to enforce its
rights with respect to the Junior Subordinated Debentures held by the Trust, any
record holder of Capital Securities may institute legal proceedings directly
against the Company to enforce the Property Trustee's rights under such Junior
Subordinated Debentures without first instituting any legal proceedings against
such Property Trustee or any other person or entity.
If the Company were to default on its obligation to pay amounts payable
under the Junior Subordinated Debentures, the Trust would lack funds for the
payment of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and, in such event, holders of the Capital Securities
would not be able to rely upon the Guarantee for payment of such amounts.
However, in the event the Company failed to pay interest on or principal of the
Junior Subordinated Debentures on the payment date on which such payment is due
and payable, then a holder of Capital Securities may directly institute a
proceeding against the Company under the Indenture for enforcement of payment to
17
<PAGE>
such holder of the interest on or principal of such Junior Subordinated
Debentures having a principal amount equal to the aggregate liquidation amount
of the Capital Securities of such holder (a "Direct Action"). In connection with
such Direct Action, the Company will be subrogated to the rights of such holder
of Capital Securities under the Declaration to the extent of any payment made by
the Company to such holder of Capital Securities in such Direct Action. Except
as set forth herein, holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of Junior Subordinated
Debentures or assert directly any other rights in respect of the Junior
Subordinated Debentures. See "Description of New Capital Securities --
Enforcement of Certain Rights by Holders of New Capital Securities",
"Description of New Guarantee" and "Description of New Junior Subordinated
Debentures -- Indenture Events of Default." The Declaration provides that each
holder of New Capital Securities by acceptance thereof agrees to the provisions
of the New Guarantee and the Indenture.
Option to Extend Interest Payment Period; Tax Consequences
The Company will have the right under the Indenture to defer the payment
of interest on the Junior Subordinated Debentures at any time or from time to
time for a period not exceeding 10 consecutive semi-annual periods, provided
that no Extension Period may extend beyond the Stated Maturity of the Junior
Subordinated Debentures. As a consequence of any such deferral, semi-annual
Distributions on the Capital Securities by the Trust will be deferred during any
such Extension Period but would continue to accumulate at the rate of 7.70% per
annum, compounded semi-annually during any such Extension Period. During any
such Extension Period, the Company may not, and may not permit any subsidiary of
the Company to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu with or junior to the Junior Subordinated
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior to the Junior Subordinated Debentures
(other than (a) dividends or distributions in common stock of the Company, (b)
payments under the Guarantee, (c) any declaration of a dividend in connection
with the implementation of a shareholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, and (d) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans).
Prior to the termination of any such Extension Period, the Company may further
extend the Extension Period, provided that no Extension Period may exceed 10
consecutive semi-annual periods or extend beyond the Stated Maturity of the
Junior Subordinated Debentures. Upon the termination of any Extension Period and
the payment of all amounts then due on any Interest Payment Date, the Company
may elect to begin a new Extension Period subject to the above requirements. See
"Description of New Capital Securities -- Distributions" and "Description of New
Junior Subordinated Debentures -- Option to Extend Interest Payment Period."
Should the Company defer payment of interest on the Junior Subordinated
Debentures, a holder of Capital Securities will be required to accrue income (in
the form of OID) for United States federal income tax purposes in respect of its
pro rata share of the Junior Subordinated Debentures held by the Trust (which
will include a holder's pro rata share of the stated interest and the de minimus
OID on the Junior Subordinated Debentures). As a result, a holder of Capital
Securities will include such OID in gross income for United States federal
income tax purposes in advance of the receipt of cash attributable to such
income, and will not receive the cash related to such income from the Trust if
the holder disposes of the Capital Securities prior to the record date for the
payment of Distributions with respect to such Extension Period. See "Certain
United States Federal Income Tax Consequences -- Interest Income and Original
Issue Discount."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures. However, should the Company elect to exercise such
right in the future, the market price of the Capital Securities is likely to be
adversely affected. A holder that disposes of its Capital Securities during an
Extension Period, therefore, might not receive the same return on its investment
as a holder that continues to hold its Capital Securities. In addition, as a
result of the Company's right to defer interest payments, the market price of
the Capital Securities (which represent preferred undivided beneficial interests
18
<PAGE>
in the Junior Subordinated Debentures) may be more volatile than the market
prices of other similar securities where the issuer does not have such right to
defer interest payments.
Special Event Redemption; Proposed Tax Legislation
Upon the occurrence and continuation of a Special Event, the Company will
have the right, subject to any necessary prior approval of the Regulatory
Authorities and the further conditions described under "Description of New
Junior Subordinated Debentures -- Redemption," to redeem the Junior Subordinated
Debentures in whole (but not in part), for 100% of the principal amount plus
accrued and unpaid interest, within 90 days following the occurrence of such
Special Event and thereby cause a mandatory redemption of the Capital Securities
and Common Securities. A "Special Event" means a Tax Event, a Regulatory Capital
Event or an Investment Company Event (each as defined herein).
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill")
was introduced in the 104th Congress which would have, among other things,
generally denied interest deductions on a debt instrument that had a maximum
term of more than 20 years and that is not shown as indebtedness on the separate
balance sheet of the issuer or, where the instrument is issued to a related
party (other than a corporation), where the holder or some other related party
issues a related instrument that is not shown as indebtedness on the issuer's
consolidated balance sheet. This provision of the Bill was proposed to be
effective generally for instruments issued on or after December 7, 1995. If this
provision were to apply to the Junior Subordinated Debentures, the Company would
not be able to deduct the interest on the Junior Subordinated Debentures.
However, on March 29, 1996, the Chairmen of the Senate Finance and House Ways
and Means Committees issued a joint statement (the "Joint Statement") to the
effect that it was their intention that the effective date of the Bill, if
enacted, would be no earlier than the date of appropriate Congressional action.
In addition, subsequent to the publication of the Joint Statement, Senator
Daniel Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel
wrote letters (the "Democrat Letters") to Treasury Department officials
concurring with the view expressed in the Joint Statement. The 104th Congress
adjourned without enacting the Bill. Similar legislation was reproposed by the
Treasury Department on February 6, 1997, as part of President Clinton's Fiscal
1998 Budget Proposal (the "Proposed Legislation"). The Proposed Legislation
would, however, generally deny an interest deduction with respect to an
instrument not shown as indebtedness on the separate or consolidated balance
sheet of the issuer (as described above) and with a maximum term of more than 15
years (as contrasted to a maximum term of more than 20 years under the provision
of the Bill). Such provision is proposed to be effective generally for
instruments issued on or after the date of the first committee action. If the
effective date contained in the Proposed Legislation is followed, the
above-described provision would not apply to the Junior Subordinated Debentures.
There can be no assurance however, that current or future legislative or
administrative proposals or final legislation will not adversely affect the
ability of the Company to deduct interest on the Junior Subordinated Debentures
or otherwise affect the tax treatment described herein. Such a change,
therefore, could give rise to a Tax Event, which would permit the Company, upon
receiving an opinion of counsel, to cause a redemption of the Capital Securities
or to dissolve the Trust and distribute the Junior Subordinated Debentures to
the holders of Trust Securities in liquidation of the Trust, as described more
fully under "Description of New Capital Securities -- Redemption -- Special
Event Redemption or Distribution of New Junior Subordinated Debentures."
Liquidation Distribution of Junior Subordinated Debentures
Upon the occurrence and continuation of a Special Event the Company will
have the right, subject to any necessary prior approval of the Regulatory
Authorities, to dissolve the Trust and cause the Junior Subordinated Debentures
to be distributed to the holders of the Capital Securities and the Common
Securities in liquidation of the Trust. In addition, upon liquidation of the
Trust and certain other events, the Junior Subordinated Debentures may be
distributed to such holders. Under current United States federal income tax law
and interpretations thereof and assuming, as expected, the Trust is treated as a
grantor trust for United States federal income tax purposes, a distribution by
the Trust of the Junior Subordinated Debentures pursuant to a liquidation of the
Trust will not be a taxable event to the Trust or to holders of the Capital
Securities, and will result in a holder of the Capital Securities receiving
directly such holder's pro rata share of the Junior Subordinated Debentures
19
<PAGE>
(previously held indirectly through the Trust). If, however, the Trust is
liquidated because the Trust is subject to United States federal income tax with
respect to income accrued or received on the Junior Subordinated Debentures as a
result of the occurrence of a Tax Event or otherwise, the distribution of Junior
Subordinated Debentures to holders of the Capital Securities by the Trust could
be a taxable event to the Trust and each holder, and holders of the Capital
Securities may be required to recognize gain or loss as if they had exchanged
their Capital Securities for the Junior Subordinated Debentures they received
upon the liquidation of the Trust. See "Certain United States Federal Income Tax
Consequences -- Distribution of Junior Subordinated Debentures or Cash Upon
Liquidation of the Trust."
There can be no assurance as to the market prices for Capital Securities
or Junior Subordinated Debentures that may be distributed in exchange for
Capital Securities if a liquidation of the Trust occurs. Accordingly, the
Capital Securities that an investor may purchase, whether pursuant to the offer
made hereby or in the secondary market, or the Junior Subordinated Debentures
that a holder of Capital Securities may receive on liquidation of the Trust, may
trade at a discount to the price that the investor paid to purchase the Capital
Securities. Because holders of Capital Securities may receive Junior
Subordinated Debentures on termination of the Trust, prospective purchasers of
Capital Securities are also making an investment decision with regard to the
Junior Subordinated Debentures and should carefully review all the information
regarding the Junior Subordinated Debentures contained herein. See "Description
of New Capital Securities -- Redemption -- Special Event Redemption or
Distribution of New Junior Subordinated Debentures" and "Description of New
Junior Subordinated Debentures -- General."
Limited Voting Rights
Holders of Capital Securities generally will have limited voting rights
relating only to the modification of the Capital Securities and certain other
matters described herein. Holders of Capital Securities will not be entitled to
vote to appoint, remove or replace any of the Trustees (as defined below), which
voting rights are vested exclusively in the holder of the Common Securities. The
Trustees and the Company may amend the Declaration without the consent of
holders of Capital Securities to ensure that the Trust will be classified as a
grantor trust for United States federal income tax purposes; provided, however,
that such action shall not adversely affect in any material respect the
interests of such holders. See "Description of Capital Securities -- Voting
Rights; Amendment of the Declaration."
Bank Regulatory Restrictions on Operations of the Trust
Because the Trust is a subsidiary of the Company and the Company is a
subsidiary of DKB, the Trust and its activities are subject to examination and
regulation by the Regulatory Authorities. Under certain circumstances, including
any determination that the Company's relationship to the Trust results in an
unsafe and unsound banking practice, the Regulatory Authorities will have the
authority to issue orders which could restrict the ability of the Trust to make
distributions on or to redeem the Capital Securities.
Market Prices
There can be no assurance as to the market prices for Capital Securities
or Junior Subordinated Debentures that may be distributed in exchange for
Capital Securities if a termination of the Trust occurs. Accordingly, the
Capital Securities that an investor may purchase whether pursuant to the offer
made hereby or in the secondary market, or the Junior Subordinated Debentures
that a holder of Capital Securities may receive in liquidation of the Trust, may
trade at a discount from the price that the investor paid to purchase the
Capital Securities offered hereby. Because holders of Capital Securities may
receive Junior Subordinated Debentures in liquidation of the Trust and because
Distributions are otherwise limited to payments on the Junior Subordinated
Debentures, prospective purchasers of Capital Securities are also making an
investment decision with regard to the Junior Subordinated Debentures and should
carefully review all the information regarding the Junior Subordinated
Debentures contained herein. See "Description of the New Junior Subordinated
Debentures."
20
<PAGE>
Consequences of a Failure to Exchange Old Capital Securities
The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements of
the Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to certain
limited exceptions). The Company and the Trust do not intend to register under
the Securities Act any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer (subject to such limited exceptions, if
applicable).
To the extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Old Capital Securities
could be adversely affected. In addition, although the Old Capital Securities
have been designated for trading in the Private Offerings, Resale and Trading
through Automatic Linkages ("PORTAL") market, to the extent that Old Capital
Securities are tendered and accepted in connection with the Exchange Offer, any
trading market for Old Capital Securities which remain outstanding after the
Exchange Offer could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will constitute a single
series of Capital Securities under the Trust Agreement and, accordingly, will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding Liquidation Amount thereof have taken
certain actions or exercised certain rights under the Declaration of Trust. See
"Description of the New Capital Securities."
The Company has agreed that, if the Exchange Offer is not consummated
within 30 days of the effective date hereof, cash penalty amounts may be payable
by the Company to the holders of the Old Capital Securities. See "Description of
The Old Securities" and "The Exchange Offer."
Absence of a Public Market
The Old Capital Securities were issued to, and the Company believes are
currently owned by, a relatively small number of beneficial owners. The Old
Capital Securities have not been registered under the Securities Act and will be
subject to restrictions on transferability to the extent that they are not
exchanged for the New Capital Securities. Although the New Capital Securities
will generally be permitted to be resold or otherwise transferred by the holders
(who are not affiliates of the Company or the Trust) without compliance with the
registration requirements under the Securities Act, they will constitute a new
issue of securities with no established trading market. The Company and the
Trust have been advised by the Initial Purchasers that the Initial Purchasers
presently intend to make a market in the New Capital Securities. However, the
Initial Purchasers are not obligated to do so and any market-making activity
with respect to the New Capital Securities may be discontinued at any time
without notice. In addition, such market-making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offer. Accordingly, no assurance can be given that an active
public or other market will develop for the New Capital Securities or the Old
Capital Securities or as to the liquidity of or the trading market for the New
Capital Securities or the Old Capital Securities. If an active public market
does not develop, the market price and liquidity of the New Capital Securities
may be adversely affected.
If a public trading market develops for the New Capital Securities, future
trading prices of such securities will depend on many factors, including, among
other things, prevailing interest rates, results of operations and the market
for similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of the
Company, the New Capital Securities may trade at a discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
21
<PAGE>
Securities Act) of the Company or the Trust may publicly offer for sale or
resell the New Capital Securities only in compliance with the provisions of Rule
144 under the Securities Act.
Each broker-dealer that receives New Capital Securities for its own
account in exchange for Old Capital Securities, where such Old Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. See
"Plan of Distribution."
Exchange Offer Procedures
Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Trust of such Old Capital Securities, a properly completed and
duly executed Letter of Transmittal and all other required documents. Therefore,
holders of the Old Capital Securities desiring to tender such Old Capital
Securities in exchange for New Capital Securities should allow sufficient time
to ensure timely delivery. The Trust is under no duty to give notification of
defects or irregularities with respect to the tenders of Old Capital Securities
for exchange.
Ratings
The Old Capital Securities are rated aa3 by Moody's, A by Standard & Poor's
and A by Duff & Phelps. It is expected that the New Capital Securities will be
rated aa3 by Moody's, A by Standard & Poor's and A by Duff & Phelps. There can
be no assurance that any rating will remain in effect for the New Capital
Securities for any given period of time or that a rating will not be lowered or
withdrawn by the assigning rating agency if, in its judgment, circumstances so
warrant. There can be no assurance whether any other rating agency will rate the
New Capital Securities, or if one does, what rating would be assigned by such
rating agency. A security rating in not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time by the
assigning rating organization.
22
<PAGE>
USE OF PROCEEDS
Neither the Company nor the Trust will receive any cash proceeds from the
issuance of the New Capital Securities offered hereby. The New Capital
Securities will be exchanged for Old Capital Securities in like Liquidation
Amounts which will be retired and cancelled.
All of the proceeds from the sale of the Old Capital Securities were
invested by the Trust in the Old Junior Subordinated Debentures. The net
proceeds from the sale of such Old Junior Subordinated Debentures will provide
additional working funds for the Company and its subsidiaries and be used
initially to reduce short-term borrowings (presently represented by commercial
paper) incurred primarily for the purpose of originating and purchasing
receivables in the ordinary course of business. The amounts which the Company
itself may use in connection with its business and which the Company may furnish
to particular subsidiaries are not now determinable. From time to time the
Company may also use the proceeds to finance the bulk purchase of receivables
and/or the acquisition of other finance-related businesses.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's consolidated ratios of earnings to fixed charges for each of
the periods indicated are set forth below:
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Dollar Amounts in Millions
<S> <C> <C> <C> <C> <C>
Net income ............................... $ 260.1 $ 225.3 $ 201.1 $ 182.3 $ 162.3
Provision for income taxes ............... 155.7 139.8 123.9 128.5 105.3
Extraordinary item-loss
on early extinguishment
of debt, net of income tax benefit ...... -- -- -- -- 4.2
------- -------- ------- ------- -------
Earnings before provision for
income taxes and extraordinary item ..... 415.8 365.1 325.0 310.8 271.8
------- -------- ------- ------- -------
Fixed Charges:
Interest and debt expenses
on indebtedness ...................... 848.3 831.5 614.0 508.0 552.0
Interest factor--one third of rentals
on real and personal properties ...... 8.1 7.9 7.9 8.0 8.3
------- -------- ------- ------- -------
Total fixed charges ...................... 856.4 839.4 621.9 516.0 560.3
------- -------- ------- ------- -------
Total earnings before provisions for
income taxes, extraordinary item
and fixed charges ................. $1,272.2 $1,204.5 $ 946.9 $ 826.8 $ 832.1
======== ======== ======= ======= =======
Ratios of Earnings to Fixed Charges ...... 1.49 1.44 1.52 1.60 1.49
</TABLE>
23
<PAGE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a
subsidiary of the Company and, accordingly, the accounts of the Trust will be
included in the consolidated financial statements of the Company. The Capital
Securities will be presented in the consolidated balance sheet of the Company as
a separate line item directly above stockholders' equity and captioned
"Redeemable Preferred Capital Securities of subsidiary holding solely parent
company's debentures" and appropriate disclosures about the Capital Securities,
the Guarantee and the Junior Subordinated Debentures will be included in the
notes to the consolidated financial statements. For financial reporting
purposes, the Company will record Distributions payable on the Capital
Securities as an expense in its consolidated statements of income.
CAPITALIZATION
The following table sets forth the unaudited historical consolidated
capitalization of the Company and its subsidiaries as of December 31, 1996, and
as adjusted to give effect to the consummation of the offering of the Capital
Securities hereby.
At December 31
1996 Pro forma
--------- ---------
in Millions
Commercial paper ............................... $ 5,827.0 $ 5,827.0
Variable rate senior notes ..................... 3,717.5 3,717.5
Fixed rate senior and
subordinated notes .......................... 5,061.2 5,061.2
--------- ---------
Total debt ................................. 14,605.7 14,605.7
Redeemable Preferred Capital
Securities of subsidiary holding
solely parent company's debentures (1) ....... -- 250.0
Stockholders' equity ........................... 2,075.4 2,075.4
--------- ---------
Total capitalization ....................... $16,681.1 $16,931.1
========= =========
- - ---------
(1) The Redeemable Preferred Capital Securities of subsidiary holding solely
parent company's debentures reflects the Capital Securities. The Trust is a
wholly owned subsidiary of the Company and holds the Junior Subordinated
Debentures as its sole asset.
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THE TRUST
The Trust is a statutory business trust formed under the Delaware Business
Trust Act, as amended (the "Trust Act"), pursuant to a declaration of trust (as
so amended and restated, the "Declaration") and the filing of a certificate of
trust as filed with the Secretary of State of the State of Delaware. The Company
acquired Common Securities in an aggregate liquidation amount equal to at least
3% of the total capital of the Trust. The Trust used all of the proceeds derived
from the issuance of the Old Capital Securities and the Common Securities to
purchase the Old Junior Subordinated Debentures and, accordingly, the assets of
the Trust consist solely of the Old Junior Subordinated Debentures. The Trust
exists for the exclusive purposes of (i) issuing and selling the Trust
Securities representing undivided beneficial ownership interests in the assets
of the Trust and effecting the Exchange Offer for the New Capital Securities,
(ii) investing the gross proceeds from the sale of the Trust Securities in the
Old Junior Subordinated Debentures, (iii) exchanging the Old Junior Subordinated
Debentures for the New Junior Subordinated Debentures in the Exchange Offer, and
(iv) engaging in only those other activities necessary or incidental thereto.
Pursuant to the Declaration, there are initially five trustees (the
"Trustees") for the Trust. Three of the Trustees (the "Regular Trustees") are
individuals who are employees or officers of or who are affiliated with the
Company. The fourth trustee is a financial institution that is unaffiliated with
the Company (the "Property Trustee"). The fifth trustee is an entity that
maintains its principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law (the "Delaware Trustee"). Initially,
The Bank of New York is acting as Property Trustee, and its affiliate, The Bank
of New York (Delaware), is acting as Delaware Trustee until, in each case,
removed or replaced by the holder of the Common Securities. The Bank of New York
is also acting as trustee under the Guarantee (the "Guarantee Trustee").
The Property Trustee will hold title to the New Junior Subordinated
Debentures for the benefit of the holders of the Trust Securities, and the
Property Trustee will have the power to exercise all rights, powers and
privileges with respect to the New Junior Subordinated Debentures under the
Indenture (as defined herein) as the holder of the New Junior Subordinated
Debentures. In addition, the Property Trustee will maintain exclusive control of
a segregated non-interest bearing bank account (the "Property Account") to hold
all payments made in respect of the New Junior Subordinated Debentures for the
benefit of the holders of the Trust Securities. The Guarantee Trustee will hold
the New Guarantee for the benefit of the holders of the Capital Securities. The
Company, as the holder of all the Common Securities, will have the right to
appoint, remove or replace any of the Trustees and to increase or decrease the
number of Trustees, provided that the number of Trustees shall be at least
three; provided further that at least one Trustee shall be a Delaware Trustee,
at least one Trustee shall be the Property Trustee and at least one Trustee
shall be a Regular Trustee.
Under the Indenture the Company, as borrower, has paid and agreed to
continue to pay all fees and expenses related to the organization and operations
of the Trust (including any taxes, duties, assessments or governmental charges
of whatever nature (other than withholding taxes) imposed by the United States
or any other domestic taxing authority upon the Trust) and the offering of the
Capital Securities and be responsible for all debts and obligations of the Trust
(other than with respect to the Capital Securities). See "Description of New
Capital Securities -- Expenses and Taxes."
For so long as the Capital Securities remain outstanding, the Company will
covenant (i) to maintain directly or indirectly 100% ownership of the Common
Securities, (ii) to cause the Trust to remain a statutory business trust and not
to voluntarily dissolve, wind-up, liquidate or be terminated, except as
permitted by the Declaration, (iii) to use its commercially reasonable efforts
to ensure that the Trust will not be an "investment company" for purposes of the
Investment Company Act of 1940, as amended, and (iv) to take no action that
would be reasonably likely to cause the Trust to be classified as an association
or a publicly traded partnership taxable as a corporation for United States
federal income tax purposes.
The rights of the holders of the Capital Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration and the Trust Act. See "Description of New Capital Securities." The
Declaration and the New Guarantee also incorporate by reference the terms of the
Trust Indenture Act.
The location of the principal executive office of the Trust is c/o The CIT
Group Holdings, Inc., Attn. Chief Financial Officer, 1211 Avenue of the
Americas, New York, New York 10036 and its telephone number is (212) 536-1950.
25
<PAGE>
THE COMPANY
The CIT Group Holdings, Inc. (the "Company"), a Delaware corporation, is a
successor to a company founded in St. Louis, Missouri on February 11, 1908. It
has its principal executive offices at 1211 Avenue of the Americas, New York,
New York 10036, and its telephone number is (212) 536-1950. The Company,
operating directly or through its subsidiaries primarily in the United States,
engages in financial services activities through a nationwide distribution
network. The Company provides financing primarily on a secured basis to
commercial borrowers, ranging from middle-market to larger companies, and to a
lesser extent to consumers. While these secured lending activities reduce the
risk of losses from extending credit, the Company's results of operations can
also be affected by other factors, including general economic conditions,
competitive conditions, the level and volatility of interest rates,
concentrations of credit risk, and government regulation and supervision. The
Company does not finance the development or construction of commercial real
estate. The Company has eight strategic business units which offer commercial
and consumer financing, and factoring products and services to clients.
The Dai-Ichi Kangyo Bank, Limited ("DKB") owns eighty percent (80%) of the
issued and outstanding shares of common stock of the Company. DKB purchased a
sixty percent (60%) common stock interest in the Company from Manufacturers
Hanover Corporation ("MHC") at year-end 1989 and acquired an additional twenty
percent (20%) common stock interest in the Company on December 15, 1995 from CBC
Holding (Delaware) Inc. (formerly known as MHC Holdings (Delaware) Inc.) ("CBC
Holding"). DKB has an option, expiring December 15, 2000, to purchase the
remaining twenty percent (20%) common stock interest from CBC Holding and its
parent.
CBC Holding became a direct, wholly owned subsidiary of Chemical Banking
Corporation ("CBC") after the merger between MHC and CBC on December 31, 1991.
On March 31, 1996, CBC was merged into The Chase Manhattan Corporation ("CMC"),
and CMC became the sole stockholder of CBC Holding.
In accordance with a stockholders agreement among DKB, CMC, as direct
successor to CBC and indirect successor to MHC, and the Company, dated as of
December 29, 1989, as amended by an Amendment to Stockholders' Agreement, dated
December 15, 1995 (the "Stockholders Agreement"), one nominee of the Board of
Directors is designated by CMC. The Stockholders Agreement also contains
restrictions with respect to the transfer of the stock of the Company to third
parties.
BUSINESS AND SERVICES
Commercial Lending and Leasing
Business Credit
The CIT Group/Business Credit offers revolving and term loans secured by
accounts receivable, inventories and fixed assets to medium and larger-sized
companies. Such loans are used by clients primarily for acquisitions,
refinancings, debtor-in-possession and turnaround financings. The CIT
Group/Business Credit sells participation interests in such loans to other
lenders and will occasionally purchase participation interests in such loans
originated by other lenders. Business is developed through direct calling
efforts and through other sources originated by new business development
officers. The CIT Group/Business Credit is headquartered in New York City, with
sales and customer service offices in New York, Chicago, Dallas, Los Angeles,
Atlanta and Charlotte.
Capital Equipment Financing
The CIT Group/Capital Equipment Financing specializes in customized secured
financing and leasing for medium-sized and large corporations in the form of
single investor leases, debt and equity portions of leveraged leases, operating
leases, direct loans, and sale and leaseback arrangements for major capital
equipment and other income producing assets. Such business is developed directly
with large companies and through third parties. A business group within The CIT
Group/Capital Equipment Financing augments its marketing efforts and provides
services relating to its area of expertise. The CIT Group/Capital Investments is
a registered broker-dealer and a member of the National Association of
Securities Dealers, Inc. and acts as an agent, broker, and advisor in financing
26
<PAGE>
and leasing transactions. To strategically align all small to medium-ticket
equipment financing into a single nationwide franchise, The CIT Group/Capital
Equipment Financing, during January 1997, transferred $1.5 billion of its
equipment related portfolio to and consolidated certain operations with The CIT
Group/Industrial Financing. The CIT Group/Capital Equipment Financing is
headquartered in New York City, with sales offices in twenty cities, including
New York, Chicago and Los Angeles.
Credit Finance
The CIT Group/Credit Finance offers revolving and term loans to small and
medium-sized companies secured by accounts receivable, inventories, and fixed
assets. Such loans are used by clients for working capital, in refinancings,
acquisitions, leveraged buyouts, reorganizations, restructurings, turnarounds
and Chapter 11 financing and confirmation plans. Business is developed through
direct calling efforts and through other sources developed by new business
development officers. The CIT Group/Credit Finance is headquartered in New York
City, with sales and customer service offices in New York, Chicago and Los
Angeles and loan production offices in five other cities.
Industrial Financing
The CIT Group/Industrial Financing offers secured equipment financing and
leasing products, including direct secured loans, leases, revolving lines of
credit, sale and leaseback arrangements, vendor financing and specialized
wholesale and retail financing for distributors and manufacturers, portfolio
acquisition, business aircraft financing, third party financing and medical
equipment financing. The CIT Group/Industrial Financing is headquartered in
Livingston, New Jersey with a nationwide network of local offices and sales
offices in twenty-two cities, including Tempe, Arizona and Atlanta, Georgia,
which also serve as regional and customer service offices.
Commercial Services
The CIT Group/Commercial Services offers a full range of domestic and
international customized credit protection and lending services. These services
include factoring, working capital and term loans, receivable management
outsourcing, bulk purchases of accounts receivable, import and export financing
and letter of credit programs. The CIT Group/Commercial Services is
headquartered in New York City, with full service offices in New York, Los
Angeles, Dallas and Charlotte and sales offices in Miami and Hong Kong.
Bookkeeping and collection functions are located in a service center in
Danville, Virginia.
Consumer Related Lending
Consumer Finance
The CIT Group/Consumer Finance offers loans and lines of credit secured
primarily by first or second mortgages on residential real estate. The CIT
Group/Consumer Finance originates business through various channels including
direct marketing to consumers, mortgage brokers and correspondent institutional
relationships. This business is headquartered in Livingston, New Jersey with 25
offices servicing brokers in over 40 states. Three regional correspondent
offices purchase loans from third parties. A national home equity center engages
in nationwide direct marketing. Servicing and collection support is provided by
The CIT Group/Sales Financing asset service center located in Oklahoma City,
Oklahoma and by The CIT Group/ Consumer Finance quality control and document
center located in Marlton, New Jersey.
Sales Financing
The CIT Group/Sales Financing, working through dealers, manufacturers and
brokers provides retail secured financing on a nationwide basis for the purchase
of recreational vehicles, manufactured housing and recreational boats. The CIT
Group/Sales Financing also purchases portfolios of these assets from banks,
savings and loans, investment banks and others, offers to manufacturers retail
and wholesale "private label" financing programs, and provides servicing for
portfolios owned by other financial institutions, U.S. government agencies, and
securitization trusts. The CIT Group/Sales Financing is headquartered in
Livingston, New Jersey with an asset service center in Oklahoma City, Oklahoma,
and covers the United States from six regional business centers located in
Atlanta, Boston, Kansas City, Sacramento, Oklahoma City and Seattle.
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Other
Equity Investments and Venture Capital
The CIT Group/Equity Investments and its subsidiary The CIT Group/Venture
Capital originate and participate in merger and acquisition transactions,
purchasing private equity and equity-related securities, and arranging
transaction financing. These units also invest in emerging growth opportunities
in selected industries, including the life sciences, information technology,
communications and consumer products. Business is developed through direct
solicitation, or through referrals from investment banking firms, financial
intermediaries, or the Company's other business units. The CIT Group/Venture
Capital is a federal licensee under the Small Business Investment Act of 1958.
The CIT Group/Equity Investments and The CIT Group/Venture Capital are
headquartered in Livingston, New Jersey.
Multi-National Marketing
Supplementing the Company's marketing efforts, the Company's Multi-National
Marketing Group promotes the services of the Company's various business units to
the U.S. subsidiaries of foreign corporations in need of asset-based financing.
Business is developed through referrals from DKB and through direct calling
efforts. The Multi-National Marketing Group is located in New York City.
REGULATION
DKB is a bank holding company within the meaning of the Bank Holding
Company Act of 1956 (the "Act"), and is registered as such with the Federal
Reserve Board. As a result, DKB and the Company are subject to certain
provisions of the Act. In general, the Act limits the activities in which a bank
holding company and its subsidiaries may engage to those of banking or managing
or controlling banks or performing services for their subsidiaries and to
continuing activities which the Federal Reserve Board has determined to be "so
closely related to banking or managing or controlling banks as to be a proper
incident thereto." The Company's current principal business activities
constitute permissible activities for a subsidiary of a bank holding company.
The operations of the Company and its subsidiaries are subject, in certain
instances, to supervision and regulation by governmental authorities and may be
subject to various laws and judicial and administrative decisions imposing
various requirements and restrictions, including among other things, regulating
credit granting activities, establishing maximum interest rates and finance
charges, regulating customers' insurance coverages, requiring disclosures to
customers, governing secured transactions, and setting collection, repossession,
and claims handling procedures and other trade practices. In most states the
consumer sales finance and loan business and the consumer second mortgage and
home equity line of credit businesses are subject to licensing or regulation. In
some states the industrial finance business is subject to similar licensing or
regulation. The consumer second mortgage, home equity line of credit, sales
finance, and loan businesses, including those conducted by the Company, are also
subject to a number of Federal statutes, including the Federal Consumer Credit
Protection Act, which requires, among other things, disclosure of the finance
charge in terms of an annual percentage rate, as well as the total dollar cost.
In the judgment of management, existing statutes and regulations have not
had a materially adverse effect on the business conducted by the Company and its
subsidiaries. However, it is not possible to forecast the nature of future
legislation, regulations, judicial decisions, orders, or interpretations, nor
their impact upon the future business, earnings, or otherwise, of the Company
and its subsidiaries.
The Company is not itself a bank holding company and hence the Regulatory
Authorities do not require the Company separately to maintain any specified
levels of capital. DKB is required by MOF to maintain certain levels of capital
for bank regulatory purposes.
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THE EXCHANGE OFFER
Purpose and Effect
In connection with the sale of the Old Capital Securities, the Company and
the Trust entered into the Registration Rights Agreement with the Initial
Purchasers, pursuant to which the Company and the Trust agreed, among other
things, to file and to use their reasonable efforts to cause to become effective
with the Commission a registration statement with respect to the exchange of the
Old Capital Securities for capital securities with terms identical in all
material respects to the terms of the Old Capital Securities. A copy of the
Registration Rights Agreement has been filed as an Exhibit to the Registration
Statement of which this Prospectus is a part. The Exchange Offer is being made
to satisfy the contractual obligations of the Company and the Trust under the
Registration Rights Agreement. The form and terms of the New Capital Securities
are identical in all material respects to the form and terms of the Old Capital
Securities except that the New Capital Securities have been registered under the
Securities Act and therefore will not be subject to certain restrictions on
transfer applicable to the Old Capital Securities and will not provide for any
increase in the Distribution rate thereon. In that regard, the Old Capital
Securities provide, among other things, that, if the Exchange Offer is not
consummated by September 23, 1997, additional interest (the "Additional
Interest") will become payable in respect of the Old Junior Subordinated
Debentures (including in respect of amounts accruing during any Extension
Period), and corresponding additional distributions (the "Additional
Distributions") will become payable on the Old Capital Securities, at the rate
of 0.25% per annum applicable to the principal amount of the Old Junior
Subordinated Debentures or the liquidation amount of Old Capital Securities, as
the case may be, for the period from and including such date to, but excluding,
the date on which the Exchange Offer is consummated. All accrued Additional
Interest (and corresponding Additional Distributions) will be paid by the
Company on each Distribution payment date to DTC by wire transfer of immediately
available funds or by federal funds check and to holders of certificated
securities by wire transfer to the accounts specified by them or by mailing
checks to their registered addresses if no such accounts have been specified.
See "Risk Factors -- Consequences of a Failure to Exchange Old Capital
Securities" and "Description of the Old Securities."
The Exchange Offer is not being made to, nor will the Company or the Trust
accept tenders for exchange from, holders of Old Capital Securities in any
jurisdiction in which the Exchange Offer or the acceptance thereof would not be
in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by The Depository Trust Company who
desires to deliver such Old Capital Securities by book-entry transfer at The
Depository Trust Company.
Pursuant to the Exchange Offer, the Company will exchange as soon as
practicable after the date hereof, the Old Guarantee for the New Guarantee and
all of the Old Junior Subordinated Debentures, of which $257,732,000 aggregate
principal amount is outstanding, for like aggregate principal of the New Junior
Subordinated Debentures. The New Guarantee and New Junior Subordinated
Debentures have been registered under the Securities Act.
Terms of the Exchange
The Company and the Trust hereby offer, upon the terms and subject to the
conditions set forth in this Prospectus and in the accompanying Letter of
Transmittal, to exchange up to $250,000,000 aggregate liquidation amount of New
Capital Securities for a like aggregate liquidation amount of Old Capital
Securities properly tendered on or prior to the Expiration Date (as defined
below) and not properly withdrawn in accordance with the procedures described
below. The Trust will issue, promptly after the Expiration Date, an aggregate
liquidation amount of up to $250,000,000 of New Capital Securities in exchange
for a like principal amount of outstanding Old Capital Securities tendered and
accepted in connection with the Exchange Offer. Holders may tender their Old
Capital Securities in any integral multiple of $1,000. The Exchange Offer is not
conditioned upon any minimum liquidation amount of Old Capital Securities being
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<PAGE>
tendered. As of the date of this Prospectus $250,000,000 aggregate liquidation
amount of the Old Capital Securities is outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Capital Securities which are
not tendered for, or are tendered but not accepted in connection with the
Exchange Offer, will remain outstanding and be entitled to the benefits of the
Declaration of Trust, but will not be entitled to any further registration
rights under the Registration Rights Agreement, except under limited
circumstances. See "Risk Factors -- Consequences of a Failure to Exchange Old
Capital Securities" and "Description of the Old Securities." If any tendered Old
Capital Securities are not accepted for exchange because of an invalid tender,
the occurrence of certain other events set forth herein or otherwise,
certificates for any such unaccepted Old Capital Securities will be returned,
without expense, to the tendering holder thereof promptly after the Expiration
Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes with respect to
the exchange of Old Capital Securities in connection with the Exchange Offer.
The Company will pay all charges and expenses, other than certain applicable
taxes described below, in connection with the Exchange Offer. See "-- Fees and
Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE TRUSTEES OF THE
TRUST MAKE ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO WHETHER
TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD CAPITAL
SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES
MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER
AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO TENDER AFTER
READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR
ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS.
Expiration Date; Extensions; Amendments
The term "Expiration Date" means 5:00 p.m., New York City time, on , 1997
unless the Exchange Offer is extended by the Company and the Trust (in which
case the term "Expiration Date" shall mean the latest date and time to which the
Exchange Offer is extended). The Company and the Trust expressly reserve the
right in their sole and absolute discretion, subject to applicable law, at any
time and from time to time, (i) to delay the acceptance of the Old Capital
Securities for exchange, (ii) to terminate the Exchange Offer (whether or not
any Old Capital Securities have theretofore been accepted for exchange) if the
Company and the Trust determine, in their sole and absolute discretion, that any
of the events or conditions referred to under "-- Conditions to the Exchange
Offer" have occurred or exist or have not been satisfied, (iii) to extend the
Expiration Date of the Exchange Offer and retain all Old Capital Securities
tendered pursuant to the Exchange Offer, subject, however, to the right of
holders of Old Capital Securities to withdraw their tendered Old Capital
Securities as described under "-- Withdrawal Rights," and (iv) to waive any
condition or otherwise amend the terms of the Exchange Offer in any respect. If
the Exchange Offer is amended in a manner determined by the Company and the
Trust to constitute a material change, or if the Company and the Trust waive a
material condition of the Exchange Offer, the Company or the Trust will promptly
disclose such amendment by means of a prospectus supplement that will be
distributed to the registered holders of the Old Capital Securities, and the
Company and the Trust will extend the Exchange Offer to the extent required by
Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Company or the Trust may choose to make any public
announcement and subject to applicable law, neither the Company nor the Trust
shall have any obligation to publish, advertise or otherwise communicate any
such public announcement other than by issuing a release to an appropriate news
agency.
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Acceptance or Exchange and Issuance of New Capital Securities
Upon the terms and subject to the conditions of the Exchange Offer, the
Company and the Trust will exchange, and will issue to the Exchange Agent, New
Capital Securities for Old Capital Securities validly tendered and not withdrawn
(pursuant to the withdrawal rights described under "-- Withdrawal Rights")
promptly after the Expiration Date. In all cases, delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of (i) Old Capital Securities or a book-entry confirmation
of a book-entry transfer of Old Capital Securities into the Exchange Agent's
account at The Depositary Trust Company ("DTC"), (ii) the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and (iii) any other documents required by the Letter of
Transmittal.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC.
Subject to the terms and conditions of the Exchange Offer, the Company and
the Trust will be deemed to have accepted for exchange, and thereby exchanged,
Old Capital Securities validly tendered and not withdrawn as, if and when the
Company or the Trust gives oral or written notice to the Exchange Agent of the
Company's and the Trust's acceptance of such Old Capital Securities for exchange
pursuant to the Exchange Offer. The Exchange Agent will act as agent for the
Company and the Trust for the purpose of receiving tenders of Old Capital
Securities, Letters of Transmittal and related documents, and as agent for
tendering holders for the purpose of receiving Old Capital Securities, Letters
of Transmittal and related documents and transmitting New Capital Securities to
validly tendering holders. Such exchange will be made promptly after the
Expiration Date. If for any reason whatsoever, acceptance for exchange or the
exchange of any Old Capital Securities tendered pursuant to the Exchange Offer
is delayed (whether before or after the Company's and the Trust's acceptance for
exchange of Old Capital Securities) or the Company or the Trust extends the
Exchange Offer or is unable to accept for exchange or exchange Old Capital
Securities tendered pursuant to the Exchange Offer, then, without prejudice to
the Company or the Trust's rights set forth herein, the Exchange Agent may,
nevertheless, on behalf of the Company and the Trust and subject to Rule
14e-1(c) under the Exchange Act, retain tendered Old Capital Securities and such
Old Capital Securities may not be withdrawn except to the extent tendering
holders are entitled to withdrawal rights as described under "-- Withdrawal
Rights."
Pursuant to the Letter of Transmittal, a holder of Old Capital Securities
will warrant and agree in the Letter of Transmittal that it has full power and
authority to tender, exchange, sell, assign and transfer Old Capital Securities,
that the Trust will acquire good, marketable and unencumbered title to the
tendered Old Capital Securities, free and clear of all liens, restrictions,
charges and encumbrances, and the Old Capital Securities tendered for exchange
are not subject to any adverse claims or proxies. The holder also will warrant
and agree that it will, upon request, execute and deliver any additional
documents deemed by the Company, the Trust or the Exchange Agent to be necessary
or desirable to complete the exchange, sale, assignment, and transfer of the Old
Capital Securities tendered pursuant to the Exchange Offer.
Procedures For Tendering Old Capital Securities
Valid Tender. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees and any other required documents, must be
received by the Exchange Agent at its address set forth under "-- Exchange
Agent," and either (i) tendered Old Capital Securities must be received by the
Exchange Agent, or (ii) such Old Capital Securities must be tendered pursuant to
the procedures for book-entry transfer set forth below and a book-entry
confirmation must be received by the Exchange Agent, in each case on or prior to
the Expiration Date, or (iii) the guaranteed delivery procedures set forth below
must be complied with.
If less than all of the Old Capital Securities are tendered, a tendering
holder should fill in the amount of Old Capital Securities being tendered in the
appropriate box on the Letter of Transmittal. The entire amount of Old Capital
Securities delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated.
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THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book Entry Transfer. The Exchange Agent will establish an account with
respect to the Old Capital Securities at DTC for purposes of the Exchange Offer
within two business days after the date of this Prospectus. Any financial
institution that is a participant in DTC's book-entry transfer facility system
may make a book-entry delivery of the Old Capital Securities by causing DTC to
transfer such Old Capital Securities into the Exchange Agent's account at DTC in
accordance with DTC's procedures for transfers. However, although delivery of
Old Capital Securities may be effected through book-entry transfer into the
Exchange Agent's account at DTC, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees and any other required documents, must in any case be delivered to
and received by the Exchange Agent at its address set forth under "-- Exchange
Agent" on or prior to the Expiration Date, or the guaranteed delivery procedure
set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for the Old Capital Securities need not
be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (b) such registered holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the Letter of Transmittal.
In the case of (a) or (b) above, such certificates for Old Capital Securities
must be duly endorsed or accompanied by a properly executed bond power, with the
endorsement or signature on the bond power and on the Letter of Transmittal
guaranteed by a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as an "eligible guarantor institution," including (as such terms
are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association (an "Eligible Institution"), unless surrendered
on behalf of such Eligible Institution. See Instruction 1 to the Letter of
Transmittal.
Guaranted Delivery. If a holder desires to tender Old Capital Securities
pursuant to the Exchange Offer and the certificates for such Old Capital
Securities are not immediately available or time will not permit all required
documents to reach the Exchange Agent on or before the Expiration Date, or the
procedures for book-entry transfer cannot be completed on a timely basis, such
Old Capital Securities may nevertheless be tendered, provided that all of the
following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of
Transmittal, is received by the Exchange Agent, as provided below, on or
prior to Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing
all tendered Old Capital Securities, in proper form for transfer, together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees and any other
documents required by the Letter of Transmittal, are received by the
Exchange Agent within five New York Stock Exchange trading days after the
date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
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Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees and any other
documents required by the Letter of Transmittal. Accordingly, the delivery of
New Capital Securities might not be made to all tendering holders at the same
time, and will depend upon when Old Capital Securities, book-entry confirmations
with respect to Old Capital Securities and other required documents are received
by the Exchange Agent.
The acceptance by the Company and the Trust for exchange of Old Capital
Securities tendered pursuant to any of the procedures described above will
constitute a binding agreement between the tendering holder, the Company and the
Trust upon the terms and subject to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Trust, in its sole
discretion, whose determination shall be final and binding on all parties. The
Company and the Trust reserve the absolute right, in their sole and absolute
discretion, to reject any and all tenders determined by them not to be in proper
form or the acceptance of which, or exchange for, may, in the view of counsel to
the Company and the Trust, be unlawful. The Company and the Trust also reserve
the absolute right, subject to applicable law, to waive any of the conditions of
the Exchange Offer as set forth under "--Conditions to the Exchange Offer" or
any condition or irregularity in any tender of Old Capital Securities of any
particular holder whether or not similar conditions or irregularities are waived
in the case of other holders.
The Company and the Trust's interpretation of the terms and conditions of
the Exchange Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding. No tender of Old Capital Securities will be
deemed to have been validly made until all irregularities with respect to such
tender have been cured or waived. Neither the Company, the Trust, any affiliates
or assigns of the Company, the Trust, the Exchange Agent nor any other person
shall be under any duty to give any notification of any irregularities in
tenders or incur any liability for failure to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney,
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the Company or
the Trust, proper evidence satisfactory to the Company or the Trust, in its sole
discretion, of such person's authority to so act must be submitted.
A beneficial owner of Old Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
Resales of New Capital Securities
The Company and the Trust are making the Exchange Offer for the Old
Capital Securities in reliance on the position of the staff of the Division of
Corporation Finance of the Commission as set forth in certain interpretive
letters addressed to third parties in other transactions. However, neither the
Company nor the Trust sought its own interpretive letter and there can be no
assurance that the staff of the Division of Corporation Finance of the
Commission would make a similar determination with respect to the Exchange Offer
as it has in such interpretive letters to third parties. Based on these
interpretations by the staff of the Division of Corporation Finance, and subject
to the two immediately following sentences, the Company and the Trust believe
that New Capital Securities issued pursuant to this Exchange Offer in exchange
for Old Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Capital Securities
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are acquired in the ordinary course of such holder's business and that such
holder is not participating, and has no arrangement or understanding with any
person to participate, in a distribution (within the meaning of the Securities
Act) of such New Capital Securities. However, any holder of Old Capital
Securities who is an "affiliate" of the Company or the Trust or who intends to
participate in the Exchange Offer for the purpose of distributing New Capital
Securities, or any broker-dealer who purchased Old Capital Securities from the
Trust to resell pursuant to Rule 144A or any other available exemption under the
Securities Act, (a) will not be able to rely on the interpretations of the staff
of the Division of Corporation Finance of the Commission set forth in the
above-mentioned interpretive letters, (b) will not be permitted or entitled to
tender such Old Capital Securities in the Exchange Offer and (c) must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any sale or other transfer of such Old Capital Securities
unless such sale is made pursuant to an exemption from such requirements. In
addition, as described below, if any broker-dealer holds Old Capital Securities
acquired for its own account as a result of market-making or other trading
activities and exchanges such Old Capital Securities for New Capital Securities,
then such broker-dealer must deliver a prospectus meeting the requirements of
the Securities Act in connection with any resales of such New Capital
Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an "affiliate" of the Company or the Trust, (ii)
any New Capital Securities to be received by it are being acquired in the
ordinary course of its business, (iii) it has no arrangement or understanding
with any person to participate in a distribution (within the meaning of the
Securities Act) of such New Capital Securities, and (iv) if such holder is not a
broker-dealer, such holder is not engaged in, and does not intend to engage in,
a distribution (within the meaning of the Securities Act) of such New Capital
Securities. In addition, the Company and the Trust may require such holder, as a
condition to such holder's eligibility to participate in the Exchange Offer, to
furnish to the Company and the Trust (or an agent thereof) in writing
information as to the number of "beneficial owners" (within the meaning of Rule
13d-3 under the Exchange Act) on behalf of whom such holder holds the Capital
Securities to be exchanged in the Exchange Offer. Each broker-dealer that
receives New Capital Securities for its own account pursuant to the Exchange
Offer must acknowledge that it acquired the Old Capital Securities for its own
account as the result of market-making activities or other trading activities
and must agree that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such New Capital Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. Based on the position
taken by the staff of the Division of Corporation Finance of the Commission in
the interpretive letters referred to above, the Company and the Trust believe
that broker-dealers who acquired Old Capital Securities for their own accounts
as a result of market-making activities or other trading activities
("Participating Broker-Dealers") may fulfill their prospectus delivery
requirements with respect to the New Capital Securities received upon exchange
of such Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the resale of
such New Capital Securities. Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating Broker-Dealer
during the period referred to below in connection with resales of New Capital
Securities received in exchange for Old Capital Securities where such Old
Capital Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
certain provisions set forth in the Capital Securities Registration Rights
Agreement, the Company and the Trust have agreed that this Prospectus, as it may
be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 180 days after the Expiration Date or, if earlier, when all such
New Capital Securities have been disposed of by such Participating
Broker-Dealer. See "Plan of Distribution." Any Participating Broker-Dealer who
is an "affiliate" of the Company or the Trust may not rely on such interpretive
letters and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
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In that regard, each Participating Broker-Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal, that, upon receipt of notice from the
Company or the Trust of the occurrence of any event or the discovery of any fact
which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or which causes this Prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain other
events specified in the Registration Rights Agreements, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Company or the Trust has amended or supplemented this
Prospectus to correct such misstatement or omission and has furnished copies of
the amended or supplemented Prospectus to such Participating Broker-Dealer or
the Company or the Trust has given notice that the sale of the New Capital
Securities (or the New Guarantee or the New Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be.
Withdrawal Rights
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "-- Exchange Agent"
on or prior to the Expiration Date. Any such notice of withdrawal must specify
the name of the person who tendered the Old Capital Securities to be withdrawn,
the aggregate principal amount of Old Capital Securities to be withdrawn, and
(if certificates for such Old Capital Securities have been tendered) the name of
the registered holder of the Old Capital Securities as set forth on the Old
Capital Securities, if different from that of the person who tendered such Old
Capital Securities. If Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such Old
Capital Securities, the tendering holder must submit the serial numbers shown on
the particular Old Capital Securities to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution, except in
the case of Old Capital Securities tendered for the account of an Eligible
Institution. If Old Capital Securities have been tendered pursuant to the
procedures for book-entry transfer set forth in "-- Procedures for Tendering Old
Capital Securities," the notice of withdrawal must specify the name and number
of the account at DTC to be credited with the withdrawal of Old Capital
Securities, in which case a notice of withdrawal will be effective if delivered
to the Exchange Agent by written, telegraphic, telex or facsimile transmission.
Withdrawals of tenders of Old Capital Securities may not be rescinded. Old
Capital Securities properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time on
or prior to the Expiration Date by following any of the procedures described
above under "-- Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company and the
Trust, in their sole discretion, whose determination shall be final and binding
on all parties. Neither the Company, the Trust, any affiliates or assigns of the
Company, the Trust, the Exchange Agent nor any other person shall be under any
duty to give any notification of any irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification. Any Old
Capital Securities which have been tendered but which are withdrawn will be
returned to the holder thereof promptly after withdrawal.
Distributions on the New Capital Securities
Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive accumulated Distributions on such Old
Capital Securities for any period from and after the last Distribution Date with
respect to such Old Capital Securities prior to the original issue date of the
New Capital Securities or, if no such Distributions have been made, will not
receive any accumulated Distributions on such Old Capital Securities, and will
be deemed to have waived the right to receive any Distributions on such Old
Capital Securities accumulated from and after such Distribution Date or, if no
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such Distributions have been made, from and after February 25, 1997. However,
because Distributions on the New Capital Securities will accumulate from
February 25, 1997, the amount of the Distributions received by holders whose Old
Capital Securities are accepted for exchange will not be affected by the
exchange.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Trust will not be required to accept for
exchange, or to exchange, any Old Capital Securities for any New Capital
Securities, and, as described below, may terminate the Exchange Offer (whether
or not any Old Capital Securities have theretofore been accepted for exchange)
or may waive any conditions to or amend the Exchange Offer, if any of the
following conditions have occurred or exists or have not been satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the New Capital Securities issued
pursuant to the Exchange Offer in exchange for Old Capital Securities to
be offered for resale, resold and otherwise transferred by holders thereof
(other than broker-dealers and any such holder which is an "affiliate" of
the Company or the Trust within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus
delivery provisions of the Securities Act provided that such New Capital
Securities are acquired in the ordinary course of such holders' business
and such holders have no arrangement or understanding with any person to
participate in the distribution of such New Capital Securities;
(b) any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect
to the Exchange Offer which, in the Company's and the Trust's judgment,
would reasonably be expected to impair the ability of the Company or the
Trust to proceed with the Exchange Offer;
(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in the Company's and the Trust's judgment, would reasonably
be expected to impair the ability of the Company or the Trust to proceed
with the Exchange Offer;
(d) a banking moratorium shall have been declared by United States
federal or Delaware or New York state authorities which, in the Company's
and the Trust's judgment, would reasonably be expected to impair the
ability of the Company or the Trust to proceed with the Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the
United States over-the-counter market shall have been suspended by order
of the Commission or any other governmental authority which, in the
Company's and the Trust's judgment, would reasonably be expected to impair
the ability of the Company or the Trust to proceed with the Exchange
Offer; or
(f) a stop order shall have been issued by the Commission or any
state securities authority suspending the effectiveness of the
Registration Statement or proceedings shall have been initiated or, to the
knowledge of the Company or the Trust, threatened for that purpose; or
(g) any change, or any development involving a prospective change,
in the business or financial affairs of the Company or the Trust or any of
their subsidiaries have occurred which, in the sole judgment of the
company and the Trust, might materially impair the ability of the Company
or the Trust to proceed with the Exchange Offer.
If the Company and the Trust determine in their sole and absolute
discretion that any of the foregoing events or conditions has occurred or exists
or has not been satisfied, the Company and the Trust may, subject to applicable
law, terminate the Exchange Offer (whether or not any Old Capital Securities
have theretofore been accepted for exchange) or may waive any such condition or
otherwise amend the terms of the Exchange Offer in any respect. If such waiver
or amendment constitutes a material change to the Exchange Offer, the Company
and the Trust will promptly disclose such waiver by means of a prospectus
supplement that will be distributed to the registered holders of the Old Capital
Securities, and the Company and the Trust will extend the Exchange Offer to the
extent required by Rule 14e-1 under the Exchange Act.
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Exchange Agent
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Delivery of the Letters of Transmittal and any other required documents,
questions, requests for assistance, and requests for additional copies of this
Prospectus or of the Letter of Transmittal should be directed to the Exchange
Agent as follows:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Telephone: (212) 815-
Facsimile: (212) 815-5595
Delivery to other than the above address or facsimile number will not
constitute a valid delivery.
Fees and Expenses
The Company has agreed to pay the Exchange Agent reasonable and customary
fees for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith. The Company will also pay brokerage houses and
other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus and related documents
to the beneficial owners of Old Capital Securities, and in handling or tendering
for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Capital Securities in connection with the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
Neither the Company nor the Trust will make any payment to brokers,
dealers or others soliciting acceptances of the Exchange Offer.
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DESCRIPTION OF NEW CAPITAL SECURITIES
Pursuant to the terms of the Declaration of Trust, the Regular Trustees,
on behalf of the Trust, have issued the Old Capital Securities and the Common
Securities, and will issue the New Capital Securities. The New Capital
Securities will represent undivided beneficial interests in the assets of the
Trust and the holders thereof will be entitled to a preference with respect to
Distributions and amounts payable on redemption of the Trust Securities or
liquidation of the Trust over the Common Securities. The Declaration of Trust
has been qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the Trust Act.
This summary of certain provisions of the New Capital Securities, the
Common Securities and the Declaration of Trust does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of the Declaration of Trust, including the definitions therein of
certain terms. The term "Capital Securities" used in this section refers to the
New Capital Securities, which will have substantially identical terms to the Old
Capital Securities. See "Description of Old Securities." The term "Guarantee"
refers to the New Guarantee, which will have identical terms to the Old
Guarantee. See "The New Guarantee."
General
The Capital Securities will rank pari passu, and payments will be made
thereon pro rata, with the Common Securities, except as described under "--
Subordination of Common Securities." Legal title to the New Junior Subordinated
Debentures will be held by the Property Trustee in trust for the benefit of the
holders of the Capital Securities and the Common Securities. The Guarantee
executed by the Company for the benefit of the holders of the Capital Securities
will be a guarantee on a subordinated basis with respect to the Capital
Securities but will not guarantee payment of Distributions or amounts payable on
redemption or liquidation of the Capital Securities when the Trust does not have
sufficient funds available to make such payments. See "Description of
Guarantee." The Company's obligations under the Guarantee, taken together with
its obligations under the New Junior Subordinated Debentures and the Indenture,
including its obligation to pay all costs, expenses and liabilities of the Trust
(other than with respect to the Capital Securities), constitute a full and
unconditional guarantee of all of the Trust's obligations under the Capital
Securities.
Holders of the Capital Securities have no preemptive or similar rights.
Distributions
Distributions on each Capital Security will be payable at the annual rate
of 7.70% of the liquidation amount of $1,000, payable semi-annually in arrears
on the 15th day of February and August of each year. Distributions will
accumulate from the date of original issuance and commence on August 15, 1997.
The amount of Distributions payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months.
Distributions on the Capital Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
Distributions. The revenue of the Trust available for distribution to holders of
its Capital Securities will be limited to payments under the New Junior
Subordinated Debentures in which the Trust will invest the proceeds from the
issuance and sale of the Capital Securities and the Common Securities. See
"Description of New Junior Subordinated Debentures." If the Company does not
make interest payments on the New Junior Subordinated Debentures, the Property
Trustee will not have funds available to pay Distributions on the Capital
Securities.
The Company will have the right under the Indenture to defer the payment
of interest on the New Junior Subordinated Debentures at any time or from time
to time for a period not exceeding 10 consecutive semi-annual periods (each, an
"Extension Period"), provided that no Extension Period may extend beyond the
Stated Maturity of the New Junior Subordinated Debentures. Accordingly, there
could be multiple Extension Periods of varying lengths throughout the term of
the New Junior Subordinated Debentures, which in the aggregate may exceed 10
semi-annual periods. As a consequence of any such extension, semi-annual
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Distributions on the Capital Securities will be deferred by the Trust during any
such Extension Period. Distributions to which holders of the Capital Securities
are entitled will accumulate and compound semi-annually to the extent permitted
by applicable law at the rate per annum of 7.70% thereof from the relevant
payment date for such Distributions. The term "Distributions" as used herein
shall include any such compounded amounts unless the context otherwise requires.
During any such Extension Period, the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu with or junior to the New Junior
Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks pari passu with or junior in interest to the New Junior
Subordinated Debentures (other than (a) dividends or distributions in common
stock of the Company, (b) payments under the Guarantee, (c) any declaration of a
dividend in connection with the implementation of a shareholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, and (d) purchases of common
stock related to the issuance of common stock or rights under any of the
Company's benefit plans). Prior to the termination of any such Extension Period,
the Company may further extend the Extension Period, provided that no Extension
Period may exceed 10 consecutive semi-annual periods or extend beyond the Stated
Maturity of the New Junior Subordinated Debentures. Upon the termination of any
such Extension Period and the payment of all amounts then due on any Interest
Payment Date, the Company may elect to begin a new Extension Period subject to
the foregoing requirements. See "Description of New Junior Subordinated
Debentures -- Option to Extend Interest Payment Period." The Company has no
current intention of exercising its right to defer payments of interest by
extending the interest payment period of the New Junior Subordinated Debentures.
In the event that any date on which Distributions are payable on the
Capital Securities is not a Business Day, then payment of the Distributions
payable on such date will be made on the next succeeding day that is a Business
Day (and without any additional Distributions or other payment in respect of any
such delay), with the same force and effect as if made on the date such payment
was originally payable (each date on which Distributions are payable in
accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed or a day on which the corporate trust office of
the Property Trustee or the Indenture Trustee (as defined herein) is closed for
business.
Distributions on the Capital Securities (other than distributions on a
Redemption Date) will be payable to the holders thereof as they appear on the
register of the Trust on the relevant record dates, which shall be the first day
of the month of the relevant Distribution Date. Distributions payable on any
Capital Securities that are not punctually paid on any Distribution Date will
cease to be payable to the person in whose name such Capital Securities are
registered on the relevant record date, and such defaulted Distribution will
instead be payable to the person in whose name such Capital Securities are
registered on the special record date or other specified date determined in
accordance with the Declaration.
Redemption
Mandatory Redemption. Unless a Special Event has occurred, the Capital
Securities will not be redeemable prior to February 15, 2007. Upon the repayment
or redemption, in whole or in part, of the Junior Subordinated Debentures,
whether at Stated Maturity or upon earlier redemption as provided in the
Indenture, the proceeds from such repayment or redemption shall be applied by
the Property Trustee to redeem Capital Securities and Common Securities upon not
less than 30 nor more than 60 days' notice prior to the date fixed for repayment
or redemption. If less than all of the Junior Subordinated Debentures are to be
repaid or redeemed on a Redemption Date, then the proceeds from such repayment
or redemption shall be allocated to the redemption pro rata of the Capital
Securities and the Common Securities.
Special Event Redemption or Distribution of New Junior Subordinated
Debentures. If a Special Event shall occur and be continuing, the Company will
have the right, subject to the receipt of any necessary prior approval of the
Regulatory Authorities, to either (i) redeem within 90 days following the
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occurrence of such Special Event the New Junior Subordinated Debentures on the
date of redemption (the "Redemption Date") in whole (but not in part) and
thereby cause a mandatory redemption of the Capital Securities in whole (but not
in part) at a redemption price with respect to the Capital Securities equal to
the redemption price in respect of the New Junior Subordinated Debentures or
(ii) dissolve the Trust and, after satisfaction of the claims of creditors of
the Trust as provided by applicable law, cause the New Junior Subordinated
Debentures to be distributed to the holders of the Capital Securities in
liquidation of the Trust; provided, however, that upon the occurrence of a Tax
Event, prior to exercising the rights described under clause (i) above, the
Company shall be required to have received an opinion of counsel, rendered by a
law firm having a recognized national tax practice, to the effect that,
notwithstanding the exercise by the Company of such rights described under
clause (ii) above, either (x) such Tax Event would still exist or (y) the
Capital Securities would not constitute Tier I Capital (or its then equivalent)
of a bank holding company. Under current United States federal income tax law
and interpretations thereof and assuming, as expected, the Trust is treated as a
grantor trust, a distribution of the New Junior Subordinated Debentures should
not be a taxable event to holders of the Capital Securities. Should there occur
a change in law, a change in legal interpretation, certain Tax Events or other
circumstances, however, the distribution could be a taxable event to holders of
the Capital Securities. See "Certain United States Federal Income Tax
Consequences -- Distribution of New Junior Subordinated Debentures or Cash Upon
Liquidation of the Trust."
If the Company does not elect either option described above, the Capital
Securities will remain outstanding until the repayment of the New Junior
Subordinated Debentures, whether at maturity or redemption, and in the event a
Tax Event has occurred and is continuing, the Company will be obligated to pay
any additional taxes, duties, assessments and other governmental charges (other
than withholding taxes) to which the Trust has become subject as a result of a
Tax Event.
A "Special Event" means a Tax Event, a Regulatory Capital Event or an
Investment Company Event. A "Tax Event" means the receipt by the Company of an
opinion of counsel, rendered by a law firm having a recognized national tax
practice, to the effect that, as a result of any amendment to, change in or
announced proposed change in the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is adopted or which proposed change, pronouncement or decision is
announced on or after the date of original issuance of the Capital Securities,
there is more than an insubstantial risk that (i) the Trust is, or will be
within 90 days of the date of such opinion, subject to United States federal
income tax with respect to income received or accrued on the New Junior
Subordinated Debentures, (ii) interest payable by the Company on such New Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that the Company shall have received
an opinion of independent bank regulatory counsel experienced in such matters to
the effect that, as a result of (a) any amendment to or change (including any
announced prospective change) in the laws (or any regulations thereunder) of the
United States or any rules, guidelines or policies of the Federal Reserve
applicable to bank holding companies or (b) any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such pronouncement or
decision is announced on or after the date of original issuance of the Capital
Securities, the Capital Securities would not constitute, or within 90 days of
the date thereof would not constitute, Tier I Capital (or its then equivalent)
of a bank holding company; provided, however, that the distribution of the
Junior Subordinated Debentures in connection with the liquidation of the Trust
by the Company shall not in and of itself constitute a Regulatory Capital Event
unless such liquidation shall have occurred in connection with a Tax Event or an
Investment Company Event. For purposes of determining whether a Regulatory
Capital Event has occurred, the opinion of independent bank regulatory counsel
shall treat the Company as if it is a bank holding company subject to the laws
and regulations of the United States, any rules, guidelines and policies of the
Federal Reserve, and any administrative pronouncements and judicial decisions
applicable to bank holding companies. See "Regulatory Treatment."
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"Investment Company Event" means the receipt by the Trust of an opinion of
counsel, rendered by a law firm having a recognized national securities
practice, to the effect that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), the Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Capital Securities.
Redemption Procedures
Capital Securities redeemed on each Redemption Date shall be redeemed at
the redemption price in respect of the New Junior Subordinated Debentures (the
"Redemption Price") with the applicable proceeds from the contemporaneous
redemption or payment at Stated Maturity of the New Junior Subordinated
Debentures. Redemptions of the Capital Securities shall be made and the
Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has sufficient funds available for the payment of such Redemption
Price. See also "-- Subordination of Common Securities."
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each holder of Capital Securities to
be redeemed at its registered address. If the Trust gives a notice of redemption
in respect of the Capital Securities, then, by 12:00 noon, New York City time,
on the Redemption Date, to the extent funds are available, the Property Trustee
will deposit irrevocably with DTC or its nominee funds sufficient to pay the
applicable Redemption Price for all securities held in DTC and will give DTC
irrevocable instructions and authority to pay the Redemption Price to the
holders of the Capital Securities. See "-- Book-Entry Issuance." If any Capital
Securities are held in certificated form, the Trust, to the extent funds are
available, will irrevocably deposit with the paying agent for such Capital
Securities funds sufficient to pay the applicable Redemption Price and will give
the paying agent irrevocable instructions and authority to pay the Redemption
Price to the holders thereof upon surrender of their certificates evidencing the
Capital Securities. Notwithstanding the foregoing, Distributions payable on or
prior to the Redemption Date for any Capital Security called for redemption
shall be payable to the holders of such Capital Security on the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date of such deposit,
all rights of the holders of such Capital Securities so called for redemption
will cease, except the right of the holders of such Capital Securities to
receive the Redemption Price, but without interest on such Redemption Price, and
such Capital Securities will cease to be outstanding. In the event that any date
fixed for redemption of Capital Securities is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date such
payment was originally payable. If payment of the Redemption Price in respect of
Capital Securities called for redemption is improperly withheld or refused and
not paid either by the Trust or by the Company pursuant to the Guarantee as
described under "Description of New Guarantee," then Distributions on such
Capital Securities will continue to accrue at the then applicable rate, from the
Redemption Date originally established by the Trust for the Capital Securities
to the date such Redemption Price is actually paid and the actual payment date
will be deemed to be the date fixed for redemption for purposes of calculating
the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.
The Trust may not redeem fewer than all of the outstanding Capital
Securities unless all accrued and unpaid distributions have been paid on all
Capital Securities for all semi-annual distribution periods terminating on or
prior to the date of redemption. If less than all of the Trust Securities issued
by the Trust are to be redeemed on a Redemption Date, then the aggregate amount
of such Trust Securities to be redeemed shall be allocated pro rata among the
Capital Securities and the Common Securities. If the Capital Securities are in
book-entry form, they will be redeemed as described below under "Book-Entry
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Issuance." If not, the particular Capital Securities to be redeemed shall be
selected on a pro rata basis not more than 60 days prior to the Redemption Date
by the Property Trustee from the outstanding Capital Securities not previously
called for redemption. The Property Trustee shall promptly notify the Trust
registrar in writing of the Capital Securities selected for redemption and, in
the case of any Capital Security selected for partial redemption, the
liquidation amount thereof to be redeemed. For all purposes of the Declaration,
unless the context otherwise requires, all provisions relating to the redemption
of Capital Securities shall relate, in the case of any Capital Security redeemed
or to be redeemed only in part, to the portion of the aggregate liquidation
amount of Capital Securities which has been or is to be redeemed.
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and the Common Securities, as applicable, shall be made pro rata
based on the liquidation amount of such Capital Securities and Common
Securities; provided, however, that if on any Distribution Date or Redemption
Date an Indenture Event of Default shall have occurred and be continuing, no
payment of any Distribution on, or Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all of the
outstanding Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all of the outstanding Capital Securities then
called for redemption, shall have been made or provided for, and all funds
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions on, or Redemption Price of, the Capital Securities
then due and payable.
Liquidation Distribution Upon Dissolution
Pursuant to the Declaration, the Trust shall automatically dissolve upon
expiration of its term and shall dissolve on the first to occur of: (i) certain
events of bankruptcy, dissolution or liquidation of the Company; (ii) the
distribution of the New Junior Subordinated Debentures to the holders of the
Capital Securities and Common Securities; (iii) the repayment of all of the
Capital Securities in connection with the maturity or redemption of all of the
New Junior Subordinated Debentures; and (iv) the entry by a court of competent
jurisdiction of an order for the dissolution of the Trust.
If an early dissolution occurs as described in clause (i), (ii) or (iv)
above, the Trust shall be liquidated by the Trustees as expeditiously as the
Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to the
holders of the Capital Securities and Common Securities their pro rata interest
in the New Junior Subordinated Debentures. If such distribution does not occur,
then such holders will be entitled to receive out of the assets of the Trust
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to, in the
case of holders of Capital Securities, the aggregate of the liquidation amount
plus accrued and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"). If such Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Capital Securities shall be paid on a pro rata
basis. The holder(s) of the Common Securities will be entitled to receive
distributions upon any such liquidation pro rata with the holders of the Capital
Securities, except that if an Indenture Event of Default has occurred and is
continuing, the Capital Securities shall have a priority over the Common
Securities.
After the liquidation date is fixed for any distribution of New Junior
Subordinated Debentures to holders of the Capital Securities (i) the Capital
Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee,
as a record holder of Capital Securities, will receive a registered global
certificate or certificates representing the New Junior Subordinated Debentures
to be delivered upon such distribution and (iii) any certificates representing
Capital Securities held in certificated form will be deemed to represent New
Junior Subordinated Debentures having a principal amount equal to the
liquidation amount of such Capital Securities, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on such
Capital Securities until such certificates are presented for cancellation
whereupon the Company will issue to such holder, and the Indenture Trustee will
authenticate, a certificate representing such New Junior Subordinated
Debentures.
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Trust Enforcement Events
An Indenture Event of Default constitutes a Trust Enforcement Event under
the Declaration with respect to the Trust Securities, provided that pursuant to
the Declaration, the holder of the Common Securities will be deemed to have
waived any Trust Enforcement Event with respect to the Common Securities until
all Trust Enforcement Events with respect to the Capital Securities have been
cured, waived or otherwise eliminated. Until such Trust Enforcement Event with
respect to the Capital Securities has been so cured, waived or otherwise
eliminated, the Property Trustee will be deemed to be acting solely on behalf of
the holders of the Capital Securities and only the holders of the Capital
Securities will have the right to direct the Property Trustee with respect to
certain matters under the Declaration, and therefore the Indenture.
Upon the occurrence of a Trust Enforcement Event, the Indenture Trustee
(as defined herein) or the Property Trustee as the holder of the New Junior
Subordinated Debentures will have the right under the Indenture to declare the
principal of and interest on the New Junior Subordinated Debentures to be
immediately due and payable. Each of the Company and the Trust is required to
file annually with the Property Trustee an officer's certificate as to its
compliance with all conditions and covenants under the Declaration.
If the Property Trustee fails to enforce its rights with respect to the
Junior Subordinated Debentures held by the Trust, any record holder of Capital
Securities may institute legal proceedings directly against the Company to
enforce the Property Trustee's rights under such New Junior Subordinated
Debentures without first instituting any legal proceedings against such Property
Trustee or any other person or entity. In addition, if a Trust Enforcement Event
has occurred and is continuing and such event is attributable to the failure of
the Company to pay interest, principal or other required payments on the New
Junior Subordinated Debentures issued to the Trust on the date such interest,
principal or other payment is otherwise payable, then a record holder of Capital
Securities may, on or after the respective due dates specified in the New Junior
Subordinated Debentures, institute a proceeding directly against the Company
under the Indenture for enforcement of payment on New Junior Subordinated
Debentures having a principal amount equal to the aggregate liquidation amount
of the Capital Securities held by such holder (a "Direct Action"). In connection
with such Direct Action, the Company will be subrogated to the rights of such
record holder of Capital Securities to the extent of any payment made by the
Company to such record holder of Capital Securities.
Voting Rights; Amendment of the Declaration
Except as provided below and under "Description of New Guarantee --
Amendments and Assignment" and as otherwise required by law and the Declaration,
the holders of the Capital Securities will have no voting rights.
So long as any New Junior Subordinated Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee or
executing any trust or power conferred on the Property Trustee with respect to
such Junior Subordinated Debentures, (ii) waive any past default that is
waivable under the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the New Junior Subordinated Debentures
shall be due and payable, or (iv) consent to any amendment, modification or
termination of the Indenture or such New Junior Subordinated Debentures, where
such consent shall be required, without, in each case, obtaining the prior
approval of the holders of a majority in aggregate liquidation amount of all
outstanding Capital Securities; provided, however, that where a consent under
the Indenture would require the consent of each holder of New Junior
Subordinated Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior consent of each holder of Capital Securities.
The Trustees shall not revoke any action previously authorized or approved by a
vote of the holders of the Capital Securities except pursuant to a subsequent
vote of the holders of the Capital Securities. The Property Trustee shall notify
each holder of record of the Capital Securities of any notice of default which
it receives with respect to the New Junior Subordinated Debentures. In addition
to obtaining the foregoing approvals of the holders of the Capital Securities,
prior to taking any of the foregoing actions, the Trustees shall receive an
opinion of counsel experienced in such matters to the effect that the Trust will
not be classified as other than a grantor trust for United States federal income
tax purposes on account of such action.
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The Declaration may be amended from time to time by a majority of the
Regular Trustees (and in certain circumstances the Property Trustee or the
Delaware Trustee), without the consent of the holders of the Capital Securities,
(i) to cure any ambiguity, to correct or supplement any provisions in the
Declaration that may be inconsistent with any other provision, or to make any
other provisions with respect to matters or questions arising under the
Declaration that shall not be inconsistent with the other provisions of the
Declaration or (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
be classified as a grantor trust for United States federal income tax purposes
at all times that any Capital Securities and Common Securities are outstanding
or to ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act, or to ensure that the Capital
Securities would constitute Tier I Capital of a bank holding company (assuming
solely for this purpose that the Company was treated as a bank holding company);
provided, however, that such action shall not adversely affect in any material
respect the interests of any holder of Capital Securities or Common Securities,
and any amendments of the Declaration shall become effective when notice thereof
is given to the holders of Capital Securities and Common Securities. The
Declaration may be amended by a majority of the Regular Trustees with (i) the
consent of holders representing not less than a majority (based upon liquidation
amounts) of the outstanding Capital Securities and Common Securities and (ii)
receipt by the Regular Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Regular Trustees in
accordance with such amendment will not affect the Trust's status as a grantor
trust for United States federal income tax purposes or the Trust's exemption
from status as an "investment company" under the Investment Company Act;
provided, further that without the consent of each holder of Capital Securities
and Common Securities affected thereby, the Declaration may not be amended to
(i) change the amount or timing of any Distribution on the Capital Securities
and Common Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Capital Securities and Common
Securities as of a specified date or (ii) restrict the right of a holder of
Capital Securities or Common Securities to institute suit for the enforcement of
any such payment on or after such date.
Any required approval of holders of Capital Securities may be given at a
meeting of holders of Capital Securities convened for such purpose or pursuant
to written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given to
each holder of record of Capital Securities in the manner set forth in the
Declaration.
No vote or consent of the holders of Capital Securities will be required
for the Trust to redeem and cancel its Capital Securities in accordance with the
Declaration.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Company, the Trustees or any affiliate of the
Company or any Trustees, shall, for purposes of such vote or consent, be treated
as if they were not outstanding.
Expenses and Taxes
In the Indenture, the Company, as borrower, has agreed to pay all debts
and other obligations (other than with respect to the Capital Securities) and
all costs and expenses of the Trust (including costs and expenses relating to
the organization of the Trust, the fees and expenses of the Trustees and the
costs and expenses relating to the operation of the Trust) and to pay any and
all taxes and all costs and expenses with respect thereto (other than United
States withholding taxes) to which the Trust might become subject. The foregoing
obligations of the Company under the Indenture are for the benefit of, and shall
be enforceable by, any person to whom any such debts, obligations, costs,
expenses and taxes are owed (a "Creditor") whether or not such Creditor has
received notice thereof. Any such Creditor may enforce such obligations of the
Company directly against the Company, and the Company has irrevocably waived any
right or remedy to require that any such Creditor take any action against the
Trust or any other person before proceeding against the Company. The Company has
also agreed in the Indenture to execute such additional agreements as may be
necessary or desirable to give full effect to the foregoing.
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Registrar and Transfer Agent
The Bank of New York will act as registrar and transfer agent for the
Capital Securities.
Registration of transfers of Capital Securities will be effected without
charge by or on behalf of the Trust, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Trust will not be required (i) to register or cause to be
registered the transfer or exchange of the Capital Securities during a period
beginning at the opening of business 15 days before the day of the mailing of
the relevant notice of redemption and ending at the close of business on the day
of mailing of such notice of redemption or (ii) to register or cause to be
registered the transfer or exchange of any Capital Securities so selected for
redemption, except in the case of any Capital Securities being redeemed in part,
any portion thereof not to be redeemed.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance of
a Trust Enforcement Event, undertakes to perform only such duties as are
specifically set forth in the Declaration and, after such Trust Enforcement
Event, must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Capital
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Trust Enforcement Event
has occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the Declaration,
and the matter is not one on which holders of Capital Securities are entitled
under the Declaration to vote, then the Property Trustee may, but shall be under
no duty to, take such action as is directed by the Company and, if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Capital Securities and the Common Securities and will have
no liability except for its own bad faith, negligence or willful misconduct.
Payment and Paying Agency
Payments in respect of the Global Capital Securities (as defined herein)
shall be made to DTC, which shall credit the relevant accounts at DTC on the
applicable Distribution Dates or, if the Capital Securities are held in
certificated form, such payments shall be made by check mailed to the address of
the holder entitled thereto as such address shall appear on the register
maintained by the registrar. The paying agent (the "Paying Agent") shall
initially be the Property Trustee and any co-paying agent chosen by the Property
Trustee and acceptable to the Regular Trustees and the Company. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee shall
no longer be the Paying Agent, the Regular Trustees shall appoint a successor
(which shall be a bank or trust company acceptable to the Regular Trustees and
the Company) to act as Paying Agent.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. The Trust may, at the request of the Company, with the consent
of the Regular Trustees and without the consent of the holders of the Capital
Securities, the Delaware Trustee or the Property Trustee, merge with or into,
consolidate, amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided that (i) such successor entity (if not the
Trust) either (a) expressly assumes all of the obligations of the Trust with
respect to the Trust Securities or (b) substitutes for the Capital Securities
other securities having substantially the same terms as the Capital Securities
(the "Successor Securities") so long as the Successor Securities rank the same
as the Capital Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) if the Trust is not
the successor entity, the Company expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Junior Subordinated Debentures, (iii) such merger, consolidation,
amalgamation, replacement, convey-ance, transfer or lease does not cause the
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Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect,
(v) such successor entity has a purpose identical to that of the Trust, (vi)
prior to such merger, consolidation, amalgamation, replacement, conveyance,
transfer, or lease, the Company has received an opinion from independent counsel
to the Trust experienced in such matters to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect
and (b) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, (1) neither the Trust nor such successor entity
will be required to register as an investment company under the Investment
Company Act and (2) the Trust or the successor entity will continue to be
classified as a grantor trust for United States federal income tax purposes,
(vii) the Company or any permitted successor or assignee owns all of the Common
Securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee, and (viii) such successor entity (if not the Trust) expressly
assumes all of the obligations of the Trust with respect to the Trustees.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in aggregate liquidation amount of the Trust Securities,
consolidate, amalgamate, merge with or into, be replaced by or convey, transfer
or lease its properties and assets substantially as an entirety to any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity to
be classified as other than a grantor trust for United States federal income tax
purposes and each holder of Trust Securities not to be treated as owning an
undivided interest in the New Junior Subordinated Debentures.
Merger or Consolidation of Trustees
Any corporation into which the Property Trustee, the Delaware Trustee or
any Regular Trustee that is not a natural person 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 Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of such Trustee, shall be the successor of such Trustee under the Declaration,
provided such corporation shall be otherwise qualified and eligible.
Miscellaneous
The Regular Trustees are authorized and directed to conduct the affairs of
and to operate the Trust in such a way that the Trust will not be deemed to be
an "investment company" required to be registered under the Investment Company
Act or classified as other than a grantor trust for United States federal income
tax purposes and so that the New Junior Subordinated Debentures will be treated
as indebtedness of the Company for United States federal income tax purposes. In
this connection, the Company and the Regular Trustees are authorized to take any
action, not inconsistent with applicable law, the Certificate of Trust or the
Declaration, that the Company and the Regular Trustees determine in their
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
Capital Securities.
The Trust may not borrow money, issue debt, or mortgage or pledge any of
its assets.
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DESCRIPTION OF NEW JUNIOR SUBORDINATED DEBENTURES
The New Junior Subordinated Debentures are to be issued under a Junior
Subordinated Indenture (the "Indenture") between the Company and The Bank of New
York, as trustee (the "Indenture Trustee"). This summary of certain terms and
provisions of the New Junior Subordinated Debentures and the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, the Indenture. Where used in this section, the term "Capital
Securities" refers to the New Capital Securities unless the context otherwise
requires.
General
Concurrently with the issuance of the Old Capital Securities, the Trust
invested the proceeds thereof and the consideration paid by the Company for the
Common Securities in the Old Junior Subordinated Debentures issued by the
Company. The New Junior Subordinated Debentures will be in the principal amount
equal to the aggregate liquidation amount of the New Capital Securities plus the
Company's concurrent investment in the Common Securities. The Junior
Subordinated Debentures will bear interest at the annual rate of 7.70% of the
principal amount thereof, payable semi-annually in arrears on the 15th day of
February and August of each year (each, an "Interest Payment Date"), commencing
August 15, 1997, to the person in whose name each Junior Subordinated Debenture
is registered, subject to certain exceptions, at the close of business on the
first day of the month of the relevant Interest Payment Date. It is anticipated
that, until the liquidation, if any, of the Trust, each Junior Subordinated
Debenture will be held in the name of the Property Trustee in trust for the
benefit of the holders of the Capital Securities and the Common Securities. The
amount of interest payable for any period will be computed on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Junior Subordinated Debentures is not a Business Day,
then payment of the interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), with the same force and effect as if made on the
date such payment was originally payable. Accrued interest that is not paid on
the applicable Interest Payment Date will bear additional interest on the amount
thereof (to the extent permitted by law) at the rate per annum of 7.70% thereof,
compounded semi-annually. The term "interest" as used herein shall include
semi-annual interest payments and interest on semi-annual interest payments not
paid on the applicable Interest Payment Date, as applicable.
The New Junior Subordinated Debentures will mature on February 15, 2027
(the "Stated Maturity").
The New Junior Subordinated Debentures will be unsecured and will rank
junior and be subordinate in right of payment to all Indebtedness (as defined
below) of the Company. The Indenture does not limit the incurrence or issuance
of other secured or unsecured debt of the Company, whether under the Indenture
or any existing or other indenture that the Company may enter into in the future
or otherwise. See "-- Subordination."
The general provisions of the Indenture do not afford holders of the New
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving the Company that may adversely affect holders of the
New Junior Subordinated Debentures.
Option to Extend Interest Payment Period
So long as no Indenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
at any time or from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each Extension Period, provided that no
Extension Period may extend beyond the Stated Maturity of the New Junior
Subordinated Debentures. At the end of such Extension Period, the Company must
pay all interest then accrued and unpaid (together with interest thereon at the
annual rate of 7.70%, compounded semi-annually, to the extent permitted by
applicable law). During an Extension Period, interest will continue to accrue
and holders of Junior Subordinated Debentures (or holders of Capital Securities
while the Capital Securities are outstanding) will be required to accrue
interest income (as OID) for United States federal income tax purposes. See
"Certain United States Federal Income Tax Consequences -- Interest Income and
Original Issue Discount."
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During any such Extension Period, the Company may not, and may not permit
any subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the New Junior Subordinated Debentures or make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any subsidiary
of the Company if such guarantee ranks pari passu with or junior in interest to
the Junior Subordinated Debentures (other than (a) dividends or distributions in
common stock of the Company, (b) payments under the New Guarantee, (c) any
declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, and
(d) purchases of common stock related to the issuance of common stock or rights
under any of the Company's benefit plans). Prior to the termination of any such
Extension Period, the Company may further extend the Extension Period, provided
that no Extension Period may exceed 10 consecutive semi-annual periods or extend
beyond the Stated Maturity of the New Junior Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all amounts then due
on any Interest Payment Date, the Company may elect to begin a new Extension
Period subject to the above requirements. No interest shall be due and payable
during an Extension Period, except at the end thereof. The Company must give the
Property Trustee, the Regular Trustees and the Indenture Trustee notice of its
election of such Extension Period not less than one Business Day prior to such
record date. The Property Trustee shall give notice of the Company's election to
begin a new Extension Period to the holders of the Capital Securities.
Redemption
The New Junior Subordinated Debentures are not redeemable prior to
February 15, 2007 unless a Special Event has occurred. The New Junior
Subordinated Debentures are redeemable prior to maturity at the option of the
Company, subject to the receipt of any necessary prior approval of the
Regulatory Authorities, on or after February 15, 2007 in whole or in part at any
time at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest, if any, to the date of redemption,
if redeemed during the twelve-month period beginning on February 15 of the years
indicated below:
Year Percentage
---- ------------
2007 .................................................... 103.6220%
2008 .................................................... 103.2598%
2009 .................................................... 102.8976%
2010 .................................................... 102.5354%
2011 .................................................... 102.1732%
2012 .................................................... 101.8110%
2013 .................................................... 101.4488%
2014 .................................................... 101.0866%
2015 .................................................... 100.7244%
2016 .................................................... 100.3622%
On or after February 15, 2017, the redemption price will be 100%, plus
accrued and unpaid interest, if any, to the date of redemption.
The New Junior Subordinated Debentures are also redeemable at any time in
whole (but not in part), within 90 days of the occurrence of a Special Event, at
a redemption price (the "Special Event Prepayment Price") of 100% of the
principal amount of such New Junior Subordinated Debentures, plus accrued and
unpaid interest thereon to the date of prepayment; provided, however, that upon
the occurrence of a Tax Event, prior to exercising the rights described in this
paragraph, the Company shall be required to have received an opinion of counsel,
rendered by a law firm having a recognized national tax practice, to the effect
that, even if the Company were to liquidate the Trust and distribute the New
Junior Subordinated Debentures directly to holders of the Trust Securities,
either (i) such Tax Event would still exist or (ii) the Capital Securities would
not constitute Tier I Capital (or its then equivalent) of a bank holding
company.
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If the New Junior Subordinated Debentures are redeemed, the Trust must
redeem Trust Securities having an aggregate liquidation amount equal to the
aggregate principal amount of New Junior Subordinated Debentures so redeemed.
See "Description of New Capital Securities -- Mandatory Redemption."
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of New Junior Subordinated
Debentures to be redeemed at its registered address. Unless the Company defaults
in payment of the redemption price, on and after the redemption date interest
ceases to accrue on such New Junior Subordinated Debentures or portions thereof
called for redemption.
Certain Covenants of the Company
The Company will covenant in the Indenture that if and so long as the
Trust is the holder of all New Junior Subordinated Debentures, the Company, as
borrower, will pay to the Trust all fees and expenses related to the Trust and
the offering of the Capital Securities and will pay, directly or indirectly, all
ongoing costs, expenses and liabilities of the Trust (including any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any domestic taxing authority
upon the Trust but excluding obligations under the Capital Securities).
The Company will also covenant that at such time as (x) there shall have
occurred any event of which the Company has actual knowledge that with the
giving of notice or the lapse of time, or both, would constitute an Indenture
Event of Default with respect to New Junior Subordinated Debentures and in
respect of which the Company shall not have taken reasonable steps to cure, (y)
the Company shall be in default with respect to its payment of any obligations
under the Guarantee or (z) the Company shall have given notice of its election
of an Extension Period as provided in the Indenture and shall not have rescinded
such notice, or such Extension Period, or any extension thereof, shall be
continuing, it will not, and will not permit any subsidiary of the Company to,
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock or (ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or redeem any debt securities of the Company that
rank pari passu with or junior in interest to the New Junior Subordinated
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to the New Junior
Subordinated Debentures (other than (a) dividends or distributions in common
stock of the Company, (b) payments under the Guarantee, (c) any declaration of a
dividend in connection with the implementation of a shareholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, and (d) purchases of common
stock related to the issuance of common stock or rights under any of the
Company's benefit plans).
Subordination
In the Indenture, the Company has covenanted and agreed that any New
Junior Subordinated Debentures issued thereunder will be subordinated and junior
in right of payment to all Indebtedness to the extent provided in the Indenture.
Upon any payment or distribution of assets of the Company upon any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Indebtedness will first be
entitled to receive payment in full of principal of and premium, if any, and
interest, if any, on such Indebtedness before the holders of New Junior
Subordinated Debentures or the Property Trustee on behalf of the holders of
Capital Securities will be entitled to receive or retain any payment in respect
of the principal of and premium, if any, or interest, if any, on the New Junior
Subordinated Debentures; provided, however, that holders of Indebtedness shall
not be entitled to receive payment of any such amounts to the extent that such
holders would be required by the subordination provisions of such Indebtedness
to pay such amounts over to the obligees on trade accounts payable or other
liabilities arising in the ordinary course of the Company's business.
In the event of the acceleration of the maturity of any New Junior
Subordinated Debentures, the holders of all Indebtedness outstanding at the time
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of such acceleration will first be entitled to receive payment in full of all
amounts then due thereon (including any amounts due upon acceleration) before
the holders of New Junior Subordinated Debentures will be entitled to receive or
retain any payment in respect of the principal of and premium, if any, or
interest, if any, on the New Junior Subordinated Debentures; provided, however,
that holders of Indebtedness shall not be entitled to receive payment of any
such amounts to the extent that such holders would be required by the
subordination provisions of such Indebtedness to pay such amounts over to the
obligees on trade accounts payable or other liabilities arising in the ordinary
course of the Company's business.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the New Junior Subordinated Debentures may be made if there
shall have occurred and be continuing a default in any payment with respect to
Indebtedness, or an event of default with respect to any Indebtedness resulting
in the acceleration of the maturity thereof, or if any judicial proceeding shall
be pending with respect to any such default.
"Indebtedness" means with respect to any person, whether recourse is to
all or a portion of the assets of such person and whether or not contingent, (i)
every obligation of such person for money borrowed; (ii) every obligation of
such person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such person; (iv) every obligation of such person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such person; (vi) every
obligation of such person for claims (as defined in Section 101(4) of the United
States Bankruptcy Code of 1978, as amended) in respect of derivative products
such as interest and foreign exchange rate contracts, commodity contracts and
similar arrangements; and (vii) every obligation of the type referred to in
clauses (i) through (vi) of another person and all dividends of another person
the payment of which, in either case, such person has guaranteed or is
responsible or liable, directly or indirectly, as obligor or otherwise; provided
that "Indebtedness" shall not include (i) any obligations which, by their terms,
are expressly stated to rank pari passu in right of payment with, or to not be
superior in right of payment to, the New Junior Subordinated Debentures, (ii)
any Indebtedness of the Company which when incurred and without respect to any
election under Section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Company, (iii) any Indebtedness of the
Company to any of its subsidiaries, (iv) Indebtedness of the Company to any
employee of the Company, or (v) any indebtedness in respect of debt securities
issued to any trust, or a trustee of such trust, partnership or other entity
affiliated with the Company that is a financing entity of the Company in
connection with the issuance of such financing entity of securities that are
similar to the Capital Securities.
The Indenture places no limitation on the amount of additional
Indebtedness that may be incurred by the Company or any indebtedness or other
liabilities that may be incurred by the Company's subsidiaries. As of December
31, 1996, Indebtedness of the Company aggregated approximately $14.6 billion,
and the Company's subsidiaries had approximately $2.1 billion of indebtedness or
other liabilities, in addition to other contractual obligations, to which the
New Junior Subordinated Debentures would be effectively subordinated.
Indenture Events of Default
The Indenture provides that any one or more of the following described
events with respect to the New Junior Subordinated Debentures that has occurred
and is continuing constitutes an "Indenture Event of Default" with respect to
the New Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on the New Junior
Subordinated Debentures when due (subject to the deferral of any due date
in the case of an Extension Period); or
(ii) failure to pay any principal on the New Junior Subordinated
Debentures when due whether at maturity, upon redemption by declaration or
otherwise; or
(iii) failure to observe or perform in any material respect any other
covenant contained in the Indenture for 90 days after written notice to
the Company from the Indenture Trustee or the holders of at least 25% in
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aggregate outstanding principal amount of outstanding New Junior
Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of
the Company.
The holders of a majority in aggregate outstanding principal amount of New
Junior Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee. The Indenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of New Junior Subordinated Debentures may declare
the principal due and payable immediately upon an Indenture Event of Default,
and, should the Indenture Trustee or such holders of such New Junior
Subordinated Debentures fail to make such declaration, the holders of at least
25% in aggregate liquidation amount of the Capital Securities shall have such
right. The holders of a majority in aggregate outstanding principal amount of
New Junior Subordinated Debentures may annul such declaration and waive the
default if the default (other than the non-payment of the principal of New
Junior Subordinated Debentures which has become due solely by such acceleration)
has been cured and a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration has been deposited with the
Indenture Trustee, and should the holders of such New Junior Subordinated
Debentures fail to annul such declaration and waive such default, the holders of
a majority in aggregate liquidation amount of the Capital Securities shall have
such right.
The holders of a majority in aggregate outstanding principal amount of the
New Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all the New Junior Subordinated Debentures, waive any past default,
except a default in the payment of principal or interest (unless such default
has been cured and a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration has been deposited with the
Indenture Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding New Junior Subordinated Debenture, and should the
holders of such New Junior Subordinated Debentures fail to waive such default,
the holders of a majority in aggregate liquidation amount of the Capital
Securities shall have such right. The Company is required to file annually with
the Indenture Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Indenture.
In case an Indenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on such New Junior Subordinated Debentures and any other amounts
payable under the Indenture to be forthwith due and payable and to enforce its
other rights as a creditor with respect to such New Junior Subordinated
Debentures.
Enforcement of Certain Rights by Holders of Capital Securities
If an Indenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or principal
on the New Junior Subordinated Debentures on the date such interest or principal
is otherwise payable, a holder of Capital Securities may institute a Direct
Action for payment. The Company may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Capital Securities. Notwithstanding any payment made
to such holder of Capital Securities by the Company in connection with a Direct
Action, the Company shall remain obligated to pay the principal of or interest
on the New Junior Subordinated Debentures held by the Trust or the Property
Trustee and the Company shall be subrogated to the rights of the holder of such
Capital Securities with respect to payments on the Capital Securities to the
extent of any payments made by the Company to such holder in any Direct Action.
The holders of Capital Securities will not be able to exercise directly any
other remedy available to the holders of the New Junior Subordinated Debentures.
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Company shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, unless (i) in case the
Company consolidates with or merges into another Person or conveys, transfers or
leases its properties and assets substantially as an entirety to any Person, the
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successor Person is organized under the laws of the United States or any state
or the District of Columbia, and such successor Person expressly assumes the
Company's obligations on the New Junior Subordinated Debentures issued under the
Indenture; (ii) immediately after giving effect thereto, no Indenture Event of
Default, and no event which, after notice or lapse of time or both, would become
an Indenture Event of Default, shall have happened and be continuing; (iii) if
at the time any Capital Securities are outstanding, such transaction is
permitted under the Declaration and the New Guarantee and does not give rise to
any breach or violation of the Declaration or the New Guarantee; (iv) any such
lease shall provide that it will remain in effect so long as any New Junior
Subordinated Debentures are outstanding; and (v) certain other conditions as
prescribed in the Indenture are met.
Modification of Indenture
From time to time the Company and the Indenture Trustee may, without the
consent of the holders of the New Junior Subordinated Debentures, amend, waive
or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of New
Junior Subordinated Debentures) and qualifying, or maintaining the qualification
of, the Indenture under the Trust Indenture Act. The Indenture contains
provisions permitting the Company and the Indenture Trustee, with the consent of
the holders of not less than a majority in principal amount of outstanding New
Junior Subordinated Debentures affected, to modify the Indenture in a manner
affecting the rights of the holders of such New Junior Subordinated Debentures;
provided that no such modification may, without the consent of the holder of
each outstanding New Junior Subordinated Debenture so affected, (i) change the
stated maturity of New Junior Subordinated Debentures, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon (except such extension as is contemplated hereby) or (ii) reduce the
percentage of principal amount of New Junior Subordinated Debentures the holders
of which are required to consent to any such modification of the Indenture,
provided that, so long as any Capital Securities remain outstanding, no such
modification may be made that adversely affects the holders of such Capital
Securities in any material respect, and no termination of the Indenture may
occur, and no waiver of any Indenture Event of Default or compliance with any
covenant under the Indenture may be effective, without the prior consent of the
holders of at least a majority of the aggregate liquidation amount of the
outstanding Capital Securities unless and until the principal of the New Junior
Subordinated Debentures and all accrued and unpaid interest thereon have been
paid in full and certain other conditions are satisfied.
Defeasance and Discharge
The Indenture provides that the Company, at the Company's option: (a) will
be discharged from any and all obligations in respect of the New Junior
Subordinated Debentures (except for certain obligations to register the transfer
or exchange of New Junior Subordinated Debentures, replace stolen, lost or
mutilated New Junior Subordinated Debentures, maintain paying agencies and hold
moneys for payment in trust) or (b) need not comply with certain restrictive
covenants of the Indenture (including that described in the second paragraph
under "Certain Covenants of the Company"), in each case if the Company deposits,
in trust with the Indenture Trustee, money or U.S. Government Obligations which
through the payment of interest thereon and principal thereof in accordance with
their terms will provide money in an amount sufficient to pay all the principal
of, and interest and premium, if any, on the New Junior Subordinated Debentures
on the dates such payments are due in accordance with the terms of such New
Junior Subordinated Debentures. To exercise any such option, the Company is
required to deliver to the Indenture Trustee an opinion of counsel to the effect
that the deposit and related defeasance would not cause the holders of the New
Junior Subordinated Debentures to recognize income, gain or loss for United
States federal income tax purposes and, in the case of a discharge pursuant to
clause (a), such opinion shall be accompanied by a private letter ruling to such
effect received by the Company from the United States Internal Revenue Service
or a revenue ruling pertaining to a comparable form of transaction to such
effect published by the United States Internal Revenue Service.
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Distributions of Junior Subordinated Debentures; Book-Entry Issuance
Under certain circumstances involving the termination of the Trust, New
Junior Subordinated Debentures may be distributed to the holders of the Capital
Securities in liquidation of the Trust after satisfaction of liabilities to
creditors of the Trust as provided by applicable law. If distributed to holders
of Capital Securities in liquidation, the New Junior Subordinated Debentures
will initially be issued in the form of global securities and certificated
securities. DTC, or any successor depositary, will act as depositary for such
global securities. It is anticipated that the depositary arrangements for such
global securities would be substantially identical to those in effect for the
Capital Securities. For a description of global securities and certificated
securities, see "Book-Entry Issuance."
There can be no assurance as to the market price of any New Junior
Subordinated Debentures that may be distributed to the holders of Capital
Securities.
Payment and Paying Agents
The Company initially will act as Paying Agent with respect to the New
Junior Subordinated Debentures except that, if the New Junior Subordinated
Debentures are distributed to the holders of the Capital Securities in
liquidation of such holders' interests in the Trust, the Indenture Trustee will
act as the Paying Agent. The Company at any time may designate additional Paying
Agents or rescind the designation of any Paying Agent or approve a change in the
office through which any Paying Agent acts, except that the Company will be
required to maintain a Paying Agent at the place of payment.
Any moneys deposited with the Indenture 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 New Junior Subordinated Debentures and
remaining unclaimed for two years after such principal and premium, if any, or
interest has become due and payable shall, at the request of the Company, be
repaid to the Company and the holder of such New Junior Subordinated Debentures
shall thereafter look, as a general unsecured creditor, only to the Company for
payment thereof.
Governing Law
The Indenture and the New Junior Subordinated Debentures will be governed
by and construed in accordance with the laws of the State of New York.
Information Concerning the Indenture Trustee
The Indenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act of 1939, as amended. Subject to such provisions, the Indenture
Trustee is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of New Junior Subordinated Debentures,
unless offered reasonable indemnity by such holder against the costs, expenses
and liabilities which might be incurred thereby. The Indenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Indenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
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DESCRIPTION OF NEW GUARANTEE
The Old Guarantee was executed and delivered by the Company concurrently
with the issuance by the Trust of the Old Capital Securities for the benefit of
the holders from time to time of such Capital Securities. As soon as practicable
after the Expiration Date, the Old Guarantee will be exchanged by the Company
for the New Guarantee. The Bank of New York will act as trustee ("Guarantee
Trustee") under the New Guarantee. This summary of certain provisions of the New
Guarantee does not purport to be complete and is subject to, and qualified in
its entirety by reference to, all of the provisions of the New Guarantee,
including the definitions therein of certain terms. The Guarantee Trustee will
hold the New Guarantee for the benefit of the holders of the Trust Securities.
General
The Company will irrevocably and unconditionally agree to pay in full on a
subordinated basis, to the extent set forth herein, the Guarantee Payments (as
defined below) to the holders of the Trust Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that the Trust may
have or assert other than the defense of payment. The following payments with
respect to the Capital Securities, to the extent not paid by or on behalf of the
Trust (the "Guarantee Payments"), will be subject to the New Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on the Trust
Securities, to the extent that the Trust has sufficient funds available therefor
at the time, (ii) the redemption price with respect to any Trust Securities
called for redemption, to the extent that the Trust has sufficient funds
available therefor at such time, or (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of the Trust (unless the New Junior
Subordinated Debentures are distributed to holders of the Trust Securities), the
lesser of (a) the aggregate liquidation amount of the Trust Securities and all
accrued and unpaid Distributions thereon to the date of payment and (b) the
amount of assets of the Trust remaining available for distribution to holders of
Trust Securities. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of the applicable Trust Securities or by causing the Trust to pay such
amounts to such holders.
The New Guarantee will be an irrevocable guarantee on a subordinated basis
of the Trust's obligations under the Trust Securities, but will apply only to
the extent that the Trust has sufficient funds available to make such payments.
If the Company does not make interest payments on the New Junior
Subordinated Debentures held by the Trust, the Trust will not be able to pay
Distributions on the Trust Securities and will not have funds legally available
therefor. The New Guarantee will rank subordinate and junior in right of payment
to all general liabilities of the Company. See "-- Status of the New Guarantee."
The New Guarantee does not limit the incurrence or issuance of other secured or
unsecured debt of the Company, whether under the Indenture or any existing or
other indenture that the Company may enter into in the future or otherwise.
The Company has, through the New Guarantee, the New Junior Subordinated
Debentures and the Indenture, taken together, fully and unconditionally
guaranteed all of the Trust's obligations under the Trust Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full and unconditional
guarantee of the Trust's obligations under the Trust Securities. See
"Relationship Among the New Capital Securities, the New Junior Subordinated
Debentures and the New Guarantee -- General."
Status of the New Guarantee
The New Guarantee will constitute an unsecured obligation of the Company
and will rank subordinate and junior in right of payment to all Indebtedness of
the Company. The New Guarantee does not place a limitation on the amount of
additional Indebtedness that may be incurred by the Company.
The New Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Guarantor to enforce its rights under the New Guarantee without
first instituting a legal proceeding against any other person or entity). The
Guarantee will be held for the benefit of the holders of the Trust Securities.
The New Guarantee will not be discharged except by payment of the Guarantee
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Payments in full to the extent not paid by the Trust or upon distribution of the
Junior Subordinated Debentures to the holders of the Trust Securities in
exchange for all of the Trust Securities.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Trust Securities (in which case no vote will be
required), the New Guarantee may not be amended without the prior approval of
the holders of not less than a majority of the aggregate liquidation amount of
the outstanding Capital Securities. The manner of obtaining any such approval
will be as set forth under "Description of New Capital Securities -- Voting
Rights; Amendment of the Declaration." All guarantees and agreements contained
in the New Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the registered
holders of the Trust Securities then outstanding.
Events of Default
An event of default under the New Guarantee will occur upon the failure of
the Company to perform any of its payment or other obligations thereunder. The
holders of a majority in aggregate liquidation amount of the Capital Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of the New
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the New Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Company to enforce its rights under the New Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the New Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the New Guarantee, undertakes to
perform only such duties as are specifically set forth in each New Guarantee
and, after default with respect to the New Guarantee, must exercise the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by the
New Guarantee at the request of any holder of any Trust Security unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
Termination of the New Guarantee
The New Guarantee will terminate and be of no further force and effect
upon full payment of the redemption price of all of the Trust Securities, upon
full payment of the amounts payable upon liquidation of the Trust or upon
distribution of Junior Subordinated Debentures to the holders of the Trust
Securities in exchange for all of the Trust Securities. The New Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of the Trust Securities must restore payment of any sums paid
under the Trust Securities or the New Guarantee.
Governing Law
The New Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
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RELATIONSHIP AMONG THE NEW CAPITAL SECURITIES,
THE NEW JUNIOR SUBORDINATED DEBENTURES AND THE NEW GUARANTEE
Payments of Distributions and other amounts due on the New Capital
Securities (to the extent the Trust has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of New Guarantee." If and to the extent that the
Company does not make payments under the New Junior Subordinated Debentures, the
Trust will not pay Distributions or other amounts due on the New Capital
Securities. The New Guarantee does not cover payment of Distributions when the
Trust does not have sufficient funds to pay such Distributions. In such event, a
holder of New Capital Securities may institute a legal proceeding directly
against the Company under the Indenture to enforce payment of such Distributions
to such holder after the respective due dates. Taken together, the Company's
obligations under the New Junior Subordinated Debentures, the Indenture and the
New Guarantee provide, in the aggregate, a full and unconditional guarantee of
payments of distributions and other amounts due on the New Capital Securities.
No single document standing alone or operating in conjunction with fewer than
all of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full and
unconditional guarantee of the Trust's obligations under the New Capital
Securities. The obligations of the Company under the New Guarantee and the New
Junior Subordinated Debentures are subordinate and junior in right of payment to
all Indebtedness of the Company.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on
the New Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the New Capital Securities,
primarily because (i) the aggregate principal amount of the New Junior
Subordinated Debentures will be equal to the sum of the aggregate stated
liquidation amount of the New Capital Securities and the Common Securities; (ii)
the interest rate and interest and other payment dates on the New Junior
Subordinated Debentures will match the Distribution rate and Distribution and
other payment dates for the related New Capital Securities; (iii) the Company
will pay for all and any costs, expenses and liabilities of the Trust except the
Trust's obligations under the New Capital Securities; and (iv) the Declaration
further provides that the Trust will not engage in any activity that is not
consistent with the limited purposes of the Trust.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set-off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a related payment under the New Guarantee.
Enforcement Rights of Holders of New Capital Securities
A holder of New Capital Securities may institute a legal proceeding
directly against the Company to enforce its rights under the New Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
Trust or any other person or entity.
A default or event of default under any Indebtedness of the Company will
not constitute a default or Indenture Event of Default. In addition, in the
event of payment defaults under, or acceleration of, Indebtedness of the
Company, the subordination provisions of the Indenture provide that no payments
may be made in respect of the New Junior Subordinated Debentures until such
Indebtedness has been paid in full or any payment default thereunder has been
cured or waived. Failure to make required payments on the New Junior
Subordinated Debentures would constitute an Indenture Event of Default under the
Indenture.
Limited Purpose of Trust
The New Capital Securities evidence a beneficial interest in the assets of
the Trust, and the Trust exists for the sole purpose of issuing the Capital
Securities and the Common Securities and investing the proceeds thereof in
Junior Subordinated Debentures. A principal difference between the rights of a
holder of New Capital Securities and a holder of New Junior Subordinated
Debentures is that a holder of New Junior Subordinated Debentures is entitled to
receive from the Company the principal amount of and interest accrued on New
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Junior Subordinated Debentures held, while a holder of New Capital Securities is
entitled to receive Distributions from the Trust (or from the Company under the
New Guarantee) if and to the extent the Trust has funds available for the
payment of such Distributions.
Rights Upon Termination
Upon any voluntary or involuntary termination, winding-up or liquidation
of the Trust involving the liquidation of the New Junior Subordinated
Debentures, the holders of the New Capital Securities will be entitled to
receive, out of assets held by the Trust, the liquidation distribution in cash.
See "Description of New Capital Securities -- Liquidation Distribution Upon
Dissolution." Upon any voluntary or involuntary liquidation or bankruptcy of the
Company, the Property Trustee, as holder of the New Junior Subordinated
Debentures, would be a subordinated creditor of the Company, subordinated in
right of payment to all Indebtedness, but entitled to receive payment in full of
principal and interest before any stockholders of the Company receive payments
or distributions. Since the Company is the guarantor under the New Guarantee and
has agreed to pay for all costs, expenses and liabilities of the Trust (other
than the Trust's obligations to the holders of the Capital Securities), the
positions of a holder of New Capital Securities and a holder of the New Junior
Subordinated Debentures relative to other creditors and to stockholders of the
Company in the event of liquidation or bankruptcy of the Company would be
substantially the same.
DESCRIPTION OF THE OLD SECURITIES
The terms of the Old Securities are identical in all material respects to
the New Securities, except that (i) the Old Securities have not been registered
under the Securities Act, are subject to certain restrictions on transfer and
are entitled to certain rights under the Registration Rights Agreement (which
rights will terminate upon consummation of the Exchange Offer, except under
limited circumstances); (ii) the New Capital Securities will not provide for any
increase in the Distribution rate thereon; and (iii) the New Junior Subordinated
Debentures will not provide for any increase in the interest rate thereon. The
Old Securities provide that, in the event that the Exchange Offer is not
consummated by September 23, 1997, additional interest (the "Additional
Interest") will become payable in respect of the old Junior Subordinated
Debentures (including in respect of amounts accruing during any Extension
Period), and corresponding additional distributions (the "Additional
Distributions") will become payable on the Old Capital Securities, at the rate
of 0.25% per annum applicable to the principal amount of the Old Junior
Subordinated Debentures or the liquidation amount of Old Capital Securities, as
the case may be, for the period from and including such date to, but excluding,
the date on which the Exchange Offer is consummated. All accrued Additional
Interest (and corresponding Additional Distributions) will be paid by the
Company on each Distribution payment date to DTC by wire transfer of immediately
available funds or by federal funds check and to holders of certificated
securities by wire transfer to the accounts specified by them or by mailing
checks to their registered addresses if no such accounts have been specified.
Accordingly, holders of Old Capital Securities should review the information set
forth under "Risk Factors -- Certain Consequences of a Failure to Exchange Old
Capital Securities" and "Description of the New Securities."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Schulte Roth & Zabel LLP, special United States federal
income tax counsel to the Company and the Trust ("Tax Counsel"), the following
summary accurately describes the material United States federal income tax
consequences that may be relevant to the purchase, ownership and disposition of
the New Capital Securities. Unless otherwise stated, this summary deals only
with Capital Securities held as capital assets by United States Holders (defined
below) who purchase the Capital Securities upon original issuance at their
original offering price. As used herein, a "United States Holder" means (i) a
person that is 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 any political subdivision thereof, (iii) an estate the income
of which is subject to United States federal income taxation regardless of its
source, or (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of such trust and one or more United
States fiduciaries have the authority to control all the substantial decisions
of such trust. The tax treatment of a holder may vary depending on his, her or
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its particular situation. This summary does not address all the tax consequences
that may be relevant to a particular holder or to holders who may be subject to
special tax treatment, such as banks, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
or tax-exempt investors. In addition, this summary does not include any
description of any alternative minimum tax consequences or the tax laws of any
state, local or foreign government that may be applicable to a holder of New
Capital Securities. This summary is based on the Internal Revenue Code of 1986,
as amended (the "Code"), the Treasury regulations promulgated thereunder and
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change, possibly on a retroactive basis. The authorities
on which this summary is based are subject to various interpretations and the
opinions of Tax Counsel are not binding on the Internal Revenue Service ("IRS")
or the courts, either of which could take a contrary position. Moreover, no
rulings have been or will be sought from the IRS with respect to the
transactions described herein. Accordingly, there can be no assurance that the
IRS will not challenge the opinions expressed herein or that a court would not
sustain such a challenge. Nevertheless, Tax Counsel has advised that it is of
the view that, if challenged, the opinions expressed herein would be sustained
by a court with jurisdiction in a properly presented case.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE CAPITAL
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION OF THE CAPITAL
SECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS SEE "DESCRIPTION OF CAPITAL
SECURITIES -- REDEMPTION -- SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF JUNIOR
SUBORDINATED DEBENTURES."
Classification of the Trust
In connection with the issuance of the New Capital Securities, Tax Counsel
is of the opinion that under current law and assuming full compliance with the
terms of the Declaration and other documents, the Trust will be classified as a
grantor trust and not as an association taxable as a corporation for United
States federal income tax purposes. Accordingly, for United States federal
income tax purposes, each holder of New Capital Securities will be treated as
owning an undivided beneficial interest in the New Junior Subordinated
Debentures and, thus, will be required to include in its gross income its pro
rata share of interest income or OID that is paid or accrued on the New Junior
Subordinated Debentures.
Classification of the New Junior Subordinated Debentures
The Company, the Trust and the holders of the New Capital Securities (by
the acceptance of a beneficial interest in a Capital Security) will agree to
treat the New Junior Subordinated Debentures as indebtedness for all United
States tax purposes. In connection with the issuance of the New Junior
Subordinated Debentures, Tax Counsel is of the opinion that, under current law,
and based on certain representations, facts and assumptions set forth in such
opinion, the New Junior Subordinated Debentures will be classified as
indebtedness for United States federal income tax purposes.
Interest Income and Original Issue Discount
Under the applicable Treasury regulations, the New Junior Subordinated
Debentures will not be treated as issued with OID within the meaning of section
1273(a) of the Code. Accordingly, except as set forth below, stated interest on
the New Junior Subordinated Debentures generally will be taxable to a holder as
ordinary income at the time it is paid or accrued in accordance with such
holder's regular method of tax accounting.
If, however, the Company exercises its right to defer payments of
interest on the New Junior Subordinated Debentures, the New Junior Subordinated
Debentures will become OID instruments at such time and all holders of the New
Junior Subordinated Debentures and, consequently, holders of the New Capital
Securities will be required to accrue their pro rata share of OID (which will
include both the stated interest and de minimis OID on the New Junior
Subordinated Debentures) on a daily economic accrual basis during the Extension
Period even though the Company will not pay stated interest on the New Junior
Subordinated Debentures until the end of the Extension Period, and even though
some holders may use the cash method of tax accounting. Moreover, thereafter the
New Junior Subordinated Debentures will be taxed as OID instruments for as long
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as they remain outstanding. Thus, even after the end of an Extension Period, all
holders would be required to continue to include the stated interest (and de
minimis OID) on the New Junior Subordinated Debentures in income on a daily
basis, regardless of their method of tax accounting and in advance of receipt of
the cash attributable to such income. Under the OID economic accrual rules, a
holder would accrue an amount of interest income each year that approximates the
stated interest payments called for under the terms of the New Junior
Subordinated Debentures, and actual cash payments of stated interest on the New
Junior Subordinated Debentures would not be reported separately as taxable
income. Any amount of OID included in a holder's gross income (whether or not
during an Extension Period) with respect to a New Capital Security will increase
such holder's tax basis in such New Capital Security, and the amount of
Distributions received by a holder in respect of such accrued OID will reduce
the tax basis of such New Capital Security.
The Treasury regulations described above have not yet been addressed in
any rulings or other interpretations by the IRS, and it is possible that the IRS
could take a contrary position. If the IRS were to assert successfully that the
stated interest on the New Junior Subordinated Debentures was OID regardless of
whether the Company exercises its option to defer payments of interest on such
debentures, all holders of New Capital Securities would be required to include
such stated interest (and de minimis OID) in income on a daily economic accrual
basis as described above.
Corporate holders of New Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized by such
holders with respect to the New Capital Securities.
Distribution of New Junior Subordinated Debentures or Cash upon Liquidation of
the Trust
As described under the caption "Description of New Junior Subordinated
Debentures -- Distribution of New Junior Subordinated Debentures" New Junior
Subordinated Debentures may be distributed to holders in exchange for the
Capital Securities and in liquidation of the Trust. Under current law, such a
distribution would be non-taxable, and will result in the holder receiving
directly its pro rata share of the New Junior Subordinated Debentures previously
held indirectly through the Trust, with a holding period and aggregate tax basis
equal to the holding period and aggregate tax basis such holder had in its
Capital Securities before such distribution. If, however, the liquidation of the
Trust were to occur because the Trust is subject to United States federal income
tax with respect to income accrued or received on the New Junior Subordinated
Debentures, the distribution of the New Junior Subordinated Debentures to
holders could be a taxable event to the Trust and to each holder and a holder
may be required to recognize gain or loss as if the holder had exchanged its New
Capital Securities for the New Junior Subordinated Debentures it received upon
liquidation of the Trust. A holder would accrue interest in respect of the New
Junior Subordinated Debentures received from the Trust in the manner described
above under "-- Interest Income and Original Issue Discount."
Under certain circumstances described herein (see "Description of New
Capital Securities -- Special Event Redemption or Distribution of New Junior
Subordinated Debentures"), the New Junior Subordinated Debentures may be
redeemed for cash, with the proceeds of such redemption distributed to holders
in redemption of their New Capital Securities. Under current law, such a
redemption would constitute a taxable disposition of the redeemed New Capital
Securities for United States federal income tax purposes, and a holder would
recognize gain or loss as if it sold such redeemed New Capital Securities for
cash. See "-- Sales of New Capital Securities."
Sales of New Capital Securities
A holder that sells New Capital Securities (including a redemption of New
Capital Securities) will recognize gain or loss equal to the difference between
the amount realized by such holder on the sale of the New Capital Securities
(except to the extent that such amount realized is characterized as a payment in
respect of accrued but unpaid interest on such holder's allocable share of the
New Junior Subordinated Debentures that the holder had not included in gross
income previously) and the holder's adjusted tax basis in the New Capital
Securities sold. Such gain or loss generally will be a capital gain or loss and
generally will be taxable as a long-term capital gain or loss if the New
Securities have been held for more than one year. Subject to certain limited
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exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
Exchange Offer
The exchange of the Old Junior Subordinated Debentures for the New Junior
Subordinated Debentures pursuant to the Exchange Offer should not be treated as
an "exchange" for United States federal income tax purposes because the New
Junior Subordinated Debentures should not be considered to differ materially in
kind or extent from the Junior Subordinated Debentures. Rather, the New Junior
Subordinated Debentures received by the Trust should be treated as a
continuation of the Junior Subordinated Debentures in the hands of the Trust. As
a result, there should be no United States federal income tax consequences to a
holder exchanging Capital Securities for New Capital Securities pursuant to the
Exchange Offer. Accordingly, the New Capital Securities should be treated as
having the same issue date and issue price as the Capital Securities for United
States federal income tax purposes.
Proposed Tax Law Changes
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill")
was introduced in the 104th Congress which would have, among other things,
generally denied interest deductions for interest or OID on an instrument issued
by a corporation that has a maximum term of more than 20 years and that is not
shown as indebtedness on the separate balance sheet of the issuer or, where the
instrument is issued to a related party (other than a corporation) where the
holder or some other related party issues a related instrument that is not shown
as indebtedness on the issuer's consolidated balance sheet. This provision of
the Bill was proposed to be effective generally for instruments issued on or
after December 7, 1995. If this provision were to apply to the New Junior
Subordinated Debentures, the Company would not be able to deduct the interest on
the New Junior Subordinated Debentures. However, on March 29, 1996, the Chairmen
of the Senate Finance and House Ways and Means Committees issued the Joint
Statement to the effect that it was their intention that the effective date of
the Bill, if enacted, would be no earlier than the date of appropriate
Congressional action. In addition, subsequent to the publication of the Joint
Statement, Senator Daniel Patrick Moynihan and Representatives Sam M. Gibbons
and Charles B. Rangel wrote the Democrat Letters to Treasury Department
officials concurring with the views expressed in the Joint Statement. The 104th
Congress adjourned without enacting the Bill. Similar legislation was reproposed
by the Treasury Department on February 6, 1997, as part of President Clinton's
Fiscal 1998 Budget Proposal (the "Proposed Legislation"). The Proposed
Legislation would, however, generally deny an interest deduction with respect to
an instrument not shown as indebtedness on the separate or consolidated balance
sheet of the issuer (as described above) and with a maximum term of more than 15
years (as contrasted to a maximum term of more than 20 years under the provision
of the Bill). Such provision is proposed to be effective generally for
instruments issued on or after the date of the first committee action. If the
effective date contained in the Proposed Legislation is followed, the
above-described provision would not apply to the New Junior Subordinated
Debentures.There can be no assurance, however, that current or future
legislative or administrative proposals or final legislation will not adversely
affect the ability of the Company to deduct interest on the New Junior
Subordinated Debentures or otherwise affect the tax treatment described herein.
Such a change, therefore, could give rise to a Tax Event, which would permit the
Company, upon receiving an opinion of counsel, to cause the redemption of the
New Capital Securities or to terminate the Trust and distribute the New Junior
Subordinated Debentures to the holders of Trust Securities in liquidation of the
Trust, as described more fully under "Description of New Capital Securities --
Special Event Redemption or Distribution of New Junior Subordinated Debentures."
Non-United States Holders
As used herein, the term "Non-United States Holder" means any person that
is not a United States Holder (as defined above). As discussed above, the New
Capital Securities will be treated as evidence of an indirect beneficial
ownership interest in the New Junior Subordinated Debentures. See "--
Classification of the Trust." Thus, under present United States federal income
tax law, and subject to the discussion below concerning backup withholding:
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(a) no withholding of United States federal income tax will be
required with respect to the payment by the Trust or any paying agent of
principal or interest (which for purposes of this discussion includes any
OID) with respect to the New Capital Securities (or on the New Junior
Subordinated Debentures) to a Non-United States Holder, provided (i) that
the beneficial owner of the Capital Securities ("Beneficial Owner") does
not actually or constructively own 10% or more of the total combined
voting power of all classes of stock of the Company entitled to vote
within the meaning of section 871(h)(3) of the Code and the regulations
thereunder, (ii) the Beneficial Owner is not a controlled foreign
corporation that is related to the Company through stock ownership, (iii)
the Beneficial Owner is not a bank whose receipt of interest with respect
to the New Capital Securities (or on the New Junior Subordinated
Debentures) is described in section 881(c)(3)(A) of the Code and (iv) the
Beneficial Owner satisfies the statement requirement (described generally
below) set forth in section 871(h) and section 881(c) of the Code and the
regulations thereunder; and
(b) no withholding of United States federal income tax will be
required with respect to any gain realized by a Non-United States Holder
upon the sale or other disposition of the New Capital Securities (or the
New Junior Subordinated Debentures).
To satisfy the requirement referred to in (a)(iv) above, the Beneficial
Owner, or a financial institution holding the New Capital Securities (or the New
Junior Subordinated Debentures) on behalf of such owner, must provide, in
accordance with specified procedures, to the Trust or its paying agent, a
statement to the effect that the Beneficial Owner is not a United States Holder.
Pursuant to current temporary Treasury regulations, these requirements will be
met if (1) the Beneficial Owner provides his name and address, and certifies,
under penalties of perjury, that it is not a United States person (which
certification may be made on an IRS Form W-8 (or successor form)) or (2) a
financial institution holding the New Capital Securities on behalf of the
Beneficial Owner certifies, under penalties of perjury, that such statement has
been received by it and furnishes a paying agent with a copy thereof.
If a Non-United States Holder cannot satisfy the requirements of the
"portfolio interest" exception described in (a) above, payments of interest
(including any OID) made to such Non-United States Holder will be subject to a
30% withholding tax unless the Beneficial Owner provides the Company or its
paying agent, as the case may be, with a properly executed (1) IRS Form 1001 (or
successor form) claiming an exemption from, or a reduction of, such withholding
tax under the benefit of a United States tax treaty or (2) IRS Form 4224 (or
successor form) stating that interest paid with respect to the New Capital
Securities (or on the New Junior Subordinated Debentures) is not subject to
withholding tax because it is effectively connected with the Beneficial Owner's
conduct of a trade or business in the United States.
If a Non-United States Holder is engaged in a trade or business in the
United States and interest with respect to the New Capital Securities (or on the
New Junior Subordinated Debentures) is effectively connected with the conduct of
such trade or business, the Non-United States Holder, although exempt from the
withholding tax discussed above, will be subject to United States federal income
tax on such interest income on a net income basis in the same manner as if it
were a United States Holder. In addition, if such Non-United States Holder is a
foreign corporation, it may be subject to a branch profits tax equal to 30% of
its effectively connected earnings and profits for the taxable year, subject to
adjustments. For this purpose, such interest income would be included in such
foreign corporation's effectively connected earnings and profits.
Any gain realized upon the sale or other disposition of the New Capital
Securities (or the New Junior Subordinated Debentures) generally will not be
subject to United States federal income tax unless (i) such gain is effectively
connected with a trade or business carried on within the United States by the
Non-United States Holder, (ii) in the case of a Non-United States Holder who is
an individual, such individual is present in the United States for 183 days or
more in the taxable year of such sale, exchange or retirement, and certain other
conditions are met, or (iii) in the case of any gain representing accrued
interest with respect to the New Capital Securities (or on the New Junior
Subordinated Debentures), the requirements described above are not satisfied.
As discussed above, legislation was introduced in the 104th Congress that
would have denied an interest deduction to the Company for the interest payable
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on the New Junior Subordinated Debentures. Such legislation also may have caused
the New Junior Subordinated Debentures to have been classified as equity (rather
than indebtedness) of the Company for United States federal income purposes and,
thus, caused the income derived from the New Junior Subordinated Debentures to
be characterized as dividend income rather than interest income for such
purposes. Dividend income is not eligible for the "portfolio interest" exception
described in (a) above. Therefore, if such legislation had been enacted, income
derived by a Non-United States Holder on the New Capital Securities may have
been subject to the 30% United States federal withholding tax described above,
unless a reduction or elimination of such tax was available under an applicable
tax treaty or such dividend income was effectively connected with a trade or
business carried on in the United States by such Non-United States Holder. The
104th Congress adjourned without enactinq such legislation. As discussed above,
similar legislation was reproposed as part of President Clinton's Fiscal 1998
Budget Proposal. Such legislation is proposed to be effective generally for
instruments issued on or after the date of the first committee action. If the
effective date of such legislation is followed, it would not apply to the New
Junior Subordinated Debentures. However, it is possible that legislation could
be enacted in the future that could affect the characterization of income
derived from the New Capital Securities (or the New Junior Subordinated
Debentures) or otherwise adversely affect a Non-United States Holder. See "--
Proposed Tax Law Changes."
Information Reporting and Backup Withholding
Income on the New Capital Securities (or the New Junior Subordinated
Debentures) held of record by United States Holders (other than corporations and
other exempt holders) will be reported annually to such holders and to the IRS.
The Regular Trustees currently intend to deliver such reports to holders of
record prior to January 31 following each calendar year. It is anticipated that
persons who hold New Capital Securities (or the New Junior Subordinated
Debentures) as nominees for beneficial holders will report the required tax
information to beneficial holders on Form 1099.
"Backup withholding" at a rate of 31% will apply to payments of interest
to non-exempt United States Holders unless the holder furnishes its taxpayer
identification number in the manner prescribed in applicable Treasury
regulations, certifies that such number is correct, certifies as to no loss of
exemption from backup withholding and meets certain other conditions.
No information reporting or backup withholding will be required with
respect to payments made by the Trust or any paying agent to Non-United States
Holders if a statement described in (a)(iv) under "Non-United States Holders"
has been received and the payor does not have actual knowledge that the
beneficial owner is a United States person.
In addition, backup withholding and information reporting will not apply
if payments of the principal, interest, OID or premium with respect to the New
Capital Securities (or on the New Junior Subordinated Debentures) are paid or
collected by a foreign office of a custodian, nominee or other foreign agent on
behalf of the Beneficial Owner, or if a foreign office of a foreign broker (as
defined in applicable Treasury regulations) pays the proceeds of the sale of the
New Capital Securities to the owner thereof. If, however, such nominee,
custodian, agent or broker is, for United States federal income tax purposes, a
United States person, a controlled foreign corporation or a foreign person that
derives 50% or more of its gross income for certain periods from the conduct of
a trade or business in the United States, such payments will not be subject to
backup withholding but will be subject to information reporting, unless (1) such
custodian, nominee, agent or broker has documentary evidence in its records that
the Beneficial Owner is not a United States person and certain other conditions
are met or (2) the Beneficial Owner otherwise establishes an exemption.
Payment of the proceeds from disposition of New Capital Securities (or the
New Junior Subordinated Debentures) to or through a United States office of a
broker is subject to information reporting and backup withholding unless the
holder or beneficial owner establishes an exemption from information reporting
and backup withholding.
Any amounts withheld from a holder of the New Capital Securities (or the
New Junior Subordinated Debentures) under the backup withholding rules will be
allowed as a refund or a credit against such holder's United States federal
income tax liability, provided the required information is furnished to the IRS.
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BOOK-ENTRY ISSUANCE
The New Capital Securities will be represented by one or more Capital
Securities registered in global form ("the Global Capital Securities").
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the Global Capital
Securities may not be exchanged for Capital Securities in certificated form
except in the limited circumstances described below. See "Exchange of Book-Entry
Capital Securities for Certificated Capital Securities."
Other Capital Securities will be issued only in registered, certificated
(i.e., non-global) form. Other Capital Securities may not be exchanged for
beneficial interests in any Global Capital Securities except in the limited
circumstances described below. See "Exchange of Certificated Capital Securities
for Book-Entry Capital Securities."
Depositary Procedures
DTC has advised the Trust and the Company that DTC is a limited-purpose
trust company created to hold securities for its participating organizations
(collectively, the "Participants") and to facilitate the clearance and
settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants. The Participants
include securities brokers and dealers (including the Initial Purchasers),
banks, trust companies, clearing corporations and certain other organizations.
Access to DTC's system is also available to other entities such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "Indirect Participants"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership interest
of each actual purchaser of each security held by or on behalf of DTC are
recorded on the records of the Participants and Indirect Participants.
DTC has also advised the Trust and the Company that, pursuant to
procedures established by it, (i) upon deposit of the New Global Capital
Securities, DTC will credit the accounts of Participants designated by the
Initial Purchasers with portions of the principal amount of the Old Global
Capital Securities and (ii) ownership of such interests in the New Global
Capital Securities will be shown on, and the transfer of ownership thereof will
be effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with respect
to other owners of beneficial interests in the Global Capital Securities).
Investors in the Restricted Global Capital Securities may hold their
interests therein directly through DTC if they are participants in such system,
or indirectly through organizations (including Euroclear and CEDEL) which are
participants in such system. Investors in the Regulation S Global Capital
Securities must initially hold their interests therein through Euroclear or
CEDEL, if they are participants in such systems, or indirectly through
organizations which are participants in such systems. After the expiration of
the Restricted Period (but not earlier), investors may also hold interests in
the Regulation S Global Capital Securities through organizations other than
Euroclear and CEDEL that are participants in the DTC system. Euroclear and CEDEL
will hold interests in the Regulation S Global Capital Securities on behalf of
their participants through customers' securities accounts in their respective
names on the books of their respective depositaries, which are Morgan Guaranty
Trust Company of New York, Brussels office, as operator of Euroclear, and
Citibank, N.A., as operator of CEDEL. The depositaries, in turn, will hold such
interests in the Regulation S Global Capital Securities in customers' securities
accounts in the depositaries' names on the books of DTC. All interest in a
Global Capital Security, including those held through Euroclear or CEDEL, may be
subject to the procedures and requirements of DTC. Those interests held through
Euroclear or CEDEL may also be subject to the procedures and requirements of
such system. The laws of some states require that certain persons take physical
delivery in certificated form of securities that they own. Consequently, the
ability to transfer beneficial interests in a Global Capital Security to such
persons will be limited to that extent. Because DTC can act only on behalf of
Participants, which in turn act on behalf of Indirect Participants and certain
banks, the ability of a person having beneficial interests in a Global Capital
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Security to pledge such interests to persons or entities that do not participate
in the DTC system, or otherwise take actions in respect of such interests, may
be affected by the lack of a physical certificate evidencing such interests. For
certain other restrictions on the transferability of the Capital Securities, see
"Exchange of Book-Entry Capital Securities for Certificated Capital Securities"
below.
Except as described below, owners of interests in the New Global Capital
Securities will not have New Capital Securities registered in their name, will
not received physical delivery of Capital Securities in certificated form and
will not be considered the registered owners or holders thereof for any purpose.
Payments in respect of the Global Capital Security registered in the name
DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder. The Property Trustee will treat the persons
in whose names the Capital Securities, including the Global Capital Securities,
are registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently, neither the
Property Trustee nor any agent thereof has or will have any responsibility or
liability for (i) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interests in the Global Capital Securities, or for maintaining,
supervising or reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the
Global Capital Securities or (ii) any other matter relating to the actions and
practices of DTC or any of its Participants or Indirect Participants. DTC has
advised the Trust and the Company that its current practice, upon receipt of any
payment in respect of securities such as the Capital Securities, is to credit
the accounts of the relevant Participants with the payment on the payment date
unless DTC has reason to believe it will not receive payment on such payment
date. Payments by the Participants and the Indirect Participants to the
beneficial owners of Capital Securities will be governed by standing
instructions and customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the responsibility of
DTC, the Property Trustee or the Trust. Neither the Trust nor the Property
Trustee will be liable for any delay by DTC or any of its Participants in
identifying the beneficial owners of the New Capital Securities, and the Trust
and the Property Trustee may conclusively rely on and will be protected in
relying on instructions from DTC or its nominee for all purposes.
Except for trades involving only Euroclear or CEDEL participants,
interests in the Global Capital Securities will trade in DTC's Same-Day Funds
Settlement System and secondary market trading activity in such interests will
therefore settle in immediately available funds, subject in all cases to the
rules and procedures of DTC and its participants.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
participants in Euroclear or CEDEL will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
New Capital Securities described herein, cross-market transfers between the
Participants in DTC, on the one hand, and Euroclear or CEDEL participants, on
the other hand, will be effect through DTC in accordance with DTC's rules on
behalf of Euroclear or CEDEL, as the case may be, by its respective depositary;
however, such cross-market transactions will require delivery of instructions to
Euroclear or CEDEL, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the established deadlines
(Brussels time) of such system. Euroclear or CEDEL, as the case may be, will, if
the transaction meets its settlement requirements, deliver instructions to its
respective depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant Global Capital Securities in
DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Euroclear participants and CEDEL
participants may not deliver instructions directly to the depositaries for
Euroclear or CEDEL.
Because of time zone differences, the securities account of a Euroclear or
CEDEL participant purchasing an interest in a Global Capital Security from a
Participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear of CEDEL participant, during the securities settlement
processing day (which must be a business day for Euroclear and CEDEL)
immediately following the settlement date of DTC. Cash received in Euroclear or
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CEDEL as a result of sales of interest in a Global Capital Security by or
through a Euroclear or CEDEL participant to a Participant in DTC will be
received with value on the settlement date of DTC but will be available in the
relevant Euroclear or CEDEL cash account only as of the business day for
Euroclear or CEDEL following DTC's settlement date.
DTC has advised the Trust and the Company that it will take any action
permitted to be taken by a holder of Capital Securities only at the direction of
one or more Participants to whose account with DTC interests in the Global
Capital Securities are credited. However, if there is an Event of Default, DTC
reserves the right to exchange the Global Capital Securities for legended
Capital Securities in certificated form and to distribute such Capital
Securities to its Participants.
The information in this section concerning DTC, Euroclear and CEDEL and
their book-entry systems has been obtained from sources that the Trust and the
Company believe to be reliable, but neither the Trust nor the Company takes
responsibility for the accuracy thereof.
Although DTC, Euroclear and CEDEL have agreed to the foregoing procedures
to facilitate transfers of interest in the Regulation S Global Capital
Securities and in the Restricted Global Capital Securities among participants in
DTC, Euroclear and CEDEL, they are under no obligation to perform or to continue
to perform such procedures, and such procedures may be discontinued at any time.
Neither the Trust nor the Property Trustee will have any responsibility for the
performance by DTC, Euroclear or CEDEL or their respective participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
Exchange of Book-Entry Capital Securities for Certificated Capital Securities
A Global Capital Security is exchangeable for Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor Depositary or (y) has
ceased to be a clearing agency registered under the Exchange Act, (ii) the
Company in its sole discretion elects to cause the issuance of the Capital
Securities in certificated form or (iii) there shall have occurred and be
continuing an Event of Default or any event which after notice or lapse of time
or both would be an Event of Default under the Declaration. In addition,
beneficial interests in a Global Capital Security may be exchanged for
certificated Capital Securities upon request but only upon at least 20 days'
prior written notice given to the Property Trustee by or on behalf of DTC in
accordance with customary procedures. In all cases, certificated Capital
Securities delivered in exchange for any Global Capital Security or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with
its customary procedures) and will bear, in the case of the Restricted Global
Capital Security, the restrictive legend referred to in "Notice to Investors."
Exchange of Certificated Capital Securities for Book-Entry Capital Securities
Other Capital Securities which will be issued in certificated form may not
be exchanged for beneficial interests in any Global Capital Security unless such
exchange occurs in connection with a transfer of such Other Capital Securities
and the transferor first delivers to the Property Trustee a written certificate
to the effect that such transfer will comply with the appropriate transfer
restrictions applicable to such Capital Securities as set forth in Appendix A
hereto. In the case of any such exchange for an interest in the Regulation S
Global Capital Security, such transfer must occur pursuant to Regulation S or
Rule 144 (if available).
ERISA CONSIDERATIONS
Generally, employee benefit plans that are subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Code ("Plans"), may purchase Capital Securities, subject to the investing
fiduciary's determination that the investment in Capital Securities satisfies
ERISA's fiduciary standards and other requirements applicable to investments by
the Plan.
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The Department of Labor ("DOL") has issued a regulation (29 C.F.R. ss.
2510.3-101) (the "DOL Regulation") concerning the definition of what constitutes
the assets of a Plan. The DOL Regulation provides that as a general rule, the
underlying assets and properties of corporations, partnerships, trusts and
certain other entities in which a plan makes an "equity" investment will be
deemed for purposes of ERISA to be assets of the investing plan unless certain
exceptions apply.
There can be no assurance that any of the exceptions set forth in the DOL
regulation will apply to the purchase of Capital Securities offered hereby and,
as a result, an investing Plan's assets could be considered to include an
undivided interest in the Junior Subordinated Debentures held by the Trust. In
the event that assets of the Trust are considered assets of an investing Plan,
the Company, the Trustees and other persons, in providing services with respect
to the Junior Subordinated Debentures, may be considered fiduciaries to such
Plan and subject to the fiduciary responsibility provisions of Title I of ERISA
(including the prohibited transaction provisions thereof). In addition, the
prohibited transaction provisions of Section 4975 of the Code could apply with
respect to transactions engaged in by any "disqualified person," as defined
below, involving such assets unless a statutory or administrative exemption
applies.
Even if they are not fiduciaries, the Company and/or any of its affiliates
may be considered a "party in interest" (within the meaning of ERISA) or a
"disqualified person" (within the meaning of Section 4975 of the Code) with
respect to certain Plans. The acquisition and ownership of Capital Securities by
a Plan (or by an individual retirement arrangement or other plan described in
Section 4975(e)(1) of the Code) may constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, unless such Capital
Securities are acquired pursuant to and in accordance with an applicable
exemption. As a result, Plans with respect to which the Company or any of its
affiliates is a party in interest or a disqualified person should not acquire
Capital Securities unless such Capital Securities are acquired pursuant to and
in accordance with an applicable prohibited transaction exemption.
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited transactions
resulting from the purchase or holding of the Capital Securities, assuming that
assets of a Trust were deemed to be "plan assets" of Plans investing in such
Trust (see above). Those class exemptions are PTCE 96-23 (for certain
transactions determined by in-house asset managers), PTCE 95-60 (for certain
transactions involving insurance company general accounts), PTCE 91-38 (for
certain transactions involving bank collective investment funds), PTCE 90-1 (for
certain transactions involving insurance company separate accounts), and PTCE
84-14 (for certain transactions determined by independent qualified asset
managers).
Because the Capital Securities may be deemed to be equity interests in a
Trust for purposes of applying ERISA and Section 4975 of the Code, the Capital
Securities may not be purchased or held by any Plan, any entity whose underlying
assets include "plan assets" by reason of any Plan's investment in the entity (a
"Plan Asset Entity") or any person investing "plan asset" of any Plan, unless
such purchaser or holder is eligible for the exemptive relief available under
PTCE 96-23, 95-60, 91-38, 90-1, or 84-14. Any purchaser or holder of the Capital
Securities or any interest therein will be deemed to have represented by its
purchase and holding thereof that it either (a) is not a Plan or a Plan Asset
Entity and is not purchasing such securities on behalf of or with "plan assets"
of any Plan or (b) is eligible for the exemptive relief available under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14 with respect to such purchase or holding. See
"Notice to Investors" herein.
Notwithstanding the foregoing, it is possible that the New Capital
Securities may qualify as "publicly offered securities" under the DOL Regulation
if, in addition to the exchange pursuant to any effective registration
statement, they are also "widely held" and "freely transferable" at the time of
the Exchange Offer. Under the DOL Regulation, a class of securities is "widely
held" only if it is a class of securities owned by 100 or more investors
independent of the issuer and each other. Although it is possible that at the
time of the Exchange Offer the New Capital Securities will be "widely held", no
assurances can be given that that will be true. If the New Capital Securities
are "publicly offered securities" at the time of the Exchange Offer, the assets
of the Trust would not be assets of the Investing Plans as of such time. If the
New Capital Securities did not qualify as "publicly offered securities," the
foregoing discussion about plan assets in the preceding paragraphs would also be
applicable to the New Capital Securities.
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Any Plans or other entities whose assets include Plan assets subject to
ERISA or Section 4975 of the Code proposing to acquire Capital Securities or New
Capital Securities should consult with their own counsel.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own
account in connection with the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Capital
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by Participating Broker-Dealers during the period referred to
below in connection with resales of New Capital Securities received in exchange
for Old Capital Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities. The Company has agreed that this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such New Capital
Securities for a period ending 180 days after the Registration Statement of
which this Prospectus constitutes a part is declared effective. See "The
Exchange Offer -- Resales of New Capital Securities." Neither the Company nor
the Trust will receive any cash proceeds from the issuance of the New Capital
Securities offered hereby. New Capital Securities received by broker-dealers for
their own accounts in connection with the Exchange Offer may be sold from time
to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the New Capital
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such New Capital Securities. Any broker-dealer that resells
New Capital Securities that were received by it for its own account in
connection with the Exchange Offer and any broker or dealer that participates in
a distribution of such New Capital Securities may be deemed to be an
"underwriter" within the meaning of the Securities Act, and any profit on any
such resale of New Capital Securities and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
Neither the Company nor the Trustees shall be liable for any delay by the
Depository or any Participant or Indirect Participant in identifying the
beneficial owners of the related New Capital Securities and each such person may
conclusively rely on, and shall be protected in relying on, instructions from
the Depository for all purposes (including with respect to the registration and
delivery, and the respective principal amounts, of the New Capital Securities to
be issued).
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Capital
Securities will be passed upon for the Trust by Richards, Layton & Finger,
Wilmington, Delaware. The validity of the Junior Subordinated Debentures and the
Guarantee will be passed upon for the Company and for the Trust by Schulte Roth
& Zabel LLP, New York, New York. Certain United States federal income taxation
matters also will be passed upon for the Company and the Trust by Schulte Roth &
Zabel LLP. Paul N. Roth, a director of the Company, is a partner of Schulte Roth
& Zabel LLP.
EXPERTS
The financial statements listed under the heading "Exhibits, Financial
Statement Schedule and Reports on Form 8-K" in CIT's 1995 Annual Report on Form
10-K have been incorporated by reference herein in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants, also
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing. The report of KPMG Peat Marwick LLP refers to a
change in the method of accounting for postretirement benefits other than
pensions in 1993.
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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, and, if given or
made, such information or representation must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities
described in this Prospectus 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 nor any sale made hereunder
shall, under any circumstances, create any implication that the information
contained herein is correct as of any time subsequent to the date of such
information.
-----------------------
TABLE OF CONTENTS
Page
----
Available Information ..................................................... 7
Documents Incorporated by Reference ....................................... 7
Summary ................................................................... 9
Summary Consolidated Financial Data ....................................... 16
Risk Factors .............................................................. 17
Use of Proceeds ........................................................... 23
Ratio of Earnings to Fixed Charges ........................................ 23
Accounting Treatment ...................................................... 24
Capitalization ............................................................ 24
The Trust ................................................................. 25
The Company ............................................................... 26
The Exchange Offer ........................................................ 29
Description of New Capital Securities ..................................... 38
Description of New Junior
Subordinated Debentures ................................................. 47
Description of New Guarantee .............................................. 54
Relationship Among the New Capital
Securities, the New Junior Subordinated
Debentures and the New Guarantee ........................................ 56
Description of the Old Securities ......................................... 57
Certain United States Federal Income Tax
Consequences ............................................................ 57
Book-Entry Issuance ....................................................... 63
ERISA Considerations ...................................................... 65
Plan of Distribution ...................................................... 67
Legal Matters ............................................................. 67
Experts ................................................................... 67
Until ________, 1997 (180 days after the date of this Prospectus) all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as underwriters and with respect to their unsold allotment of
subscriptions.
================================================================================
================================================================================
CIT CAPITAL TRUST I
Offer for all Outstanding
7.70% Preferred Capital Securities
In Exchange for
7.70% Preferred Capital Securities
Registered under the Securities Act of 1933
Fully and Unconditionally
Guaranteed to the Extent Set Forth Herein by
The CIT Group
Holdings, Inc.
-----------------------
PROSPECTUS
_________, 1997
-----------------------
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Subsection (a) of Section 145 of the General Corporation Law of Delaware
empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he 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, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding if he 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 action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation except that no indemnification may be made in
respect of any claim, issue, or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine that despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
Section 145 further provides that to the extent a director, officer,
employee, or agent of a corporation has been successful in the defense of any
action, suit, or proceeding referred to in subsections (a) and (b) or in the
defense of any claim, issue, or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith; that indemnification provided for by Section 145 shall not
be deemed exclusive of any other rights to which the indemnified party may be
entitled; and empowers the corporation to purchase and maintain insurance on
behalf of any person acting in any of the capacities set forth in the second
preceding paragraph against any liability asserted against him or 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 him against such liabilities under
Section 145.
The By-Laws of The CIT Group Holdings, Inc. provide for indemnification of
directors and officers of The CIT Group Holdings, Inc. to the full extent
permitted by Delaware law.
Article X of the By-Laws of The CIT Group Holdings, Inc. provides, in
effect, that, in addition to any rights afforded to an officer, director or
employee of The CIT Group Holdings, Inc. by contract or operation of law, The
CIT Group Holdings, Inc. may indemnify any person who is or was a director,
officer, employee, or agent of The CIT Group Holdings, Inc., or of any other
corporation which he served at the request of The CIT Group Holdings, Inc.,
against any and all liability and reasonable expense incurred by him in
connection with or resulting from any claim, action, suit, or proceeding
(whether brought by or in the right of The CIT Group Holdings, Inc. or such
other corporation or otherwise), civil or criminal, in which he may have become
involved, as a party or otherwise, by reason of his being or having been such
director, officer, employee, or agent of The CIT Group Holdings, Inc. or such
other corporation, whether or not he continues to be such at the time such
liability or expense is incurred, provided that such person acted in good faith
and in what he reasonably believed to be the best interests of The CIT Group
Holdings, Inc. or such other corporation, and, in connection with any criminal
action proceeding, had no reasonable cause to believe his conduct was unlawful.
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Article X further provides that any person who is or was a director,
officer, employee, or agent of The CIT Group Holdings, Inc. or any director or
indirect wholly-owned subsidiary of The CIT Group Holdings, Inc. shall be
entitled to indemnification as a matter of right if he has been wholly
successful, on the merits or otherwise, with respect to any claim, action, suit,
or proceeding of the type described in the foregoing paragraph.
In addition, The CIT Group Holdings, Inc. maintains directors' and
officers' reimbursement and liability insurance pursuant to standard form
policies with aggregate limits of $65,000,000. The risks covered by such
policies do not exclude liabilities under the Securities Act of 1933.
The Amended and Restated Declaration of Trust of CIT Capital Trust I and
the Indenture provide for indemnification of each of the Regular Trustees and
other Trustees of the Trust by the Registrants against any and all expenses and
liabilities other than under circumstances of willful bad faith conduct or gross
negligence.
Item 21. Exhibits and Financial Statement Schedules
EXHIBIT
NUMBER DESCRIPTION
---------- ---------------
*1.1 Amended and Restated Purchase Agreement, dated February 21, 1997,
among The CIT Group Holdings, Inc., CIT Capital Trust I, Lehman
Brothers Inc., Chase Securities Inc., Salomon Brothers Inc, and UBS
Securities LLC
*3.1 Amended and Restated Declaration of Trust of CIT Capital Trust I,
dated as of February 25, 1997, between The CIT Group Holdings, Inc.,
The Bank of New York, The Bank of New York (Delaware), Albert R.
Gamper, Jr., Joseph M. Leone, and Corinne M. Taylor
*3.2 Restated Certificate of Incorporation of The CIT Group Holdings,
Inc., as amended as of December 29, 1989 (incorporated by reference
to Exhibit 3(a) to Form 10-K filed by The CIT Group Holdings, Inc.
for the fiscal year ended December 31, 1989)
*3.3 By-Laws of The CIT Group Holdings, Inc., as amended as of December
29, 1989 (incorporated by reference to Exhibit 3(b) to Form 10-K
filed by The CIT Group Holdings, Inc. for the fiscal year ended
December 31, 1989)
*4.1 Indenture, dated as of February 25, 1997, between The CIT Group
Holdings, Inc. and The Bank of New York
*4.2 Registration Rights Agreement, dated as of February 25, 1997, among
The CIT Group Holdings, Inc., CIT Capital Trust I, Lehman Brothers
Inc., Chase Inc., Salomon Brothers Inc, and UBS Securities LLC
*4.3 Form of 7.70% Preferred Capital Security of CIT Capital Trust I
(included as part of Exhibit 3.1)
*4.4 Form of 7.70% Junior Subordinated Debenture of The CIT Group
Holdings, Inc. (included as part of Exhibit 4.1)
*4.5 Guarantee Agreement, dated as of February 25, 1997
**5.1 Opinion of Schulte Roth & Zabel LLP, as to the legality of the 7.70%
Junior Subordinated Debentures of The CIT Group Holdings, Inc. and
the Guarantee of The CIT Group Holdings, Inc.
**5.2 Opinion of Richards Layton & Finger, as to the legality of the 7.70%
Preferred Capital Securities of CIT Capital Trust I
**8.1 Opinion of Schulte Roth & Zabel LLP as to tax matters
**12.1 Calculation of Ratio of Earnings to Fixed Charges
*23.1 Consent of KPMG Peat Marwick LLP
**23.2 Consent of Schulte Roth & Zabel LLP (included as part of Exhibit
5.1)
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EXHIBIT
NUMBER DESCRIPTION
---------- ---------------
**23.3 Consent of Richards Layton & Finger (included as part of Exhibit
5.2)
*24.1 Powers of Attorney of The CIT Group Holdings, Inc.
*25.1 Form T-1 of The Bank of New York as to the Amended and Restated
Declaration of Trust
*25.2 Form T-1 of The Bank of New York as to the Guarantee Agreement
*25.3 Form T-1 of The Bank of New York as to the Indenture
*99.1 Form of Letter of Transmittal
*99.2 Form of Notice of Guaranteed Delivery
*99.3 Form of Exchange Agent Agreement
- - ------------
* Filed herewith
** To be filed by amendment
Item 22. Undertakings
(1) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act 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) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and 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 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 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 and will be governed by the final adjudication of such issue.
(3) The undersigned Registrants hereby undertake to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection(a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Trust Indenture Act.
(4) The undersigned Registrants undertake:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by section 10(a)(3) of
the Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
II-3
<PAGE>
prospectus filed with the Securities and Exchange Commission pursuant
to rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in
this Registration Statement when it becomes effective;
(iii) to include any material information with respect to the
play of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
(b) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
anew registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) 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.
(5) The undersigned Registrants hereby undertake to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4,10(b),11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of this Registration Statements through
the date of responding to the request.
(6) The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in this Registration Statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York, on March 4, 1997.
THE CIT GROUP HOLDINGS, INC.
By: /S/ ERNEST D. STEIN
---------------------------------------
Ernest D. Stein
Executive Vice President, General
Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Date
--------- ----
* March 4, 1997
- - ------------------------------------
Albert R. Gamper, Jr.
President, Chief Executive
Officer, and Director
(Principal executive officer)
* March 4, 1997
- - ------------------------------------
Hisao Kobayashi
Director
* March 4, 1997
- - ------------------------------------
Takasuke Kaneko
Director
* March 4, 1997
- - ------------------------------------
Kenji Nakamura
Director
* March 4, 1997
- - ------------------------------------
Joseph A. Pollicino
Director
* March 4, 1997
- - ------------------------------------
Paul N. Roth
Director
* March 4, 1997
- - ------------------------------------
Peter J. Tobin
Director
* March 4, 1997
- - ------------------------------------
Keiji Torii
Director
II-5
<PAGE>
Signature Date
--------- ----
* March 4, 1997
- - ------------------------------------
Yukihara Uno
Director
* March 4, 1997
- - ------------------------------------
Yasuo Tsunemi
Director
/S/ JOSEPH M. LEONE March 4, 1997
- - ------------------------------------
Joseph M. Leone
Executive Vice President
and Chief Financial Officer
(principal financial
and accounting officer)
*By: /S/ ERNEST D. STEIN March 4, 1997
-------------------------------
Ernest D. Stein
Attorney-in-fact
Original powers of attorney authorizing Albert R. Gamper, Jr., Ernest D.
Stein, and Donald J. Rapson and each of them to sign the Registration Statement
and amendments thereto on behalf of the directors and officers of the Registrant
indicated above are held by The CIT Group Holdings, Inc. and available for
examination pursuant to Item 302(b) of Regulation S-T.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York, on March 4, 1997.
CIT CAPITAL TRUST I.
By: /S/ ALBERT R. GAMPER, JR.
------------------------------
Albert R. Gamper, Jr.
Regular Trustee
By: /S/ JOSEPH M. LEONE
------------------------------
Joseph M. Leone
Regular Trustee
By: /S/ CORINNE M. TAYLOR
-------------------------------
Corinne M. Taylor
Regular Trustee
II-7
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Exhibit No. Description Page
---------- --------------- ------
<S> <C>
*1.1 Amended and Restated Purchase Agreement, dated February 21, 1997,
among The CIT Group Holdings, Inc., CIT Capital Trust I, Lehman
Brothers Inc., Chase Securities Inc., Salomon Brothers Inc, and UBS
Securities LLC
*3.1 Amended and Restated Declaration of Trust of CIT Capital Trust I,
dated as of February 25, 1997, between The CIT Group Holdings, Inc.,
The Bank of New York, The Bank of New York (Delaware), Albert R.
Gamper, Jr., Joseph M. Leone, and Corinne M. Taylor
*3.2 Restated Certificate of Incorporation of The CIT Group Holdings,
Inc., as amended as of December 29, 1989 (incorporated by reference
to Exhibit 3(a) to Form 10-K filed by The CIT Group Holdings, Inc.
for the fiscal year ended December 31, 1989)
*3.3 By-Laws of The CIT Group Holdings, Inc., as amended as of December
29, 1989 (incorporated by reference to Exhibit 3(b) to Form 10-K
filed by The CIT Group Holdings, Inc. for the fiscal year ended
December 31, 1989)
*4.1 Indenture, dated as of February 25, 1997, between The CIT Group
Holdings, Inc. and The Bank of New York
*4.2 Registration Rights Agreement, dated as of February 25, 1997, among
The CIT Group Holdings, Inc., CIT Capital Trust I, Lehman Brothers
Inc., Chase Inc., Salomon Brothers Inc, and UBS Securities LLC
*4.3 Form of 7.70% Preferred Capital Security of CIT Capital Trust I
(included as part of Exhibit 3.1)
*4.4 Form of 7.70% Junior Subordinated Debenture of The CIT Group
Holdings, Inc. (included as part of Exhibit 4.1)
*4.5 Guarantee Agreement, dated as of February 25, 1997
**5.1 Opinion of Schulte Roth & Zabel LLP, as to the legality of the 7.70%
Junior Subordinated Debentures of The CIT Group Holdings, Inc. and
the Guarantee of The CIT Group Holdings, Inc.
**5.2 Opinion of Richards Layton & Finger, as to the legality of the 7.70%
Preferred Capital Securities of CIT Capital Trust I
**8.1 Opinion of Schulte Roth & Zabel LLP as to tax matters
**12.1 Calculation of Ratio of Earnings to Fixed Charges
*23.1 Consent of KPMG Peat Marwick LLP
**23.2 Consent of Schulte Roth & Zabel LLP (included as part of Exhibit
5.1)
**23.3 Consent of Richards Layton & Finger (included as part of Exhibit
5.2)
*24.1 Powers of Attorney of The CIT Group Holdings, Inc.
*25.1 Form T-1 of The Bank of New York as to the Amended and Restated
Declaration of Trust
*25.2 Form T-1 of The Bank of New York as to the Guarantee Agreement
*25.3 Form T-1 of The Bank of New York as to the Indenture
*99.1 Form of Letter of Transmittal
*99.2 Form of Notice of Guaranteed Delivery
*99.3 Form of Exchange Agent Agreement
- - ------------
* Filed herewith
** To be filed by amendment
</TABLE>
$250,000,000
CIT CAPITAL TRUST I
7.70% Preferred Capital Securities
AMENDED AND RESTATED PURCHASE AGREEMENT
February 21, 1997
Lehman Brothers Inc.
Chase Securities Inc.
Salomon Brothers Inc
UBS Securities LLC
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
CIT Capital Trust I, a Delaware statutory business trust (the "Trust"),
proposes to sell to you (collectively, the "Initial Purchasers") $250,000,000
7.70% Preferred Capital Securities (liquidation amount $1000 per Capital
Security) (the "Capital Securities"), guaranteed (the "Guarantee"; together with
the Capital Securities, the "Securities") by the Company (as defined herein) to
the extent set forth in the Guarantee Agreement (the "Guarantee Agreement") to
be entered into between the Company and The Bank of New York, as Guarantee
Trustee (the "Guarantee Trustee"). This agreement amends, restates and replaces
in its entirety the Purchase Agreement dated February 20, 1997. The CIT Group
Holdings, Inc., a Delaware corporation (the "Company"), will be the owner of all
of the beneficial ownership interests represented by common securities (the
"Common Securities") of the Trust. Concurrently with the issuance of the
Securities and the Company's purchase of all of the beneficial interests
represented by the Common Securities of the Trust, the Trust will invest the
proceeds of each thereof in the Company's 7.70% Junior Subordinated Debentures
(the "Junior Subordinated Debentures"). The Junior Subordinated Debentures are
to be issued pursuant to an Indenture (the "Indenture") to be entered into
between the Company and The Bank of New York, as Indenture Trustee (the
"Indenture Trustee").
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions therefrom.
In connection with the sale of the Securities, the Trust and the Company
will prepare a final offering memorandum (the "Memorandum") setting forth or
including a description of the terms of the Securities, the terms of the
offering, a description of the Company and the Trust, and any material
developments relating to the Company occurring after the date of the most recent
financial statements included therein.
<PAGE>
2
1. Representations, Warranties and Agreements of the Company and the Trust.
The Company and the Trust, jointly and severally, represent and warrant to, and
agree with the Initial Purchasers that as of the date hereof:
(a) The Memorandum will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this Section 1(a) do not apply to statements or omissions in the Memorandum
based upon information furnished to the Company or the Trust by or through
you expressly for use therein. Reference herein to the Memorandum shall be
deemed to refer to and include any document filed by the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which is
incorporated in the Memorandum by reference.
(b) Assuming the accuracy of the representations and warranties and
compliance with the agreements of the Initial Purchasers contained herein,
it is not required by applicable law or regulation in connection with the
offer, sale and delivery of the Securities to you in the manner
contemplated by this Agreement to register the Securities or the Junior
Subordinated Debentures under the Securities Act or to qualify the
Declaration (as defined herein), the Guarantee Agreement or the Indenture
in respect of the Securities or the Junior Subordinated Debentures under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(c) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act of
the State of Delaware (the "Delaware Business Trust Act") with the trust
power and authority to own property and conduct its business as described
in the Memorandum, and has conducted and will conduct no business other
than the transactions contemplated by this Agreement as described in the
Memorandum; the Trust is not a party to or bound by any agreement or
instrument other than this Agreement, the Registration Rights Agreement
(the "Registration Rights Agreement") to be entered into among the Company,
the Trust and the Initial Purchasers, the Amended and Restated Declaration
of Trust (the "Declaration") among the Company, as sponsor, and Albert R.
Gamper, Jr., Joseph M. Leone and Corinne M. Taylor (the "Trustees"), and
the agreements and instruments contemplated by the Declaration and
described in the Memorandum; the Trust has no liabilities or obligations
other than those arising out of the transactions contemplated by this
Agreement and the Declaration and described in the Memorandum; and the
<PAGE>
3
Trust is not a party to or subject to any action, suit or proceeding of any
nature.
(d) The Declaration has been duly authorized and, when duly executed
and delivered by the Company, as Sponsor, and the Trustees, and assuming
due authorization, execution and delivery of the Declaration by the
Property Trustee and the Delaware Trustee, the Declaration will be a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing, and will
conform to all statements relating thereto in the Memorandum.
(e) All of the outstanding beneficial interests in the Trust have
been, and the Capital Securities and the Common Securities, upon issuance
and delivery and payment therefor in the manner described herein, will be,
duly authorized, validly issued, fully paid and non-assessable and will
conform to the descriptions of the Capital Securities and the Common
Securities contained in the Memorandum.
(f) Each of the Indenture and the Guarantee Agreement has been duly
authorized and, when duly executed and delivered by the proper officers of
the Company (assuming, in the case of the Indenture, due execution and
delivery by the Indenture Trustee and, in the case of the Guarantee
Agreement, due execution and delivery by the Guarantee Trustee) and
delivered by the Company, will each constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing; and the Junior Subordinated
Debentures and the Guarantee have been duly authorized, and, when duly
executed, authenticated, issued and delivered as provided in the Indenture
and the Guarantee Agreement, respectively, and delivered against payment of
the purchase price therefor as provided in this Agreement, will be duly and
validly issued and outstanding, and will constitute valid and legally
binding obligations of the Company entitled to the benefits of the
Indenture and the Guarantee Agreement, respectively, and enforceable
against the Company in accordance with their terms, subject to the effects
<PAGE>
4
of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing; and the Junior Subordinated Debentures and the Guarantee,
when issued and delivered, will conform to the descriptions thereof
contained in the Memorandum.
(g) This Agreement has been duly authorized, executed and delivered by
each of the Trust and the Company and the Registration Rights Agreement has
been duly authorized and will be duly delivered and executed by each of the
Trust and the Company.
(h) The execution, delivery and performance of this Agreement, the
Declaration, the Registration Rights Agreement, the Common Securities and
the Capital Securities by the Trust, the purchase of the Junior
Subordinated Debentures by the Trust from the Company, the distribution of
the Junior Subordinated Debentures upon the liquidation of the Trust in the
circumstances contemplated by the Declaration and described in the
Memorandum, and the consummation of the transactions contemplated herein
and in the Declaration (the "Trust Transactions"), will not conflict with
or result in a violation of any statute or order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Trust or
any of its assets; and except for such consents, approvals, authorizations,
registrations or qualifications as may be required under applicable state
securities laws in connection with the purchase and distribution of the
Capital Securities by the Initial Purchasers, no consent, approval,
authorization or order of or filing or registration with, any such court or
governmental agency or body is required for the Trust Transactions.
(i) The execution, delivery and performance of this Agreement, the
Guarantee Agreement, the Registration Rights Agreement, the Indenture and
the Junior Subordinated Debentures by the Company, the purchase of the
Common Securities by the Company from the Trust, and the consummation by
the Company of the transactions herein (the "Company Transactions") 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 or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the properties or
assets of the Company or any of its subsidiaries is subject, nor will such
<PAGE>
5
actions result in any violation of the provisions of the charter or by-laws
of the Company or any of its subsidiaries or any statute or order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company, any of its subsidiaries or any of their properties or
assets; and except for such consents, approvals, authorizations,
registrations or qualifications as may be required under applicable state
securities laws in connection with the purchase and distribution of the
Capital Securities by the Initial Purchasers, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the Company Transactions.
(j) Neither the Company nor any subsidiary nor the Trust is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the
Securities and Exchange Commission (the "Commission") thereunder.
(k) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware, is duly
qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, save where the failure
to be so qualified could not reasonably be expected to have a material
adverse effect on the business or property of the Company, and the Company
has all power and authority necessary to own or hold its properties and to
conduct the businesses in which it is engaged.
(l) The financial statements (including the related notes and
supporting schedules) incorporated in the Memorandum present fairly the
financial condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
(m) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company, whose report is incorporated by reference in the
Memorandum and who have delivered the initial letter referred to in Section
hereof, are independent public accountants as required by the Securities
Act and the Rules and Regulations during the periods covered by the
financial statements on which they reported incorporated by reference in
the Memorandum.
<PAGE>
6
(n) Since the date as of which information is given in the Memorandum
through the date hereof, and except as may otherwise be disclosed in the
Memorandum, the Trust has not issued or granted any securities and neither
the Company nor the Trust has (i) incurred any liability or obligation,
direct or contingent, other than liabilities and obligations which were
incurred in the ordinary course of business, (ii) entered into any
transaction not in the ordinary course of business or (iii) in the case of
the Company, declared or paid any dividend on its capital stock.
(o) Neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the sale
of the Capital Securities in a manner that would require the registration
under the Securities Act of the Securities or (ii) engaged in any form of
general solicitation or general advertising in connection with the offering
of the Securities (as those terms are used in Regulation D under the
Securities Act), or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
2. Purchase of the Capital Securities by the Initial Purchasers. (i) On the
basis of the representations and warranties herein contained, and subject to the
terms and conditions herein set forth, the Trust agrees to sell to you, and each
of you, severally and not jointly, agrees to purchase from the Trust, 80% of the
liquidation amount of the Capital Securities set forth opposite each Initial
Purchaser's name in Schedule 1 hereto at a purchase price equal to 99.544% of
their liquidation amount and 20% of the liquidation amount of the Capital
Securities set forth opposite each Initial Purchaser's name in Schedule 1 hereto
at a purchase price equal to 99.209% of their liquidation amount.
As compensation to the Initial Purchasers for their commitments hereunder,
the Company agrees to pay the Initial Purchasers a commission of 1% of the
liquidation amount of the Capital Securities set forth in Schedule 1 opposite
each Initial Purchaser's name.
(ii) The Company shall not be obligated to deliver any of the Capital
Securities, except upon payment for all of the Capital Securities to be
purchased as hereinafter provided.
3. Sale and Resale of the Capital Securities by the Initial Purchasers. You
have advised the Company that you propose to offer the Capital Securities for
resale upon the terms and conditions set forth in this Agreement and in the
<PAGE>
7
Offering Memorandum. You hereby represent and warrant to, and agree with, the
Company that you (i) are purchasing the Capital Securities pursuant to a private
sale exempt from registration under the Securities Act, (ii) have not and will
not solicit offers for, or offer or sell, the Capital Securities by means of any
form of general solicitation or general advertising or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act, (iii)
have and will solicit offers for the Capital Securities only from, and have and
will offer, sell or deliver the Capital Securities, as part of their initial
offering, only to (A) in the case of offers inside the United States, (1)
persons whom you reasonably believe to be qualified institutional buyers
("Qualified Institutional Buyers") as defined in Rule 144A under the Securities
Act, as such rule may be amended from time to time ("Rule 144A") or, if any such
person is buying for one or more institutional accounts for which such person is
acting as fiduciary or agent, only when such person has represented to you that
each such account is a Qualified Institutional Buyer, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A or (2)
institutional accredited investors ("Accredited Investors") as defined in Rule
501(a)(1), (2), (3) or (7) under Regulation D who execute letters of
representation in the form included as Appendix A to the Offering Memorandum in
private sales exempt from registration under the Securities Act (such Capital
Securities to be issued in certificated form) and (B) in the case of offers
outside the United States, to persons other than U.S. persons ("foreign
purchasers", which term shall include dealers or other professional fiduciaries
in the United States acting on a discretionary basis for foreign beneficial
owners (other than an estate or trust)), in such transactions only in accordance
with Regulation S under the Securities Act, and you have not offered or sold,
and will not offer or sell, Capital Securities to, or for the account or benefit
of, U.S. persons (x) as part of your distribution at any time or (y) otherwise
until one year after the Closing Time, (iv) are a Qualified Institutional Buyer
and an Accredited Investor, (v) (x) have not offered or sold and will not offer
or sell any Capital Securities to persons in the United Kingdom, except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or payment) for the purposes of their
businesses or otherwise in circumstances which do not constitute an offer to the
public in the United Kingdom for purposes of the Public Offers of Securities
Regulations 1995, (y) have complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom with respect
to anything done by it in relation to the Capital Securities in, from or
otherwise involving the United Kingdom, and (z) have only issued or passed on
and will only issue or pass on in the United Kingdom any document in connection
with the issue of the Capital Securities to a person who is of a kind described
in Article 8 of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) (No. 2) Order 1995 of the United Kingdom or is a person to whom the
document may otherwise lawfully be issued or passed on.
<PAGE>
8
4. Delivery of and Payment for the Capital Securities. (a) Payment of the
purchase price for, and delivery of, the Capital Securities shall be made at the
offices of Simpson Thacher & Bartlett, New York, New York or at such other place
as shall be agreed upon by the Company and you, at 9:30 a.m. (New York time), on
February 25, 1997 or at such other time or date as you and the Company shall
determine (such date and time of payment and delivery being herein called the
"Closing Date").
(b) On the Closing Date, payment shall be made to the Company in
immediately available funds by wire transfer to such account or accounts as the
Company shall specify prior to the Closing Date or by such means as the parties
hereto shall agree prior to the Closing Date against delivery to you of the
certificates evidencing the Capital Securities. Upon delivery, the Capital
Securities shall be registered in such names and in such denominations as the
Initial Purchasers shall request in writing not less than two full business days
prior to the Closing Date. For the purpose of expediting the checking and
packaging of certificates evidencing the Capital Securities, the Company agrees
to make such certificates available for inspection at least 24 hours prior to
the Closing Date.
5. Further Agreements of the Company. Each of the Company and the Trust
agrees:
(a) To furnish to you, without charge, as many copies of the
Memorandum and any supplements and amendments thereto as you may reasonably
request.
(b) Prior to making any amendment or supplement to the Memorandum, the
Company shall furnish a copy thereof to the Initial Purchasers and counsel
to the Initial Purchasers and will not effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by
notice to the Company after a reasonable period to review, which shall not
in any case be longer than five business days after receipt of such copy;
provided, however, that the obligations of the Company pursuant to this
paragraph shall terminate on the earlier to occur of (i) the effective date
of a Registration Statement with respect to the securities filed pursuant
to the Registration Rights Agreement and (ii) the date upon which the
Initial Purchasers and their affiliates cease to hold Capital Securities
acquired as part of their initial distribution, but in any event (in the
case of this clause (ii)) not later than nine months from the Closing Time.
(c) If, at any time prior to completion of the distribution of the
Capital Securities by you to purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
you or counsel for the Company, to amend or supplement the Memorandum in
<PAGE>
9
order that the Memorandum will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in light of the circumstances
existing at the time it is delivered to a purchaser, or if it is necessary
to amend or supplement the Memorandum to comply with applicable law, to
promptly prepare such amendment or supplement as may be necessary to
correct such untrue statement or omission or so that the Memorandum, as so
amended or supplemented, will comply with applicable law and to furnish you
such number of copies as you may reasonably request; provided, however,
that the obligations of the Company and the Initial Purchasers pursuant to
this paragraph shall terminate on the earlier to occur of (i) the effective
date of a Registration Statement with respect to the securities filed
pursuant to the Registration Rights Agreement and (ii) the date upon which
the Initial Purchasers and their affiliates cease to hold Capital
Securities acquired as part of their initial distribution, but in any event
(in the case of this clause (ii)) not later than nine months from the
Closing Time.
(d) So long as the Capital Securities are outstanding and are
"Restricted Securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Capital Securities and
prospective purchasers of Capital Securities designated by such holders,
upon request of such holders or such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(e) Promptly from time to time to take such action as the Initial
Purchasers may reasonably request to qualify the Capital Securities, the
Guarantee Agreement and the Junior Subordinated Debentures for offering and
sale under the securities laws of such jurisdictions as the Initial
Purchasers may reasonably request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such United States
jurisdictions for as long as may be necessary to complete the distribution
of the Capital Securities; provided, however, that the Company shall not be
obligated to qualify as a foreign corporation or as a dealer in securities
or to execute or file any consents to service of process under the laws of
any such state.
(f) Not to offer, sell, contract to sell or otherwise dispose of any
additional securities of the Trust or the Company substantially similar to
the Capital Securities or any securities convertible into or exchangeable
for or that represent the right to receive any such similar securities,
<PAGE>
10
without the consent (which consent shall not be unreasonably withheld) of
Lehman Brothers Inc. during the period beginning from the date of this
Agreement and continuing to and including the earlier of (i) the
termination of trading restrictions on the Capital Securities, as
communicated to the Company by Lehman Brothers Inc. and (ii) 90 days
following the Closing Date.
(g) To apply the net proceeds from the sale of the Capital Securities
being sold by the Trust as set forth in the Memorandum.
(h) Except following the effectiveness of the Registration Statement
(as defined in the Registration Rights Agreement), not to, and will cause
its affiliates not to, solicit any offer to buy or offer to sell the
Capital Securities by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities
Act) or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act.
(i) Not to, and will cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Securities Act) in a transaction that could be
integrated with the sale of the Capital Securities in a manner that would
require the registration under the Securities Act of the Capital
Securities.
(j) To take such steps as shall be necessary to ensure that neither
the Company, any subsidiary of the Company nor the Trust shall become an
"investment company" within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the Commission
thereunder.
6. Expenses. The Company agrees to pay (i) the costs incident to the
authorization, issuance, sale and delivery of the Capital Securities and any
taxes payable in that connection; (ii) the costs incident to the preparation and
printing of the Memorandum and any amendments or supplements thereto; (iii) the
costs of distributing the Memorandum and any amendments or supplements thereto;
(iv) the fees and expenses of qualifying the Capital Securities under the
securities laws of the several jurisdictions as provided in Section 5(f) and of
preparing, printing and distributing a Blue Sky Memorandum and a Legal
Investment Survey (including related fees and expenses of counsel to the
Company); (v) any fees incurred by the Company in connection with the rating of
the Capital Securities; (vi) all fees and expenses, if any, incurred in
connection with the admission of such Securities for trading in PORTAL; (vii)
the fees and expenses of the Property Trustee (as defined in the Declaration),
<PAGE>
11
the Guarantee Trustee and the Indenture Trustee; and (viii) all other costs and
expenses incident to the performance of the obligations of the Company and the
Trust.
7. Conditions to the Initial Purchasers' Obligations. The respective
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of the
Company and the Trust contained herein, to the performance by the Company and
the Trust of their respective obligations hereunder, and to each of the
following additional terms and conditions:
(a) No Initial Purchaser shall have discovered and disclosed to the
Company and the Trust on or prior to the Closing Date that the Memorandum
or any amendment or supplement thereto contains any untrue statement of a
fact which, in the opinion of Simpson Thacher & Bartlett, counsel for the
Initial Purchasers, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(b) Schulte Roth & Zabel LLP, counsel to the Company, shall have
furnished to the Initial Purchasers their written opinion, as counsel to
the Company, addressed to the Initial Purchasers and dated the Closing
Date, in form and substance satisfactory to the Initial Purchasers, to the
effect set forth in Exhibit A hereto.
(c) Ernest D. Stein, Executive Vice-President, General Counsel and
Secretary of the Company, shall have furnished to the Initial Purchasers
his written opinion addressed to the Initial Purchasers and dated the
Closing Date, in form and substance satisfactory to the Initial Purchasers,
to the effect set forth in Exhibit B hereto.
(d) Richards, Layton & Finger shall have furnished to the Initial
Purchasers their written opinion, on certain matters of Delaware law
relating to the validity of the Capital Securities, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers, to the effect set forth in Exhibit
C hereto.
(e) You shall have received on the Closing Date a letter, dated the
date hereof and the Closing Date, as the case may be, in form and substance
satisfactory to you, from KPMG Peat Marwick LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information, including the
<PAGE>
12
financial information contained or incorporated by reference in the
Memorandum as identified by you.
(f) The Company and the Trust shall have furnished to the Initial
Purchasers a certificate, dated the Closing Date, of the Chief Financial
Officer or Treasurer stating that:
(i) The representations, warranties and agreements of the Company
and the Trust in Section 1 are true and correct in all material
respects as of the Closing Date and the Company has complied with all
its agreements contained herein;
(ii) (A) The Company has not sustained since the date of the
latest quarterly financial statements included or incorporated by
reference in the Memorandum 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 Memorandum or (B) since such date there has not
been any change in the capital stock of the Company or any change, or
any material development involving a prospective material change, in
or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company,
otherwise than as set forth or contemplated in the Memorandum; and
(iii) Such officer has carefully examined the Memorandum and, in
such officer's opinion (A) the Memorandum, as of its date, did not
include any untrue statement of a material fact and did not omit to
state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and (B) since the date of the Memorandum no event has
occurred which should have been set forth in a supplement or amendment
to the Memorandum.
(g) (i) Subsequent to the respective dates as of which information is
given in the Memorandum there shall not have occurred any change, or any
development involving a prospective change, in or affecting the business,
properties, financial condition or results of operations of the Company or
its subsidiaries the effect of which is, in the reasonable judgment of the
Initial Purchasers, so material and adverse to the Company so as to make it
impracticable or inadvisable to proceed with the purchase of the Capital
Securities as contemplated by the Memorandum; and (ii) subsequent to the
<PAGE>
13
date hereof, (u) no public announcement shall have been given of any
intended or potential downgrading in the rating accorded the Capital
Securities and no downgrading of the Capital Securities shall have occurred
in the rating accorded by Moody's Investors Service, Inc., Standard &
Poor's Corporation or Duff & Phelps, Inc., (v) trading of securities
generally on the New York Stock Exchange or the National Association of
Securities Dealers Automated Quotations System shall not have been
suspended or materially limited, (w) a general moratorium on commercial
banking activities in New York shall not have been declared by either
Federal or New York State authorities, (x) trading of any securities of the
Company shall not have been suspended on any exchange or in any
over-the-counter market, (y) there shall not have occurred any outbreak or
escalation of hostilities or national emergency the effect of which on the
financial markets of the United States is, in the judgment of a majority in
interest of the Initial Purchasers, such as to make it impracticable to
market the Capital Securities, and (z) there shall not have occurred such a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the Initial Purchasers, impracticable or
inadvisable to proceed with the offering or delivery of the Capital
Securities on the terms and in the manner contemplated in the Memorandum.
(h) Simpson Thacher & Bartlett, counsel to the Initial Purchasers,
shall have furnished to the Initial Purchasers their written opinion,
addressed to the Initial Purchasers and dated the Closing Date, in form and
substance satisfactory to the Initial Purchasers, to the effect set forth
in Exhibit D hereto.
(i) The Initial Purchasers shall have received on the date hereof the
Registration Rights Agreement executed by the Company and the Trust.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to counsel
for the Initial Purchasers.
<PAGE>
14
8. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each Initial
Purchaser and any person who controls such Initial Purchaser within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act from and against any
loss, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, such Initial Purchaser or any such
controlling person may incur under the Act or otherwise, insofar as such loss,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in the Memorandum, or
any amendment or supplement thereto, or arises out of or is based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as any such loss, expense, liability or claim arises out of or is
based upon any alleged untrue statement of a material fact contained therein in
conformity with information furnished in writing by such Initial Purchaser to
the Company or the Trust expressly for use in any of such documents or arises
out of or is based upon any alleged omission to state therein a material fact in
connection with such information required to be stated therein or necessary to
make such information not misleading. The Company's agreement to indemnify such
Initial Purchaser or any such controlling person as aforesaid is expressly
conditioned upon it being notified of the action in connection therewith brought
against such Initial Purchaser or such controlling person by letter or telegram
or other facsimile transmission addressed to the Company with reasonable
promptness after the first legal process which discloses the nature of the
liability or claim shall have been served upon such Initial Purchaser or such
controlling person (or after it shall have received notice of such service upon
any agent designated by it), but failure so to notify the Company shall not
relieve the Company from any liability which it may have to such Initial
Purchaser or controlling person otherwise than on account of the indemnity
agreement contained in this Section 8. The Company shall assume the defense of
any suit brought to enforce any such liability or claim, including the
employment of counsel satisfactory to such Initial Purchaser and the payment of
all expenses. Such Initial Purchaser or controlling person against whom such
suit is brought shall have the right to employ one separate counsel in any such
suit and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Initial Purchaser or controlling person
unless (i) the employment of such counsel has been specifically authorized by
the Company or (ii) the named parties to any such suit (including any impleaded
parties) include such Initial Purchaser or controlling person and the Company
and such Initial Purchaser or controlling person shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Company, in which case
the Company shall not have the right to assume the defense of such action on
behalf of such Initial Purchaser or controlling person, it being understood,
however, that the Company shall not, in connection with any one such action or
<PAGE>
15
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (and
any required local counsel) for such Initial Purchaser and controlling persons,
which firm (and local counsel, if any) shall be designated in writing by such
Initial Purchaser. The Company shall not be liable for any settlement of any
such action effected without its consent (which will not be unreasonably
withheld or delayed).
The Company agrees to notify each Initial Purchaser with reasonable
promptness of the commencement of any litigation or proceedings against the
Company or any of its officers or directors or the Trust or any of its Trustees
in connection with the issue and sale of the Capital Securities or with the
Memorandum.
(b) Each Initial Purchaser represents and warrants that the information
furnished in writing by such Initial Purchaser to the Company or the Trust
expressly for use with reference to such Initial Purchaser in the Memorandum
does not contain any untrue statement of a material fact and does not omit to
state a material fact in connection with such information required to be stated
in the Memorandum or necessary to make such information not misleading.
Each Initial Purchaser severally agrees to indemnify, defend and hold
harmless the Company and its directors and officers and the Trust and each
Trustee from and against any loss, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company or
any such person may incur under the Act or otherwise, insofar as such loss,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in the Memorandum or
any amendment or supplement thereto which is in reliance on and in conformity
with information furnished in writing by such Initial Purchaser to the Company,
the Trust or each Trustee expressly for use with reference to such Initial
Purchaser, or arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required to be stated
in any of such documents or necessary to make such information not misleading.
Each Initial Purchaser's agreement to indemnify the Company, the Trust and any
such person as aforesaid is expressly conditioned upon such Initial Purchaser
being notified of the action in connection therewith brought against the
Company, the Trust or any such person by letter, telegram, or facsimile
transmission addressed to it at its address furnished to the Company for the
purpose, with reasonable promptness after the first legal process which
discloses the nature of the liability or claim shall have been served upon the
Company, the Trust or any such person (or after the Company, the Trust or any
such person shall have received notice of such service on any agent designated
by the Company or any such person), but failure so to notify such Initial
<PAGE>
16
Purchaser shall not relieve such Initial Purchaser from any liability which it
may have to the Company, the Trust or any such person otherwise than on account
of the indemnity agreement contained in this Section 8.
Such Initial Purchaser shall assume the defense of any suit brought to
enforce any such liability or claim, including the employment of counsel
satisfactory to the Company, the Trust or such other person and the payment of
all expenses. The Company, the Trust or such person against whom such suit is
brought shall have the right to employ separate counsel in any such suit and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Company, the Trust or such person unless (i) the
employment of such counsel has been specifically authorized by such Initial
Purchaser or (ii) the named parties to any suit (including any impleaded
parties) include the Company, the Trust or such person and such Initial
Purchaser, and the Company, the Trust or such person shall have been advised by
such counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to such Initial Purchaser,
in which case such Initial Purchaser shall not have the right to assume the
defense of such action on behalf of the Company, the Trust or such person, it
being understood, however, that the Initial Purchaser shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (and any required local counsel) for the Company, the
Trust and such person, which firm (and local counsel, if any) shall be
designated in writing by the Company. An Initial Purchaser shall not be liable
for any settlement of any such action effected without its consent (which will
not be unreasonably withheld or delayed).
(c) If the indemnification provided for in this Agreement is unavailable to
or insufficient to hold harmless an indemnified party under subsections (a) and
(b) above for any reason other than as specified therein in respect of any
losses, expenses, liabilities or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Trust on the one hand and each Initial Purchaser on the other hand from the
offering of the Capital Securities to which such losses, expenses, liabilities
or claims relate or (ii) if the allocation provided in clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Trust on the one hand and of each Initial Purchaser
on the other in connection with the statements or omissions which resulted in
such losses, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
<PAGE>
17
Trust on the one hand and each Initial Purchaser on the other shall be deemed to
be in the same proportion as the total net proceeds to the Trust from sales of
the Capital Securities bears to the aggregate commissions received by each
Initial Purchaser pursuant to Section 2 hereof. The relative fault of the
Company and the Trust on the one hand and of each Initial Purchaser on the other
shall be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Trust or by any Initial Purchaser and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any claim or action.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Agreement were determined by pro rata
allocation (even if the Initial Purchasers 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 in the immediately preceding paragraph.
Notwithstanding the provisions of this Agreement, no Initial Purchaser shall be
required to contribute any amount in excess of the amount by which the total
price at which the Capital Securities sold and distributed by it exceeds the
amount of the damages which such Initial Purchaser has otherwise been required
to pay by reason of an untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of 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
Initial Purchaser in this subsection (c) to contribute are several, in the same
proportion which the amount of the Capital Securities which are the subject of
the action and which were distributed to the public by such Initial Purchaser
pursuant to this Agreement bears to the total amount of such Capital Securities
sold and distributed to the public by the Initial Purchasers pursuant to this
Agreement, and not joint.
The obligations of the Company and any Initial Purchasers under this
Section 8 shall be in addition to any liability that each of them may otherwise
have.
9. Termination. The obligations of the Initial Purchasers hereunder may be
terminated by them by notice given to and received by the Company or the Trust
prior to delivery of and payment for the Capital Securities if, prior to that
time, any of the events described in Section 7(g) shall have occurred or if the
Initial Purchasers shall decline to purchase the Capital Securities for any
reason permitted under this Agreement.
<PAGE>
18
10. Reimbursement of Initial Purchasers' Expenses. If (a) the Trust shall
fail to tender the Capital Securities for delivery to the Initial Purchasers for
any reason, or (b) the Initial Purchasers shall decline to purchase the Capital
Securities for any reason permitted under this Agreement, the Company shall
reimburse the Initial Purchasers for the reasonable fees and expenses of their
counsel and for such other out-of-pocket expenses as shall have been incurred by
them in connection with this Agreement and the proposed purchase of the Capital
Securities, and upon demand the Company shall pay the full amount thereof to the
Initial Purchasers.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail,
telex or facsimile transmission to Lehman Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 212-528-8822);
(b) if to the Company or the Trust shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in
the Memorandum, Attention: Executive Vice President and Chief Financial
Officer (Fax: 212-536-1912).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company and the Trust shall be entitled to act and
rely upon any request, consent, notice or agreement given or made on behalf of
the Initial Purchasers by Lehman Brothers Inc.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Initial Purchasers, the Company, the
Trust and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(x) the representations, warranties, indemnities and agreements of the Company
and the Trust contained in this Agreement shall also be deemed to be for the
benefit of the officers and employees of each Initial Purchaser and the person
or persons, if any, who control each Initial Purchaser within the meaning of
Section 15 of the Securities Act and (y) the indemnity agreement of the Initial
Purchasers contained in Section of this Agreement shall be deemed to be for the
benefit of directors, officers and employees of the Company and the Trust and
any person controlling the Company or the Trust within the meaning of Section 15
of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
12, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
<PAGE>
19
13. Survival. The respective indemnities, representations, warranties and
agreements of the Company, the Trust and the Initial Purchasers contained in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Capital Securities
and shall remain in full force and effect, regardless of any investigation made
by or on behalf of any of them or any person controlling any of them.
14. Definition of the Terms "Business Day" and "Subsidiary". For purposes
of this Agreement, (a) "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
<PAGE>
If the foregoing correctly sets forth the agreement among the Company, the
Trust and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
THE CIT GROUP HOLDINGS, INC.
By:_____________________________
CIT CAPITAL TRUST I
By:_____________________________
Regular Trustee
Accepted:
LEHMAN BROTHERS INC.
By:_____________________________
For itself and the several other Initial Purchasers named in
Schedule I hereto
<PAGE>
SCHEDULE 1
Liquidation
Amount of
Initial Purchasers Capital Securities
------------------ ------------------
Lehman Brothers Inc. $125,500,000
Chase Securities Inc. 41,500,000
Salomon Brothers Inc 41,500,000
UBS Securities LLC 41,500,000
==================
Total $250,000,000
<PAGE>
EXHIBIT A
FORM OF OPINION OF
COMPANY COUNSEL TO BE DELIVERED
PURSUANT TO SECTION 7(b)
(i) The Indenture, when duly authorized, executed and delivered by the
Indenture Trustee, will constitute a valid and legally binding obligation of the
Company, enforceable against the Company, in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and implied covenant of good faith and fair dealing.
(ii) The Junior Subordinated Debentures, when duly authenticated by the
Indenture Trustee and upon payment and delivery as described in the Purchase
Agreement, will constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(iii) The Guarantee Agreement, assuming due authorization, execution and
delivery by the Guarantee Trustee, will constitute a valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(iv) The statements made in the Memorandum under the captions "Description
of Junior Subordinated Debentures", "The Trust", "Description of Capital
Securities", "Description of Guarantee" and "Relationship Among the Capital
Securities, the Junior Subordinated Debentures and the Guarantee", insofar as
such statements constitute a summary of legal matters, documents or legal
proceedings or refer to statements of regulation, law or legal conclusions, are
a fair summary of such legal matters, documents or legal proceedings and
statements and are accurate in all material respects.
(v) (A) The Trust will be characterized as a grantor trust for United
States federal income tax purposes taxable as a corporation;
A-1
<PAGE>
(B) The Junior Subordinated Debentures will constitute indebtedness of
the Company; and
(C) Subject to the qualifications set forth therein, the statements
made in the Memorandum under the caption "Certain United States Federal
Income Tax Consequences" fairly present in all material respects the
principal United States federal income tax consequences of an investment in
the Securities;
(vi) The Trust is not a party to or otherwise bound by any agreement other
than those described in the Memorandum.
(vii) Neither the Company nor the Trust is required to be registered as an
"investment company" under the 1940 Act.
(viii) Assuming (a) the accuracy of the representations and warranties of
the Trust, the Company and of the Initial Purchasers set forth herein, (b) the
due performance by the Trust, the Company and by the Initial Purchasers of the
covenants and agreements set forth herein, (c) compliance by the Initial
Purchasers with the offering and transfer procedures and restrictions described
in the Memorandum, (d) the accuracy of the representations and warranties made
in accordance with the Purchase Agreement and Memorandum by purchasers to whom
the Initial Purchasers initially resell Capital Securities and (e) the
purchasers to whom the Initial Purchasers initially resell Capital Securities
receive a copy of the Memorandum prior to such resale, the offer, sale and
delivery of the Capital Securities to the Initial Purchasers in the manner
contemplated herein and in the Memorandum and the initial resale of the Capital
Securities by the Initial Purchasers in the manner contemplated herein and in
the Memorandum do not require registration under the Securities Act of 1933, as
amended (the "Act"). Such counsel need not express any opinion as to any
subsequent resale of the Capital Securities. On or before the date hereof, none
of the Indenture, the Declaration or the Guarantee is required to be qualified
under the Trust Indenture Act of 1939, as amended.
A-2
<PAGE>
EXHIBIT B
FORM OF OPINION OF
COMPANY COUNSEL TO BE DELIVERED
PURSUANT TO SECTION 7(c)
(i) The Company and each of its active subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have all
power and authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged.
(ii) Each of the Purchase Agreement and the Registration Rights Agreement
has been duly authorized, executed and delivered by the Company and has been
duly executed and delivered by the Trust.
(iii) The Indenture has been duly authorized, executed, and delivered by
the Company.
(iv) The Junior Subordinated Debentures have been duly authorized, executed
and delivered by the Company.
(v) The Guarantee Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The Declaration has been duly authorized, executed and delivered by
the Company.
(vii) The execution, delivery and performance of the Purchase Agreement,
the Declaration, the Indenture, the Junior Subordinated Debentures and the
Guarantee Agreement (collectively, the "Transaction Documents") by the Company
and the Trust, as applicable, will not constitute a material breach of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
active subsidiaries is a party or by which the Company or any of its active
subsidiaries is bound or to which any of the property or assets of the Company
or any of its active subsidiaries is subject, nor will such actions result in
any material violation of the provisions of the charter or by-laws of the
Company or any of its active subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its active subsidiaries or any of their respective
properties or assets.
(viii) No consent, approval, authorization, order, registration or
qualification of any Federal governmental agency or body or any Delaware
governmental agency or body acting pursuant to the Delaware General Corporation
Law or any Federal court or any Delaware court acting pursuant to the Delaware
B-1
<PAGE>
General Corporation Law is required for the issue and sale by the Trust of the
Capital Securities, the issuance by the Company of the Junior Subordinated
Debentures, the issuance of the Guarantee Agreement by the Company and the
compliance by the Company and Trust with all of the provisions of the Purchase
Agreement, except for such consents approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Capital Securities and the
Guarantee Agreement by the Initial Purchasers and except that I express no
opinion on the requirement for the registration of the Capital Securities under
the Securities Act of 1933, as amended.
(ix) There is not pending or threatened any legal or governmental
proceeding required to be described in the Memorandum which is not described as
required.
I have participated in the preparation of the Memorandum and in conferences
with officers and other representatives of the Company, representatives of the
independent public accountants for the Company and with your representatives and
counsel at which the contents of the Memorandum and related matters were
discussed and, although I do not pass upon or assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Memorandum, based upon the foregoing, no facts have come to my attention that
have caused me to believe that the Memorandum (except for the financial
statements and schedules and statistical and other financial data included
therein or omitted therefrom, as to which we make no statement), as of the date
of the delivery of the Securities, contained an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
B-2
<PAGE>
EXHIBIT C
FORM OF OPINION OF RICHARDS, LAYTON & FINGER
SPECIAL DELAWARE COUNSEL TO THE COMPANY AND
THE TRUST TO BE DELIVERED PURSUANT TO SECTION 7(d)
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Trust Act with the business
trust power and authority to own property and to conduct its business as
described in the Memorandum and to enter into and perform its obligations under
each of the Purchase Agreement, the Capital Securities, the Common Securities
and the Declaration; to such counsel's knowledge, the Trust is not a party to or
otherwise bound by any agreement other than those described in the Memorandum.
(ii) The Common Securities have been duly authorized by the Declaration
and, when issued and delivered by the Trust to the Company against payment
therefor as described in the Memorandum, will be validly issued and (subject to
the terms of the Declaration) fully paid undivided beneficial interests in the
assets of the Trust (such counsel may note that the Holders of Common Securities
will be subject to the withholding provisions of Section 10.4 of the
Declaration, will be required to make payment or provide indemnity or security
as set forth in the Declaration and will be liable for the debts and obligations
of the Trust to the extent provided in Section 9.1(b) of the Declaration); under
the Delaware Trust Act and the Declaration the issuance of the Common Securities
is not subject to preemptive or other similar rights.
(iii) The Capital Securities have been duly authorized by the Declaration
and, when issued and delivered against payment of the consideration as set forth
in the Purchase Agreement, the Capital Securities will be validly issued and
(subject to the terms of the Declaration) fully paid and non-assessable
undivided beneficial interests in the Trust, the Holders of the Capital
Securities will be entitled to the benefits of the Declaration (subject to the
limitations set forth in clause (v) below) and will be entitled to the same
limitation of personal liability under Delaware law as extended to stockholders
of private corporations for profit (such counsel may note that the Holders of
Capital Securities will be subject to the withholding provisions of Section 10.4
of the Declaration and will be required to make payment or provide indemnity or
security as set forth in the Declaration).
(iv) All necessary trust action has been taken to duly authorize the
execution and delivery by the Trust of the Purchase Agreement.
(v) Assuming the Declaration has been duly authorized by the Company and
has been duly executed and delivered by the Company and the Regular Trustees,
and assuming due authorization, execution and delivery of the Declaration by the
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Property Trustee and the Delaware Trustee, the Declaration constitutes a valid
and binding obligation of the Company and the Regular Trustees, enforceable
against the Company and the Regular Trustees in accordance with its terms,
except to the extent that enforcement thereof may be limited by (i) bankruptcy,
insolvency, receivership, liquidation, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and remedies, (ii) general principles of equity (regardless of
whether considered and applied in a proceeding in equity or at law), and (iii)
considerations of public policy and the effect of applicable law relating to
fiduciary duties.
(vi) The issuance and sale by the Trust of the Securities, the purchase by
the Trust of the Junior Subordinated Debentures, the execution, delivery and
performance by the Trust of the Purchase Agreement, the consummation by the
Trust of the transactions contemplated by the Purchase Agreement and compliance
by the Trust with its obligations thereunder will not violate (i) any of the
provisions of the Certificate of Trust or the Declaration or (ii) any applicable
Delaware law or administrative regulation.
(vii) Assuming that the Trust derives no income from or connected with
services provided within the State of Delaware and has no assets, activities
(other than having a Delaware Trustee as required by the Delaware Trust Act and
the filing of documents with the Secretary of State of Delaware) or employees in
the State of Delaware, no filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any Delaware court or
Delaware governmental authority or agency (other that as may be required under
the securities or blue sky laws of the state of Delaware, as to which such
counsel need express no opinion) is necessary or required in connection with the
due authorization, execution and delivery of the Purchase Agreement or the
offering, issuance, sale or delivery of the Capital Securities.
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EXHIBIT D
FORM OF OPINION OF SIMPSON THACHER & BARTLETT
COUNSEL TO THE INITIAL PURCHASERS
TO BE DELIVERED PURSUANT TO SECTION 7(h)
(i) The Company has been duly incorporated and is validly existing and in
good standing as a corporation under the laws of the State of Delaware. The
Trust has been duly created and is validly existing and in good standing as a
business trust under the Delaware Business Trust Act.
(ii) The Purchase Agreement has been duly authorized, executed and
delivered by each of the Company and the Trust.
(iii) The Registration Rights Agreement has been duly authorized, executed
and delivered by each of the Company and the Trust, and constitutes a valid and
legally binding instrument of each of the Company and the Trust enforceable
against each of the Company and the Trust in accordance with its terms.
(iv) The Declaration has been duly authorized, executed and delivered by
the Company and, assuming due authorization, execution and delivery thereof by
each of the Property Trustee and the Delaware Trustee, constitutes a valid and
legally binding obligation of the Company enforceable against the Company in
accordance with its terms.
(v) The Capital Securities to be sold by the Trust are validly issued
beneficial interests in the Trust entitled to the benefits provided by the
Declaration.
(vi) The Guarantee has been duly authorized, executed and delivered by the
Company and, assuming due authorization, execution and delivery thereof by the
Guarantee Trustee and upon payment for and delivery of the Capital Securities in
accordance with the Purchase Agreement, the Guarantee will constitute a valid
and legally binding obligation of the Company enforceable against the Company in
accordance with its terms.
(vii) The Indenture has been duly authorized, executed and delivered by the
Company and, assuming due authorization, execution and delivery thereof by the
Indenture Trustee, constitutes a valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms.
(viii) The Junior Subordinated Debentures have been duly authorized,
executed and issued by the Company and, assuming due authentication thereof by
the Indenture Trustee and upon payment and delivery in accordance with the
Purchase Agreement, will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms.
(ix) The statements made in the Offering Memorandum under the captions
"Description of Capital Securities", "Description of Junior Subordinated
Debentures" and "Description of Guarantee," insofar as they purport to
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constitute summaries of certain terms of documents referred to therein,
constitute accurate summaries of the terms of such documents in all material
respects.
(x) The Trust is not an "investment company" required to be registered
under the Investment Company Act of 1940.
(xi) No registration of the Capital Securities, the Guarantee or the Junior
Subordinated Debentures under the Securities Act of 1933, as amended, and no
qualification of the Declaration of Trust, the Guarantee or the Indenture under
the Trust Indenture Act of 1939, as amended, is required for the offer and sale
of the Capital Securities by the Company to the Initial Purchasers or the
initial reoffer and resale of the Capital Securities by the Initial Purchasers
solely in the manner contemplated by the Memorandum.
We have not independently verified the accuracy, completeness or fairness
of the statements made or included in the Memorandum or the documents
incorporated by reference therein (the "Exchange Act Documents") and take no
responsibility therefor, except as and to the extent set forth in paragraph (ix)
above. In the course of the preparation by the Company of the Memorandum
(excluding the Exchange Act Documents), we participated in conferences with
certain officers and employees of the Company, with representatives of KPMG Peat
Marwick LLP and with counsel to the Company. We did not prepare the Exchange Act
Documents or review such documents prior to their filing with the Commission.
Based upon our examination of the Memorandum and the Exchange Act Documents, our
investigations made in connection with the preparation of the Offering
Memorandum (excluding the Exchange Act Documents) and our participation in
conferences referred to above, we have no reason to believe that the Memorandum
(including the Exchange Act Documents) contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that we express no belief with respect to the
financial statements or other financial or statistical data contained or
incorporated by reference in the Memorandum or the Exchange Act Documents.
D-2
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AMENDED AND RESTATED DECLARATION OF TRUST
CIT CAPITAL TRUST I
Dated as of February 25, 1997
- - --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE 1
INTERPRETATION AND DEFINITIONS.................... 1
Section 1.1 Interpretation and Definitions ............................... 1
Affiliate ................................................................. 2
Authorized Officer ........................................................ 2
Business Day .............................................................. 2
Business Trust Act ........................................................ 2
Capital Security .......................................................... 2
Cedel ..................................................................... 2
Certificate ............................................................... 2
Certificate of Trust ...................................................... 2
Closing Date .............................................................. 2
Code ...................................................................... 3
Commission ................................................................ 3
Common Securities Holder .................................................. 3
Common Security ........................................................... 3
Common Security Certificate ............................................... 3
Corporate Trust Office .................................................... 3
Covered Person ............................................................ 3
Debenture Issuer .......................................................... 3
Debenture Issuer Indemnified Person ....................................... 3
Debenture Trustee ......................................................... 3
Debentures ................................................................ 3
Delaware Trustee .......................................................... 3
Depositary ................................................................ 4
Distribution .............................................................. 4
DTC ....................................................................... 4
DWAC ...................................................................... 4
Euroclear ................................................................. 4
Exchange Act .............................................................. 4
Federal Reserve ........................................................... 4
Fiduciary Indemnified Person .............................................. 4
Fiscal Year ............................................................... 4
Global Security ........................................................... 4
Guarantee ................................................................. 4
Holder .................................................................... 4
Indemnified Person ........................................................ 4
Indenture ................................................................. 4
Indenture Event of Default ................................................ 5
Initial Purchasers ........................................................ 5
Institutional Accredited Investor ......................................... 5
Investment Company ........................................................ 5
Investment Company Act .................................................... 5
Investment Company Event .................................................. 5
Legal Action .............................................................. 5
Liquidation ............................................................... 5
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Page
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Liquidation Distribution .................................................. 5
List of Holders ........................................................... 5
Majority in Liquidation Amount ............................................ 5
New Capital Securities .................................................... 5
New Capital Security Certificate .......................................... 5
Officers' Certificate ..................................................... 6
Paying Agent .............................................................. 6
Payment Amount ............................................................ 6
Person .................................................................... 6
Private Placement Legend .................................................. 6
Property Account .......................................................... 6
Property Trustee .......................................................... 6
Pro Rata .................................................................. 6
Qualified Institutional Buyer ............................................. 6
Quorum .................................................................... 7
Registration Rights Agreement ............................................. 7
Regular Trustee ........................................................... 7
Regulation S .............................................................. 7
Regulation S Global Security .............................................. 7
Regulatory Capital Event .................................................. 7
Related Party ............................................................. 7
Responsible Officer ....................................................... 7
Restricted Global Security ................................................ 8
Restricted Period ......................................................... 8
Restricted Security ....................................................... 8
Rule 144A ................................................................. 8
Rule 3a-5 ................................................................. 8
Securities ................................................................ 8
Securities Act ............................................................ 8
Special Event ............................................................. 8
Sponsor ................................................................... 8
Successor Delaware Trustee ................................................ 8
Successor Entity .......................................................... 8
Successor Property Trustee ................................................ 8
Successor Security ........................................................ 8
Super Majority ............................................................ 8
Tax Event ................................................................. 8
10% in Liquidation Amount ................................................. 9
Transfer Restricted Securities ............................................ 9
Transfer Restricted Securities Certificate ................................ 9
Treasury Regulations ...................................................... 9
Trust Enforcement Event ................................................... 9
Trust Indenture Act ....................................................... 9
Trustee or Trustees ....................................................... 9
Trustees' Authorization Certificate ....................................... 9
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Page
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ARTICLE 2
TRUST INDENTURE ACT......................... 10
Section 2.1 Trust Indenture Act; Application ............................ 10
Section 2.2 Lists of Holders of Securities .............................. 10
Section 2.3 Reports by the Property Trustee ............................. 10
Section 2.4 Periodic Reports to the Property Trustee .................... 11
Section 2.5 Evidence of Compliance with Conditions Precedent ............ 11
Section 2.6 Trust Enforcement Events; Waiver ............................ 11
Section 2.7 Trust Enforcement Event; Notice ............................. 13
ARTICLE 3
ORGANIZATION............................. 13
Section 3.1 Name and Organization ....................................... 13
Section 3.2 Office ...................................................... 14
Section 3.3 Purpose ..................................................... 14
Section 3.4 Authority ................................................... 14
Section 3.5 Title to Property of the Trust .............................. 15
Section 3.6 Powers and Duties of the Regular Trustees ................... 15
Section 3.7 Prohibition of Actions by the Trust and the Trustees ........ 18
Section 3.8 Powers and Duties of the Property Trustee ................... 19
Section 3.9 Certain Duties and Responsibilities of the Property Trustee . 21
Section 3.10 Certain Rights of Property Trustee .......................... 23
Section 3.11 Delaware Trustee ............................................ 26
Section 3.12 Execution of Documents ...................................... 26
Section 3.13 Not Responsible for Recitals or Issuance of Securities ...... 26
Section 3.14 Duration of Trust ........................................... 26
Section 3.15 Mergers ..................................................... 26
Section 3.16 Property Trustee May File Proofs of Claim ................... 28
ARTICLE 4
SPONSOR............................... 29
Section 4.1 Responsibilities of the Sponsor ............................. 29
Section 4.2 Compensation, Indemnification and Expenses of the Trustee ... 30
ARTICLE 5
TRUST COMMON SECURITIES HOLDER.................... 30
Section 5.1 Debenture Issuer's Purchase of Common Securities ............ 30
Section 5.2 Covenants of the Common Securities Holder ................... 30
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Page
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ARTICLE 6
DELAWARE TRUSTEES.......................... 31
Section 6.1 Number of Trustees .......................................... 31
Section 6.2 Delaware Trustee ............................................ 31
Section 6.3 Property Trustee; Eligibility ............................... 32
Section 6.4 Qualifications of Regular Trustees and Delaware Trustee
Generally ................................................. 32
Section 6.5 Initial Trustees ............................................ 33
Section 6.6 Appointment, Removal and Resignation of Trustees ............ 33
Section 6.7 Vacancies among Trustees .................................... 34
Section 6.8 Effect of Vacancies ......................................... 34
Section 6.9 Meetings .................................................... 35
Section 6.10 Delegation of Power ......................................... 35
Section 6.11 Merger, Conversion, Consolidation or Succession to Business . 35
ARTICLE 7
THE SECURITIES............................ 36
Section 7.1 General Provisions Regarding Securities ..................... 36
Section 7.2 Distributions ............................................... 38
Section 7.3 Redemption of Securities .................................... 39
Section 7.4 Redemption Procedures ....................................... 39
Section 7.5 Voting Rights of Capital Securities ......................... 41
Section 7.6 Voting Rights of Common Securities .......................... 43
Section 7.7 Paying Agent ................................................ 44
Section 7.8 Transfer of Securities ...................................... 45
Section 7.9 Mutilated, Destroyed, Lost or Stolen Certificates ........... 46
Section 7.10 Deemed Security Holders ..................................... 46
Section 7.11 Global Securities ........................................... 46
Section 7.12 Restrictive Legend .......................................... 49
Section 7.13 Special Transfer Provisions ................................. 51
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST................. 54
Section 8.1 Dissolution and Termination of Trust ........................ 54
Section 8.2 Liquidation Distribution Upon Termination and Dissolution
of the Trust ............................................. 55
ARTICLE 9
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS.............. 56
Section 9.1 Liability ................................................... 56
Section 9.2 Exculpation ................................................. 56
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Page
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Section 9.3 Fiduciary Duty .............................................. 57
Section 9.4 Indemnification ............................................. 58
Section 9.5 Outside Businesses .......................................... 60
ARTICLE 10
ACCOUNTING.............................. 60
Section 10.1 Fiscal Year ................................................. 60
Section 10.2 Certain Accounting Matters .................................. 61
Section 10.3 Banking ..................................................... 61
Section 10.4 Withholding ................................................. 61
ARTICLE 11
AMENDMENTS AND MEETINGS....................... 62
Section 11.1 Amendments .................................................. 62
Section 11.2 Meetings of the Holders of Securities; Action by
Written Consent .......................................... 64
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE......................... 66
Section 12.1 Representations and Warranties of the Property Trustee ...... 66
Section 12.2 Representations and Warranties of the Delaware Trustee ...... 67
ARTICLE 13
MISCELLANEOUS............................ 67
Section 13.1 Notices ..................................................... 67
Section 13.2 Governing Law ............................................... 68
Section 13.3 Intention of the Parties .................................... 68
Section 13.4 Headings .................................................... 68
Section 13.5 Successors and Assigns ...................................... 69
Section 13.6 Partial Enforceability ...................................... 69
Section 13.7 Counterparts ................................................ 69
Section 13.8 Undertaking for Costs ....................................... 69
v
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated as of
February 25, 1997 between The CIT Group Holdings, Inc., a Delaware corporation,
as Sponsor, and Albert R. Gamper, Jr., Joseph M. Leone and Corinne M. Taylor as
the initial Regular Trustees, THE BANK OF NEW YORK, as the initial Property
Trustee and THE BANK OF NEW YORK (DELAWARE) as the initial Delaware Trustee, not
in their individual capacities but solely as Trustees, and the holders, from
time to time, of undivided beneficial ownership interests in the assets of the
Trust to be issued pursuant to this Declaration.
WHEREAS, the Trustees and the Sponsor established CIT Capital Trust I (the
"Trust"), a business trust under the Business Trust Act (as defined, together
with other capitalized terms, herein) pursuant to a Declaration of Trust dated
as of February 20, 1997 (the "Original Declaration") and a Certificate of Trust
(the "Certificate of Trust") filed with the Secretary of State of the State of
Delaware on February 20, 1997; and
WHEREAS, the sole purpose of the Trust shall be to issue and sell certain
securities representing undivided beneficial ownership interests in the assets
of the Trust, to invest the proceeds from such sales in the Debentures issued by
the Debenture Issuer and to engage in only those activities necessary or
incidental thereto; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Act, the Trustees hereby
declare that all assets contributed to the Trust be held in trust for the
benefit of the Holders, from time to time, of the Securities representing
undivided beneficial ownership interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
Section 1.1 Interpretation and Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE>
2
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections are to
Articles and Sections of this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa and a
reference to any masculine form of a term shall include the feminine form of a
term, as applicable.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means the Chairman of the Board, a Vice
Chairman of the Board, the Chief Executive Officer, the President, a Vice
President, the principal financial officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in The City of New York are authorized or required by
law or executive order to remain closed or a day on which the Corporate Trust
Office of the Property Trustee is closed for business.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Capital Security" has the meaning specified in Section 7.1.
"Capital Security Certificate" means a certificate representing a Capital
Security.
"Cedel" means Cedel, S.A.
"Certificate" means a Common Security Certificate or a Capital Security
Certificate.
"Certificate of Trust" has the meaning specified in the recitals hereto.
"Closing Date" means the date on which the Capital Securities are issued
and sold.
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3
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section of the
Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities Holder" means The CIT Group Holdings, Inc. in its
capacity as purchaser and holder of all of the Common Securities issued by the
Trust.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security.
"Corporate Trust Office" means the office of the Property Trustee at which
the corporate trust business of the Property Trustee shall, at any particular
time, be principally administered, which office at the date of execution of this
Declaration is located at 101 Barclay Street, Floor 21 West, New York, New York
10286; Attention: Corporate Trust Administration.
"Covered Person" means (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means The CIT Group Holdings, Inc. in its capacity as
issuer of the Debentures under the Indenture.
"Debenture Issuer Indemnified Person" means (a) any Regular Trustee; (b)
any Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee
or any Affiliate thereof; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Debenture Trustee" means The Bank of New York, in its capacity as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means the Securities (as defined in the Indenture) to be
issued by the Debenture Issuer and to be held by the Property Trustee.
"Delaware Trustee" has the meaning set forth in Section 6.2.
<PAGE>
4
"Depositary" means, with respect to Securities issuable in whole or in part
in the form of one or more Global Securities, a clearing agency registered under
the Exchange Act that is designated to act as Depositary for such Securities.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 7.2.
"DTC" means The Depository Trust Company, the initial Depositary.
"DWAC" means Deposit and Withdrawal At Custodian Service.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Fiduciary Indemnified Person" has the meaning set forth in Section 9.4(b).
"Fiscal Year" has the meaning set forth in Section 10.1.
"Global Security" has the meaning set forth in Section 7.11.
"Guarantee" means the guarantee agreement of the Sponsor in respect of the
Capital Securities and the Common Securities.
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act; provided, however, that in determining whether the Holders
of the requisite liquidation amount of Capital Securities have voted on any
matter provided for in this Declaration, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Capital
Securities remain in the form of one or more Global Securities, the term
"Holders" shall mean the holder of the Global Security acting at the direction
of the Capital Security Beneficial Owners.
"Indemnified Person" means a Debenture Issuer Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of February 25, 1997, among the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
<PAGE>
5
"Indenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Initial Purchasers" means Lehman Brothers Inc., Chase Securities Inc.,
Salomon Brothers Inc and UBS Securities LLC.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as the term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Investment Company" means an investment company as defined in the
Investment Company Act and the regulations promulgated thereunder.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" means the receipt by the Trust of an opinion of
counsel, rendered by a law firm having a recognized national securities
practice, to the effect that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), the Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act,
which Change in 1940 Act Law becomes effective on or after the Closing Date.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidation" has the meaning set forth in Section 8.2(a).
"Liquidation Distribution" has the meaning set forth in Section 8.2(a).
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount" means, except as provided in the terms of
the Capital Securities or by the Trust Indenture Act, Holder(s) of outstanding
Securities, voting together as a single class, or, as the context may require,
Holders of outstanding Capital Securities or Holders of outstanding Common
Securities, voting separately as a class, who are the record owners of more than
50% of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"New Capital Securities" has the meaning specified in Section 7.1.
"New Capital Security Certificate" has the meaning specified in Section
7.1.
<PAGE>
6
"Officers' Certificate" means, with respect to any Person (other than
Regular Trustees who are natural persons), a certificate signed by two
Authorized Officers of such Person on behalf of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer on behalf of such Person in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer and on
behalf of such Person, such condition or covenant has been complied with;
provided, that the term "Officers' Certificate", when used with reference to
Regular Trustees who are natural persons shall mean a certificate signed by two
of the Regular Trustees which otherwise satisfies the foregoing requirements.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 7.2(a).
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"Private Placement Legend" has the meaning specified in Section 314 of the
Indenture.
"Property Account" has the meaning specified in Section 3.8(c).
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 6.3.
"Pro Rata" means pro rata to each Holder of Securities according to the
aggregate liquidation amount of the Securities held by the relevant Holder in
relation to the aggregate liquidation amount of all Securities outstanding.
"Qualified Institutional Buyer" or "QIB" has the meaning specified in Rule
144A under the Securities Act.
<PAGE>
7
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Redemption Price" has the meaning specified in Section 7.3(a).
"Registration Rights Agreement" means the Registration Rights Agreement
dated the date hereof between the Debenture Issuer, the Trust and the Initial
Purchasers for the benefit of themselves and the Holders as the same may be
amended from time to time in accordance with the terms thereof.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Regulation S" means Regulation S under the Securities Act and any
successor regulation thereto.
"Regulation S Global Security" means any Global Security or Securities
evidencing Securities that are to be traded pursuant to Regulation S.
"Regulatory Capital Event" means that the Debenture Issuer shall have
received an opinion of independent bank regulatory counsel experienced in such
matters to the effect that, as a result of (a) any amendment to or change
(including any announced prospective change) in the laws (or any regulations
thereunder) of the United States or any rules, guidelines or policies of the
Federal Reserve applicable to bank holding companies or (b) any official
administrative pronouncement or judicial decision for interpreting or applying
such laws or regulations which amendment or change is effective or such
pronouncement or decision is announced on or after the date of original issuance
of the Capital Securities, the Capital Securities would not constitute, or
within 90 days of the date thereof, would not constitute Tier I capital (or its
then equivalent) of a bank holding company; provided, however, that the
distribution of the Securities in connection with the liquidation of the Trust
by the Debenture Issuer shall not in and of itself constitute a Regulatory
Capital Event unless such liquidation shall have occurred in connection with a
Tax Event or an Investment Company Event. For purposes of determining whether a
Regulatory Capital Event has occurred, the opinion of independent bank
regulatory counsel shall treat the Company as if it is a bank holding company
subject to the laws and regulations of the United States, any rules, guidelines
and policies of the Federal Reserve, and any administrative pronouncements and
judicial decisions applicable to bank holding companies.
"Related Party" means, with respect to the Sponsor, any direct or wholly
owned subsidiary of the Sponsor or any Person that owns, directly or indirectly,
100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee, including any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily
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8
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Restricted Global Security" means any Global Security or Securities
evidencing Securities that are to be traded pursuant to Rule 144A.
"Restricted Period" shall have the meaning specified in Section 7.13(g).
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) of the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Special Event" means a Tax Event, a Regulatory Capital Event or an
Investment Company Event.
"Sponsor" means The CIT Group Holdings, Inc., a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified in Section 6.6(b).
"Successor Entity" has the meaning specified in Section 3.15(b)(i).
"Successor Property Trustee" has the meaning specified in Section 6.6(b).
"Successor Security" has the meaning specified in Section 3.15(b)(i)b.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" means the receipt by the Debenture Issuer of an opinion of
counsel, rendered by a law firm having a national tax practice, to the effect
that, as a result of any amendment to, change in or announced proposed change in
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is adopted or
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9
which proposed change, pronouncement or decision is announced on or after the
Closing Date, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date of such opinion, subject to the United States
Federal income tax with respect to income received or accrued on the Debentures,
(ii) interest payable by the Debenture Issuer on such Debentures is not, or
within 90 days of the date of such opinion will not be, deductible by the
Debenture Issuer, in whole or in part, for United States Federal income tax
purposes, or (iii) the Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimus amount of other taxes, duties or
other governmental charges.
"10% in Liquidation Amount" means, except as provided in the terms of the
Capital Securities or by the Trust Indenture Act, Holder(s) of outstanding
Securities, voting together as a single class, or, as the context may require,
Holders of outstanding Capital Securities or Holders of outstanding Common
Securities, voting separately as a class, who are the record owners of 10% or
more of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Transfer Restricted Securities" has the meaning specified in Section 7.1.
"Transfer Restricted Securities Certificate" has the meaning specified in
Section 7.1.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Enforcement Event" in respect of the Securities means an Indenture
Event of Default has occurred and is continuing in respect of the Debentures.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trustees' Authorization Certificate" means a written certificate signed by
two of the Regular Trustees for the purpose of establishing the terms and form
of the Capital Securities and the Common Securities as determined by the Regular
Trustees.
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10
ARTICLE 2
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration conflicts
with the duties imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the Trust's classification as a grantor trust for United States
Federal income tax purposes and shall not affect the nature of the Securities as
equity securities representing undivided beneficial ownership interests in the
assets of the Trust.
Section 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee with a list (unless the Property Trustee is
Registrar for the Securities), in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders of the Securities
("List of Holders"), (i) not later than January 31 and July 31 of each year and
current as of such date, and (ii) at any other time, within 30 days of receipt
by the Trust of a written request from the Property Trustee for a List of
Holders as of a date no more than 15 days before such List of Holders is given
to the Property Trustee; provided that neither the Sponsor nor the Regular
Trustees on behalf of the Trust shall be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity), provided that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under, and shall
be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the Trust
Indenture Act.
Section 2.3 Reports by the Property Trustee.
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11
Within 60 days after May 15 of each year (commencing in the year of the
first anniversary of the issuance of the Capital Securities), the Property
Trustee shall provide to the Holders of the Capital Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
Section 2.4 Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
Section 2.6 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the Capital
Securities may, by vote or written consent, on behalf of the Holders of all of
the Capital Securities, waive any past Trust Enforcement Event in respect of the
Capital Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, the Trust Enforcement Event under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in principal
amount of the holders of the Debentures (a "Super Majority") to be
waived under the Indenture, the Trust Enforcement Event under the
Declaration may only be waived by the vote or written consent of the
Holders of at least the proportion in liquidation amount of the
Capital Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Trust Enforcement Event with respect to
the Capital Securities arising therefrom shall be deemed to
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12
have been cured, for every purpose of this Declaration and the Capital
Securities, but no such waiver shall extend to any subsequent or other Trust
Enforcement Event with respect to the Capital Securities or impair any right
consequent thereon. Any waiver by the Holders of the Capital Securities of a
Trust Enforcement Event with respect to the Capital Securities shall also be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Trust Enforcement Event with respect to the Common Securities for all
purposes of this Declaration without any further act, vote, or consent of the
Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the Common
Securities may, by vote or written consent, on behalf of the Holders of all of
the Common Securities, waive any past Trust Enforcement Event in respect of the
Common Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Trust
Enforcement Event under the Declaration as provided below in this
Section 2.6(b), the Trust Enforcement Event under the Declaration
shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived
under the Indenture, except where the Holders of the Common
Securities are deemed to have waived such Trust Enforcement Event
under the Declaration as provided below in this Section 2.6(b),
the Trust Enforcement Event under the Declaration may only be
waived by the vote or written consent of the Holders of at least
the proportion in liquidation amount of the Common Securities that
the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any Trust Enforcement Event and all Trust Enforcement Events with respect to the
Common Securities and the consequences thereof until all Trust Enforcement
Events with respect to the Capital Securities have been cured, waived or
otherwise eliminated, and until such Trust Enforcement Events with respect to
the Capital Securities have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6
(b), upon such waiver, any such default shall cease to exist and any Trust
Enforcement Event with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to
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13
any subsequent or other Trust Enforcement Event with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Indenture Event of Default by the Property Trustee at
the direction of the Holders of the Capital Securities constitutes a waiver of
the corresponding Trust Enforcement Event with respect to the Capital Securities
under this Declaration. The foregoing provisions of this Section 2.6(c) shall be
in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.
Section 2.7 Trust Enforcement Event; Notice.
(a) The Property Trustee shall, within 90 days after the occurrence of a
Trust Enforcement Event, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Indenture Event of Default, not including any periods of grace provided for
therein and irrespective of the giving of any notice provided therein); provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Property
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 501(1) and 501(2) of the Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or of which a Responsible Officer of the Property
Trustee charged with the administration of this Declaration shall
have actual knowledge.
ARTICLE 3
ORGANIZATION
Section 3.1 Name and Organization.
The Trust hereby continued is named "CIT Capital Trust I" as such name may
be modified from time to time by the Regular Trustees following written notice
to the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
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14
Section 3.2 Office.
The address of the principal executive office of the Trust is c/o The CIT
Group Holdings, Inc., Attn: Chief Financial Officer, 1211 Avenue of the
Americas, New York, New York 10036. On 10 Business Days' written notice to the
Holders of Securities and the Property Trustee, the Regular Trustees may
designate another principal office.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the gross proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, mortgage, pledge any
of its assets or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified as a grantor trust for United
States Federal income tax purposes.
By the acceptance of this Trust, none of the Trustees, the Sponsor, the
Holders of the Capital Securities or Common Securities or the Capital Securities
Beneficial Owners will take any position for United States Federal income tax
purposes which is contrary to the classification of the Trust as a grantor
trust.
Section 3.4 Authority.
Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Regular Trustees shall have exclusive
authority to carry out the purposes of the Trust. An action taken by the Regular
Trustees in accordance with their powers shall constitute the act of and serve
to bind the Trust and an action taken by the Property Trustee on behalf of the
Trust in accordance with its powers shall constitute the act of and serve to
bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no
person shall be required to inquire into the authority of the Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Trustees as set forth in this Declaration.
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6(b), provided, that the registration statements referred
to in Section 3.6(b)(i), including any amendments thereto, shall be signed by or
on behalf of a majority of the Regular Trustees; and
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15
(c) a Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of signing any documents which the Regular Trustees have power
and authority to cause the Trust to execute pursuant to Section 3.6.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Property Account or as otherwise provided in this Declaration, legal title to
all assets of the Trust shall be vested in the Trust. The Holders shall not have
legal title to any part of the assets of the Trust, but shall have an undivided
beneficial ownership interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) to establish the terms and form of the Capital Securities and the
Common Securities in the manner specified in Section 7.1 and issue and sell the
Capital Securities and the Common Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than two series
of Capital Securities (which will consist exclusively of the Transfer Restricted
Securities and the New Capital Securities) and no more than one series of Common
Securities, and, provided further, that there shall be no interests in the Trust
other than the Securities, and the issuance of Securities shall be limited to a
one-time, simultaneous issuance of both Transfer Restricted Securities and
Common Securities on the Closing Date and a one-time issuance of New Capital
Securities pursuant to an exchange offer required pursuant to the Registration
Rights Agreement;
(b) in connection with the issue and sale of the Capital Securities, at the
direction of the Sponsor, to:
(i) execute and file with the Commission one or more registration
statements on the applicable forms prepared by the Sponsor,
including any amendments thereto, pertaining to the Capital
Securities, the Guarantee and the Debentures;
(ii) if deemed necessary or desirable by the Sponsor, execute and file
an application, prepared by the Sponsor, to the New York Stock
Exchange, Inc. or any other national stock exchange or the Nasdaq
National Market for listing of any Capital Securities, the
Guarantee and the Debentures;
(iii) if deemed necessary or desirable by the Sponsor, execute and file
with the Commission a registration statement on Form 8-A,
including any amendments thereto, prepared by the Sponsor,
relating to the
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16
registration of the Capital Securities, the Guarantee and the
Debentures under Section 12(b) of the Exchange Act;
(iv) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary, in order to
qualify or register all or part of the Capital Securities in any
State in which the Sponsor has determined to qualify or register
such Capital Securities for sale;
(v) execute and enter into a purchase agreement and other related
agreements providing for the sale of the Capital Securities to the
Initial Purchasers; and
(vi) execute and enter into the Registration Rights Agreement.
(c) to acquire the Debentures with the proceeds of the sale of the Capital
Securities and the Common Securities; provided, however, that the Regular
Trustees shall cause legal title to the Debentures to be held of record in the
name of the Property Trustee for the benefit of the Holders of the Capital
Securities and the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining
from taking any action in relation to any such Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Capital Securities and Holders of Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of this Agreement and the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants to conduct only those services that the Regular Trustees have
authority to conduct directly, and to pay reasonable compensation for such
services;
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(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out any of
the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debenture Issuer of its election to defer payments of
interest on the Debentures by extending the interest payment period under the
Debentures as authorized by the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Capital
Securities and the Holders of the Common Securities or to enable the Trust to
effect the purposes for which the Trust was created;
(o) to take any action, not inconsistent with applicable law, that the
Regular Trustees determine in their discretion to be necessary or desirable in
carrying out the purposes and functions of the Trust as set out in Section 3.3
or the activities of the Trust as set out in this Section 3.6, including, but
not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified as a grantor trust for United
States Federal income tax purposes; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States Federal income tax purposes.
(p) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust;
and
(q) to execute all documents or instruments, perform all duties and powers,
and do all things for and on behalf of the Trust in all matters necessary or
incidental to the foregoing.
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The Regular Trustees shall exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall have no power to, and
shall not, take any action that is inconsistent with the purposes and functions
of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Debenture Issuer.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property Trustee)
shall cause the Trust not to, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than the Debentures (and any interest or
proceeds received thereon);
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets;
(vi) possess any power or otherwise act in such a way as to vary the
terms of the Securities in any way whatsoever (except to the
extent expressly authorized in this Declaration or by the terms of
the Securities);
(vii) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the
Securities; or
(viii) other than as provided in this Declaration or by the terms of the
Securities, (A) direct the time, method and place of exercising
any trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past default that is
waivable under the Indenture, (C) exercise any right to rescind or
annul any declaration that the principal of all the Debentures
shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture
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19
or the Debentures where such consent shall be required unless, in
each case, the Trust shall have received (A) the prior approval of
the Majority in Liquidation Amount of the Capital Securities;
provided, however, that where a consent or action under the
Indenture would require the consent or act of the holders of more
than a majority of the aggregate liquidation amount of Debentures
affected thereby, only the Holders of the percentage of the
aggregate stated liquidation amount of the Capital Securities
which is at least equal to the percentage required under the
Indenture may direct the Property Trustee to give such consent or
to take such action and (B) an opinion of counsel to the effect
that such modification will not cause more than an insubstantial
risk that the Trust will be deemed an Investment Company required
to be registered under the Investment Company Act, or the Trust
will not be classified as a grantor trust for United States
Federal income tax purposes; or
(ix) take any action inconsistent with the status of the Trust as a
grantor trust for United States Federal income tax purposes; or
(x) revoke any action previously authorized or approved by a vote of
the Holders of the Capital Securities except pursuant to a
subsequent vote of the Holders of the Capital Securities.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Property Trustee in trust for the benefit of the Trust and
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 6.6. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or to the Delaware Trustee (if the
Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders
of the Securities and, upon the receipt of payments of funds made
in respect of the Debentures held by the Property Trustee, deposit
such funds into the Property Account and make payments to the
Holders of the Capital Securities and Holders of the Common
Securities from the Property Account in accordance with Section
7.2. Funds in the Property Account
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20
shall be held uninvested until disbursed in accordance with this
Declaration. The Property Account shall be an account that is
maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating
assigned to the Capital Securities by a "nationally recognized
statistical rating organization", as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Capital Securities and
the Common Securities to the extent the Debentures are redeemed or
mature; and
(iii) upon written notice of distribution issued by the Regular Trustees
in accordance with the terms of the Securities, engage in such
ministerial activities as so directed and as shall be necessary or
appropriate to effect the distribution of the Debentures to
Holders of Securities upon the occurrence of a Special Event.
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
this Agreement and the Securities.
(e) The Property Trustee shall take any Legal Action which arises out of or
in connection with a Trust Enforcement Event of which a Responsible Officer of
the Property Trustee has actual knowledge or the Property Trustee's duties and
obligations under this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall continue to serve as a Trustee until either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to
the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 6.6.
(g) Subject to such limitations as are necessary to insure compliance with
Section 3.3, the Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if a Trust Enforcement Event actually known to a Responsible Officer of the
Property Trustee occurs and is continuing, the Property Trustee shall, for the
benefit of Holders of the Securities, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of such
Securities.
(h) The Property Trustee may authorize one or more Persons (each, a "Paying
Agent") to pay Distributions, redemption payments or liquidation payments on
behalf of the
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21
Trust with respect to all Securities and any such Paying Agent shall comply with
Section 317(b) of the Trust Indenture Act. Any Paying Agent may be removed by
the Property Trustee at any time and a successor Paying Agent or additional
Paying Agents may be appointed at any time by the Property Trustee. In the event
the Capital Securities do not remain in the form of one or more Global
Securities, the Property Trustee will act as Paying Agent and may designate an
additional or substitute Paying Agent at any time.
(i) Subject to this Section 3.8, the Property Trustee shall have none of
the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee shall exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall have no power to, and
shall not, take any action that is inconsistent with the purposes and functions
of the Trust set out in Section 3.3.
Section 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Trust Enforcement
Event and after the curing of all Trust Enforcement Events that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants shall be read into this
Declaration against the Property Trustee. In case a Trust Enforcement Event has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Property Trustee has actual knowledge, the Property
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and after the
curing or waiving of all such Trust Enforcement Events that may
have occurred:
a. the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this
Declaration and the Property Trustee shall not be liable
except for the performance of such duties and obligations
as are specifically set forth in this Declaration, and no
implied covenants or obligations shall be read into this
Declaration against the Property Trustee; and
b. in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein,
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22
upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Property Trustee, the
Property Trustee shall be under a duty to examine the same
to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it without negligence, in
good faith in accordance with the direction of the Holders of not
less than a Majority in Liquidation Amount of the Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee
under this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it under the
terms of this Declaration or indemnity reasonably satisfactory to
the Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safe-keeping and physical preservation of the Debentures and the
Property Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its
own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Declaration
and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the
Sponsor. Money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Property
Account maintained
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23
by the Property Trustee pursuant to Section 3.8(c)(i) and except
to the extent otherwise required by law;
(viii) the Property Trustee shall not be responsible for monitoring the
compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Property
Trustee be liable for any default or misconduct of the Regular
Trustees or the Sponsor; and
(ix) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law.
The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing
with the Debenture Issuer.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced
by an Officers' Certificate (or, with respect to the establishment
of the terms and form of the Securities by the Regular Trustees,
by a Trustees' Authorization Certificate);
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered
by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing
or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its choice or
other experts and the advice or opinion of such counsel and
experts with
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24
respect to legal matters or advice within the scope of such
experts' area of expertise 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
accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include
any of its employees. The Property Trustee shall have the right at
any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the
request or direction of any Holder, unless such Holder shall have
provided to the Property Trustee security and indemnity,
reasonably satisfactory to the Property Trustee, against the
costs, expenses (including attorneys fees and expenses and the
expenses of the Property Trustee's agents, nominees or custodians)
and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as
may be requested by the Property Trustee; provided that, nothing
contained in this Section 3.10(a) shall be taken to relieve the
Property Trustee, upon the occurrence of an Indenture Event of
Default, of its obligation to exercise the rights and powers
vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Property
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Property
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;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third
party shall be required to inquire as to the authority of the
Property Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's
taking such action;
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25
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other
action hereunder, the Property Trustee (i) may request
instructions from the Holders of the Securities, the Regular
Trustees or the Sponsor which instructions may only be given by
the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Property Trustee
under the terms of the Securities in respect of such remedy, right
or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions;
(xi) If no Trust Enforcement Event has occurred and is continuing and
the Property Trustee is required to decide between alternative
causes of action, construe ambiguous provisions in this
Declaration or is unsure of the application of any provision of
this Declaration, and the matter is not one on which Holders of
Capital Securities are entitled under the Declaration to vote,
then the Property Trustee may, but shall be under no duty to, take
such action as is directed by the Sponsor and, if not so directed,
shall take such action as it deems advisable and in the best
interests of the Holders of the Securities and will have no
liability except for its own bad faith, negligence or willful
misconduct;
(xii) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this
Declaration; and
(xiii) the Property Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it without negligence, in good
faith and reasonably believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this
Declaration.
(xiv) The Property Trustee shall have a lien prior to the Securities as
to all property and funds held by it hereunder for any amount
owing it or any predecessor Property Trustee, except with respect
to funds held in trust for the benefit of the Holders of
Securities.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
<PAGE>
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section
6.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees or the Property Trustee described in this Declaration. Except
as set forth in Section 6.2, the Delaware Trustee shall be a Trustee for the
sole and limited purpose of fulfilling the requirements of Section 3807 of the
Business Trust Act.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents that the Regular Trustees have
the power and authority to execute pursuant to Section 3.6.
Section 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration, the Securities, the Debentures or the Indenture.
Section 3.14 Duration of Trust.
The Trust shall exist until terminated pursuant to the provisions of
Article 8 hereof.
Section 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor, with the consent of the
Regular Trustees or, if there are more than two, a majority of the Regular
Trustees and without the consent of the Holders of the Securities, the Delaware
Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, or
be replaced by or convey, transfer or lease its properties substantially as an
entirety to a trust organized as such under the laws of any State; provided
that:
(i) if the Trust is not the successor, such successor entity (the
"Successor Entity") either:
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27
a. expressly assumes all of the obligations of the Trust under
the Securities; or
b. substitutes for the Capital Securities other securities
having substantially the same terms as the Capital
Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Capital
Securities rank with respect to Distributions and payments
upon liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of such Successor Entity
that possesses the same powers and duties as the Property Trustee
as the holder of the Debentures;
(iii) the Capital Securities or any Successor Securities are listed, or
any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with any other or
organization on which the Capital Securities are then listed or
quoted;
(iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Capital Securities (including
any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Capital
Securities (including any Successor Securities) in any material
respect;
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease the Sponsor has received an opinion
of independent counsel to the Trust experienced in such matters to
the effect that:
a. such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the
Capital Securities (including any Successor Securities) in
any material respect;
b. following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease neither the
Trust nor the Successor Entity will be required to register
as an Investment Company; and
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28
c. following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will
continue to be classified as a grantor trust for United
States Federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns all of the
Common Securities and guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent
provided by the Guarantee; and
(ix) such Successor Entity expressly assumes all of the obligations of
the Trust with respect to the Trustees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States Federal income tax purposes and each Holder of the Securities not to be
treated as owning an undivided interest in the Debentures.
Section 3.16 Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation amount as
may be specified in the terms of such Securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, and its counsel) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
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29
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement adjustment or compensation affecting the
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
ARTICLE 4
SPONSOR
Section 4.1 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission one or more
registration statements on the applicable forms, including any amendments
thereto, pertaining to the Capital Securities, the Guarantee and the Debentures;
(b) to determine the States in which to take appropriate action to qualify
or register for sale all or part of the Capital Securities and to do any and all
such acts, other than actions which must be taken by the Trust, and advise the
Trust of actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor deems necessary
or advisable in order to comply with the applicable laws of any such States;
(c) to prepare any filing by the Trust of an application to the New York
Stock Exchange, Inc. or any other national stock exchange or the Nasdaq National
Market for listing, if such filing is determined to be necessary or desirable by
the Sponsor;
(d) to prepare any filing by the Trust with the Commission of a
registration statement on Form 8-A, including any amendments thereto, if such
filing is determined to be necessary or desirable by the Sponsor;
(e) to negotiate the terms of a purchase agreement and other related
agreements providing for the sale of the Capital Securities to the Initial
Purchasers; and
(f) to negotiate the terms of the Registration Rights Agreement.
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30
Section 4.2 Compensation, Indemnification and Expenses of the Trustee.
The Sponsor, in its capacity as Debenture issuer, agrees:
(1) to pay to the Trustee from time to time such compensation as
the Debenture Issuer and the Trustee shall from time to time agree in
writing 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 compensation and the expenses
and disbursements of its agent and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Property Trustee and the Delaware Trustee and
their authorized agents for, and to hold each of them harmless against,
any loss, liability or expense including taxes (other than taxes based
upon, measured by or determined by the income of any Trustee) incurred
without negligence or bad faith on the part of the Property Trustee, the
Delaware Trustee or their respective authorized agents, as the case may
be, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses of
defending any of them against any claim or liability in connection with
the exercise or performance of any of their respective powers or duties
hereunder; the provisions of this Section 4.2 shall survive the
resignation or removal of the Delaware Trustee or the Property Trustee or
the termination of this Declaration.
ARTICLE 5
TRUST COMMON SECURITIES HOLDER
Section 5.1 Debenture Issuer's Purchase of Common Securities.
On the Closing Date the Debenture Issuer will purchase all of the Common
Securities issued by the Trust, for an amount at least equal to 3% of the
capital of the Trust, at the same time as the Capital Securities are sold.
Section 5.2 Covenants of the Common Securities Holder.
For so long as the Capital Securities remain outstanding, the Common
Securities Holder will covenant (i) to maintain directly 100% ownership of the
Common Securities, (ii) to cause the Trust to remain a statutory business trust
and not to voluntarily dissolve, wind up, liquidate or be terminated, except as
permitted by this Declaration, (iii) to use its commercially reasonable efforts
to ensure that the Trust will not be an investment
<PAGE>
31
company for purposes of the Investment Company Act, and (iv) to take no action
which would be reasonably likely to cause the Trust to be classified as an
association or a publicly traded partnership taxable as a corporation for United
States Federal income tax purposes.
ARTICLE 6
DELAWARE TRUSTEES
Section 6.1 Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in Liquidation
Amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities or by written consent in lieu of such meeting; provided
that the number of Trustees shall be at least three; and provided further that
(1) the Delaware Trustee, in the case of a natural person, shall be a person who
is a resident of the State of Delaware or that, if not a natural person, is an
entity which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law; (2) at least one Regular
Trustee is an employee or officer of, or is affiliated with, the Sponsor; and
(3) one Trustee shall be the Property Trustee for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture Act, and such
Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
Section 6.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
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32
Section 6.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as Property
Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or other Person
permitted by the Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to
exercise corporate trust owners, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law
or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section
6.3(a)(ii), 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.
(b) If at any time the Property Trustee shall cease to be eligible to so
act under Section 6.3(a), the Property Trustee shall immediately resign in the
manner and with the effect set forth in Section 6.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Property
Trustee and the Holder of the Common Securities (as if it were the Obliger
referred to in Section 310(b) of the Trust Indenture Act) shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
(d) The Guarantee shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the first provision contained in
Section 310(b) of the Trust Indenture Act.
Section 6.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the Property Trustee
also acts as Delaware Trustee) shall be either a natural person who is at least
21 years of age or a legal entity that shall act through one or more Authorized
Officers.
<PAGE>
33
Section 6.5 Initial Trustees.
The initial Regular Trustees shall be:
Albert R. Gamper, Jr., Joseph M. Leone and Corinne M. Taylor, the business
address of all of whom is c/o The CIT Group Holdings, Inc., Attn: Chief
Financial Officer, 1211 Avenue of the Americas, New York, New York 10036.
Section 6.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 6.6(b), Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of a
Majority in Liquidation Amount of the Common Securities voting as
a class at a meeting of the Holders of the Common Securities.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 6.6(a) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 3.8(h) (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor. The Trustee that acts as Delaware Trustee
shall not be removed in accordance with Section 6.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 6.2 and
6.4 (a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his or its
successor shall have been appointed, until his death or its dissolution or until
his or its removal or resignation. Any Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing signed by
the Trustee and delivered to the Sponsor and the Trust, which resignation shall
take effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
a. until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by
such Successor Property Trustee and delivered to the Trust,
the Sponsor and the resigning Property Trustee; or
<PAGE>
34
b. until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the
holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has
been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Property Trustee, as
the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 6.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee, as the
case may be, shall have been appointed and accepted appointment as provided in
this Section 6.6 within 60 days after delivery to the Sponsor and the Trust of
an instrument of resignation or removal, the resigning or removed Property
Trustee or Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee, as applicable. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the acts or
omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
Section 6.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 6.1, or if the number of Trustees is
increased pursuant to Section 6.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 6.6.
Section 6.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 6.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
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Section 6.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular Trustees
shall be held from time to time upon the call of any Regular Trustee. Regular
meetings of the Regular Trustees may be held at a time and place fixed by
resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice
of such meeting except where a Regular Trustee attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Regular Trustees may be taken at a meeting
by vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees. In the event there is only one Regular Trustee, any and all
action of such Regular Trustee shall be evidenced by a written consent of such
Regular Trustee.
Section 6.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any natural person over the age of 21 his, her or
its power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing.
(b) The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
Section 6.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware Trustee, as
the case may be, may be merged or converted or with which either may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, 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.
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ARTICLE 7
THE SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue a class of
capital securities representing undivided beneficial ownership interests in the
assets of the Trust (the "Transfer Restricted Securities"), a class of capital
securities to be only issued in exchange for the Transfer Restricted Securities
(the "New Capital Securities," and together with the Transfer Restricted
Securities the "Capital Securities"), and one class of common securities
representing undivided beneficial ownership interests in the assets of the Trust
(the "Common Securities").
(i) Capital Securities. The Capital Securities of the Trust have an
aggregate liquidation amount with respect to the assets of the
Trust of $250,000,000 and a liquidation amount with respect to the
assets of the Trust of $1,000 per Capital Security. The New
Capital Security Certificates and the Transfer Restricted Capital
Certificates evidencing the Capital Securities shall be
substantially in the form of Exhibit A to the Declaration
provided, that the New Capital Security Certificate shall not
contain any of the provisions following the Trustee's
authentication, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom
or practice or to conform to the rules of any stock exchange on
which the Capital Securities are listed.
(ii) Common Securities. The Common Securities of the Trust have an
aggregate liquidation amount with respect to the assets of the
Trust of $257,732,000 and a liquidation amount with respect to the
assets of the Trust of $1,000 per Common Security. The Common
Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit B to the Declaration, with
such changes and additions thereto or deletions therefrom as may
be required by ordinary usage, custom or practice.
(b) Payment of distributions on, and amounts payable on redemption of, the
Capital Securities and the Common Securities, as applicable, shall be made Pro
Rata based on the liquidation amount of such Capital Securities and Common
Securities; provided, however, that if on any date on which amounts are payable
on distribution or redemption an Indenture Event of Default shall have occurred
and be continuing, then no payment of any distribution on, or Redemption Price
of, any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities, shall be
made unless payment in full in cash of all accumulated and unpaid distributions
on all of the outstanding Capital Securities for all distribution periods
terminating on or prior thereto, or in the case of amounts payable on redemption
the full amount of such redemption amounts on
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all of the outstanding Capital Securities then called for redemption, shall have
been made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all distributions on, or the
Redemption Price of, the Capital Securities then due and payable. The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Capital Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. Such signature shall be the manual or facsimile signature of any
present or any future Regular Trustee. In case a Regular Trustee of the Trust
who shall have signed any of the Certificates shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Certificate, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Securities may be listed, or to conform to usage.
A Certificate shall not be valid until authenticated by the manual
signature of an authorized officer of the Property Trustee. Such signature shall
be conclusive evidence that the Certificate has been authenticated under this
Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Certificates for original issue. The
aggregate number of Capital Securities outstanding at any time shall not exceed
the liquidation amount set forth in Section 7(a)(i).
The Property Trustee may appoint an authenticating agent acceptable to the
Trust to authenticate Certificates. An authenticating agent may authenticate
Certificates whenever the Property Trustee may do so. Each reference in this
Declaration to authentication by the Property Trustee includes authentication by
such agent. An authenticating agent has the same rights as the Property Trustee
to deal with the Sponsor or an Affiliate of the Sponsor.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
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(f) Every Person, by virtue of having become a Holder or a Capital Security
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by, this Declaration and the terms of the Securities, the Guarantee, the
Indenture and the Debentures.
(g) The Securities shall have no preemptive rights.
Section 7.2 Distributions.
(a) Holders of Securities shall be entitled to receive cumulative cash
distributions at the rate per annum of 7.70% of the stated liquidation amount of
$1,000 per Security, calculated on the basis of a 360-day year consisting of
twelve 30-day months. For any period shorter than a full 180-day semi-annual
period, distributions will be computed on the basis of the actual number of days
elapsed based on 30-day months. Subject to Section 7.1(b), distributions shall
be made on the Capital Securities and the Common Securities on a Pro Rata basis.
Distributions on the Securities shall, from the date of original issue, accrue
and be cumulative and shall be payable semi-annually only to the extent that the
Trust has funds available for the payment of such Distributions in the Property
Account. Distributions not paid on the scheduled payment date will accumulate
and compound semi-annually at the rate of 7.70% per annum, to the extent
permitted by applicable law, ("Compounded Distributions"). "Distributions" shall
mean ordinary cumulative distributions together with any Compounded
Distributions. If and to the extent that the Debenture Issuer makes a payment of
interest (including Additional Interest (as defined in the Indenture)), premium
and/or principal on the Debentures held by the Property Trustee (the amount of
any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a Pro Rata
distribution (a "Distribution") of the Payment Amount to Holders, subject to the
terms of Section 7.1(b).
(b) Distributions on the Securities will be cumulative, will accrue from
February 25, 1997 and will be payable semi-annually in arrears on each February
15 and August 15, commencing August 15, 1997, when, as and if available for
payment, by the Property Trustee, except as otherwise described below. If
Distributions are not paid when scheduled, the accrued Distributions shall be
paid to the Holders of record of Securities as they appear on the books and
records of the Trust on the record date as determined under Section 7.2(c).
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates, which relevant record date shall be the 1st of the month of the relevant
payment dates. In the event that any date on which distributions are payable on
the Securities is not a Business Day, payment of the distribution payable on
such date will be made on the next succeeding day which is a Business Day
(without any interest or other payment in respect of any such delay) with the
same force and effect as if made on such date.
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Section 7.3 Redemption of Securities.
(a) Upon the repayment or redemption, in whole or in part, of the
Debentures, the proceeds from such repayment or redemption shall be
simultaneously applied Pro Rata, (subject to Section 7.1(b)) to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed for an amount equal to
the redemption price paid by the Debenture Issuer in respect of such Debentures
plus an amount equal to accrued and unpaid Distributions thereon through the
date of the redemption or such lesser amount as shall be received by the Trust
in respect of the Debentures so repaid or redeemed (the "Redemption Price").
Holders will be given not less than 30 nor more than 60 days notice of such
redemption. The Property Trustee will be given not less than 30 days notice of
such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed, the
Common Securities and the Capital Securities will be redeemed Pro Rata and the
Capital Securities to be redeemed will be redeemed as described in Section 7.4
below.
(c) If, at any time, a Special Event shall occur and be continuing, the
Regular Trustees may elect to, unless the Debentures are redeemed, within 90
days following the occurrence of such Special Event, subject to the receipt of
any necessary approval by the Federal Reserve and the Ministry of Finance of
Japan, dissolve the Trust upon not less than 30 nor more than 60 days' notice
and, after satisfaction of creditors, if any, cause the Debentures to be
distributed to the holders of the Capital Securities in liquidation of the
Trust.
(d) On the date fixed for any distribution of Debentures, upon dissolution
of the Trust, (i) the Capital Securities and the Common Securities will no
longer be deemed to be outstanding and (ii) certificates representing Securities
will be deemed to represent the Debentures having an aggregate principal amount
equal to the stated liquidation amount of, and bearing accrued and unpaid
distributions equal to accrued and unpaid distributions on, such Securities
until such certificates are presented to the Sponsor or its agent for transfer
or reissuance.
Section 7.4 Redemption Procedures.
(a) Notice of any redemption of, or notice of distribution of Debentures in
exchange for, the Securities (a "Redemption/Distribution Notice") will be given
by the Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date fixed for
redemption of the Debentures. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to this
Section 7.4, a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to Holders
of Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the books
and records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with
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respect to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(b) If fewer than all the outstanding Securities are to be so redeemed, the
Common Securities and the Capital Securities will be redeemed Pro Rata and the
Capital Securities to be redeemed will be redeemed as described below. The Trust
may not redeem the Securities in part unless all accrued and unpaid interest has
been paid in full on all Securities then outstanding plus accrued but unpaid
interest to the date of redemption. For all purposes of this Declaration, unless
the context otherwise requires, all provisions relating to the redemption of
Capital Securities shall relate, in the case of any Capital Security redeemed or
to be redeemed only in part, to the portion of the aggregate liquidation amount
of Capital Securities which has been or is to be redeemed.
(c) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 7.4 (which notice will be
irrevocable), then (A) by 12:00 noon, New York City time, on the redemption
date, the Property Trustee, upon receipt of such funds, will deposit irrevocably
with the DTC (in the case of book-entry form Capital Securities) or its nominee
(or successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Capital Securities and will give
the DTC irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Capital Securities, and (B) with respect to Capital
Securities and Common Securities issued in definitive form, the Property Trustee
will pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books and
records of the Trust on the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, then immediately prior to
the close of business on the date of such deposit, distributions will cease to
accrue on the Securities so called for redemption and all rights of Holders of
such Securities will cease, except the right of the Holders of such Securities
to receive the Redemption Price, but without interest on such Redemption Price.
If any date fixed for redemption of Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the Property
Trustee or by the Sponsor as guarantor pursuant to the Guarantee, Distributions
on such Securities will continue to accrue at the then applicable rate from the
original redemption date to the actual date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price. For these purposes, the applicable Redemption
Price shall not include Distributions which are being paid to Holders who were
Holders on a relevant record date. Upon satisfaction of the foregoing
conditions, then immediately prior to the close of business on the date of such
deposit or payment, all rights of Holders of such Debentures so called for
redemption will cease, except the right of the Holders to receive the Redemption
Price, but
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without interest on such Redemption Price, and from and after the date fixed for
redemption, such Debentures will not accrue distributions or bear interest.
Neither the Regular Trustees nor the Trust shall be required to register or
cause to be registered the transfer or exchange of any Securities that have been
called for redemption, except in the case of any Securities being redeemed in
part, any portion thereof not to be redeemed.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States Federal securities laws), the Debenture Issuer or its
subsidiaries may at any time and from time to time purchase outstanding Capital
Securities by tender, in the open market or by private agreement.
Section 7.5 Voting Rights of Capital Securities.
(a) Except as provided under this Article VII and as otherwise required by
the Business Trust Act, the Trust Indenture Act and other applicable law, the
Holders of the Capital Securities will have no voting rights.
(b) Subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in Section 7.5(b) below, the Holders
of a Majority in liquidation amount of the Capital Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee, as Holder of the Debentures, to (i)
exercise the remedies available to it under the Indenture as a Holder of the
Debentures or (ii) consent to any amendment or modification of the Indenture or
the Debentures where such consent shall be required; provided, however, that
where a consent or action under the Indenture would require the consent or act
of the Holders of more than a majority of the aggregate liquidation amount of
Debentures affected thereby, only the Holders of the percentage of the aggregate
stated liquidation amount of the Capital Securities which is at least equal to
the percentage required under the Indenture may direct the Property Trustee to
give such consent to take such action.
(c) If the Property Trustee fails to enforce its rights under the
Debentures after a Holder of record of Capital Securities has made a written
request, such Holder of record of Capital Securities may, to the extent
permitted by applicable law, institute a legal proceeding directly against the
Debenture Issuer to enforce the Property Trustee's rights under the Indenture
without first instituting any legal proceeding against the Property Trustee or
any other person or entity. Notwithstanding the foregoing, if a Trust
Enforcement Event has occurred and is continuing and such event is attributable
to the failure of the Debenture Issuer to make any required payment when due
under the Indenture, then a Holder of Capital Securities may directly institute
a proceeding against the Debenture Issuer for enforcement of such payment under
the Indenture.
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(d) The Property Trustee shall notify all Holders of the Capital Securities
of any notice of any Indenture Event of Default received from the Debenture
Issuer with respect to the Debentures. Such notice shall state that such
Indenture Event of Default also constitutes a Trust Enforcement Event. Except
with respect to directing the time, method, and place of conducting a proceeding
for a remedy, the Property Trustee shall be under no obligation to take any of
the actions described in clause 7.5(b)(i) and (ii) above unless the Property
Trustee has obtained an opinion of independent tax counsel to the effect that as
a result of such action, the Trust will not fail to be classified as a grantor
trust for United States Federal income tax purposes and each Holder will be
treated as owning an undivided beneficial ownership interest in the Debentures.
(e) In the event the consent of the Property Trustee, as the Holder of the
Debentures, is required under the Indenture with respect to any amendment or
modification of the Indenture, the Property Trustee shall request the direction
of the Holders of the Securities with respect to such amendment or modification
and shall vote with respect to such amendment or modification as directed by a
Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the Holders of more than a majority of the aggregate principal
amount of the Debentures, the Property Trustee may only give such consent at the
direction of the Holders of at least the same proportion in aggregate stated
liquidation amount of the Securities. The Property Trustee shall not take any
such action in accordance with the directions of the Holders of the Securities
unless the Property Trustee has obtained an opinion of tax counsel to the effect
that, as a result of such action, the Trust will not be classified as other than
a grantor trust for United States Federal income tax purposes and each Holder
will be treated as owning an undivided beneficial ownership interest in the
Debentures.
(f) A waiver of an Indenture Event of Default with respect to the
Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
(g) Any required approval or direction of Holders of Capital Securities may
be given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Capital Securities. Each such notice will include a
statement setting forth the following information: (i) the date of such meeting
or the date by which such action is to be taken; (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents.
(h) No vote or consent of the Holders of Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or distribute
Debentures in accordance with the Declaration.
(i) Notwithstanding that Holders of Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Securities
that are owned
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at such time by the Debenture Issuer or any entity directly or indirectly
controlled by, or under direct or indirect common control with, the Debenture
Issuer, shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if such Securities were not outstanding,
provided, however that persons otherwise eligible to vote to whom the Debenture
Issuer or any of its subsidiaries have pledged Capital Securities may vote or
consent with respect to such pledged Capital Securities under any of the
circumstances described herein.
(j) Holders of the Capital Securities will have no rights to appoint or
remove the Trustees, who may be appointed, removed or replaced solely by the
Debenture Issuer, as the Holder of all of the Common Securities. If an Indenture
Event of Default has occurred and is continuing, the Property Trustee and the
Delaware Trustee may be removed at such time by a Majority in Liquidation Amount
of the Capital Securities.
Section 7.6 Voting Rights of Common Securities.
(a) Except as provided under Section 6.1(b) or this Section 7.6 or as
otherwise required by the Business Trust Act, the Trust Indenture Act or other
applicable law or provided by the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article 5 of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after all Trust
Enforcement Events with respect to the Capital Securities have been cured,
waived, or otherwise eliminated and subject to the requirement of the Property
Trustee obtaining a tax opinion in certain circumstances set forth in this
paragraph (c), the Holders of a Majority in liquidation amount of the Common
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or to direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as Holder of
the Debentures, to (i) exercise the remedies available to it under the Indenture
as a Holder of the Debentures, or (ii) consent to any amendment or modification
of the Indenture or the Debentures where such consent shall be required;
provided, however, that where a consent or action under the Indenture would
require the consent or act of the Holders of more than a majority of the
aggregate liquidation amount of Debentures affected thereby, only the Holders of
the percentage of the aggregate stated liquidation amount of the Common
Securities which is at least equal to the percentage required under the
Indenture may direct the Property Trustee to have such consent or take such
action. Except with respect to directing the time, method, and place of
conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clause 7.6(c)(i) and (ii)
above unless the Property Trustee has obtained an opinion of independent tax
counsel to the effect that, as a result of such action, for United States
Federal income tax purposes the Trust will not fail to
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be classified as a grantor trust and each Holder will be treated as owning an
undivided beneficial ownership interest in the Debentures.
(d) If the Property Trustee fails to enforce its rights under the
Debentures after a Holder of record of Common Securities has made a written
request, such Holder of record of Common Securities may, to the extent permitted
by applicable law, directly institute a legal proceeding directly against the
Debenture Issuer, as sponsor of the Trust, to enforce the Property Trustee's
rights under the Debentures without first instituting any legal proceeding
against the Property Trustee or any other person or entity.
(e) A waiver of an Indenture Event of Default with respect to the
Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
(f) Any required approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Trust Common Securities are entitled to vote, or of any matter on
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth the following information: (i) the date of such meeting
or the date by which such action is to be taken; (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents.
(g) No vote or consent of the holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
Debentures in accordance with the Declaration and the terms of the Securities.
Section 7.7 Paying Agent.
In the event that any Capital Securities are not in book-entry only form,
the Trust shall maintain in the Borough of Manhattan, City of New York, State of
New York, an office or agency where the Capital Securities may be presented for
payment ("Paying Agent"). The Trust may appoint the paying agent and may appoint
one or more additional paying agents in such other locations as it shall
determine. The term "Paying Agent" includes any additional paying agent. The
Trust may change any Paying Agent without prior notice to the Holders. The Trust
shall notify the Property Trustee of the name and address of any Paying Agent
not a party to this Declaration. If the Trust fails to appoint or maintain
another entity as Paying Agent, the Property Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent. The Bank of New York
shall initially act as Paying Agent for the Capital Securities and the Common
Securities. In the event the Property Trustee shall no longer be the Paying
Agent, the Regular Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Regular Trustees and the Debenture Issuer) to
act as Paying Agent. The Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Property Trustee and the Debenture
Issuer.
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Section 7.8 Transfer of Securities.
(a) The Trust shall cause to be kept at the Corporate Trust Office of the
Property Trustee a register (the register maintained in such office being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Trust shall provide for the
registration of Capital Securities and of transfers of Capital Securities. The
Property Trustee is hereby appointed "Security Registrar" for the purpose of
registering Capital Securities and transfers of Capital Securities as herein
provided.
(b) Upon surrender for registration of transfer of any Security at an
office or agency of the Trust designated for such purpose, the Trust shall
execute, and the Property Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denominations and of a like aggregate principal amount.
(c) At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Trust shall
execute, and the Property Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
(d) Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Trust or the Property Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Trust and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of transfer or
exchange of Securities, but the Trust 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.
(f) If the Securities are to be redeemed in part, the Trust shall not be
required (A) to issue, register the transfer of or exchange any Securities
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of any such Securities selected for
redemption under Section 7.4 and ending at the close of business on the day of
such mailing, or (B) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
(g) Each Holder of a Security agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable United States federal or state securities law.
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46
(h) The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Depositary
Participants or beneficial owners of interests in any Global Security) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
Section 7.9 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them, the Sponsor and the
Trust harmless, then, in the absence of notice that such Certificate shall have
been acquired by a bona fide purchaser, any Regular Trustee on behalf of the
Trust shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under this
Section 7.9, the Regular Trustees may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 7.10 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
Section 7.11 Global Securities.
If the Trust shall establish that the Capital Securities are to be issued
in the form of one or more Global Securities, then a Regular Trustee on behalf
of the Trust shall execute and the Property Trustee shall authenticate and
deliver one or more Global Securities that (i) shall represent and shall be
denominated in an amount equal to the aggregate liquidation amount of all of the
Capital Securities to be issued in the form of Global
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47
Securities and not yet cancelled, (ii) shall be registered in the name of the
Depositary for such Global Security or Capital Securities or the nominee of such
Depositary, and (iii) shall be delivered by the Property Trustee to such
Depositary or pursuant to such Depositary's instructions. Global Securities
shall bear a legend substantially to the following effect:
"This Capital Security is a Global Security within the meaning of the
Declaration hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. Notwithstanding the provisions of
Section 7.8 of the Declaration, unless and until it is exchanged in whole or in
part for Capital Securities in definitive registered form, a Global Security
representing all or a part of the Capital Securities may not be transferred in
the manner provided in Section 7.8 of the Declaration except as a whole by the
Depositary to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. Every Capital Security delivered upon registration of transfer of,
or in exchange for, or in lieu of, this Global Security shall be a Global
Security subject to the foregoing, except in the limited circumstances described
above. Unless this certificate is presented by an authorized representative of
DTC to the Trust or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is to be made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein."
Definitive Capital Securities issued in exchange for all or a part of a
Global Security pursuant to this Section 7.11 shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Property Trustee. Upon execution and authentication, the Property Trustee shall
deliver such definitive Capital Securities to the persons in whose names such
definitive Capital Securities are so registered.
At such time as all interests in Global Securities have been redeemed,
repurchased or canceled, such Global Securities shall be, upon receipt thereof,
canceled by the Property Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian. At any time
prior to such cancellation, if any interest in Global Securities is exchanged
for definitive Capital Securities, redeemed, canceled or transferred to a
transferee who receives definitive Capital Securities therefor or any definitive
Capital Security is exchanged or transferred for part of Global Securities, the
principal amount of such Global Securities shall, in accordance with the
standing procedures and instructions existing between the Depositary and the
Custodian, be reduced or increased, as the case may be, and an endorsement shall
be made on such Global Securities by the Property Trustee or the Custodian, at
the direction of the Property Trustee, to reflect such reduction or increase.
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The Trust and the Property Trustee may for all purposes, including the
making of payments due on the Capital Securities, deal with the Depositary as
the authorized representative of the Holders for the purposes of exercising the
rights of Holders hereunder. The rights of the owner of any beneficial interest
in a Global Security shall be limited to those established by law and agreements
between such owners and depository participants or Euroclear and Cedel;
provided, that no such agreement shall give any rights to any person against the
Trust or the Property Trustee without the written consent of the parties so
affected. Multiple requests and directions from and votes of the Depositary as
holder of Capital Securities in global form with respect to any particular
matter shall not be deemed inconsistent to the extent they do not represent an
amount of Capital Securities in excess of those held in the name of the
Depositary or its nominee.
If at any time the Depositary for any Capital Securities represented by one
or more Global Securities notifies the Trust that it is unwilling or unable to
continue as Depositary for such Capital Securities or if at any time the
Depositary for such Capital Securities shall no longer be eligible under this
Section 7.11, the Trust shall appoint a successor Depositary with respect to
such Capital Securities. If a successor Depositary for such Capital Securities
is not appointed by the Trust within 90 days after the Trust receives such
notice or becomes aware of such ineligibility, the Trust's election that such
Capital Securities be represented by one or more Global Securities shall no
longer be effective and a Regular Trustee on behalf of the Trust shall execute,
and the Property Trustee will authenticate and deliver Capital Securities in
definitive registered form, in any authorized denominations, in an aggregate
liquidation amount equal to the principal amount of the Global Security or
Capital Securities representing such Capital Securities in exchange for such
Global Security or Capital Securities.
The Trust may at any time and in its sole discretion determine that the
Capital Securities issued in the form of one or more Global Securities shall no
longer be represented by a Global Security or Capital Securities. In such event
a Regular Trustee on behalf of the Trust shall execute, and the Property Trustee
shall authenticate and deliver, Capital Securities in definitive registered
form, in any authorized denominations, in an aggregate liquidation amount equal
to the principal amount of the Global Security or Capital Securities
representing such Capital Securities, in exchange for such Global Security or
Capital Securities.
Notwithstanding any other provisions of this Declaration (other than the
provisions set forth in Section 314(a)), Global Securities may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
Interests of beneficial owners in a Global Security may be transferred or
exchanged for definitive Capital Securities and definitive Capital Securities
may be transferred or exchanged for interest in Global Securities in accordance
with rules of the Depositary and the provisions of Section 7.13.
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49
Any Capital Security in global form may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Declaration as may be required by the
Custodian, the Depositary or by the National Association of Securities Dealers,
Inc. in order for the Capital Securities to be tradeable on the PORTAL Market or
as may be required for the Capital Securities to be tradeable on any other
market developed for trading of securities pursuant to Rule 144A or required to
comply with any applicable law or any regulation thereunder or with Regulation S
or with the rules and regulations of any securities exchange upon which the
Capital Securities may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to which
any particular Capital Securities are subject.
Section 7.12 Restrictive Legend.
(a) Each Global Security and definitive Capital Security that constitutes a
Restricted Security shall bear the following legend (the "Private Placement
Legend") on the face thereof until three years after the later of the date of
original issue and the last date on which the Sponsor or any affiliate of the
Sponsor was the owner of such Capital Securities (or any predecessor thereto)
(the "Resale Restriction Termination Date"), unless otherwise agreed by the
Trust and the Holder thereof:
"THIS CAPITAL SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THIS CAPITAL SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS CAPITAL SECURITY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THIS CAPITAL SECURITY, BY ITS ACCEPTANCE
HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE TRUST
THAT: (I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR
OTHERWISE TRANSFER THIS CAPITAL SECURITY PRIOR TO THE LATER OF THE DATE
WHICH IS THREE YEARS AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF AND THE
LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE OF THE TRUST WAS THE OWNER
OF SUCH RESTRICTED SECURITIES (OR ANY PREDECESSOR) EXCEPT (A) TO THE
TRUST, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS CAPITAL
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (D) OUTSIDE THE UNITED STATES IN A
TRANSACTION MEETING THE REQUIREMENTS
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OF RULE 904 UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND
(III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THIS CAPITAL SECURITY OF THE RESALE RESTRICTIONS SET
FORTH IN (II) ABOVE. ANY OFFER, SALE OR OTHER DISPOSITION PURSUANT TO THE
FOREGOING CLAUSES (II)(D) AND (E) IS SUBJECT TO THE RIGHT OF THE ISSUER
OF THIS CAPITAL SECURITY AND THE PROPERTY TRUSTEE FOR SUCH CAPITAL
SECURITIES TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN FORM AND
SUBSTANCE."
Any Capital Security (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms may, upon satisfaction of the requirements of
Section 7.12(b) and surrender of such Capital Security for exchange to the
Capital Security Registrar in accordance with the provisions of this Section
7.12(a), be exchanged for a new Capital Security or Capital Securities, of like
tenor and aggregate liquidation amount, which shall not bear the restrictive
legend required by this Section 7.12(a).
(b) Upon any sale or transfer of any Restricted Security (including any
interest in a Global Security) (i) that is effected pursuant to an effective
registration statement under the Securities Act or (ii) in connection with which
the Property Trustee receives certificates and other information (including an
opinion of counsel, if requested) reasonably acceptable to the Company and the
Property Trustee to the effect that such security will no longer be subject to
the resale restrictions under federal and state securities laws, then (A) in the
case of a Restricted Security in definitive form, the Capital Security registrar
or co-registrar shall permit the holder thereof to exchange such Restricted
Security for a security that does not bear the legend set forth in Section
314(a), and shall rescind any such restrictions on transfer and (B) in the case
of Restricted Securities represented by a Global Security, such Capital Security
shall no longer be subject to the restrictions contained in the legend set forth
in Section 7.12(a) (but still subject to the other provisions hereof). In
addition, any Capital Security (or security issued in exchange or substitution
therefor) as to which the restrictions on transfer described in the legend set
forth in Section 7.12(a) have expired by their terms, may, upon surrender
thereof (in accordance with the terms of this Indenture) together with such
certifications and other information (including an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and the Property
Trustee and in a form acceptable to the Company, to the effect that the transfer
of such Restricted Security has been made in compliance with Rule 144 or such
successor provision) acceptable to the Company and the Property Trustee as
either of them may reasonably require, be exchanged for a new Capital Security
or Capital Securities of like tenor and aggregate liquidation amount, which
shall not bear the restrictive legends set forth in Section 7.12(a).
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(c) Each Global Security and definitive Capital Security shall bear the
following legend:
"NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") (EACH, A "PLAN"), NO ENTITY OF WHOSE UNDERLYING ASSETS INCLUDE
"PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN
ASSET ENTITY"), AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN, MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST HEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ENTITLED TO THE EXEMPTIVE RELIEF UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
96-23, 95-60, 91-38, 90-1 OR 84-14 OR OTHER APPLICABLE EXEMPTION WITH
RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS
SECURITY OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT IT EITHER (A) IS NOT A PLAN OR A PLAN
ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH
"PLAN ASSETS" OF ANY PLAN OR (B) IS ENTITLED TO THE EXEMPTIVE RELIEF
UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 OR OTHER APPLICABLE
EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING."
Section 7.13 Special Transfer Provisions.
(a) At any time at the request of the beneficial holder of a Capital
Security in global form, such beneficial holder shall be entitled to obtain a
definitive Capital Security upon written request to the Property Trustee in
accordance with the standing instructions and procedures existing between the
Depositary and the Property Trustee for the issuance thereof. Any transfer of a
beneficial interest in a Capital Security in global form which cannot be
effected through book-entry settlement must be effected by the delivery to the
transferee (or its nominee) of a definitive Capital Security or Securities
registered in the name of the transferee (or its nominee) on the books
maintained by the Security Registrar. With respect to any such transfer, the
Property Trustee will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Property Trustee, the
aggregate liquidation amount of the Global Security to be reduced and, following
such reduction, the Property Trustee will cause Definitive Capital Securities in
the appropriate aggregate liquidation amount in the name of such transferee (or
its nominee) and bearing such restrictive legends as may be required by this
Declaration to be delivered. In connection with any such transfer, the Property
Trustee may request such representations and agreements relating to the
restrictions on transfer of such Capital Securities from such transferee (or
such transferee's nominee) as the Property Trustee may reasonably require.
(b) So long as the Capital Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Capital Security to a QIB
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52
in accordance with Rule 144A, unless otherwise requested by the transferor, and
upon receipt of the definitive Capital Security being so transferred, together
with a certification in the form attached to the Security from the transferor
that the transferor reasonably believes the transferee is a QIB (or other
evidence satisfactory to the Property Trustee), the Property Trustee shall make
an endorsement on the Restricted Global Security to reflect an increase in the
aggregate liquidation amount of the Restricted Global Security, and the Property
Trustee shall cancel such definitive Capital Security and cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Property Trustees, the aggregate liquidation amount of Capital
Securities represented by the Restricted Global Security to be increased
accordingly.
(c) So long as the Capital Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Capital Security in accordance with Regulation S, if requested by the
transferor, and upon receipt of the definitive Capital Security or Capital
Securities being so transferred, together with a certification in the form
attached to the Security from the transferor that the transfer was made in
accordance with Rule 903 or 904 of Regulation S or Rule 144 under the Securities
Act (or other evidence satisfactory to the Property Trustee), the Property
Trustee shall make or direct the Custodian to make, an endorsement on the
Regulation S Global Security to reflect an increase in the aggregate liquidation
amount of the Capital Securities represented by the Regulation S Global
Security, the Property Trustee shall cancel such definitive Capital Security or
Capital Securities and cause, or direct the Custodian to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Property Trustee, the aggregate liquidation amount of Capital Securities
represented by the Regulation S Global Security to be increased accordingly.
(d) If a holder of a beneficial interest in the Restricted Global Security
wishes at any time to exchange its interest in the Restricted Global Security
for an interest in the Regulation S Global Security, or to transfer its interest
in the Restricted Global Security to a person who wishes to take delivery
thereof in the form of an interest in the Regulation S Global Security, such
holder may, subject to the rules and procedures of the Depositary and to the
requirements set forth in the following sentence, exchange or cause the exchange
or transfer or cause the transfer of such interest for an equivalent beneficial
interest in the Regulation S Global Security. Upon receipt by the Property
Trustee, as transfer agent of (1) instructions given in accordance with the
Depositary's procedures from or on behalf of a holder of a beneficial interest
in the Restricted Global Security, directing the Property Trustee (via DWAC), as
transfer agent, to credit or cause to be credited a beneficial interest in the
Regulation S Global Security in an amount equal to the beneficial interest in
the Restricted Global Security to be exchanged or transferred, (2) a written
order given in accordance with the Depositary's procedures containing
information regarding the Euroclear or Cedel account to be credited with such
increase and the name of such account, and (3) a certificate given by the holder
of such beneficial interest stating that the exchange or transfer of such
interest has been made pursuant to and in accordance with Rule 903 or Rule 904
of Regulation S or Rule 144 under the Securities Act (or other evidence
satisfactory to the Property Trustee), the Property Trustee, as transfer agent,
shall promptly deliver appropriate instructions to the Depositary (via DWAC),
its nominee, or the custodian for the Depositary, as the case may be,
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53
to reduce or reflect on its records a reduction of the Restricted Global
Security by the aggregate liquidation amount of the beneficial interest in such
Restricted Global Security to be so exchanged or transferred from the relevant
participant, and the Property Trustee, as transfer agent, shall promptly deliver
appropriate instructions (via DWAC) to the Depositary, its nominee, or the
custodian for the Depositary, as the case may be, concurrently with such
reduction, to increase or reflect on its records an increase of the liquidation
amount of such Regulation S Global Security by the aggregate liquidation amount
of the beneficial interest in such Restricted Global Security to be so exchanged
or transferred, and to credit or cause to be credited to the account of the
person specified in such instructions (who may be Morgan Guaranty Trust Company
of New York, Brussels office, as operator of Euroclear or Cedel or another agent
member of Euroclear or Cedel, or both, as the case may be, acting for and on
behalf of them) a beneficial interest in such Regulation S Global Security equal
to the reduction in the liquidation amount of such Restricted Global Security.
(e) If a holder of a beneficial interest in the Regulation S Global
Security wishes at any time to exchange its interest in the Regulation S Global
Security for an interest in the Restricted Global Security, or to transfer its
interest in the Regulation S Global Security to a person who wishes to take
delivery thereof in the form of an interest in the Restricted Global Security,
such holder may, subject to the rules and procedures of Euroclear or Cedel and
the Depositary, as the case may be, and to the requirements set forth in the
following sentence, exchange or cause the exchange or transfer or cause the
transfer of such interest for an equivalent beneficial interest in such
Restricted Global Security. Upon receipt by the Property Trustee, as transfer
agent of (l) instructions given in accordance with the procedures of Euroclear
or Cedel and the Depositary, as the case may be, from or on behalf of a
beneficial owner of an interest in the Regulation S Global Security directing
the Property Trustee, as transfer agent, to credit or cause to be credited a
beneficial interest in the Restricted Global Security in an amount equal to the
beneficial interest in the Regulation S Global Security to be exchanged or
transferred, (2) a written order given in accordance with the procedures of
Euroclear or Cedel and the Depositary, as the case may be, containing
information regarding the account with the Depositary to be credited with such
increase and the name of such account, and (3) prior to the expiration of the
Restricted Period, a certificate given by the holder of such beneficial interest
and stating that the person transferring such interest in such Regulation S
Global Security reasonably believes that the person acquiring such interest in
the Restricted Global Security is a QIB and is obtaining such beneficial
interest in a transaction meeting the requirements of Rule 144A and any
applicable securities laws of any state of the United States or any other
jurisdiction (or other evidence satisfactory to the Property Trustee), the
Property Trustee, as transfer agent, shall promptly deliver (via DWAC)
appropriate instructions to the Depositary, its nominee, or the custodian for
the Depositary, as the case may be, to reduce or reflect on its records a
reduction of the Regulation S Global Security by the aggregate liquidation
amount of the beneficial interest in such Regulation S Global Security to be
exchanged or transferred, and the Property Trustee, as transfer agent, shall
promptly deliver (via DWAC) appropriate instructions to the Depositary, its
nominee, or the custodian for the Depositary, as the case may be, concurrently
with such reduction, to increase or reflect on its records an increase of the
liquidation amount of the Restricted Global Security by the aggregate
liquidation amount of the beneficial interest in the Regulation S Global
Security to be so exchanged or transferred, and to credit or cause
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54
to be credited to the account of the person specified in such instructions a
beneficial interest in the Restricted Global Security equal to the reduction in
the liquidation amount of the Regulation S Global Security. After the expiration
of the Restricted Period, the certification requirement set forth in clause (3)
of the second sentence of this Section 7.13(e) will no longer apply to such
exchanges and transfers.
(f) Any beneficial interest in one of the Global Securities that is
transferred to a person who takes delivery in the form of an interest in the
other Global Security will, upon transfer, cease to be an interest in such
Global Security and become an interest in the other Global Security and,
accordingly, will thereafter be subject to all transfer restrictions and other
procedures applicable to beneficial interests in such other Global Security for
as long as it remains such an interest.
(g) Prior to or on the 40th day after the later of the commencement of the
offering of the Capital Securities and the Closing Date (the "Restricted
Period"), beneficial interests in a Regulation S Global Security may only be
held through Morgan Guaranty Trust Company of New York, Brussels office, as
operator of Euroclear or Cedel or another agent member of Euroclear and Cedel
acting for and on behalf of them, unless delivery is made through the Restricted
Global Security in accordance with the certification requirements hereof. During
the Restricted Period, interests in the Regulation S Global Security, may be
exchanged for interests in the Restricted Global Security or for definitive
Securities only in accordance with the certification requirements described
above.
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve upon the earliest of:
(i) the bankruptcy of the Holder of the Common Securities or the
Sponsor;
(ii) the filing of a certificate of dissolution or its equivalent with
respect to the Sponsor; the consent of the Holder of at least a
Majority in Liquidation Amount of the Securities to the filing of
a certificate of cancellation with respect to the Trust or the
revocation of the Sponsor's charter and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the Sponsor or
the Trust;
(iv) the time when all of the Securities shall have matured or been
called for redemption and the amounts then due shall have been
paid to the Holders in accordance with the terms of the
Securities;
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(v) upon the election of the Regular Trustees, following the
occurrence and continuation of a Special Event and subject to the
receipt of any necessary approvals by the Federal Reserve or the
Ministry of Finance of Japan and the receipt by the Debenture
Issuer of an opinion of counsel; or
(vi) the time when all of the Regular Trustees and the Sponsor shall
have consented to termination of the Trust provided such action is
taken before the issuance of any Securities.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a) and upon completion of the winding up of the Trust, the
Trustees shall terminate by filing a certificate of cancellation with the
Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article 10 shall survive the
termination of the Trust.
Section 8.2 Liquidation Distribution Upon Termination and Dissolution of
the Trust.
(a) In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the Holders of
the Securities on the date of the Liquidation will be entitled to receive, out
of the assets of the Trust available for distribution to Holders of Securities
after satisfaction of the Trusts' liabilities and creditors, distributions in
cash or other immediately available funds in an amount equal to the aggregate of
the stated liquidation amount of $1,000 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such Liquidation, Debentures in an
aggregate stated liquidation amount equal to the aggregate stated liquidation
amount of, with a distribution rate identical to the distribution rate of, and
accrued and unpaid distributions equal to accrued and unpaid distributions on,
such Securities shall be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
(b) If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis. The Holders of the
Common Securities will be entitled to receive distributions upon any such
Liquidation Pro Rata with the Holders of the Capital Securities, except that if
an Indenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities with regard to
such distributions.
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ARTICLE 9
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 9.1 Liability.
(a) Except as expressly set forth in this Declaration, the Guarantee and
the terms of the Securities, the Sponsor:
(i) shall not be personally liable for the return of any portion of
the capital contributions (or any return thereon) of the Holders
of the Securities, which shall be made solely from assets of the
Trust; and
(ii) shall not be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Capital Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
Section 9.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable or any such loss, damage or claim incurred
by reason of such Indemnified Person's gross negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
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Section 9.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in
a manner that is, or provides terms that are, fair and reasonable
to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall
have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
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Section 9.4 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full extent permitted
by law, any Debenture Issuer Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Debenture Issuer Indemnified Person against expenses
(including attorney fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the Debenture Issuer
Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent permitted by
law, any Debenture Issuer Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a Judgment in its favor by
reason of the fact that he is or was a Debenture Issuer Indemnified Person
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as to
which such Debenture Issuer Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) Any indemnification under paragraphs (i) and (ii) of this Section
9.4(a) (unless ordered by a court) shall be made by the Debenture Issuer only as
authorized in the specific case upon a determination that indemnification of the
Debenture Issuer Indemnified Person is proper in the circumstances because he
has met the applicable standard of conduct set forth in paragraphs (i) and (ii).
Such determination shall be made (1) by the Regular Trustees by a majority vote
of a quorum consisting of such Regular Trustees who were not parties to such
action, suit or proceeding, (2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Common Security
Holder of the Trust.
(iv) Expenses (including attorneys' fees) incurred by a Debenture Issuer
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 9.4(a) shall be paid by the
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Debenture Issuer in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Debenture
Issuer Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Debenture Issuer as
authorized in this Section 9.4(a). Notwithstanding the foregoing, no advance
shall be made by the Debenture Issuer if a determination is reasonably and
promptly made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion or (iii) by the Common Security
Holder of the Trust, that, based upon the facts known to the Regular Trustees,
counsel or the Common Security Holder at the time such determination is made,
such Debenture Issuer Indemnified Person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Debenture Issuer
Indemnified Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the Regular
Trustees, independent legal counsel or Common Security Holder reasonably
determine that such person deliberately breached his duty to the Trust or its
Common or Capital Security Holders.
(v) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other paragraphs of this Section 9.4(a) shall not be deemed
exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debenture Issuer or Capital
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 9.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Debenture Issuer
Indemnified Person who serves in such capacity at any time while this Section
9.4(a) is in effect. Any repeal or modification of this Section shall not affect
any rights or obligations then existing.
(vi) The Debenture Issuer or the Trust may purchase and maintain insurance
on behalf of any person who is or was a Debenture Issuer Indemnified Person
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Debenture
Issuer would have the power to indemnify him against such liability under the
provisions of this Section 9.4(a).
(vii) For purposes of this Section 9.4(a), references to "the Trust" shall
include, in addition to the resulting or surviving entity, any constituent
entity (including any constituent of a constituent) absorbed in a consolidation
or merger, so that any person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of another
entity, shall stand in the same position under the provisions of this Section
9.4(a) with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.
(viii) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.4(a) shall, unless otherwise provided when
authorized or
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ratified, continue as to a person who has ceased to be a Debenture Issuer
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a person. The obligation to indemnify as set forth in
this Section 9.4(a) shall survive the satisfaction and discharge of this
Declaration.
(b) The Debenture Issuer agrees to indemnify (i) the Property Trustee, (ii)
the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 9.4(b) shall
survive the satisfaction and discharge of this Declaration.
Section 9.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the activities of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the activities of the Trust, shall not be deemed
wrongful or improper. No Covered Person, the Sponsor, the Delaware Trustee or
the Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE 10
ACCOUNTING
Section 10.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
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Section 10.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles. The
Trust shall use the accrual method of accounting for United States Federal
income tax purposes. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the Regular
Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to each
of the Holders of Securities, within 90 days after the end of each Fiscal Year
of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, an annual United States Federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority, an annual United States Federal income tax return,
on a Form 1041 or such other form required by United States Federal income tax
law, and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
Section 10.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Account and no other funds of the Trust shall be deposited in the
Property Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Property Trustee shall
designate the signatories for the Property Account.
Section 10.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of,
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and in fulfilling, its withholding obligations. The Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE 11
AMENDMENTS AND MEETINGS
Section 11.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed (i) by the Regular Trustees (or, if there are
more than two Regular Trustees, a majority of the Regular Trustees) and (ii) by
the Property Trustee if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee; and (iii) by the Delaware
Trustee if the amendment affects the rights, powers, duties, obligations or
immunities of the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from
each of the Trust and the Sponsor that such amendment is permitted
by, and conforms to, the terms of this Declaration (including the
terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property
Trustee, the Property Trustee shall have first received:
a. an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of
the Securities); and
b. an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
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(iii) to the extent the result of such amendment would be to:
a. cause the Trust to be classified other than as a grantor
trust for United States Federal income tax purposes;
b. reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture
Act; or
c. cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would (i) adversely affect the powers,
preferences or special rights of the Securities, whether by way of amendment to
the Declaration or otherwise, (ii) result in the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of this Declaration,
(iii) change the amount or timing of any distribution of the Securities or
otherwise adversely affect the amount of any distribution required to be made in
respect of the Securities as of a specified date or (iv) restrict the right of a
Holder of Securities to institute suit for the enforcement of any such payment
on or after such date, then the holders of the Securities voting together as a
single class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of at
least a Majority in Liquidation Amount of the Securities affected thereby;
provided that, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Capital Securities or the Common Securities,
then only the affected class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of a Majority in Liquidation Amount of such class of Securities.
(d) Section 7.8 and this Section 11.1 shall not be amended without the
consent of all of the Holders of the Securities.
(e) Article 4 shall not be amended without the consent of the Holders of a
Majority in Liquidation Amount of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article 6 to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in Liquidation Amount
of the Common Securities.
(g) Notwithstanding Section 11.1(c) , this Declaration may be amended
without the consent of the Holders of the Securities:
(i) to cure any ambiguity, to correct or supplement any provisions in
this Declaration that may be inconsistent with any other
provision, or to make any other provisions with respect to matters
or questions arising
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under this Declaration that shall not be inconsistent with the
other provisions of this Declaration; or
(ii) to modify, eliminate or add to any provisions of this Declaration
to such extent as shall be necessary to ensure that the Trust will
be classified as a grantor trust for United States federal income
tax purposes at all times that any Securities are outstanding or
to ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act or to ensure
that the Capital Securities would constitute Tier I Capital of a
bank holding company (assuming solely for this purpose that the
Company was treated as a bank holding company).
provided, however, that such action shall not adversely affect in any material
respect the interests of any Holder of Capital Securities or Common Securities,
and any amendments of this Declaration shall become effective when notice
thereof is given to the Holders of Capital Securities and Common Securities.
(h) The issuance of a Trustees' Authorization Certificate by the Regular
Trustees for purposes of establishing the terms and form of the Securities as
contemplated by Section 8.1 shall not be deemed an amendment of this Declaration
subject to the provisions of this Section 12.1.
Section 11.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at any
time by the Regular Trustees (or as provided in the terms of the Securities) to
consider and act on any matter on which Holders of such class of Securities are
entitled to act under the terms of this Declaration, the terms of the Securities
or the rules of any stock exchange on which the Capital Securities are listed or
admitted for trading. The Regular Trustees shall call a meeting of the Holders
of such class if directed to do so by the Holders of at least 10% in Liquidation
Amount of such class of Securities. Such direction shall be given by delivering
to the Regular Trustees one or more calls in a writing stating that the signing
Holders of Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of Securities exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provisions shall apply to meetings of Holders of Securities:
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(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not
more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any
stock exchange on which the Capital Securities are listed or
admitted for trading, such vote, consent or approval may be given
at a meeting of the Holders of Securities. Any action that may be
taken at a meeting of the Holders of Securities may be taken
without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at a meeting
at which all Holders of Securities having a right to vote thereon
were present and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders of Securities
entitled to vote who have not consented in writing. The Regular
Trustees may specify that any written ballot submitted to the
Security Holders for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified
by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting,
or voting or participating at a meeting. No proxy shall be valid
after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Securities executing such proxy.
Except as otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of the
Securities, the Trust Indenture Act or the listing rules of any
stock exchange on which the Capital Securities are then listed for
trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time,
place or purpose of any meeting at which any matter is to be voted
on by any Holders of Securities, waiver of any such notice, action
by consent without a meeting, the establishment of a record date,
quorum requirements, voting in person
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or by proxy or any other matter with respect to the exercise of
any such right to vote.
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 12.1 Representations and Warranties of the Property Trustee.
The Trustee that acts as initial Property Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Property Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) the Property Trustee is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration;
(b) the Property Trustee satisfies the requirements set forth in Section
6.3(a);
(c) the execution, delivery and performance by the Property Trustee of this
Declaration has been duly authorized by all necessary corporate action on the
part of the Property Trustee. This Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(d) the execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the articles
of association or incorporation, as the case may be, or the by-laws (or other
similar organizational documents) of the Property Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Property Trustee of this Declaration.
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Section 12.2 Representations and Warranties of the Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) the Delaware Trustee satisfies the requirements set forth in Section
6.2 and has the power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration and, if it is not a
natural person, is duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization;
(b) the Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and this Declaration. This Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law); and
(c) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is require for the execution,
delivery or performance by the Delaware Trustee of this Declaration.
ARTICLE 13
MISCELLANEOUS
Section 13.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Property Trustee, the Delaware Trustee and the Holders of the
Securities):
CIT Capital Trust I
c/o The CIT Group Holdings, Inc.
1211 Avenue of the Americas
New York, New York 10036
Attention: Chief Financial Officer
<PAGE>
68
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Regular Trustees, the Property Trustee and the Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporation Trust Department
(c) if given to the Property Trustee, at its Corporate Trust Office (or
such other address as the Property Trustee may give notice of to the Regular
Trustees, the Delaware Trustee and the Holders of the Securities).
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice of to the Property Trustee, the Delaware
Trustee and the Trust):
The CIT Group Holdings, Inc.
1211 Avenue of the Americas
New York, New York 10036
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed or mailed by first class mail, postage
prepaid except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.
Section 13.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware.
Section 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States Federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted in a manner consistent with such
classification.
Section 13.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
<PAGE>
69
Section 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
Section 13.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 13.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
Section 13.8 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Declaration or in any suit against any Trustee for any action taken or omitted
by it as a Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable
attorney's fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 14.8 does not apply to a suit by a Trustee, a suit by a
Holder to enforce its right to payment or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
THE CIT GROUP HOLDINGS, INC.
as Sponsor and Common Securities Holder
BY:______________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
BY:______________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
BY:______________________________________
Name:
Title:
_________________________________________
Name: Albert R. Gamper, Jr.,
as Regular Trustee
_________________________________________
Name: Joseph M. Leone,
as Regular Trustee
_________________________________________
Name: Corinne M. Taylor,
as Regular Trustee
<PAGE>
EXHIBIT A
THIS CAPITAL SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS CAPITAL SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS CAPITAL SECURITY, BY ITS
ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE
TRUST THAT: (I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE
TRANSFER THIS CAPITAL SECURITY PRIOR TO THE LATER OF THE DATE WHICH IS THREE
YEARS AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON WHICH THE
TRUST OR ANY AFFILIATE OF THE TRUST WAS THE OWNER OF SUCH RESTRICTED SECURITIES
(OR ANY PREDECESSOR) EXCEPT (A) TO THE TRUST, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (D) OUTSIDE THE UNITED STATES IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (E) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND (III)
IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT
OF THIS CAPITAL SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE, ANY
OFFER, SALE OR OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSES (II)(D) AND
(E) IS SUBJECT TO THE RIGHT OF THE ISSUER OF THIS CAPITAL SECURITY AND THE
PROPERTY TRUSTEE FOR SUCH CAPITAL SECURITIES TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN
FORM AND SUBSTANCE.
This Capital Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company, a New York corporation (the "Depository"), or a
nominee of the Depository. This Capital Security is exchangeable for Capital
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Capital Security (other than a transfer of this Capital
Security 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) may be registered except in limited circumstances.
<PAGE>
2
Unless this Capital Security Certificate is presented by an authorized
representative of the Depository to CIT Capital Trust I or its agent for
registration of transfer, exchange or payment, and any Capital Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depository (and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depository), 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.
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), NO
ENTITY OF WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST HEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ENTITLED TO THE EXEMPTIVE RELIEF UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23,
96-60, 91-38, 90-1 OR 84-14 OR OTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH
PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST
HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF
THAT IT EITHER (A) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING
SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN OR (B) IS
ENTITLED TO THE EXEMPTIVE RELIEF UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14
OR OTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING.
Certificate No. 1 Number of Capital Securities: 200,000
CUSIP No. 125563 AA 4
Certificate Evidencing Capital Securities
of
CIT Capital Trust I
7.70% Preferred Capital Securities
(liquidation amount $1,000 per Capital Security)
CIT CAPITAL TRUST I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of 200,000 ($200,000,000 aggregate liquidation
amount) capital securities of the Trust representing undivided beneficial
ownership interests in the assets of the Trust designated the 7.70% Preferred
Capital Securities (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). The Capital Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer as provided in
the Declaration (as defined below). The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust,
<PAGE>
3
dated as of February 25, 1997 (as the same may be amended from time to time (the
"Declaration"), among The CIT Group Holdings, Inc., as Sponsor (the "Company"),
Albert R. Gamper, Jr., Joseph M. Leone and Corinne M. Taylor, as Regular
Trustees, The Bank of New York, as Property Trustee, and The Bank of New York
(Delaware), as Delaware Trustee. Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Holder is entitled to
the benefits of the Guarantee to the extent described therein. The Sponsor will
provide a copy of the Declaration, the Guarantee and the Indenture to a Holder
without charge upon written request to the Sponsor at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder and to the benefit of the Capital
Security Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Capital Securities as
evidence of undivided indirect beneficial ownership interests in the Debentures.
<PAGE>
4
IN WITNESS WHEREOF, the Trust has executed this certificate this 25th day
of February, 1997.
CIT CAPITAL TRUST I
By:______________________________
Name: Corinne M. Taylor
Title: Regular Trustee
This is one of the Securities referred to in the within-mentioned
Declaration.
Dated: THE BANK OF NEW YORK
By:______________________________
Authorized Signatory
<PAGE>
5
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act
covering resales of this Security (which effectiveness shall not have been
suspended or terminated at the date of the transfer) and (ii) three years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Capital Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date"), the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer:
[Check One]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter containing
certain representations and agreements (the form of which letter can
be obtained from the Trustee); or
(4) ___ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as amended;
or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, as amended; or
(6) ___ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) ___ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3), (4), (5)
or (7) is checked, the Company or the Trustee may require, prior to registering
any such transfer of the Securities, in its sole discretion, such written legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Trustee or the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, as amended.
<PAGE>
6
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 315 of the Indenture shall have
been satisfied.
Dated: __________________ Signed:____________________________________
(Sign exactly as name appears on the other
side of this Security)
Signature Guarantee:____________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: ________ ______________________________________________
NOTICE: To be executed by an executive officer
<PAGE>
EXHIBIT B
THIS CAPITAL SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS CAPITAL SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS CAPITAL SECURITY, BY ITS
ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE
TRUST THAT: (I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE
TRANSFER THIS CAPITAL SECURITY PRIOR TO THE LATER OF THE DATE WHICH IS THREE
YEARS AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON WHICH THE
TRUST OR ANY AFFILIATE OF THE TRUST WAS THE OWNER OF SUCH RESTRICTED SECURITIES
(OR ANY PREDECESSOR) EXCEPT (A) TO THE TRUST, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (D) OUTSIDE THE UNITED STATES IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (E) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND (III)
IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT
OF THIS CAPITAL SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE, ANY
OFFER, SALE OR OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSES (II)(D) AND
(E) IS SUBJECT TO THE RIGHT OF THE ISSUER OF THIS CAPITAL SECURITY AND THE
PROPERTY TRUSTEE FOR SUCH CAPITAL SECURITIES TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN
FORM AND SUBSTANCE.
This Capital Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company, a New York corporation (the "Depository"), or a
nominee of the Depository. This Capital Security is exchangeable for Capital
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Capital Security (other than a transfer of this Capital
Security 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) may be registered except in limited circumstances.
Unless this Capital Security Certificate is presented by an authorized
representative of the Depository to CIT Capital Trust I or its agent for
registration of transfer,
<PAGE>
2
exchange or payment, and any Capital Security Certificate issued is registered
in the name of Cede & Co. or such other name as registered by an authorized
representative of the Depository (and any payment hereon is made to Cede & Co.
or to such other entity as is requested by an authorized representative of the
Depository), 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.
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), NO
ENTITY OF WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST HEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ENTITLED TO THE EXEMPTIVE RELIEF UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23,
96-60, 91-38, 90-1 OR 84-14 OR OTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH
PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST
HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF
THAT IT EITHER (A) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING
SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN OR (B) IS
ENTITLED TO THE EXEMPTIVE RELIEF UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14
OR OTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING.
Certificate No. 2 Number of Capital Securities: 50,000
CUSIP No. 125563 AA 4
Certificate Evidencing Capital Securities
of
CIT Capital Trust I
7.70% Preferred Capital Securities
(liquidation amount $1,000 per Capital Security)
CIT CAPITAL TRUST I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of 50,000 ($50,000,000 aggregate liquidation
amount) capital securities of the Trust representing undivided beneficial
ownership interests in the assets of the Trust designated the 7.70% Preferred
Capital Securities (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). The Capital Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer as provided in
the Declaration (as defined below). The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust,
dated as of February 25, 1997 (as the same may be amended from time to time (the
"Declaration"), among The CIT Group Holdings, Inc., as Sponsor (the "Company"),
Albert R.
<PAGE>
3
Gamper, Jr., Joseph M. Leone and Corinne M. Taylor, as Regular Trustees, The
Bank of New York, as Property Trustee, and The Bank of New York (Delaware), as
Delaware Trustee. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Guarantee to the extent described therein. The Sponsor will provide a copy
of the Declaration, the Guarantee and the Indenture to a Holder without charge
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder and to the benefit of the Capital
Security Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Capital Securities as
evidence of undivided indirect beneficial ownership interests in the Debentures.
<PAGE>
4
IN WITNESS WHEREOF, the Trust has executed this certificate this 25th day
of February, 1997.
CIT CAPITAL TRUST I
By:____________________________
Name: Corinne M. Taylor
Title: Regular Trustee
This is one of the Securities referred to in the within-mentioned
Declaration.
Dated: THE BANK OF NEW YORK
By:____________________________
Authorized Signatory
<PAGE>
5
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act
covering resales of this Security (which effectiveness shall not have been
suspended or terminated at the date of the transfer) and (ii) three years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Capital Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date"), the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer:
[Check One]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter containing
certain representations and agreements (the form of which letter can
be obtained from the Trustee); or
(4) ___ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as amended;
or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, as amended; or
(6) ___ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) ___ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3), (4), (5)
or (7) is checked, the Company or the Trustee may require, prior to registering
any such transfer of the Securities, in its sole discretion, such written legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Trustee or the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, as amended.
<PAGE>
6
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 315 of the Indenture shall have
been satisfied.
Dated: __________________ Signed:____________________________________
(Sign exactly as name appears on the other
side of this Security)
Signature Guarantee:____________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: ________ ______________________________________________
NOTICE: To be executed by an executive officer
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate No. 1 Number of Common Securities: 7,732
Certificate Evidencing Common Securities
of
CIT Capital Trust I
Common Securities
(liquidation amount $1,000 per Common Security)
CIT Capital Trust I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that The CIT Group
Holdings, Inc. (the "Holder") is the registered owner of common securities of
the Trust representing an undivided beneficial ownership interest in the assets
of the Trust designated the 7.70% Common Securities (liquidation amount $1,000
per Common Security) (the "Common Securities"). The Common Securities are not
transferable and any attempted transfer thereof shall be void. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of February 25, 1997 (as the same may be amended from time
to time, the "Declaration"), among The CIT Group Holdings, Inc., as Sponsor,
Albert R. Gamper, Jr., Joseph M. Leone and Corinne M. Taylor, as Regular
Trustees, The Bank of New York, as Property Trustee and The Bank of New York
(Delaware), as Delaware Trustee. The Holder is entitled to the benefits of the
Guarantee to the extent described therein. Capitalized terms used herein but not
defined shall have the meaning given them in the Declaration. The Sponsor will
provide a copy of the Declaration, the Guarantee and the Indenture to a Holder
without charge upon written request to the Sponsor at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of an undivided indirect beneficial ownership interest in the
Debentures.
<PAGE>
2
IN WITNESS WHEREOF, the Trust has executed this certificate this 25th day
of February, 1997.
CIT CAPITAL TRUST I
By:____________________________________
Name: Corinne M. Taylor
Title: Regular Trustee
THE CIT GROUP HOLDINGS, INC.
TO
THE BANK OF NEW YORK
a New York banking corporation, Trustee
INDENTURE
Dated as of February 25, 1997
$257,732,000
7.70% Junior Subordinated Debentures due 2027
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..........1
SECTION 101. Definitions......................................................1
Act......................................................................2
Affiliate................................................................2
Authenticating Agent.....................................................2
Board of Directors.......................................................2
Board Resolution.........................................................2
Business Day.............................................................2
Capital Securities.......................................................3
Cedel....................................................................3
Closing Date.............................................................3
Commission...............................................................3
Common Securities........................................................3
Company..................................................................3
Company Request..........................................................3
Company Order............................................................3
Corporate Trust Office...................................................3
Covenant Defeasance......................................................3
Custodian................................................................3
Declaration..............................................................3
Defaulted Interest.......................................................3
Depositary...............................................................3
DWAC.....................................................................3
Event of Default.........................................................4
Exchange Act.............................................................4
Extension Period.........................................................4
Euroclear................................................................4
Federal Reserve..........................................................4
Global Security..........................................................4
Guarantee................................................................4
Holder...................................................................4
Indebtedness.............................................................4
Indenture................................................................5
Initial Purchasers.......................................................5
Institutional Accredited Investor........................................5
Interest Payment Date....................................................5
Investment Company Event.................................................5
Junior Subordinated Securities...........................................5
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Legal Defeasance.........................................................5
Maturity.................................................................5
MOF......................................................................5
New Junior Subordinated Securities.......................................5
Officers' Certificate....................................................5
Opinion of Counsel.......................................................6
Outstanding..............................................................6
Paying Agent.............................................................6
Person...................................................................7
Predecessor Security.....................................................7
Private Placement Legend.................................................7
Property Trustee.........................................................7
Qualified Institutional Buyer or QIB.....................................7
Redemption Date..........................................................7
Redemption Price.........................................................7
Registration Rights Agreement............................................7
Regular Record Date......................................................7
Regulation S.............................................................7
Regulation S Global Security.............................................7
Regulatory Authorities...................................................7
Regulatory Capital Event.................................................7
Remaining Life...........................................................8
Responsible Officer......................................................8
Restricted Global Security...............................................8
Restricted Period........................................................8
Restricted Security......................................................8
Rule 144A................................................................8
Securities...............................................................8
Securities Act...........................................................8
Security Register........................................................8
Security Registrar.......................................................8
Special Event............................................................9
Special Record Date......................................................9
Stated Maturity..........................................................9
Subsidiary...............................................................9
Tax Event................................................................9
Trust....................................................................9
Trustee..................................................................9
Trust Indenture Act......................................................9
U.S. Government Obligations..............................................9
Vice President..........................................................10
SECTION 102. Compliance Certificates and Opinions............................10
SECTION 103. Form of Documents Delivered to Trustee..........................10
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<PAGE>
SECTION 104. Acts of Holders; Record Dates...................................10
SECTION 105. Notices, Etc. to Trustee and the Company........................11
SECTION 106. Notice to Holders; Waiver.......................................12
SECTION 107. Conflict With Trust Indenture Act...............................12
SECTION 108. Effect of Headings and Table of Contents........................12
SECTION 109. Separability Clause.............................................12
SECTION 110. Benefits of Indenture...........................................13
SECTION 111. GOVERNING LAW...................................................13
SECTION 112. Legal Holidays..................................................13
ARTICLE TWO
SECURITY FORMS..............................13
ARTICLE THREE
THE SECURITIES..............................14
SECTION 301. Title and Terms.................................................14
SECTION 302. Denominations...................................................16
SECTION 303. Execution, Authentication, Delivery and Dating..................16
SECTION 304. Temporary Securities............................................17
SECTION 305. Registration; Registration of Transfer and Exchange.............17
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities................18
SECTION 307. Payment of Interest; Interest Rights Preserved..................19
SECTION 308. Persons Deemed Owners...........................................20
SECTION 309. Cancellation....................................................20
SECTION 310. Computation of Interest.........................................21
SECTION 311. Right of Set-off................................................21
SECTION 312. CUSIP Numbers...................................................21
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SECTION 313. Global Securities...............................................21
SECTION 314. Restrictive Legend..............................................23
SECTION 315. Special Transfer Provisions.....................................26
ARTICLE FOUR
SATISFACTION AND DISCHARGE; DEFEASANCE..................29
SECTION 401. Satisfaction and Discharge of Indenture.........................29
SECTION 402. Legal Defeasance................................................30
SECTION 403. Covenant Defeasance.............................................30
SECTION 404. Conditions to Legal Defeasance or Covenant Defeasance...........31
SECTION 405. Application of Trust Money......................................32
SECTION 406. Indemnity for U.S. Government Obligations.......................32
ARTICLE FIVE
REMEDIES.................................32
SECTION 501. Events of Default...............................................32
SECTION 502. Acceleration of Maturity; Rescission and Annulment..............33
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee......................................................34
SECTION 504. Trustee may File Proofs of Claim................................34
SECTION 505. Trustee may Enforce Claims Without Possession of Securities.....35
SECTION 506. Application of Money Collected..................................35
SECTION 507. Limitation on Suits.............................................35
SECTION 508. Unconditional Right of Holders to Receive Principal and
Interest; Capital Security Holders' Rights....................36
SECTION 509. Restoration of Rights and Remedies..............................36
SECTION 510. Rights and Remedies Cumulative..................................36
SECTION 511. Delay or Omission not Waiver....................................37
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SECTION 512. Control by Holders..............................................37
SECTION 513. Waiver of Past Defaults.........................................37
SECTION 514. Undertaking for Costs...........................................38
SECTION 515. Waiver of Stay or Extension Laws................................38
ARTICLE SIX
TRUSTEE.................................38
SECTION 601. Certain Duties and Responsibilities.............................38
SECTION 602. Notice of Defaults..............................................38
SECTION 603. Certain Rights of Trustee.......................................39
SECTION 604. Not Responsible for Recitals or Issuance of Securities..........40
SECTION 605. Trustee and Other Agents may Hold Securities....................40
SECTION 606. Money Held in Trust.............................................40
SECTION 607. Compensation; Reimbursement; and Indemnity......................41
SECTION 608. Disqualification; Conflicting Interests.........................41
SECTION 609. Corporate Trustee Required; Eligibility.........................42
SECTION 610. Resignation and Removal; Appointment of Successor...............42
SECTION 611. Acceptance of Appointment by Successor..........................43
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.....43
SECTION 613. Preferential Collection of Claims Against Company...............44
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY............44
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.......44
SECTION 702. Preservation of Information; Communications to Holders..........44
SECTION 703. Reports by Trustee..............................................44
SECTION 704. Reports by Company..............................................45
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<PAGE>
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE...........45
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms............45
SECTION 802. Successor Person Substituted....................................46
ARTICLE NINE
SUPPLEMENTAL INDENTURES.........................46
SECTION 901. Supplemental Indentures Without Consent of Holders..............46
SECTION 902. Supplemental Indentures With Consent of Holders.................47
SECTION 903. Execution of Supplemental Indentures............................48
SECTION 904. Effect of Supplemental Indentures...............................48
SECTION 905. Conformity With Trust Indenture Act.............................48
SECTION 906. Reference in Securities to Supplemental Indentures..............48
ARTICLE TEN
COVENANTS................................49
SECTION 1001. Payment of Principal and Interest..............................49
SECTION 1002. Maintenance of Office or Agency................................49
SECTION 1003. Money for Security Payments to be Held in Trust................49
SECTION 1004. Statements by Officers as to Default...........................50
SECTION 1005. Existence......................................................50
SECTION 1006. Maintenance of Properties......................................51
SECTION 1007. Payment of Taxes and Other Claims..............................51
SECTION 1008. Waiver of Certain Covenants....................................51
SECTION 1009. Payment of the Trust's Costs and Expenses......................51
SECTION 1010. Restrictions on Payments and Distributions.....................52
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ARTICLE ELEVEN
SUBORDINATION OF SECURITIES.......................52
SECTION 1101. Securities Subordinate to Indebtedness.........................52
SECTION 1102. Default on Indebtedness........................................53
SECTION 1103. Prior Payment of Indebtedness Upon Acceleration of Securities..53
SECTION 1104. Liquidation; Dissolution; Bankruptcy...........................54
SECTION 1105. Subrogation....................................................55
SECTION 1106. Trustee to Effectuate Subordination............................56
SECTION 1107. Notice by the Company..........................................56
SECTION 1108. Rights of the Trustee; Holders of Indebtedness.................57
SECTION 1109. Subordination May Not Be Impaired..............................57
ARTICLE TWELVE
REDEMPTION OF SECURITIES.........................58
SECTION 1201. Optional Redemption; Conditions to Optional Redemption.........58
SECTION 1202. Applicability of Article.......................................59
SECTION 1203. Election to Redeem; Notice to Trustee..........................59
SECTION 1204. Selection by Trustee of Securities to be Redeemed..............59
SECTION 1205. Notice of Redemption...........................................60
SECTION 1206. Deposit of Redemption Price....................................60
SECTION 1207. Securities Payable on Redemption Date..........................61
SECTION 1208. Securities Redeemed in Part....................................61
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<PAGE>
Sections 310 through 318 of the Trust
Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- - --------------- ---------
Section 310(a)(1)...........................................................609
(a)(2)..............................................................609
(a)(3)...................................................Not Applicable
(a)(4)...................................................Not Applicable
(b)............................................................608, 610
Section 311(a)..............................................................613
(b).................................................................613
Section 312(a)..............................................................701
(b)..............................................................702(b)
(c)..............................................................702(c)
Section 313(a)...........................................................703(a)
(a)(4)........................................................101, 1004
(b)..............................................................703(a)
(c)..............................................................703(a)
(d)..............................................................703(b)
Section 314(a)..............................................................704
(b)......................................................Not Applicable
(c)(1)..............................................................102
(c)(2)..............................................................102
(c)(3)...................................................Not Applicable
(d)......................................................Not Applicable
(e).................................................................102
Section 315(a)..............................................................601
(b).................................................................602
(c).................................................................601
(d).................................................................601
(e).................................................................514
Section 316(a)..............................................................101
(a)(1)(A)...........................................................502
(a)(1)(B).......................................................... 513
(a)(2)...................................................Not Applicable
(b).................................................................508
(c)..............................................................104(c)
Section 317(a)(1)...........................................................503
(a)(2)..............................................................504
(b)................................................................1003
Section 318(a)..............................................................107
<PAGE>
This INDENTURE is dated as of February 25, 1997, between THE CIT GROUP
HOLDINGS, INC., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
1211 Avenue of the Americas, New York, New York 10036, and THE BANK OF NEW YORK,
a New York banking corporation, as Trustee (herein called the "Trustee").
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the execution and delivery of this Indenture to provide for the issuance of its
7.70% Junior Subordinated Debentures due 2027 (the "Junior Subordinated
Securities") and its 7.70% New Junior Subordinated Debentures due 2027 (the "New
Junior Subordinated Securities", and together with the Junior Subordinated
Securities, the "Securities") to be issued in exchange for the Junior
Subordinated Securities.
WHEREAS, CIT Capital Trust I (the "Trust") has offered to the public
$250,000,000 aggregate liquidation amount of its 7.70% Preferred Capital
Securities (the "Capital Securities") representing undivided beneficial
interests in the assets of the Trust and proposes to invest the proceeds from
such offering and the $7,732,000 in proceeds from the issuance of its Common
Securities in $257,732,000 aggregate principal amount of the Securities.
WHEREAS, to provide the terms and conditions upon which the Securities are
to be authenticated, issued and delivered, the Company has duly authorized the
execution of this Indenture.
WHEREAS, all things necessary to make this Indenture a valid agreement of
the Company, 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 agreed, for the equal and proportionate
benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as 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 and the masculine as
well as the feminine;
<PAGE>
(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;
(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;
(5) a reference to any Person shall include its successor and assigns;
(6) a reference to any agreement or instrument shall mean such agreement or
instrument as supplemented, modified, amended or amended and restated and in
effect from time to time;
(7) a reference to any statute, law, rule or regulation, shall include any
amendments thereto applicable to the relevant Person, and any successor statute,
law, rule or regulation; and
(8) a reference to any particular rating category shall be deemed to
include any corresponding successor category, or any corresponding rating
category issued by a successor or subsequent rating agency.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board as the context requires.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in The City of New York are authorized or required by
law or executive order
2
<PAGE>
to remain closed or a day on which the Corporate Trust Office of the Trustee, or
the principal office of the Property Trustee, under the Declaration, is closed
for business.
"Capital Securities" has the meaning specified in the Recitals to this
instrument.
"Cedel" means Cedel, S.A.
"Closing Date" means February 25, 1997.
"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.
"Common Securities" means the common securities issued by the Trust.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in the
City of New York, at which at any particular time its corporate trust business
shall be administered and which at the date of this Indenture is located at 101
Barclay Street, Floor 21 West, New York, New York 10286, Attention: Corporate
Trust Administration.
"Covenant Defeasance" has the meaning specified in Section 403.
"Custodian" means the custodian for the time being of any Global Security.
"Declaration" means the Amended and Restated Declaration of Trust, dated as
of February 25, 1997, as amended, modified or supplemented from time to time,
among the trustees of the Trust named therein, the Company, as sponsor, and the
holders from time to time of undivided beneficial ownership interests in the
assets of the Trust.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to Securities issuable in whole or in part
in the form of one or more Global Securities, a clearing agency registered under
the Exchange Act that is designated to act as Depositary for such Securities.
"DWAC" means Deposit and Withdrawal At Custodian Service.
3
<PAGE>
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor legislation.
"Extension Period" has the meaning specified in Section 301.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Global Security" means a Security that evidences all or part of the
Securities and is authenticated and delivered to, and registered in the name of,
the Depositary for such Securities or a nominee thereof.
"Guarantee" means the Guarantee Agreement, dated as of February 25, 1997,
made by the Company in favor of The Bank of New York as trustee thereunder for
the benefit of the Holders (as defined therein) of the Capital Securities and
the holder of the Common Securities.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, whether recourse is to
all or a portion of the assets of such Person and whether or not contingent, (i)
every obligation of such Person for money borrowed, (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments
of such Person, including obligations incurred in connection with the
acquisition of property, assets or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (iv)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business), (v) every capital lease
obligation of such Person, (vi) every obligation of such Person for claims (as
defined in Section 101(4) of the United States Bankruptcy Code of 1978, as
amended) in respect of derivative products such as interest and foreign exchange
rate contracts, commodity contracts and similar arrangements and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise; provided that "Indebtedness" shall not include (a) any
obligations which, by their terms, are expressly stated to rank pari passu in
right of payment with, or to not be superior in right of payment to, the
Securities, (b) any Indebtedness of the Company which when incurred and without
respect to any election under Section 1111(b) of the United States Bankruptcy
Code of 1978, as amended, was without recourse to the Company, (c) any
Indebtedness of the Company to any of its subsidiaries, (d) Indebtedness of the
Company to any employee or (e) any indebtedness in respect of debt securities
issued to any trust, or a trustee of such trust, partnership or other entity
affiliated with the Company that is a financing entity of the
4
<PAGE>
Company in connection with the issuance by such financing entity of securities
that are similar to the Capital Securities.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.
"Initial Purchasers" means Lehman Brothers Inc., Salomon Brothers Inc, UBS
Securities LLC, and Chase Securities Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as the term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date", when used with respect to any installment of
interest on a Security, means the date specified in such Security as the fixed
date on which an installment of interest with respect to the Securities is due
and payable.
"Investment Company Event" means the receipt by the Trust of an Opinion of
Counsel having a recognized national securities practice to the effect that, as
a result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
the Trust is or will be considered an "investment company" that is required to
be registered under the Investment Company Act of 1940 as amended, which Change
in 1940 Act Law becomes effective on or after the date of original issuance of
the Securities.
"Junior Subordinated Securities" has the meaning specified in the Recitals
to this instrument.
"Legal Defeasance" has the meaning specified in Section 402.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"MOF" means the Ministry of Finance of Japan.
"New Junior Subordinated Securities" has the meaning specified in the
Recitals to this instrument.
"Officers' Certificate" means a certificate signed on behalf of the Company
by the Chairman of the Board, a Vice Chairman of the Board, the President or a
Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Company.
5
<PAGE>
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(a) a statement that each officer signing the Officers' Certificate on
behalf of the Company has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer on behalf of the Company in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company (and who may be an employee of the Company), and who shall be
reasonably acceptable to the Trustee. An opinion of counsel may rely on
certificates as to matters of fact.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities authenticated and delivered under this
Indenture, except: (i) Securities canceled by the Trustee or delivered to the
Trustee for cancellation; (ii) Securities for whose payment or redemption money
in the necessary amount has been deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holder of
such Securities; provided that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and (iii) Securities which
have been paid pursuant to Section 306, or in exchange or for in lieu of which
other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; provided, however, that in determining whether the
holders of the requisite principal amount of Outstanding Notes are present at a
meeting of holders of Notes for quorum purposes or have consented to or voted in
favor of any request, demand, authorization, direction, notice, consent, waiver,
amendment or modification hereunder, Notes held for the account of the Company,
any of its subsidiaries or any of its affiliates shall be disregarded and deemed
not to be Outstanding, except that in determining whether the Trustee shall be
protected in making such a determination or relying upon any such quorum,
consent or vote, only Notes which the Trustee actually knows to be so owned
shall be so disregarded.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company. The Company
will initially act as Paying Agent with respect to the Securities except that,
if the Securities are distributed to the holders of the Capital Securities in
liquidation of such holders' interest in the Trust, the Indenture Trustee will
act as the Paying Agent. The Company at any time may designated additional
Paying
6
<PAGE>
Agents or rescind the designation of any Paying Agent or approve a change in the
office through which any Paying Agent acts, except that the Company will be
required to maintain a Paying Agent at the place of payment.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Private Placement Legend" has the meaning specified in Section 314 of this
Indenture.
"Property Trustee" has the meaning set forth in the Declaration.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified
in Rule 144A under the Securities Act.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights Agreement
dated the date hereof between the Company and the Initial Purchasers for the
benefit of themselves and the Holders (as defined therein) of the Capital
Securities as the same may be amended from time to time in accordance with the
terms thereof.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the 1st day of the month of the relevant Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act and any
successor regulation thereto.
"Regulation S Global Security" means any Global Security or Securities
evidencing Securities that are to be traded pursuant to Regulation S.
"Regulatory Authorities" means the Federal Reserve and MOF.
"Regulatory Capital Event" means that the Company shall have received an
opinion of independent bank regulatory counsel experienced in such matters to
the effect that, as a result of
7
<PAGE>
(a) any amendment to or change (including any announced prospective change) in
the laws (or any regulations thereunder) of the United States or any rules,
guidelines or policies of the Federal Reserve applicable to bank holding
companies or (b) any official administrative pronouncement or judicial decision
for interpreting or applying such laws or regulations which amendment or change
is effective or such pronouncement or decision is announced on or after the date
of original issuance of the Capital Securities, the Capital Securities would not
constitute, or within 90 days of the date thereof would not constitute, Tier I
Capital (or its then equivalent); provided, however, that the distribution of
the Securities in connection with the liquidation of the Trust by the Company
shall not in and of itself constitute a Regulatory Capital Event unless such
liquidation shall have occurred in connection with a Tax Event or an Investment
Company Event. For purposes of determining whether a Regulatory Capital Event
has occurred, the opinion of independent bank regulatory counsel required in the
immediately proceeding sentence shall treat the Company as if it is a bank
holding company subject to the laws and regulations of the United States, any
rules, guidelines and policies of the Federal Reserve, and any administrative
pronouncements and judicial decisions applicable to bank holding companies.
"Remaining Life" has the meaning specified in Section 1201.
"Responsible Officer", when used with respect to the Trustee, means the
Chairman or any Vice-Chairman of the board of directors, the Chairman or any
Vice-Chairman of the executive committee of the board of directors, the Chairman
of the trust committee, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer
or Assistant Trust Officer, the Controller or any Assistant Controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Global Security" means any Global Security or Securities
evidencing Securities that are to be traded pursuant to Rule 144A.
"Restricted Period" shall have the meaning specified in Section 315.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) of the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities" has the meaning specified in the Recitals to this instrument.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
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"Special Event" means either an Investment Company Event, a Regulatory
Capital Event or a Tax Event.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the date on which the principal, together with any accrued and unpaid interest,
of such Security or such installment of interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel,
rendered by a law firm having a recognized national tax practice, to the effect
that, as a result of any amendment to, change in or announced proposed change in
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is adopted or which
pronouncement or decision is announced on or after the date of original issuance
of the Capital Securities under the Declaration, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the date
of such opinion, subject to United States federal income tax with respect to
income received or accrued on the Securities, (ii) interest payable by the
Company on the Securities is not, or within 90 days of the date of such opinion
will not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Trust" means CIT Capital Trust I, a statutory business trust declared and
established pursuant to the Delaware Business Trust Act by the Declaration.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"U.S. Government Obligations" has the meaning specified in Section 404.
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"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee at
the address specified in Section 105 and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or
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instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
entitled to give or take any request, demand, authorization, direction, notice,
consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 15th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be.
With regard to any record date, only the Holders on such date (or their
duly designated proxies) shall be entitled to give or take, or vote on, the
relevant action.
(d) The ownership of Securities shall be proved by the Security Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, Etc. to Trustee and the Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration; or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the
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first paragraph of this instrument or at any other address previously furnished
in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made by telecopier or overnight air courier
guaranteeing next day delivery.
SECTION 107. Conflict With Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the provision of the Trust Indenture Act shall control.
If any provision of this Indenture modifies or excludes any provision of the
Trust Indenture Act that may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as to modified or so be excluded, as
the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the holders of Indebtedness, the holders of Capital Securities (to
the extent provided herein) and the Holders of Securities, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 111. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF. THIS INDENTURE IS SUBJECT TO THE PROVISIONS OF THE
TRUST INDENTURE ACT THAT ARE REQUIRED TO BE PART OF THIS INDENTURE AND SHALL, TO
THE EXTENT APPLICABLE, BE GOVERNED BY SUCH PROVISIONS.
SECTION 112. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal of the Securities need not be made on such date, but may be made on
the next succeeding Business Day (except that, if such Business Day is in the
next succeeding calendar year, such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be, shall be the immediately preceding Business
Day) with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
The Junior Subordinated Securities in definitive form and the New Junior
Subordinated Securities in definitive form shall be in the form attached hereto
as Exhibit A; provided, that the New Junior Subordinated Securities shall not
contain any of the provisions relating to the prohibition on transfer imposed by
the Securities Act.
If the Securities are distributed to the holders of Capital Securities and
Common Securities, the record holder (including any Depositary) of any Capital
Securities or Common Securities shall be issued Securities in definitive, fully
registered form without interest coupons, substantially in the form of Exhibit A
hereto, with the legends in substantially the form of the legends existing on
the security representing the Capital Securities or Common Securities to be
exchanged (with such changes thereto as the officers executing such Securities
determine to be necessary or appropriate, as evidenced by their execution of the
Securities) and such other legends as may be applicable thereto (including any
legend required by Section 313 or Section 314 hereof), duly executed by the
Company and authenticated by the Trustee or the authenticating agent as
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provided herein, which Securities, if to be held in global form by any
Depositary, may be deposited on behalf of the holders of the Securities
represented thereby with the Trustee, as custodian for the Depositary, and
registered in the name of a nominee of the Depositary.
Any Global Security shall represent such of the outstanding Securities as
shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities represented thereby may
from time to time be increased or reduced to reflect transfers or exchanges
permitted hereby. Any endorsement of a Global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee or the Custodian, at the direction of the
Trustee, in such manner and upon instructions given by the holder of such
Securities in accordance with the Indenture. Payment of principal of and
interest and premium, if any, on any Global Security shall be made to the holder
of such Global Security.
The Securities shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities.
The definitive Securities shall be typed, printed, lithographed or engraved
or produced by any combination of these or other methods, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is limited to $257,732,000 except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities pursuant to Sections 304, 305, 306, 906 or
1208.
The Securities' Stated Maturity shall be February 15, 2027.
The Securities shall bear interest at the rate of 7.70% per annum, from
February 25, 1997 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable
semi-annually (subject to deferral as set forth herein), in arrears, on February
15 and August 15 of each year, commencing August 15, 1997, until the principal
thereof is paid or made available for payment. Interest will compound
semi-annually and will accrue at the rate of 7.70% per annum, to the extent
permitted by applicable law, on any interest installment in arrears for more
than one semi-annual period or during an extension of an
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interest payment period as set forth below in this Section 301. In the event
that any date on which interest is payable on the Securities is not a Business
Day, then a payment of the interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay).
The Company shall have the right, at any time during the term of the
Securities, from time to time, to defer payment of interest on such Security for
up to 10 consecutive semi-annual periods (an "Extension Period") provided that
no Extension Period may extend past the Maturity of the Security. There may be
multiple Extension Periods of varying lengths during the term of the Securities,
which may in the aggregate exceed 10 semi-annual periods. At the end of each
Extension Period, if any, the Company shall pay all interest then accrued and
unpaid, together with interest thereon, compounded semi-annually at the rate
specified on this Security to the extent permitted by applicable law. During any
such Extension Period, the Company may not, and may not permit any Subsidiary of
the Company to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in interest to the Securities or
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any Subsidiary of the Company if such guarantee ranks pari
passu or junior in interest to the Securities (other than (a) dividends or
distributions in common stock of the Company, (b) payments under the Guarantee,
(c) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, and
(d) purchases of common stock related to the issuance of common stock or rights
under any of the Company's benefit plans). Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period,
provided that no Extension Period may exceed 10 consecutive semi-annual periods
without payment of all amounts then due on any Interest Payment Date or extend
beyond the Stated Maturity of the Securities. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Company shall give the Property Trustee, the
Regular Trustees and the Debenture Trustee written notice of its election of
such Extension Period at least one Business Day prior to the record date for the
related interest payment.
The Trustee shall promptly give notice of the Company's selection of such
Extension Period to the Holders of the Capital Securities.
The principal of and interest on the Securities shall be payable at the
office or agency of the Paying Agent in the United States maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made (i)
by check mailed to the address of the Person entitled thereto as such address
shall appear in the
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Security Register or (ii) by wire transfer in immediately available funds at
such place and to such account as may be designated by the Person entitled
thereto as specified in the Security Register.
Any moneys deposited with the Indenture Trustee or any Paying Agent, or
then held by the Company in trust, for the payment of principal of and premium,
if any, or interest on any Securities and remaining unclaimed for two years
after such principal and premium, if any, or interest has become due and payable
shall, at the request of the Company, be repaid to the Company and the holder of
such Securities shall thereafter look, as a general unsecured creditor, only to
the Company for payment thereof.
The Securities shall be subordinated in right of payment to Indebtedness as
provided in Article Eleven.
The Securities shall be redeemable as provided in Article Twelve.
SECTION 302. Denominations.
The Securities shall be issuable only in registered form, without coupons,
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and make available for delivery such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
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SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and make available for
delivery, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 305. Registration; Registration of Transfer and Exchange.
The Company shall cause to be kept at the principal office of The Bank of
New York, a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Bank of New York
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an office or
agency of the Company designated pursuant to Section 1002 for such purpose, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
any authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
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Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Sections 304, 906 or 1208 not involving any transfer.
If the Securities are to be redeemed in part, the Company shall not be
required (A) to issue, register the transfer of or exchange any Securities
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of any such Securities selected for
redemption under Section 1204 and ending at the close of business on the day of
such mailing, or (B) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
So long as the Securities are eligible for book-entry settlement with the
Depositary, or unless otherwise required by law, all Securities to be traded on
the PORTAL Market shall be represented by the Restricted Global Security
registered in the name of the Depositary or the nominee of the Depositary.
The transfer and exchange of beneficial interests in any Global Security,
which does not involve the issuance of a definitive Security or the transfer of
interests to another Global Security, shall be effected through the Depositary
(but not the Trustee or the Custodian) in accordance with this Indenture
(including the restrictions on transfer set forth herein) and the procedures of
the Depositary therefor. Neither the Trustee nor the Custodian (in such
respective capacities) will have any responsibility for the transfer and
exchange of beneficial interests in such Global Security that does not involve
the issuance of a definitive Security or the transfer of interests to another
Global Security.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and make available for delivery in
exchange therefor a new Security of like tenor and principal amount and bearing
a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and make
available for delivery, in lieu of any such destroyed, lost or stolen Security,
a new Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
subject to the preceding paragraph, pay such Security instead of issuing a new
Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause
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notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable pursuant to
the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and if so listed, upon such notice as may
be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee. Subject to the foregoing provisions
of this Section, each Security delivered under this Indenture upon registration
of transfer of or in exchange for or in lieu of any other Security shall carry
the rights to interest accrued and unpaid, and to accrue which, which were
carried by such other Security.
In the event that a Registration Default (as defined in the Registration
Rights Agreement) occurs, additional interest ("Additional Interest") shall
become payable in respect of the Junior Subordinated Securities at the rate of
0.25% per annum applicable to the liquidation amount of Junior Subordinated
Securities for the period from and including the date on which such Registration
Default occurs to, but excluding, the date on which it ceases to exist.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee shall treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and (subject to Section
307) interest on such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly canceled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held by
the Trustee shall be disposed of as directed by a Company Order, provided,
however, that the Trustee may but shall not be required to destroy such
Securities.
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SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day year
of twelve 30-day months. The amount of interest payable for any period shorter
than a full semi-annual period for which interest is computed will be computed
on the basis of actual number of days elapsed based on 30-day months.
SECTION 311. Right of Set-off.
Notwithstanding anything to the contrary in the Indenture, the Company
shall have the right to set-off any payment it is otherwise required to make
thereunder to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a related payment under the Guarantee.
SECTION 312. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company shall promptly notify
the Trustee of any change in the "CUSIP" numbers.
SECTION 313. Global Securities.
If the Securities are distributed to the holders of Capital Securities,
such Securities distributed in respect of Capital Securities that are held in
global form by a Depositary will initially be issued as a Global Security,
unless such transfer cannot be effected through book-entry settlement. If the
Company shall establish that the Securities are to be issued in the form of one
or more Global Securities, then the Company shall execute and the Trustee shall,
in accordance with Section 303 and the Company Order, authenticate and deliver
one or more Global Securities that (i) shall represent and shall be denominated
in an amount equal to the aggregate principal amount of all of the Securities to
be issued in the form of Global Securities and not yet canceled, (ii) shall be
registered in the name of the Depositary for such Global Security or Securities
or the nominee of such Depositary, and (iii) shall be delivered by the Trustee
to such Depositary or pursuant to such Depositary's instructions. Global
Securities shall bear a legend substantially to the following effect:
"This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. Notwithstanding the provisions of Section 305, unless
and until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a part of the Securities
may not be transferred in the manner provided in Section 305 except as a whole
by the Depositary to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. Every Security delivered upon registration
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or transfer of, or in exchange for, or in lieu of, this Global Security shall be
a Global Security subject to the foregoing, except in the limited circumstances
described above. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Company or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is to be made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein."
Definitive Securities issued in exchange for all or a part of a Global
Security pursuant to this Section 313 shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
Upon execution and authentication, the Trustee shall deliver such definitive
Securities to the persons in whose names such definitive Securities are so
registered.
At such time as all interests in Global Securities have been redeemed,
repurchased or canceled, such Global Securities shall be, upon receipt thereof,
canceled by the Trustee in accordance with standing procedures and instructions
existing between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in Global Securities is exchanged for definitive
Securities, redeemed, canceled or transferred to a transferee who receives
definitive Securities therefor or any definitive Security is exchanged or
transferred for part of Global Securities, the principal amount of such Global
Securities shall, in accordance with the standing procedures and instructions
existing between the Depositary and the Custodian, be reduced or increased, as
the case may be, and an endorsement shall be made on such Global Securities by
the Trustee or the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.
The Company and the Trustee may for all purposes, including the making of
payments due on the Securities, deal with the Depositary as the authorized
representative of the Holders for the purposes of exercising the rights of
Holders hereunder. The rights of the owner of any beneficial interest in a
Global Security shall be limited to those established by law and agreements
between such owners and depository participants or Euroclear and Cedel;
provided, that no such agreement shall give any rights to any person against the
Company or the Trustee without the written consent of the parties so affected.
Multiple requests and directions from and votes of the Depositary as holder of
Securities in global form with respect to any particular matter shall not be
deemed inconsistent to the extent they do not represent an amount of Securities
in excess of those held in the name of the Depositary or its nominee.
If at any time the Depositary for any Securities represented by one or more
Global Securities notifies the Company that it is unwilling or unable to
continue as Depositary for such Securities or if at any time the Depositary for
such Securities shall no longer be eligible under this Section 313, the Company
shall appoint a successor Depositary with respect to such Securities. If a
successor Depositary for such Securities is not appointed by the Company within
90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company's election that
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such Securities be represented by one or more Global Securities shall no longer
be effective and the Company shall execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Securities, will
authenticate and make available for delivery Securities in definitive registered
form, in any authorized denominations, in an aggregate principal amount equal to
the principal amount of the Global Security or Securities representing such
Securities in exchange for such Global Security or Securities.
The Company may at any time and in its sole discretion determine that the
Securities issued in the form of one or more Global Securities shall no longer
be represented by a Global Security or Securities. In such event the Company
shall execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities, shall authenticate and
make available for delivery, Securities in definitive registered form, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such
Securities, in exchange for such Global Security or Securities.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in Section 314(a)), Global Securities may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
Interests of beneficial owners in Global Security may be transferred or
exchanged for definitive Securities and definitive Securities may be transferred
or exchange for Global Securities in accordance with rules of the Depositary and
the provisions of Section 315.
Any Security in global form may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Securities to be tradeable on the PORTAL Market or as may be required for the
Securities to be tradeable on any other market developed for trading of
securities pursuant to Rule 144A or required to comply with any applicable law
or any regulation thereunder or with Regulation S or with the rules and
regulations of any securities exchange upon which the Securities may be listed
or traded or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Securities are
subject.
SECTION 314. Restrictive Legend.
(a) Each Global Security and definitive Security that constitutes a
Restricted Security shall bear the following legend (the "Private Placement
Legend") on the face thereof until three years after the later of the date of
original issue and the last date on which the Company or any Affiliate of the
Company was the owner of such Capital Securities (or any predecessor thereto)
(the "Resale Restriction Termination Date"), unless otherwise agreed by the
Company and the Holder thereof:
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"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF,
REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE COMPANY THAT:
(I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE
TRANSFER THIS SECURITY PRIOR TO THE LATER OF THE DATE WHICH IS THREE YEARS
AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF SUCH RESTRICTED
SECURITIES (OR ANY PREDECESSOR) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (D)
OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND (III) IT WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS
SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE, ANY OFFER,
SALE OR OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSES (II)(D) AND (E)
IS SUBJECT TO THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE PROPERTY
TRUSTEE FOR SUCH SECURITIES TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN FORM AND
SUBSTANCE."
Any Security (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms may, upon satisfaction of the requirements of Section 314(b) and
surrender of such Security for exchange to the Security Registrar in accordance
with the provisions of this Section 314, be exchanged for a new Security or
Securities, of like tenor and aggregate principal amount, which shall not bear
the restrictive legend required by this Section 314(a).
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(b) Upon any sale or transfer of any Restricted Security (including any
interest in a Global Security) (i) that is effected pursuant to an effective
registration statement under the Securities Act or (ii) in connection with which
the Trustee receives certificates and other information (including an opinion of
counsel, if requested) reasonably acceptable to the Company and the Trustee to
the effect that such security will no longer be subject to the resale
restrictions under federal and state securities laws, then (A) in the case of a
Restricted Security in definitive form, the Security Registrar or co-Registrar
shall permit the holder thereof to exchange such Restricted Security for a
Security that does not bear the legend set forth in Section 314(a), and shall
rescind any such restrictions on transfer and (B) in the case of Restricted
Securities represented by a Global Security, such Security shall no longer be
subject to the restrictions contained in the legend set forth in Section 314(a)
(but still subject to the other provisions hereof). In addition, any Security
(or Security issued in exchange or substitution therefor) as to which the
restrictions on transfer described in the legend set forth in Section 314(a)
have expired by their terms, may, upon surrender thereof (in accordance with the
terms of this Indenture) together with such certifications and other information
(including an Opinion of Counsel having substantial experience in practice under
the Securities Act and otherwise reasonably acceptable to the Company, addressed
to the Company and the Trustee and in a form acceptable to the Company, to the
effect that the transfer of such Restricted Security has been made in compliance
with Rule 144 or such successor provision) acceptable to the Company and the
Trustee as either of them may reasonably require, be exchanged for a new
Security or Securities of like tenor and aggregate principal amount, which shall
not bear the restrictive legends set forth in Section 314(a).
(c) Each Global Security and definitive Security shall bear the following
legend:
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A
"PLAN"), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSETS ENTITY"), AND NO
PERSON INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS
SECURITY OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS
ENTITLED TO THE EXEMPTIVE RELIEF UNDER U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 OR
OTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDING OF THIS SECURITY OR ANY INTEREST HEREIN WILL BE DEEMED
TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT EITHER (A)
IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES
ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN OR (B) IS ENTITLED TO THE
EXEMPTIVE RELIEF UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 OR OTHER
APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING.
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SECTION 315. Special Transfer Provisions.
At any time at the request of the beneficial holder of an interest in a
Security in global form, such beneficial holder shall be entitled to obtain a
definitive Security upon written request to the Trustee in accordance with the
standing instructions and procedures existing between the Depositary and the
Trustee for the issuance thereof. Upon receipt of any such request, the Trustee
will cause the aggregate principal amount of the Security in global form to be
reduced and, following such reduction, the Company will execute and the Trustee
will authenticate and deliver to such beneficial holder (or its nominee) a
Security or Securities in the appropriate aggregate principal amount in the name
of such beneficial holder (or its nominee) and bearing such restrictive legends
as may be required by this Indenture.
Any transfer of a beneficial interest in a Security in global form which
cannot be effected through book-entry settlement must be effected by the
delivery to the transferee (or its nominee) of a definitive Security or
Securities registered in the name of the transferee (or its nominee) on the
books maintained by the Trustee. With respect to any such transfer, the Trustee
will cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Trustee, the aggregate principal amount of the
Security in global form to be reduced and, following such reduction, the Company
will execute and the Trustee will authenticate and deliver to the transferee (or
such transferee's nominee, as the case may be), a Security or Securities in the
appropriate aggregate principal amount in the name of such transferee (or its
nominee) and bearing such restrictive legends as may be required by this
Indenture. In connection with any such transfer, the Trustee may request such
representations and agreements relating to the restrictions on transfer of such
Security or Securities from such transferee (or such transferee's nominee) as
the Trustee may reasonably require.
So long as the Securities are eligible for book-entry settlement, or unless
otherwise required by law, upon any transfer of a definitive Security to a QIB
in accordance with Rule 144A, unless otherwise requested by the transferor, and
upon receipt of the definitive Security or Securities being so transferred,
together with a certification in the form attached to the Security from the
transferor that the transferor reasonably believes that the transferee is a QIB
(or other evidence satisfactory to the Trustee), the Trustee shall make an
endorsement on the Restricted Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Restricted
Global Security, the Trustee shall cancel such definitive Security or Securities
and cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Trustee, the aggregate principal amount of
Securities represented by the Restricted Global Security to be increased
accordingly.
So long as the Securities are eligible for book-entry settlement, or unless
otherwise required by law, upon any transfer of a definitive Security in
accordance with Regulation S, if requested by the transferor, and upon receipt
of the definitive Security or Securities being so transferred, together with a
certification in the form attached to the Security from the transferor that the
transfer was made in accordance with Rule 903 or 904 of Regulation S or Rule 144
under the Securities Act (or other evidence satisfactory to the Trustee), the
Trustee shall make or direct the Custodian to make, an endorsement on the
Regulation S Global Security to reflect an increase in
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the aggregate principal amount of the Securities represented by the Regulation S
Global Security, the Trustee shall cancel such definitive Security or Securities
and cause, or direct the Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Custodian,
the aggregate principal amount of Securities represented by the Regulation S
Global Security to be increased accordingly.
If a holder of a beneficial interest in the Restricted Global Security
wishes at any time to exchange its interest in the Restricted Global Security
for an interest in the Regulation S Global Security, or to transfer its interest
in the Restricted Global Security to a person who wishes to take delivery
thereof in the form of an interest in the Regulation S Global Security, such
holder may, subject to the rules and procedures of the Depositary and to the
requirements set forth in the following sentence, exchange or cause the exchange
or transfer or cause the transfer of such interest for an equivalent beneficial
interest in the Regulation S Global Security. Upon receipt by The Bank of New
York, as transfer agent of (1) instructions given in accordance with the
Depositary's procedures from or on behalf of a holder of a beneficial interest
in the Restricted Global Security, directing The Bank of New York (via DWAC), as
transfer agent, to credit or cause to be credited a beneficial interest in the
Regulation S Global Security in an amount equal to the beneficial interest in
the Restricted Global Security to be exchanged or transferred, (2) a written
order given in accordance with the Depositary's procedures containing
information regarding the Euroclear or Cedel account to be credited with such
increase and the name of such account, and (3) a certificate given by the holder
of such beneficial interest stating that the exchange or transfer of such
interest has been made pursuant to and in accordance with Rule 903 or Rule 904
of Regulation S or Rule 144 under the Securities Act (or other evidence
satisfactory to the Trustee), The Bank of New York, as transfer agent, shall
promptly deliver appropriate instructions to the Depositary (via DWAC), its
nominee, or the custodian for the Depositary, as the case may be, to reduce or
reflect on its records a reduction of the Restricted Global Security by the
aggregate principal amount of the beneficial interest in such Restricted Global
Security to be so exchanged or transferred from the relevant participant, and
The Bank of New York, as transfer agent, shall promptly deliver appropriate
instructions (via DWAC) to the Depositary, its nominee, or the custodian for the
Depositary, as the case may be, concurrently with such reduction, to increase or
reflect on its records an increase of the principal amount of such Regulation S
Global Security by the aggregate principal amount of the beneficial interest in
such Restricted Global Security to be so exchanged or transferred, and to credit
or cause to be credited to the account of the person specified in such
instructions (who may be Morgan Guaranty Trust Company of New York, Brussels
office, as operator of Euroclear or Cedel or another agent member of Euroclear
or Cedel, or both, as the case may be, acting for and on behalf of them) a
beneficial interest in such Regulation S Global Security equal to the reduction
in the principal amount of such Restricted Global Security.
If a holder of a beneficial interest in the Regulation S Global Security
wishes at any time to exchange its interest in the Regulation S Global Security
for an interest in the Restricted Global Security, or to transfer its interest
in the Regulation S Global Security to a person who wishes to take delivery
thereof in the form of an interest in the Restricted Global Security, such
holder may, subject to the rules and procedures of Euroclear or Cedel and the
Depositary, as the case may be, and to the requirements set forth in the
following sentence, exchange or cause the exchange or transfer or cause the
transfer of such interest for an equivalent beneficial interest in
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such Restricted Global Security. Upon receipt by The Bank of New York, as
transfer agent of (l) instructions given in accordance with the procedures of
Euroclear or Cedel and the Depositary, as the case may be, from or on behalf of
a beneficial owner of an interest in the Regulation S Global Security directing
The Bank of New York, as transfer agent, to credit or cause to be credited a
beneficial interest in the Restricted Global Security in an amount equal to the
beneficial interest in the Regulation S Global Security to be exchanged or
transferred, (2) a written order given in accordance with the procedures of
Euroclear or Cedel and the Depositary, as the case may be, containing
information regarding the account with the Depositary to be credited with such
increase and the name of such account, and (3) prior to the expiration of the
Restricted Period, a certificate given by the holder of such beneficial interest
and stating that the person transferring such interest in such Regulation S
Global Security reasonably believes that the person acquiring such interest in
the Restricted Global Security is a QIB and is obtaining such beneficial
interest in a transaction meeting the requirements of Rule 144A and any
applicable securities laws of any state of the United States or any other
jurisdiction (or other evidence satisfactory to the Trustee), The Bank of New
York, as transfer agent, shall promptly deliver (via DWAC) appropriate
instructions to the Depositary, its nominee, or the custodian for the
Depositary, as the case may be, to reduce or reflect on its records a reduction
of the Regulation S Global Security by the aggregate principal amount of the
beneficial interest in such Regulation S Global Security to be exchanged or
transferred, and The Bank of New York, as transfer agent, shall promptly deliver
(via DWAC) appropriate instructions to the Depositary, its nominee, or the
custodian for the Depositary, as the case may be, concurrently with such
reduction, to increase or reflect on its records an increase of the principal
amount of the Restricted Global Security by the aggregate principal amount of
the beneficial interest in the Regulation S Global Security to be so exchanged
or transferred, and to credit or cause to be credited to the account of the
person specified in such instructions a beneficial interest in the Restricted
Global Security equal to the reduction in the principal amount of the Regulation
S Global Security. After the expiration of the Restricted Period (as defined
below), the certification requirement set forth in clause (3) of the second
sentence of the above paragraph will no longer apply to such exchanges and
transfers.
If a holder of a definitive Security wishes at any time to exchange its
Security for a beneficial interest in any Global Security (or vice versa), or to
transfer its definitive Security to a person who wishes to take delivery thereof
in the form of a beneficial interest in a Global Security (or vice versa), such
Securities and beneficial interests may be exchanged or transferred for one
another only in accordance with such procedures as are substantially consistent
with the provisions of the two preceding paragraphs (including the certification
requirements intended to ensure that such exchanges or transfers comply with
Rule 144, Rule 144A or Regulation S, as the case may be) and as may be from time
to time adopted by the Company and the Trustee.
Any beneficial interest in one of the Global Securities that is transferred
to a person who takes delivery in the form of an interest in the other Global
Security will, upon transfer, cease to be an interest in such Global Security
and become an interest in the other Global Security and, accordingly, will
thereafter be subject to all transfer restrictions and other procedures
applicable to beneficial interests in such other Global Security for as long as
it remains such an interest.
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Prior to or on the 40th day after the later of the commencement of the
offering of the Capital Securities and the Closing Date (the "Restricted
Period"), beneficial interests in a Regulation S Global Security may only be
held through Morgan Guaranty Trust Company of New York, Brussels Office, as
operator of Euroclear or Cedel or another agent member of Euroclear and Cedel
acting for and on behalf of them, unless delivery is made through the Restricted
Global Security in accordance with the certification requirements hereof. During
the Restricted Period, interests in the Regulation S Global Security, if any,
may be exchanged for interests in the Restricted Global Security or for
definitive Securities only in accordance with the certification requirements
described above.
ARTICLE FOUR
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on written demand of and at the
expense of the Company, shall execute instruments supplied by the Company
acknowledging satisfaction and discharge of this Indenture, when (1) either (A)
all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to the Trustee for
cancellation; or (B) all such Securities not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or (ii) will become
due and payable at their 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 Company,
in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited
with the Trustee as funds in trust for the purpose on amount sufficient to pay
and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and interest to the
date of such deposit (in the case of Securities which have become due and
payable) or to the Maturity or Redemption Date, as the case may be; (2) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company; and (3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with. Notwithstanding the satisfaction and
discharge of this Indenture, the obligations of the Company to the Trustee under
Section 607 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
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SECTION 402. Legal Defeasance.
In addition to discharge of this Indenture pursuant to Section 401, in the
case of any Securities with respect to which the exact amount described in
subparagraph (a) of Section 404 can be determined at the time of making the
deposit referred to in such subparagraph (a), the Company shall be deemed to
have paid and discharged the entire indebtedness on all the Securities as
provided in this Section on and after the date the conditions set forth in
Section 404 are satisfied, and the provisions of this Indenture with respect to
the Securities shall no longer be in effect (except as to (i) rights of
registration of transfer and exchange of Securities, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Securities, (iii) maintenance of a
Paying Agent, (iv) rights of Holders of Securities to receive, solely from the
trust fund described in subparagraph (a) of Section 404, payments of principal
thereof and interest, if any, thereon upon the original stated due dates
therefor (but not upon acceleration), (v) the rights, obligations, duties and
immunities of the Trustee hereunder, (vi) this Section 402 and (vii) the rights
of the Holders of Securities as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them)
(hereinafter called "Legal Defeasance"), and the Trustee, at the cost and
expense of the Company, shall execute proper instruments acknowledging the same.
SECTION 403. Covenant Defeasance.
In the case of any Securities with respect to which the exact amount
described in subparagraph (a) of Section 404 can be determined at the time of
making the deposit referred to in such subparagraph (a), (x) the Company shall
be released from its obligations under any covenants specified in or pursuant to
this Indenture (except as to (i) rights of registration of transfer and exchange
of Securities, (ii) substitution of mutilated, defaced, destroyed, lost or
stolen Securities, (iii) maintenance of a Paying Agent, (iv) rights of Holders
of Securities to receive from the Company, pursuant to Section 1001, payments of
principal thereof and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), (v) the rights, obligations, duties
and immunities of the Trustee hereunder and (vi) the rights of the Holders of
Securities as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them), and (y) the occurrence of any
event specified in Section 501(3) (with respect to any of the covenants
specified in or pursuant to this Indenture) shall be deemed not to be or result
in an Event of Default, in each case with respect to the Outstanding Securities
as provided in this Section on and after the date the conditions set forth in
Section 404 are satisfied (hereinafter called "Covenant Defeasance"), and the
Trustee, at the cost and expense of the Company, shall execute proper
instruments acknowledging the same. For this purpose, such Covenant Defeasance
means that the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant (to
the extent so specified in the case of Section 501(3)), whether directly or
indirectly by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document, but the remainder of this Indenture and the Securities
shall be unaffected thereby.
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SECTION 404. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 402
or 403 to the Outstanding Securities:
(a) with reference to Section 402 or 403, the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as funds in
trust, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of Securities (i) cash in an amount, (ii) direct
obligations of the United States of America, backed by its full faith and credit
("U.S. Government Obligations"), maturing as to principal and interest, if any,
at such times and in such amounts as will ensure the availability of cash, (iii)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, or (iv) a combination thereof, in each case sufficient, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge the principal of and interest, if any, on all Securities on each
date that such principal or interest, if any, is due and payable;
(b) in the case of Legal Defeasance under Section 402, the Company has
delivered to the Trustee an Opinion of Counsel based on the fact that (x) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (y), since the date hereof, there has been a change in the
applicable United States federal income tax law, in either case to the effect
that, and such opinion shall confirm that, the Holders of the Securities of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and Legal Defeasance and will be subject to federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit and Legal Defeasance had not occurred;
(c) in the case of Covenant Defeasance under Section 403, the Company has
delivered to the Trustee an Opinion of Counsel to the effect that, and such
opinion shall confirm that, the Holders of the Securities will not recognize
income, gain or loss for federal income tax purposes as a result of such deposit
and Covenant Defeasance and will be subject to federal income tax on the same
amount in the same manner and at the same times as would have been the case if
such deposit and Covenant Defeasance had not occurred;
(d) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any agreement or
instrument to which the Company is a party or by which it is bound; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent contemplated by this provision have been complied with.
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SECTION 405. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations deposited with the Trustee pursuant to Section
401 shall be held in trust and such money and all money from such U.S.
Government Obligations shall be applied by it, in accordance with the provisions
of the Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
interest for whose payment such money and U.S. Government Obligations has been
deposited with the Trustee.
SECTION 406. Indemnity for U.S. Government Obligations.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 or the principal or interest received in
respect of such obligations other than any such tax, fee or other charge that by
law is for the account of the Holders of Outstanding Securities.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default" wherever used herein, means any one of the following
events that has occurred and is continuing (whatever the reason for such Event
of Default and whether it shall be occasioned by the provisions of Article
Eleven or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) failure for 30 days to pay any interest on the Securities when due
(subject to the deferral of any due date in the case of an Extension Period); or
(2) failure to pay any principal on the Securities when due, whether at
Maturity, upon redemption, by declaration of acceleration or otherwise;
(3) failure to observe or perform in any material respect any other
covenant herein that continues 90 days after written notice to the Company from
the Trustee or the holders of at least 25% in aggregate principal amount of the
Outstanding Securities; or
(4) entry by a court having jurisdiction in the premises of (A) a decree or
order for relief in respect of the Company in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of substantially all of the property of the
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Company, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 90 consecutive days; or
(5) (A) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or (B) the consent by the Company to the entry of a
decree or order for relief in respect of itself in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company, or (C) the filing by the
Company of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or (D) the consent by the Company to
the filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of all or substantially all of the property
of the Company, or (E) the making by the Company of an assignment for the
benefit of creditors.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities shall have the right to declare the
principal of and the interest on all the Securities and any other amounts
payable hereunder to be due and payable immediately, provided, however, that if
upon an Event of Default, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities fail to declare the
payment of all amounts on the Securities to be immediately due and payable, the
holders of at least 25% in aggregate liquidation amount of Capital Securities
then outstanding shall have such right, by a notice in writing to the Company
(and to the Trustee if given by Holders or the holders of Capital Securities)
and upon any such declaration such principal and all accrued interest shall
become immediately due and payable.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the Holders of a majority
in aggregate principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if (1) the Company has paid or deposited with the Trustee a sum
sufficient to pay (A) all overdue interest on all Securities, (B) the principal
of (and premium, if any, on) any Securities which have become due otherwise than
by such declaration of acceleration and interest thereon at the rate borne by
the Securities, (C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities, and (D) all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel; and
(2) all Events of Default, other than the non-payment of the principal of
Securities which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513. Should the Holders of such
Securities fail to annul such declaration and waive such default, the holders of
a majority in
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aggregate liquidation amount of the Capital Securities then outstanding shall
have such right. No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a period of
30 days, or
(2) default is made in the payment of the principal of any Security at the
Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest, and, to the extent that payment thereof
shall be legally enforceable, interest on any overdue principal and on any
overdue interest, at the rate borne by the Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee may File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee shall
be authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607. No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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SECTION 505. Trustee may Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trust without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of any express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Subject to Article Eleven, 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, upon presentation of the Securities and the notation thereon of the
payment, if only partially paid, and upon surrender thereof, if fully paid;
FIRST: To the payment of all amounts due the Trustee under Section 607; and
SECOND: To the payment of the amounts then due and unpaid for principal of
and interest on the Securities in respect of which or for the benefit of which
such money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable as such Securities for principal
and interest, respectively.
THIRD: To the Company, if any balance shall remain.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the Outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity
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
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Outstanding Securities; it being understood and intended that no one or more
Holders shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders, or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all the
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal and Interest;
Capital Security Holders' Rights.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and (subject to Section 307) interest on such
Security on the Stated Maturity expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
If an Event of Default constituting the failure to pay interest or
principal on the Securities on the date such interest or principal is otherwise
payable has occurred and is continuing, then a holder of Capital Securities may
directly institute a proceeding for enforcement of payment to such holder
directly of the principal of or interest on the Securities having a principal
amount equal to the aggregate liquidation amount of the Capital Securities as
such holder on or after the respective due date specified in the Securities. The
Company may not amend this Section without the prior written consent of the
holders of all of the Capital Securities. Notwithstanding any payment made to
such holder of Capital Securities by the Company in connection with such a
Direct Action, the Company shall remain obligated to pay the principal of or
interest on the Securities held by the Trust or the Property Trustee and the
Company shall be subrogated to the rights of the holder of such Capital
Securities with respect to payments on the Capital Securities to the extent of
any payments made by the Company to such holder in any Direct Action. A holder
of Capital Securities will not be able to exercise directly any other remedy
available to the Holders of the Securities.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by
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law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 511. Delay or Omission not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture; and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
Subject to Sections 902 and 1008 hereof, the Holders of not less than a
majority in principal amount of the Outstanding Securities may on behalf of the
Holders of all the Securities waive any past default hereunder and its
consequences, except a default
(1) in the payment of the principal of or interest on any Security (unless
such default has been cured and a sum sufficient to pay all matured installments
of interest and principal due otherwise than by acceleration has been deposited
with the Trustee); or
(2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected;
provided, however, that such waiver or modification to such waiver shall not be
effective until the holders of a majority in liquidation preference of Capital
Securities shall have consented to such waiver or modification to such waiver;
provided further, that if the consent of the Holder of each of the Outstanding
Securities is required, such waiver shall not be effective until each holder of
the Capital Securities shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist, effective as of
the date specified in such waiver (and effective retroactively to the date of
default, if so specified) and any
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Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or the Trustee or in
any suit for the enforcement of the right to receive the principal of and
interest on any Security.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder as and
to the extent provided by the Trust Indenture Act; provided, however, that
except in the case of a default in the payment of the principal of or interest
on any Security, the Trustee shall be protected in
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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; provided, further, that in the case of
any default of the character specified in Section 501(3), no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default. For
purposes of this Section, the Trustee shall not be deemed to have knowledge of a
default unless the Trustee has actual knowledge of such default or has received
written notice of such default in the manner contemplated by Section 105.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity 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,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further
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inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(h) any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable to the Company for any action taken
by, or omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities, the Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. Trustee and Other Agents may Hold Securities.
The Trustee, any Paying Agent, any Security Registrar, or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar, or such other agent. Money held by the Trustee
in trust hereunder shall not be invested by the Trustee pending distribution
thereof to the holders of the Securities.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
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SECTION 607. Compensation; Reimbursement; and Indemnity.
The Company, as issuer of the Securities, agrees
(1) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing 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 each of the Trustee and any predecessor Trustee for, and
to hold it harmless against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based on the income, revenues or
gross receipts of the Trustee) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
this trust or the trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such obligations
of the Company, the Trustee shall have a lien prior to the Securities upon all
property and lands held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and premiums, if any, on) or interest
on particular Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(4) or Section 501(5), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
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SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and has its Corporate Trust
Office in New York, New York. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of removal, the removed Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, (i)
the Company by a Board Resolution may remove the Trustee, or (ii) subject
to Section 514, any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
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(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities delivered to the
Company and the Retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; provided that, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not made available for delivery, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may
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adopt such authentication and make available for delivery the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or becomes a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee (a)
semi-annually, not later than January 31 and July 31 in each year, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders to the extent the Company has knowledge thereof as of a date not
more than 15 days prior to the delivery thereof, and (b) at such other times as
the Trustee may request in writing, within 30 days after the receipt by the
Company of any such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished, excluding from any
such list names and addresses received by the Trustee in its capacity as
Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701, and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and duties of the Trustee, shall be as provided by the Trust Indenture
Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders as of May 15 of each year such
reports concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
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(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when the Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 shall be filed
with the Trustee within 15 days after the same is so required to be filed with
the Commission. Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:
(1) the Person formed by such consolidation or into which the Company is
merged or the Person that acquires by conveyance or transfer, or which leases,
the properties and assets of the Company substantially as an entirety shall be a
corporation, partnership or trust, shall be organized and existing under the
laws of the United States of America or any State or the District of Columbia,
and shall expressly 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
(including any additional interest) on 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, 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;
(3) for so long as Securities registered on the Securities Register in the
name of the Trust (or the Property Trustee) are outstanding, such consolidation,
merger, conveyance, transfer or lease is permitted under the Declaration and the
Guarantee and does not give rise to any breach or violation of the Declaration
or the Guarantee;
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(4) any such lease shall provide that it will remain in effect so long as
any Securities are Outstanding; and
(5) 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 any such supplemental indenture complies with this Article
and that all conditions precedent herein provided for relating to such
transaction have been complied with; and the Trustee, subject to Section 601,
may rely upon such Officers' Certificate and Opinion of Counsel as conclusive
evidence that such transaction complies with this Section 801.
SECTION 802. Successor Person Substituted.
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein; and, in the event of any such conveyance,
transfer or lease the Company shall be discharged from all obligations and
covenants under the Indenture and the Securities and may be dissolved and
liquidated.
Such successor Person may cause to be signed, and may issue either in its
own name or in the name of the Company, any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor Person instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall make available
for delivery any Securities which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication
pursuant to such provisions and any Securities which such successor Person
thereafter shall cause to be signed and delivered to the Trustee on its behalf
for the purpose pursuant to such provisions. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
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(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and in
the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders,
or to surrender any right or power herein conferred upon the Company; or
(3) to cure any ambiguity or defect, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this Indenture,
provided that such action pursuant to this clause (3) shall not adversely affect
the interests of the Holders of the Securities or, so long as any of the Capital
Securities shall remain outstanding, the holders of the Capital Securities; or
(4) to comply with any requirement of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of, the principal of, or any installment of
interest on, any Security, or reduce the principal amount thereof or the rate of
interest thereon or extend the time of payment of interest thereon (except such
extension as is contemplated hereby), or change the place of payment where, or
the coin or currency in which, any Security or interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or modify the provisions of this Indenture with respect to
the subordination of the Securities in a manner adverse to the Holders,
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or Section
1008, 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; provided, that, so
long as any of the Capital Securities remains outstanding, no such amendment
shall be made that adversely affects the holders of the Capital Securities, and
no termination of this Indenture shall occur, and no waiver of any Event of
Default or compliance with
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any covenant under this Indenture shall be effective, without the prior consent
of the holders of at least a majority of the aggregate liquidation preference of
the outstanding Capital Securities unless and until the principal of and any
premium on the Securities and all accrued and unpaid interest thereon have been
paid in full.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trust created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into such supplemental indenture which affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and made available for delivery by the Trustee in
exchange for Outstanding Securities.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and interest on
the Securities in accordance with the terms of the Securities and this Indenture
and comply with all other terms and conditions and agreements contained herein.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in The City of New York an office or agency where
Securities may be presented or surrendered for registration of transfer or
exchange, where Securities may be surrendered for conversion and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in location, of such office or agency.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies in the United States where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the United States for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
SECTION 1003. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on,
or at the option of the Company, or before each due date of the principal of or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal 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. In such case the Company shall not invest the
amount so segregated and held in trust pending the distribution thereof.
Whenever the Company shall have one or more Paying Agents, it will, on or
prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act; provided, however, that any such deposit on a due date shall
be initiated prior to 12:00 noon (New York time) in same-day funds.
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The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will (i) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent and (ii) during the continuance of any default by the
Company (or any other obligor upon the Securities) in the making of any payment
in respect of the Securities, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in the trust
by the Company or such Paying Agent, such sums to be held by the Trustee upon
the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Payment Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal or interest that has
become due and payable shall be paid to the Company on Company Request, or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease.
SECTION 1004. Statements by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
material terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders and, while
any Capital Securities are outstanding, the holders of the Capital Securities.
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SECTION 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary that comprise more than 10%
of the assets of the Company and its Subsidiaries, taken as a whole; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1008. Waiver of Certain Covenants.
Except as otherwise specified or as contemplated by Section 301 for
Securities, the Company may, with respect to the Securities, omit in any
particular instance to comply with any term, provision or condition set forth in
any covenant provided pursuant to Section 901(2) for the benefit of the Holders
if before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, but no 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
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
SECTION 1009. Payment of the Trust's Costs and Expenses.
Since the Trust is being formed solely to facilitate an investment in the
Securities, the Company, as borrower, hereby covenants to pay all debts and
obligations (other than with respect to the Capital Securities and Common
Securities) and all costs and expenses of the Trust (including, but not limited
to, all costs and expenses relating to the organization of the Trust, the fees
and expenses of the Trustees and all costs and expenses relating to the
operation of the Trust) and to pay any and all taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
on the Trust by the United States, or any other taxing authority, so
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that the net amounts received and retained by the Trust and the Property Trustee
after paying such expenses will be equal to the amounts the Trust and the
Property Trustee would have received had no such costs or expenses been incurred
by or imposed on the Trust. The foregoing obligations of the Company are for the
benefit of, and shall be enforceable by, any person to whom any such debts,
obligations, costs, expenses and taxes are owed (each, a "Creditor") whether or
not such Creditor has received notice thereof. Any such Creditor may enforce
such obligations of the Company directly against the Company, and the Company
irrevocably waives any right or remedy to require that any such Creditor take
any action against the Trust or any other person before proceeding against the
Company. The Company shall execute such additional agreements as may be
necessary or desirable to give full effect to the foregoing.
SECTION 1010. Restrictions on Payments and Distributions.
At such time as (x) there shall have occurred any event of which the
Company has actual knowledge that (I) with the giving of notice or the lapse of
time, or both, would constitute an Event of Default and (II) in respect of which
the Company shall not have taken reasonable steps to cure, (y) the Company shall
be in default with respect to its payment of any obligations under the Guarantee
or (z) the Company shall have given notice of its election of an Extension
Period as provided herein and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing, the Company
will not, and will not permit any Subsidiary to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in interest to the Securities or make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any Subsidiary
if such guarantee ranks pari passu with or junior in interest to the Securities
(other than (a) dividends or distributions in common stock of the Company, (b)
payments under the Guarantee, (c) any declaration of a dividend in connection
with the implementation of a shareholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, and (d) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans).
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101. Securities Subordinate to Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article (subject to Article Four), the
payment of the principal of and interest on each and all of the Securities are
hereby expressly made subordinate and subject in right of payment to the prior
payment in full in cash of all Indebtedness.
This Article Eleven shall constitute a continuing offer to all persons who
become holders of, or continue to hold, Indebtedness, and such provisions are
made for the benefit of the
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holders of Indebtedness and such holders are made obligees hereunder and any one
or more of them may enforce such provisions. Holders of Indebtedness need not
prove reliance on the subordination provisions hereof.
SECTION 1102. Default on Indebtedness.
In the event and during the continuation of any default in the payment of
principal, premium, interest or any other payment due on any Indebtedness, or in
the event that any event of default with respect to any Indebtedness shall have
occurred and be continuing and shall have resulted in such Indebtedness becoming
or being declared due and payable prior to the date on which it would otherwise
have become due and payable (unless and until such event of default shall have
been cured or waived or shall have ceased to exist and such acceleration shall
have been rescinded or annulled) or in the event any judicial proceeding shall
be pending with respect to any such default in payment or such event of default,
then no payment shall be made by the Company with respect to the principal
(including redemption payments) of, or interest on, the Securities.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by the
preceding paragraph of this Section 1102, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Indebtedness may have been
issued, as their respective interests may appear, but only to the extent that
the holders of the Indebtedness (or their representative or representatives or a
trustee) notify the Trustee within 90 days of such payment of the amounts then
due and owing on the Indebtedness and only the amounts specified in such notice
to the Trustee shall be paid to the holders of Indebtedness.
SECTION 1103. Prior Payment of Indebtedness Upon Acceleration of Securities.
In the event that the Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of the Indebtedness
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts then due on or in respect of
such Indebtedness (including any amounts due upon acceleration), or provision
shall be made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Indebtedness, before the Holders of the
Securities are entitled to receive any payment or distribution of any kind or
character, whether in cash, properties or securities, by the Company on account
of the principal of or interest on the Securities or on account of the purchase
or other acquisition of Securities by the Company or any Subsidiary; provided,
however, that holders of Indebtedness shall not be entitled to receive payment
of any such amounts to the extent that such holders would be required by the
subordination provisions of such Indebtedness to pay such amounts over to the
obligees on trade accounts payable or other liabilities arising in the ordinary
course of the Company's business.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by the
preceding paragraph of this Section 1103, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Indebtedness or their respective representatives, or to the trustee or
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trustees under any indenture pursuant to which any of such Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Indebtedness (or their representative or representatives
or a trustee) notify the Trustee within 90 days of such payment of the amounts
then due and owing on the Indebtedness and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Indebtedness.
SECTION 1104. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, and premium, if any, and
interest due or to become due upon all Indebtedness (including interest after
the commencement of any bankruptcy, insolvency, receivership or other
proceedings at the rate specified in the applicable Indebtedness, whether or not
such interest is an allowable claim in any such proceeding) shall first be paid
in full, or payment thereof provided for in money in accordance with its terms,
before any payment is made on account of the principal or interest on the
Securities; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of substantially all
of the assets of the Company of any kind or character, whether in cash, property
or securities, to which the Holders of the Securities or the Trustee would be
entitled, except for the provisions of this Article Eleven, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Holders of the
Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Indebtedness (pro rata to such holders on the basis
of the respective amounts of Indebtedness held by such holders, as calculated by
the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay all Indebtedness in full (including interest after
the commencement of any bankruptcy, insolvency, receivership or other
proceedings at the rate specified in the applicable Indebtedness, whether or not
such interest is in an allowable claim in any such proceeding) or to provide for
such payment in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Indebtedness, before
any payment or distribution is made to the Holders of Securities or to the
Trustee or the Property Trustee on behalf of the Holders of Capital Securities;
provided, however, that such holders of Indebtedness shall not be entitled to
receive payment of any such amounts to the extent that such holders would be
required by the subordination provisions of such Indebtedness to pay such
amounts over to the obligees on trade accounts payable or other liabilities
arising in the ordinary course of the Company's business.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Securities before all Indebtedness is paid in full
(including interest after commencement of any bankruptcy, insolvency,
receivership or other proceedings at the rate specified in the applicable
Indebtedness, whether or not such interest is an allowable claim in any such
proceeding), or provision is made for such payment
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in money in accordance with its terms, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any Indebtedness may have been issued, as their respective interests
may appear, as calculated by the Company, for application to the payment of all
Indebtedness remaining unpaid to the extent necessary to pay all Indebtedness in
full in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of such Indebtedness.
Any holder of Indebtedness may file any proof of claim or similar
instrument on behalf of the Trustee and the Holders if such instrument has not
been filed by the date which is 30 days prior to the date specified for filing
thereof.
For purposes of this Article Eleven, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Eleven with
respect to the Securities to the payment of all Indebtedness that may at the
time be outstanding, provided, however, that (i) the Indebtedness is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Indebtedness are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or merger of the Company
into, another corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Eight hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 1104 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
Eight hereof. Nothing in Section 1103 or in this Section 1104 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 607.
SECTION 1105. Subrogation.
Subject to the payment in full of all Indebtedness to the extent provided
in Sections 1103 and 1104, the rights of the Holders of the Securities shall be
subrogated to the rights of the holders of Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to the
Indebtedness until the principal of (and premium, if any) and interest on the
Securities shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article Eleven, shall, as
between the Company, its creditors other than holders of Indebtedness, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of the Indebtedness. It is understood that the provisions of this
Article Eleven are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Indebtedness on the other hand.
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Nothing contained in this Article Eleven or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Indebtedness, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest 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 creditors of the Company other than
the holders of the Indebtedness, nor shall anything herein or therein prevent
the Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article Eleven of the holders of Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article Eleven, the Trustee, subject to the provisions of Section 601, and
the Holders of the Securities, shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the Holders of the Securities, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of the 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 Eleven.
SECTION 1106. Trustee to Effectuate Subordination.
Each Holder of a Security by acceptance thereof authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article Eleven and
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
SECTION 1107. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article Eleven. Notwithstanding the provisions of this
Article Eleven or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article Eleven, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office of the Trustee from the Company or a holder or
holders of Indebtedness or from any trustee therefor; and before the receipt of
any such written notice, the Trustee, subject to the provisions of Section 601,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for in
this Section 1107 at least three Business Days prior to the date upon which by
the terms hereof any money may become payable for any purpose
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(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within three Business Days prior to such date.
The Trustee, subject to the provisions of Section 601, shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of Indebtedness or a
trustee on behalf of any such holder or holders. 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 Indebtedness to participate in any payment or
distribution pursuant to this Article Eleven, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article Eleven, 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 1108. Rights of the Trustee; Holders of Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article Eleven in respect of any Indebtedness at any time held
by it, to the same extent as any other holder of Indebtedness, and nothing in
this Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Eleven, and no implied covenants or
obligations with respect to the holders of 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 Indebtedness and, subject to the provisions of
Section 601, the Trustee shall not be liable to any holder of Indebtedness if it
shall pay over or deliver to holders of Securities, the Company or any other
Person money or assets to which any holder of Indebtedness shall be entitled by
virtue of this Article Eleven or otherwise.
SECTION 1109. Subordination May Not Be Impaired.
No right of any present or future holder of any Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Indebtedness may, at any time and from time to time, without the
consent of or notice to the
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Trustee or the Holders of the Securities, without incurring responsibility to
the Holders of the Securities and without impairing or releasing the
subordination provided in this Article or the obligations hereunder of the
Holders of the Securities to the holders of Indebtedness, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Indebtedness or otherwise amend or
supplement in any manner Indebtedness or any instrument evidencing the same or
any agreement under which Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Indebtedness; (iii) release any Person liable in any manner for the
collection of Indebtedness; and (iv) exercise or refrain from exercising any
rights against the Company and any other Person.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Optional Redemption; Conditions to Optional Redemption.
At any time on or after February 15, 2007, the Company shall have the
right, subject to the last paragraph of this Section 1201 and to the receipt of
any necessary prior approval of the Regulatory Authorities, to redeem the
Securities, in whole or in part, from time to time, at the Redemption Prices
(expressed as a percentage of the principal amount of such Securities) set forth
below, plus any accrued but unpaid interest to the Redemption Date, if redeemed
during the twelve-month period beginning on February 15 of the years indicated
below:
Year Percentage
---- ----------
2007 103.6220%
2008 103.2598%
2009 102.8976%
2010 102.5354%
2011 102.1732%
2012 101.8110%
2013 101.4488%
2014 101.0866%
2015 100.7244%
2016 100.3622%
On or after February 15, 2017, the Redemption Price will be 100%, plus
accrued and unpaid interest, if any, to the Redemption Date.
Prior to February 15, 2007, if a Special Event shall occur and be
continuing, the Company shall have the right, subject to the last paragraph of
this Section 1201 and to the receipt of any necessary prior approval of the
Regulatory Authorities, to redeem, upon not less than 30 days nor more than 60
days notice, the Securities in whole, but not in part, at a Redemption Price
equal to 100% of the principal amount of Securities then outstanding, plus
accrued and unpaid interest
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thereon to the Redemption Date; provided, however, that upon the occurrence of a
Tax Event, prior to exercising the rights set forth in this paragraph, the
Company shall be required to have received an opinion of counsel, rendered by a
law firm having a recognized national tax practice, to the effect that, even if
the Company were to liquidate the Trust and distribute the Junior Subordinated
Securities to the holders of the Capital Securities, either (x) such Tax Event
would still exist or (y) the Capital Securities would not constitute Tier I
Capital (or its then equivalent) of a bank holding company. For purposes of
determining whether a Regulatory Capital Event has occurred, the opinion of
independent bank regulatory counsel required in the immediately proceeding
sentence shall treat the Company as if it is a bank holding company subject to
the laws and regulations of the United States, any rules, guidelines and
policies of the Federal Reserve, and any administrative pronouncements and
judicial decisions applicable to bank holding companies.
For so long as the Trust is the Holder of all Securities Outstanding, the
proceeds of any redemption described in this Section 1201 shall be used by the
Trust to redeem Common Securities and Capital Securities in accordance with
their terms. The Company shall not redeem the Securities in part unless all
accrued and unpaid interest has been paid in full on all Securities outstanding
for all semi-annual interest periods terminating on or prior to the Redemption
Date.
SECTION 1202. Applicability of Article.
Redemption of Securities at the election of the Company, as permitted by
Section 1201, shall be made in accordance with such provision and this Article.
SECTION 1203. Election to Redeem; Notice to Trustee.
The election of the Company to redeem Securities pursuant to Section 1201
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 45 days and no more than 60
days prior to the Redemption Date fixed by the Company, notify the Trustee of
such Redemption Date and of the principal amount of Securities to be redeemed
and provide a copy of the notice of redemption given to Holders of Securities to
be redeemed pursuant to Section 1205.
SECTION 1204. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected by lot (or such other method of selection as the Trustee may
customarily employ) not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities not previously called for redemption.
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The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Security, whether such Security is to
be redeemed in whole or in part. In the case of any such redemption in part, the
unredeemed portion of the principal amount of the Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1205. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 (provided that the Trustee shall itself have received
notice not less than 45 days prior to the Redemption Date) nor more than 60 days
prior to the Redemption Date, to each Holder of Securities to be redeemed, at
his address appearing in the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and that interest thereon will
cease to accrue on and after said date, and
(4) the place or places where such Securities are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1206. 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 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the
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Securities which are to be redeemed on that date; provided, however, that any
such deposit on a Redemption Date shall be initiated prior to 12:00 noon (New
York time) in same-day funds.
SECTION 1207. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the rate borne by the Security.
SECTION 1208. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
place of payment therefor (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 therefor or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
THE CIT GROUP HOLDINGS, INC.
By: _______________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By: _______________________________
Name:
Title:
<PAGE>
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF
THIS SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR
THE BENEFIT OF THE COMPANY THAT: (I) IT HAS ACQUIRED A "RESTRICTED" SECURITY
WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE LATER OF THE DATE WHICH IS
THREE YEARS AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF SUCH
RESTRICTED SECURITIES (OR ANY PREDECESSOR) EXCEPT (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (D) OUTSIDE THE UNITED STATES
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT,
OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE
JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE RESTRICTIONS SET
FORTH IN (II) ABOVE, ANY OFFER, SALE OR OTHER DISPOSITION PURSUANT TO THE
FOREGOING CLAUSES (II)(D) AND (E) IS SUBJECT TO THE RIGHT OF THE ISSUER OF THIS
SECURITY AND THE PROPERTY TRUSTEE FOR SUCH SECURITIES TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN
FORM AND SUBSTANCE." NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")
(EACH, A "PLAN"), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSETS ENTITY"), AND NO
PERSON INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS SECURITY OR
ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ENTITLED TO THE
EXEMPTIVE RELIEF UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 OR OTHER APPLICABLE
<PAGE>
EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDING OF
THIS SECURITY OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT IT EITHER (A) IS NOT A PLAN OR A PLAN ASSET
ENTITY AND IS NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS"
OF ANY PLAN OR (B) IS ENTITLED TO THE EXEMPTIVE RELIEF UNDER PTCE 96-23, 95-60,
91-38, 90-1 OR 84-14 OR OTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE
OR HOLDING.
THE CIT GROUP HOLDINGS, INC.
Junior Subordinated Debenture due 2027
$257,732,000
No. 1
CUSIP No. 125569 DL 4
THE CIT GROUP HOLDINGS, INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to THE BANK OF NEW YORK, as Property
Trustee of CIT Capital I Trust, or registered assigns, the principal sum of TWO
HUNDRED FIFTY SEVEN MILLION, SEVEN HUNDRED THIRTY TWO THOUSAND DOLLARS
($257,732,000) on February 15, 2027, and to pay interest on said principal sum
from February 25, 1997 or from the most recent interest payment date (each such
date, an "Interest Payment Date") to which interest has been paid or duly
provided for, semi-annually (subject to deferral as set forth herein) in arrears
on February 15 and August 15 of each year, commencing August 15, 1997, at the
rate of 7.70% per annum until the principal hereof shall have become due and
payable, and on any overdue principal and (without duplication and to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum. The amount of
interest payable for any period will be computed on the basis of twelve 30-day
months and a 360-day year. The amount of interest payable for any period shorter
than a full semi-annual period for which interest is computed, will be computed
on the basis of actual number of days elapsed based on 30-day months. In the
event that any date on which interest is payable on this Security is not a
Business Day, then a payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), with the same force and effect as
if made on the date the payment was originally payable. A "Business Day" shall
mean any day other than a Saturday or a Sunday or a day on which banking
institutions in the City of New York are authorized or required by law or
executive order to remain closed or a day on which the Corporate Trust Office of
the Trustee, or the principal office of the Property Trustee under the
Declaration, is closed for business. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name the Securities
(or one or more Predecessor
<PAGE>
Securities, as defined in the Indenture) is registered at the close of business
on the Regular Record Date for such interest installment, which shall be the 1st
day of the month of such Interest Payment Date. Any such interest installment
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name the Securities for one or more Predecessor Securities is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
The Company shall have the right at any time during the term of this
Security, from time to time, to defer payment of interest on such Security for
up to 10 semi-annual periods (an "Extension Period"), provided that no Extension
Period may extend past the Maturity of this Security. There may be multiple
Extension Periods of varying lengths during the term of this Security. At the
end of each Extension Period, if any, the Company shall pay all interest then
accrued and unpaid, together with interest thereon, compounded semi-annually at
the rate specified on this Security to the extent permitted by applicable law.
During any such Extension Period, the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu with or junior in interest to the
Securities or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu or junior in interest to the Securities (other than
(a) dividends or distributions in common stock of the Company, (b) payments
under the Guarantee, (c) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto and (d) purchases of common stock related to the issuance of
common stock or rights under any of the Company's benefit plans). Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that no Extension Period may exceed 10
consecutive semi-annual periods or extend beyond the Stated Maturity of the
Securities. Upon the termination of any such Extension Period and the payment of
all amounts then due on any Interest Payment Date, the Company may elect to
begin a new Extension Period subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Company shall give the Property Trustee, the Regular Trustees and the
Trustee notice of its election of such Extension Period at least one Business
Day prior to the record date for the related interest payment.
Payment of the principal of and interest on this Security will be made at
the office or agency of the Paying Agent maintained for that purpose in the
United States, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company, payment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer in
immediately available funds at such place
64
<PAGE>
and to such account as may be designated by the Person entitled thereto as
specified in the Security Register.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of the Indenture
summarized on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, The CIT Group Holdings, Inc. has caused this instrument
to be duly executed.
Dated: February __, 1997
THE CIT GROUP HOLDINGS, INC.
By:______________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK
as Trustee
By:______________________________
Authorized Signatory
Dated: February __, 1997
<PAGE>
[Form of Reverse of Security]
This Security is one of a duly authorized issue of The CIT Group Holdings,
Inc. (the "Company"), designated as its 7.70% Junior Subordinated Debentures due
2027 (herein called the "Securities"), limited in aggregate principal amount to
$257,732,000 issued under an Indenture, dated as of February 15, 1997 (herein
called the "Indenture"), between the Company and The Bank of New York, a New
York banking corporation, as Trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Trustee, the Company and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
At any time on or after February 15, 2007, the Company shall have the
right, subject to the terms and conditions of Article Twelve of the Indenture,
to redeem this Security at the option of the Company, in whole or in part, at
the Redemption Price (expressed as a percentage of the principal amount of such
securities) set forth below, plus accrued but unpaid interest to the Redemption
Date, if redeemed during the twelve-month period beginning on February 15 of the
years indicated below:
Year Percentage
---- ----------
2007 103.6220%
2008 103.2598%
2009 102.8976%
2010 102.5354%
2011 102.1732%
2012 101.8110%
2013 101.4488%
2014 101.0866%
2015 100.7244%
2016 100.3622%
On or after February 15, 2017, the Redemption Price will be 100%, plus
accrued and unpaid interest, if any, to the Redemption Date.
Prior to February 15, 2007, if a Special Event as defined in Article Twelve
of the Indenture shall occur and be continuing, the Company shall have the
right, subject to the terms and conditions of Article Twelve of the Indenture,
to redeem this Security at the option of the Company, without premium or
penalty, in whole but not in part, at a Redemption Price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon (including
any Additional Interest) to the Redemption Date; provided, however, that upon
the occurrence of a Tax
<PAGE>
Event, prior to exercising the rights set forth in this paragraph, the Company
shall be required to have received an opinion of counsel, rendered by a law firm
having a recognized national tax practice, to the effect that, even if the
Company were to liquidate the Trust and distribute the Junior Subordinated
Securities to the holders of the Capital Securities, either (x) such Tax Event
would still exist or (y) the Capital Securities would not constitute Tier I
Capital (or its then equivalent) of a bank holding company. For purposes of
determining whether a Regulatory Capital Event has occurred, the opinion of
independent bank regulatory counsel required in the immediately proceeding
sentence shall treat the Company as if it is a bank holding company subject to
the laws and regulations of the United States, any rules, guidelines and
policies of the Federal Reserve, and any administrative pronouncements and
judicial decisions applicable to bank holding companies. Any redemption pursuant
to this paragraph will be made upon not less than 30 nor more than 60 days
notice, at the Redemption Price. If the Securities are only partially redeemed
by the Company, the Securities will be redeemed by lot (or such other method of
selection as the Trustee may customarily employ). In the event of redemption of
this Security in part only, a new Security or Securities for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to the Securities shall occur and be
continuing, the principal of the Securities may be declared due and payable in
the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions for satisfaction and discharge or legal
defeasance of the entire indebtedness of this Security and for the defeasance of
certain covenants under the Indenture at any time upon compliance by the Company
with certain conditions set forth in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of Holders of not less than a majority in principal amount of
the Outstanding Securities affected by such modification, to modify the
Indenture in a manner affecting the rights of the Holders of the Securities;
provided that so such modification may, without the consent of the Holder of
each Outstanding Security affected thereby, (i) except to the extent permitted
and subject to the conditions set forth in the Indenture with respect to the
extension of the Maturity of the Security, change the maturity of, the principal
of, or any installment of interest on, the Security or reduce the principal
amount thereof, or the rate of payment of interest thereon, or change the place
of payment where, or the coin or currency in which, this Security or interest
thereon is payable, or impair the right to institute suit for the enforcement of
such payment on or after the Maturity thereof (or, in the case of redemption, on
or after the Redemption Date), or modify the provisions of the Indenture with
respect to the subordination of the Securities in a manner adverse to the
Holders, (ii) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for such supplemental
Indenture or the consent of whose Holders is required for any waiver (of
compliance with certain provisions of the Indenture or certain defaults
hereunder and their consequences) provided for in the Indenture, or (iii) modify
any of the provisions of Section 513, Section 902 or Section 1008 of the
Indenture, except to increase any such percentage or to provide that certain
other provisions of the Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby, provided
that, so long as
<PAGE>
any of the Preferred Securities remains outstanding, no such amendment shall be
made that adversely affects the holders of the Preferred Securities, and no
termination of the Indenture shall occur, and no waiver of an Event of Default
or compliance with any covenant under this Indenture shall be effective, without
the prior consent of the holders of at least a majority of the aggregate
liquidation preference of the outstanding Preferred Securities unless and until
the principal of and any premium on the Securities and all accrued and unpaid
interest thereon have been paid in full.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in New York, New York, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees. No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
THE SECURITIES AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
<PAGE>
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act
covering resales of this Security (which effectiveness shall not have been
suspended or terminated at the date of the transfer) and (ii) three years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Capital Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date"), the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer:
[Check One]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter containing
certain representations and agreements (the form of which letter can
be obtained from the Trustee); or
(4) ___ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as amended;
or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, as amended; or
(6) ___ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) ___ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3), (4), (5)
or (7) is checked, the Company or the Trustee may require, prior to registering
any such transfer of the Securities, in its sole discretion, such written legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Trustee or the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, as amended.
<PAGE>
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 315 of the Indenture shall have
been satisfied.
Dated: __________________ Signed:____________________________________
(Sign exactly as name appears on the
other side of this Security)
Signature Guarantee: __________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: __________________ __________________________________________
NOTICE: To be executed by an executive officer
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of February 25, 1997
Among
CIT CAPITAL TRUST I,
THE CIT GROUP HOLDINGS, INC.
and
LEHMAN BROTHERS INC.
and
CHASE SECURITIES INC.
SALOMON BROTHERS INC
UBS SECURITIES LLC
as Initial Purchasers
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
1. Definitions............................................................. 1
2. Securities Subject to This Agreement.................................... 3
3. Registered Exchange Offer............................................... 3
4. Shelf Registration...................................................... 5
5. Additional Interest and Additional Distributions
Under Certain Circumstances.......................................... 6
6. Registration Procedures................................................. 7
7. Registration Expenses................................................... 11
8. Indemnification and Contribution........................................ 12
9. Rule 144A............................................................... 15
10. Miscellaneous........................................................... 15
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and entered
into as of February 25, 1997 by and among CIT Capital Trust I, a Delaware
statutory business trust (the "Trust"), The CIT Group Holdings, Inc., a Delaware
corporation ("the Company") and Lehman Brothers Inc., Chase Securities Inc.,
Salomon Brothers Inc and UBS Securities LLC (together, the "Initial
Purchasers").
This Agreement is entered into in connection with the Purchase Agreement,
dated as of February 20, 1997, as amended and restated as of February 21, 1997,
among the Company, the Trust and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Trust to the Initial Purchasers
of $250,000,000 aggregate principal amount of the Trust's 7.70% Preferred
Capital Securities, liquidation amount $1,000 per security (the "Capital
Securities"). The Company will be the owner of all of the beneficial ownership
interests represented by the common securities (the "Common Securities" and
together with the Capital Securities, the "Trust Securities") of the Trust. The
Trust Securities will be guaranteed by a guarantee (the "Guarantee") by the
Company, to the extent of funds held by the Trust. Concurrently with the
issuance of the Capital Securities, the Guarantee and the Common Securities, the
Trust will invest the proceeds of each thereof in the Company's 7.70% Junior
Subordinated Debentures (the "Junior Subordinated Debentures" and, together with
the Capital Securities and the Guarantee, the "Securities"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Trust and the
Company have agreed to provide the registration rights set forth in this
Agreement for the benefit of the Initial Purchasers and their direct and
indirect transferees and assigns. The execution and delivery of this Agreement
is a condition to the Initial Purchasers' obligations to purchase the Capital
Securities under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following capitalized terms
shall have the following meanings:
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Closing Date: The date on which the Securities were sold.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) effectiveness
under the Securities Act of the Exchange Offer Registration Statement
relating to the New Securities to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof, and (iii) the delivery by
the Company and the Trust of the New Securities in the same aggregate
principal amount as the aggregate principal amount of Transfer Restricted
Securities that were duly tendered by Holders thereof pursuant to the
Exchange Offer.
Damages Payment Date: With respect to the Securities, each
Distribution Date until the earlier of (i) the date on which Liquidated
Damages no longer are payable or (ii) maturity of the Securities.
Declaration: The Amended and Restated Declaration of Trust, dated as
of February 25, 1997, among The Bank of New York, as Property Trustee, The
Bank of New York (Delaware), as Delaware Trustee and the other trustees
named therein, pursuant to which the Capital Securities are being issued,
as amended or supplemented from time to time in accordance with the terms
thereof.
<PAGE>
2
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company and the Trust under
the Securities Act of the New Securities pursuant to a Registration
Statement pursuant to which the Company and the Trust offer the Holders of
all outstanding Transfer Restricted Securities the opportunity to exchange
all such outstanding Transfer Restricted Securities held by such Holders
for New Securities in an aggregate amount equal to the aggregate amount of
the Transfer Restricted Securities tendered in such exchange offer by such
Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the Prospectus which forms a part
thereof.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Securities to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Securities Act, to certain
institutional "accredited investors," as such term is defined in Rule
501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act
("Accredited Institutions") and to certain non-U.S. persons.
Guarantee Agreement: The Guarantee Agreement, dated as of February 25,
1997, between the Company and The Bank of New York, as Guarantee Trustee,
pursuant to which the Guarantee is being issued, as amended or supplemented
from time to time in accordance with the terms thereof.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of February 25, 1997, between the
Company and The Bank of New York, as trustee (the "Trustee"), pursuant to
which the Junior Subordinated Debentures are to be issued, as such
Indenture is amended or supplemented from time to time in accordance with
the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
NASD: National Association of Securities Dealers, Inc.
New Junior Subordinated Debentures: The Company's Junior Subordinated
Debentures to be issued pursuant to the Indenture in the Exchange Offer.
New Securities: The Securities to be issued pursuant to the Indenture,
the Declaration and the Guarantee Agreement in the Exchange Offer.
Person: An individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
<PAGE>
3
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company and
the Trust relating to (a) an offering of New Securities pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, which is filed
pursuant to the provisions of this Agreement, in either case, including the
Prospectus included therein, all amendments and supplements thereto
(including post-effective amendments) and all exhibits and material
incorporated by reference therein.
Securities Act: The Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb),
as amended.
Transfer Restricted Securities: Each Security, until the earliest to
occur of (a) the date on which such Security has been exchanged by a person
other than a Broker-Dealer for New Securities in the Exchange Offer, (b)
following the exchange by a Broker-Dealer in the Exchange Offer of such
Securities for one or more New Securities, the date on which such New
Securities are sold to a purchaser who receives from such Broker-Dealer on
or prior to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement, (c) the date on which such
Securities has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement or (d) the
date on which such Securities is distributed to the public pursuant to Rule
144 under the Securities Act.
2. Securities Subject to This Agreement.
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever
such Person owns Transfer Restricted Securities.
3. Registered Exchange Offer.
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with), the Company and the Trust
shall (i) cause to be filed with the Commission as soon as practicable
after the Closing Date, but in no event later than 150 days after the
Closing Date, a Registration Statement under the Securities Act relating to
the New Securities and the Exchange Offer, (ii) use their respective best
efforts to cause such Registration Statement to become effective at the
earliest possible time, but in no event later than 180 days after the
<PAGE>
4
Closing Date, (iii) in connection with the foregoing, file (A) all
pre-effective amendments to such Registration Statement as may be necessary
in order to cause such Registration Statement to become effective, (B) if
applicable, a post-effective amendment to such Registration Statement
pursuant to Rule 430A under the Securities Act and (C) cause all necessary
filings in connection with the registration and qualification of the New
Securities to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv) unless the
Exchange Offer would not be permitted by applicable law or Commission
policy, the Company will commence the Exchange Offer and use its best
efforts to issue on or prior to 30 business days after the date on which
such Registration Statement was declared effective by the Commission, New
Securities in exchange for all Securities tendered prior thereto in the
Exchange Offer. The Exchange Offer shall be on the appropriate form
permitting registration of the New Securities to be offered in exchange for
the Transfer Restricted Securities and to permit resales of New Securities
held by Broker-Dealers as contemplated by Section 3(c) below.
(b) the Company and the Trust shall cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the
Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate
the Exchange Offer; provided, however, that in no event shall such period
be less than 20 business days. The Company and the Trust shall cause the
Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the New Securities shall be included in the
Exchange Offer Registration Statement. The Company and the Trust shall use
its best efforts to cause the Exchange Offer to be Consummated on the
earliest practicable date after the Exchange Offer Registration Statement
has become effective, but in no event later than 30 business days
thereafter.
(c) the Company and the Trust shall indicate in a "Plan of
Distribution" section contained in the Prospectus contained in the Exchange
Offer Registration Statement that any Broker-Dealer who holds Securities
that are Transfer Restricted Securities and that were acquired for its own
account as a result of market-making activities or other trading activities
(other than Transfer Restricted Securities acquired directly from the
Company and the Trust), may exchange such Securities pursuant to the
Exchange Offer; however, such Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of the New Securities received by such
Broker-Dealer in the Exchange Offer, which prospectus delivery requirement
may be satisfied by the delivery by such Broker-Dealer of the Prospectus
contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information with respect
to such resales by Broker-Dealers that the Commission may require in order
to permit such resales pursuant thereto, but such "Plan of Distribution"
shall not name any such Broker-Dealer or disclose the amount of New
Securities held by any such Broker-Dealer except to the extent required by
the Commission as a result of a change in policy announced after the date
of this Agreement.
The Company and the Trust shall use their respective best efforts to keep
the Exchange Offer Registration Statement continuously effective, supplemented
and amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for resales of New Securities acquired
by Broker-Dealers for their own accounts as a result of market-making activities
or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
<PAGE>
5
180 days from the date on which the Exchange Offer Registration Statement is
declared effective.
The Company and the Trust shall provide sufficient copies of the latest
version of such Prospectus to Broker-Dealers promptly upon request at any time
during such 180-day period in order to facilitate such resales.
4. Shelf Registration.
(a) Shelf Registration. If (i) the Company and the Trust are not
required to file an Exchange Offer Registration Statement or to consummate
the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with), (ii) the Company has received
an opinion of counsel, rendered by a law firm having a nationally
recognized tax practice, to the effect that, as a result of the
consummation of the Exchange Offer there is more than an insubstantial risk
that (x) the Trust would be subject to United States federal income tax
with respect to income received or accrued on the Junior Subordinated
Debentures or New Junior Subordinated Debentures, (y) interest payable by
the Company on such Junior Subordinated Debentures or New Junior
Subordinated Debentures would not be deductible by the Company, in whole or
in part, for United States federal income tax purposes, or (z) the Trust
would be subject to more than a de minimis amount of other taxes, duties or
other governmental charges or (iii) if any Holder of Transfer Restricted
Securities that is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) or an "accredited investor" (as defined in
Rule 501(A)(1), (2), (3) or (7) under the Securities Act) shall notify the
Company at least 20 business days prior to the Consummation of the Exchange
Offer (A) that such Holder is prohibited by applicable law or Commission
policy from participating in the Exchange Offer, or (B) that such Holder
may not resell the New Securities acquired by it in the Exchange Offer to
the public without delivering a prospectus and that the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate
or available for such resales by such Holder, or (C) that such Holder is a
Broker-Dealer and holds Securities acquired directly from the Trust and the
Company or one of its affiliates, then the Trust and the Company shall use
their respective best efforts to:
(x) cause to be filed a shelf registration statement pursuant to
Rule 415 under the Securities Act, which may be an amendment to the
Exchange Offer Registration Statement (in either event, the "Shelf
Registration Statement"), on or prior to the earliest to occur of (1)
the 150th day after the date on which the Trust and the Company
determines that they are not required to file the Exchange Offer
Registration Statement or (2) the 150th day after the date on which
the Trust and the Company receive notice from a Holder of Transfer
Restricted Securities as contemplated by clause (iii) above (such
earliest date being the "Shelf Filing Deadline"), which Shelf
Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be declared
effective by the Commission on or before the 180th day after the Shelf
Filing Deadline.
<PAGE>
6
The Trust and the Company shall use their respective best efforts to keep
such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) hereof to
the extent necessary to ensure that it is available for resales of
Securities by the Holders of Transfer Restricted Securities entitled to the
benefit of this Section 4(a), and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules
and regulations of the Commission as announced from time to time, for a
period ending on the third anniversary of the Closing Date.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such
Holder furnishes to the Trust and the Company in writing, within 20
business days after receipt of a request therefor, such information as the
Trust and the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be
entitled to Liquidated Damages pursuant to Section 5 hereof unless and
until such Holder shall have used its best efforts to provide all such
reasonably requested information. Each Holder as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Trust and the Company all information required to be disclosed in order to
make the information previously furnished to the Trust and the Company by
such Holder not materially misleading.
5. Additional Interest and Additional Distributions Under Certain
Circumstances.
(a) If (a) any of the Registration Statements required by this Agreement is
not filed with the Commission on or prior to the date specified for such filing
in this Agreement, (b) any of such Registration Statements has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (c) the
Exchange Offer has not been Consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (d) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose (other than for any reason set forth in Section
6(c)(iii)(D) hereof) without being succeeded within two business days by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself immediately declared effective (each such event referred to
in clauses (a) through (d), a "Registration Default"), additional interest (the
"Additional Interest") shall become payable in respect of the Junior
Subordinated Debentures (including in respect of amounts accruing during any
Extension Period (as defined in the Indenture)) and corresponding additional
Distributions (the "Additional Distributions") shall become payable to each
holder of Trust Securities at the rate of 0.25% per annum applicable to the
principal amount of the Junior Subordinated Debentures or the liquidation amount
of Trust Securities, as the case may be, for the period from and including the
date on which such Registration Default occurs to, but excluding, the date on
which it ceases to exist. All accrued Additional Interest (and corresponding
Additional Distributions) shall be paid to holders by the Trust and the Company
by wire transfer of immediately available funds or by federal funds check on the
last day of each such 90-day period. Following the cure of all Registration
Defaults relating to any particular Transfer Restricted Securities, the accrual
of Additional Interest (and corresponding Additional Distributions) with respect
to such Transfer Restricted Securities will cease.
All obligations of the Trust and the Company set forth in the preceding
paragraph that are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
<PAGE>
7
survive until such time as all such obligations with respect to such Transfer
Restricted Security shall have been satisfied in full.
(b) The Trust and the Company shall notify the Property Trustee within one
business day after each and every date on which an event occurs in respect of
which Additional Distributions are required to be paid (an "Event Date").
Additional Distributions shall be paid by depositing Additional Interest with
the Property Trustee, in trust, for the benefit of the Holders thereof, on or
before the applicable Interest Payment Date (whether or not any payment other
than Additional Distributions is payable on the Capital Securities), in
immediately available funds in sums sufficient to pay the Additional
Distributions then due to Holders of Transfer Restricted Securities with respect
to which the Property Trustee serves. Each obligation to pay Additional Interest
and Additional Distributions shall be deemed to accrue from the applicable date
of the occurrence of the Registration Default.
6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Trust and the Company shall comply with all of the
provisions of Section 6(c) below, shall use their best efforts to effect
such exchange to permit the sale of Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution
thereof, and shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Trust and the
Company there is a question as to whether the Exchange Offer is
permitted by applicable law, the Trust and the Company hereby agrees
to seek a no-action letter or other favorable decision from the
Commission allowing the Trust and the Company to Consummate an
Exchange Offer for such Securities. The Trust and the Company hereby
agree to pursue the issuance of such a decision to the Commission
staff level but shall not be required to take commercially
unreasonable action to effect a change of Commission policy. The Trust
and the Company hereby agree, however, to (A) participate in
telephonic conferences with the Commission, (B) deliver to the
Commission staff an analysis prepared by counsel to the Trust and the
Company setting forth the legal bases, if any, upon which such counsel
has concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Trust or
the Company, prior to the Consummation thereof, a written
representation to the Trust or the Company (which may be contained in
the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate
of the Trust or the Company, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any
person to participate in, a distribution of the New Securities to be
issued in the Exchange Offer and (C) it is acquiring the New
Securities in its ordinary course of business. In addition, all such
Holders of Transfer Restricted Securities shall otherwise cooperate in
the Company's and the Trust's preparations for the Exchange Offer.
Each Holder hereby acknowledges and agrees that any Broker-Dealer and
any such Holder using the Exchange Offer to participate in a
distribution of the securities to be acquired in the Exchange Offer
(1) could not under Commission policy as in effect on the date of this
<PAGE>
8
Agreement rely on the position of the Commission enunciated in Morgan
Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters (including any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale transaction and that such a
secondary resale transaction should be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of New Securities obtained by such Holder in
exchange for Securities acquired by such Holder directly from the
Trust or the Company.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Trust shall provide a supplemental
letter to the Commission (A) stating that the Company and the Trust
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991)
and, if applicable, any no-action letter obtained pursuant to clause
(i) above and (B) including a representation that the Company and the
Trust have not entered into any arrangement or understanding with any
Person to distribute the New Securities to be received in the Exchange
Offer and that, to the best of the Company's and the Trust's
information and belief, each Holder participating in the Exchange
Offer is acquiring the New Securities in its ordinary course of
business and has no arrangement or understanding with any Person to
participate in the distribution of the New Securities received in the
Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Trust shall comply with all the
provisions of Section 6(c) below and shall use their best efforts to effect
such registration to permit the sale of the Transfer Restricted Securities
being sold in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Company and the Trust will
as expeditiously as possible prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Securities Act, which form shall be available for the sale of the
Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof.
(c) General Provisions. In connection with any Registration Statement
and any Prospectus required by this Agreement to permit the sale or resale
of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit
resales of Securities by Broker-Dealers), the Company and the Trust shall:
(i) use their best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
for the period specified in Section 3 or 4 of this Agreement, as
applicable; upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective
and usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company and the Trust shall
file promptly an appropriate amendment to such Registration Statement,
in the case of clause (A), correcting any such misstatement or
omission, and, in the case of either clause (A) or (B), use their best
efforts to cause such amendment to be declared effective and such
<PAGE>
9
Registration Statement and the related Prospectus to become usable for
their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as applicable,
or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold;
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable
provisions of Rules 424 and 430A under the Securities Act in a timely
manner; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iii) advise the selling Holders promptly and, if requested by
such Persons, to confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to any Registration Statement or any
post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Securities Act or of the suspension
by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Trust and the Company
shall use their best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time;
(iv) furnish to the Initial Purchasers before filing with the
Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such
Registration Statement), and use its reasonable efforts to reflect in
each such document furnished to the Initial Purchasers, such comments
and changes as the Initial Purchasers may propose within five business
days after the receipt thereof. A selling Holder or underwriter, if
any, shall be deemed to have reasonably objected to such filing if
such Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains a material misstatement
or omission;
<PAGE>
10
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the Initial Purchasers;
(vi) if requested by any selling Holders, promptly incorporate in
any Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such
selling Holders may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities
being sold, the purchase price being paid therefor and any other terms
of the offering of the Transfer Restricted Securities to be sold in
such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after
the Trust and the Company are notified of the matters to be
incorporated in such Prospectus supplement or post-effective
amendment;
(vii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate
principal amount of Securities covered thereby;
(viii) furnish to each selling Holder, without charge, at least
one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) deliver to each selling Holder, without charge, as many
copies of the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such Persons reasonably may
request; the Trust and the Company hereby consent to the use of the
Prospectus and any amendment or supplement thereto by each of the
selling Holders in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(x) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their respective
counsel in connection with the registration and qualification of the
Transfer Restricted Securities under the securities or Blue Sky laws
of such jurisdictions as the selling Holders may reasonably request
and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the Shelf Registration Statement;
provided, however, that neither the Company nor the Trust shall not be
required to register or qualify as a foreign corporation where it is
not now so qualified or to take any action that would subject it to
the service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration Statement, in
any jurisdiction where it is not now so subject;
(xi) shall issue, upon the request of any Holder of Securities
covered by the Shelf Registration Statement, New Securities in the
same amount as the Securities surrendered to the Company and the Trust
by such Holder in exchange therefor or being sold by such Holder; such
New Securities to be registered in the name of such Holder or in the
name of the purchaser(s) of such Securities, as the case may be; in
<PAGE>
11
return, the Securities held by such Holder shall be surrendered to the
Company and the Trust for cancellation;
(xii) cooperate with the selling Holders to facilitate the timely
preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the Holders may request
at least two business days prior to any sale of Transfer Restricted
Securities made by such underwriter(s);
(xiii) provide CUSIP numbers for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide certificates for the Transfer Restricted
Securities;
(xiv) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period commencing at
the end of any fiscal quarter in which Transfer Restricted Securities
are sold to underwriters in a firm or best efforts Underwritten
Offering; and
(xv) cause the Indenture and the Declaration to be qualified
under the TIA not later than the effective date of the first
Registration Statement required by this Agreement, and, in connection
therewith, cooperate with the Trustee and the Holders of Securities to
effect such changes to the Indenture and the Declaration as may be
required for such Indenture and the Declaration to be so qualified in
accordance with the terms of the TIA; and execute and use their best
efforts to cause the Indenture Trustee, Guarantee Trustee and the
Property Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be
filed with the Commission to enable such Indenture to be so qualified
in a timely manner.
Each Holder agrees by acquisition of a Transfer Restricted Security that,
upon receipt of any notice from the Company or the Trust of the existence of any
fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the applicable Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 6(c)(i) and
(ii) hereof, or until it is advised in writing (the "Advice") by the Company or
the Trust that the use of the Prospectus may be resumed, and has received copies
of any additional or supplemental filings that are incorporated by reference in
the Prospectus. If so directed by the Company or the Trust, each Holder will
deliver to the Company or the Trust (at the Company's and the Trust's expense)
all copies, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Transfer Restricted Securities that was current
at the time of receipt of such notice. In the event the Company or the Trust
shall give any such notice, the time period regarding the effectiveness of such
Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall
be extended by the number of days during the period from and including the date
of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and
including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Sections 6(c)(i) and (ii) hereof or shall have
received the Advice.
<PAGE>
12
7. Registration Expenses.
All expenses incident to the Company's and the Trust's performance of or
compliance with this Agreement will be borne by the Company and the Trust,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the New Securities to be issued in the Exchange Offer and printing of
Prospectuses), and associated messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel for the Company and the Trust; (v)
all application and filing fees in connection with listing Securities on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company and the Trust (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Company and the Trust will, in any event, bear their internal expenses
(including, without limitation, all salaries and expenses of their officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company or the Trust.
8. Indemnification and Contribution.
(a) In connection with a Shelf Registration Statement or in connection with
any delivery of a Prospectus contained in an Exchange Offer Registration
Statement by any participating Broker-Dealer or Initial Purchaser, as
applicable, who seeks to sell New Securities, the Company and the Trust agree to
defend and hold harmless each Holder of Transfer Restricted Securities included
within any such Shelf Registration Statement and each participating
Broker-Dealer or Initial Purchaser selling New Securities, and each person, if
any, who controls any such person within the meaning of Section 15 of the
Securities Act (each, a "Participant") from and against any loss, expense,
liability, or claim (including the reasonable cost of investigation) which
jointly or severally, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action relating to purchases
and sales of Securities) which such Participant or controlling person may incur
under the Act or otherwise, insofar as such loss, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in any such Registration Statement or any
prospectus forming part thereof, or in any amendment or supplement thereto, or
arises out of or is based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as any such loss, expense,
liability or claim arises out of or is based upon any alleged untrue statement
of a material fact contained therein in conformity with information furnished in
writing by such Participant to the Company or the Trust expressly for use in any
of such documents or arises out of or is based upon any alleged omission to
state therein a material fact in connection with such information required to be
stated therein or necessary to make such information not misleading; and
provided further that as to any preliminary Prospectus, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of any such
Participant or any controlling person of such Participant on account of any
loss, claim, damage, liability or action arising from the sale of the New
Securities to any person by that Participant if (i) that Participant failed to
send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Securities Act and
(ii) the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in such preliminary
Prospectus was corrected in the Prospectus, unless, in each case, such failure
resulted from non-compliance by the Company and the Trust with Section 6(c). The
<PAGE>
13
foregoing indemnity agreement is in addition to any liability which the Company
and the Trust may otherwise have to any Participant or to any controlling person
of that Participant. The Company's agreement to indemnify such Participant or
any such controlling person as aforesaid is expressly conditioned upon it being
notified of the action in connection therewith brought against such Participant
or such controlling person by letter or telegram or other facsimile transmission
addressed to the Company with reasonable promptness after the first legal
process which discloses the nature of the liability or claim shall have been
served upon such Participant or such controlling person (or after it shall have
received notice of such service upon any agent designated by it), but failure so
to notify the Company shall not relieve the Company from any liability which it
may have to such Participant or controlling person otherwise than on account of
the indemnity agreement contained in this Section 8. The Company shall assume
the defense of any suit brought to enforce any such liability or claim,
including the employment of counsel satisfactory to such Participant and the
payment of all expenses. Such Participant or controlling person against whom
such suit is brought shall have the right to employ one separate counsel in any
such suit and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Participant or controlling person
unless (i) the employment of such counsel has been specifically authorized by
the Company or (ii) the named parties to any such suit (including any impleaded
parties) include such Participant or controlling person and the Company and such
Participant or controlling person shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the Company, in which case the Company shall
not have the right to assume the defense of such action on behalf of such
Participant or controlling person, it being understood, however, that the
Company shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys (and any required local
counsel) for such Participant and controlling persons, which firm (and local
counsel, if any) shall be designated in writing by such Participant. The Company
shall not be liable for any settlement of any such action effected without its
consent (which will not be unreasonably withheld or delayed).
The Company agrees to notify each Participant with reasonable promptness of
the commencement of any litigation or proceedings against the Company or any of
its officers or directors or the Trust or any of its Trustees in connection with
the issue and sale of the Capital Securities or with any such Registration
Statement or any prospectus forming part thereof, or in any amendment or
supplement thereto.
(b) Each Participant severally agrees to indemnify, defend and hold
harmless the Company and its directors and officers and the Trust and each
Trustee from and against any loss, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company or
any such person may incur under the Act or otherwise, insofar as such loss,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus, any Registration Statement or any prospectus forming part thereof or
in any amendment or supplement thereto which is in reliance on and in conformity
with information furnished in writing by such Participant to the Company, the
Trust or each Trustee expressly for use with reference to such Participant, or
arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in any
of such documents or necessary to make such information not misleading. Such
Participant's agreement to indemnify the Company, the Trust and any such person
as aforesaid is expressly conditioned upon such Participant being notified of
the action in connection therewith brought against the Company, the Trust or any
such person by letter, telegram, or facsimile transmission addressed to it at
its address furnished to the Company for the purpose, with reasonable promptness
after the first legal process which discloses the nature of the liability or
<PAGE>
14
claim shall have been served upon the Company, the Trust or any such person (or
after the Company, the Trust or any such person shall have received notice of
such service on any agent designated by the Company or any such person), but
failure so to notify such Participant shall not relieve such Participant from
any liability which it may have to the Company, the Trust or any such person
otherwise than on account of the indemnity agreement contained in this Section
8.
Such Participant shall assume the defense of any suit brought to enforce
any such liability or claim, including the employment of counsel satisfactory to
the Company, the Trust or such other person and the payment of all expenses. The
Company, the Trust or such person against whom such suit is brought shall have
the right to employ separate counsel in any such suit and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Company, the Trust or such person unless (i) the employment of
such counsel has been specifically authorized by such Participant or (ii) the
named parties to any suit (including any impleaded parties) include the Company,
the Trust or such person and such Participant, and the Company, the Trust or
such person shall have been advised by such counsel that there may be one or
more legal defenses available to it which are different from or additional to
those available to such Participant, in which case such Participant shall not
have the right to assume the defense of such action on behalf of the Company,
the Trust or such person, it being understood, however, that the Participant
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (and any required local
counsel) for the Company, the Trust and such person, which firm (and local
counsel, if any) shall be designated in writing by the Company. A Participant
shall not be liable for any settlement of any such action effected without its
consent (which will not be unreasonably withheld or delayed).
(c) If the indemnification provided for in this Agreement is unavailable to
or insufficient to hold harmless an indemnified party under subsections (a) and
(b) above for any reason other than as specified therein in respect of any
losses, expenses, liabilities or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Trust on the one hand and each Participant on the other hand from the offering
of the Notes to which such losses, expenses, liabilities or claims relate or
(ii) if the allocation provided in clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Trust on the one hand and of each Participant on the other
in connection with the statements or omissions which resulted in such losses,
expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Trust on
the one hand and each Participant on the other shall be deemed to be in the same
proportion as the total net proceeds to the Trust from sales of the Notes bears
to the amount of proceeds received by each Participant from the offering of
Notes. The relative fault of the Company and the Trust on the one hand and of
each Participant on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Trust or by any Participant and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any claim
or action.
<PAGE>
15
Notwithstanding the provisions of this Section 8(c), no Participant shall
be required to contribute any amount in excess of the amount by which proceeds
received by such Participant from an offering of the Notes exceeds the amount of
any damages which such Participant has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Participants' obligations to contribute as provided in this Section 8(c) are
several and not joint.
The obligations of the Company and any Participant under this Section 8
shall be in addition to any liability that each of them may otherwise have.
9. Rule 144A.
The Company and the Trust hereby agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
10. Miscellaneous.
(a) Remedies. The Company and the Trust agree that monetary damages
(including the Additional Interest and Additional Distributions
contemplated hereby) would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement
and hereby agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company and the Trust will not on
or after the date of this Agreement enter into any agreement with respect
to their securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof. Except the Registration Rights Agreement, dated December 15, 1995,
by and between The CIT Group Holdings, Inc. and CBC Holding (Delaware)
Inc., the Company and the Trust have not previously entered into any
agreement granting any registration rights with respect to their securities
to any Person. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Trust's and the Company's securities under any agreement in
effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company and the Trust will
not take any action, or permit any change to occur, with respect to
Securities that would materially and adversely affect the ability of the
Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless the Company
and the Trust have obtained the written consent of Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
securities are being tendered pursuant to the Exchange Offer and that does
not affect directly or indirectly the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer may be
<PAGE>
16
given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Declaration; and
(ii) if to the Company and the Trust:
The CIT Group Holdings, Inc.
1211 Avenue of the Americas
New York, New York 10036
Attn: Chief Financial Officer
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be
binding upon a successor or assign of a Holder unless and to the extent
such successor or assign acquired Transfer Restricted Securities from such
Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
Conflict of Law rules thereof.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and
<PAGE>
17
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Entire Agreement. This Agreement together with the other
transaction documents is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company and
the Trust with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
(l) Required Consents. Whenever the consent or approval of Holders of
a specified percentage of Transfer Restricted Securities is required
hereunder, Transfer Restricted Securities held by the Company or its
affiliates (as such term is defined in Rule 405 under the Securities Act)
shall not be counted in determining whether such consent or approval was
given by the Holders of such required percentage.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
THE CIT GROUP HOLDINGS, INC.
By:_______________________________
Name:
Title:
CIT CAPITAL TRUST I
By:_______________________________
Name:
Title: Regular Trustee
Accepted as of the date thereof
Lehman Brothers Inc.
Chase Securities Inc.
Salomon Brothers Inc
UBS Securities LLC
Acting severally on behalf of
themselves and the several
Purchasers named herein
By LEHMAN BROTHERS INC.
By:_______________________________
Name:
Title:
- - --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
CIT CAPITAL TRUST I
Dated as of February 25, 1997
- - --------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE TABLE*
Section of Trust
Indenture Act of Section of
1939, as amended Agreement
- - ---------------- ---------
310(a)..................................................................4.1(a)
310(b)..................................................................4.1(c)
310(c)............................................................Inapplicable
311(a)..................................................................2.2(b)
311(b)..................................................................2.2(b)
311(c)............................................................Inapplicable
312(a)..................................................................2.2(a)
312(b)..................................................................2.2(b)
312(c).....................................................................2.9
313(a).....................................................................2.3
313(b).....................................................................2.3
313(c).....................................................................2.3
313(d).....................................................................2.3
314(a).....................................................................2.4
314(b)............................................................Inapplicable
314(c).....................................................................2.5
314(d)............................................................Inapplicable
314(e).....................................................................2.5
314(f)............................................................Inapplicable
315(a)..........................................................3.1(d); 3.2(a)
315(b)..................................................................2.7(a)
315(c)..................................................................3.1(c)
315(d)..................................................................3.1(d)
316(a).............................................................2.6; 5.4(a)
317(a)...............................................................2.10; 5.4
318(a)..................................................................2.1(b)
- - --------
* This Cross-Reference Table does not constitute part of the Agreement and
shall not have any bearing upon the interpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 INTERPRETATION AND DEFINITIONS....................................1
SECTION 1.1 Interpretation and Definitions.................................1
ARTICLE 2 TRUST INDENTURE ACT...............................................4
SECTION 2.1 Trust Indenture Act; Application...............................4
SECTION 2.2 Lists of Holders of Securities.................................4
SECTION 2.3 Reports by Guarantee Trustee...................................5
SECTION 2.4 Periodic Reports to Guarantee Trustee..........................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent...............5
SECTION 2.6 Guarantee Event of Default; Waiver.............................5
SECTION 2.7 Guarantee Event of Default; Notice.............................5
SECTION 2.8 Conflicting Interests..........................................6
SECTION 2.9 Disclosure of Information......................................6
SECTION 2.10 Guarantee Trustee May File Proofs of Claim.....................6
ARTICLE 3 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE.....................6
SECTION 3.1 Powers and Duties of Guarantee Trustee.........................6
SECTION 3.2 Certain Rights of Guarantee Trustee............................8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.........10
ARTICLE 4 GUARANTEE TRUSTEE................................................10
SECTION 4.1 Guarantee Trustee; Eligibility................................10
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee.....10
ARTICLE 5 GUARANTEE.......................................................11
SECTION 5.1 Guarantee.....................................................11
SECTION 5.2 Waiver of Notice and Demand...................................11
SECTION 5.3 Obligations Not Affected......................................12
SECTION 5.4 Rights of Holders.............................................13
SECTION 5.5 Guarantee of Payment..........................................13
SECTION 5.6 Subrogation...................................................13
SECTION 5.7 Independent Obligations.......................................14
ARTICLE 6 LIMITATION OF TRANSACTIONS; SUBORDINATION........................14
SECTION 6.1 Limitation of Transactions....................................14
SECTION 6.2 Ranking.......................................................14
<PAGE>
ARTICLE 7 TERMINATION......................................................14
SECTION 7.1 Termination...................................................15
ARTICLE 8 INDEMNIFICATION..................................................15
SECTION 8.1 Exculpation...................................................15
SECTION 8.2 Indemnification...............................................15
ARTICLE 9 MISCELLANEOUS....................................................16
SECTION 9.1 Successors and Assigns........................................16
SECTION 9.2 Amendments....................................................16
SECTION 9.3 Notices.......................................................16
SECTION 9.4 Benefit.......................................................17
SECTION 9.5 Governing Law.................................................17
ii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as of February 25, 1997,
is executed and delivered by The CIT Group Holdings, Inc., a Delaware
corporation (the "Guarantor"), and The Bank of New York, a New York banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) of the Securities (as defined herein) of CIT Capital
Trust I, a Delaware statutory business trust (the "Trust").
W I T N E S S E T H :
WHEREAS, pursuant to the Declaration (as defined herein), the Trust is
issuing on the date hereof $250,000,000 aggregate principal amount of capital
securities, having a liquidation amount of $1,000 per capital security,
designated the 7.70% Preferred Capital Securities (the "Capital Securities") and
$7,732,000 aggregate principal amount of common securities, having a liquidation
amount of $1,000 per common security, designated the 7.70% Common Securities
(the "Common Securities"; together with the Capital Securities, the
"Securities");
WHEREAS, as incentive for the Holders to purchase the Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this Guarantee, to pay to the Holders of the Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein; and that if a Trust Enforcement Event (as defined
in the Declaration) has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee are
subordinated to the rights of Holders of Capital Securities to receive Guarantee
Payments under this Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Holders.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions. In this Guarantee, unless the
context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Guarantee has the same meaning
throughout;
(c) all references to "the Guarantee" or "this Guarantee" are to this
Guarantee as modified, supplemented or amended from time to time;
<PAGE>
(d) all references in this Guarantee to Articles and Sections are to
Articles and Sections of this Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee, unless otherwise defined in this Guarantee or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa and a
reference to the masculine includes, as applicable, the feminine.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" has the meaning given to such term in the Indenture.
"Corporate Trust Office" means the office of the Guarantee Trustee at which
the corporate trust business of the Guarantee Trustee shall at any particular
time, be principally administered, which office at the date of execution of this
Guarantee is located at The Bank of New York, 101 Barclay Street, Floor 21 West,
New York, New York 10286, Attention: Corporate Trust Administration.
"Covered Person" means any Holder or beneficial owner of Securities.
"Debentures" means the series of subordinated deferrable interest
debentures to be issued by the Guarantor, designated the 7.70% Junior
Subordinated Debentures due 2027 held by the Property Trustee (as defined in the
Declaration) of the Trust.
"Declaration" means the Amended and Restated Declaration of Trust, dated as
of February 25, 1997, as amended, modified or supplemented from time to time,
among the trustees of the Trust named therein, the Guarantor, as sponsor, and
the holders from time to time of undivided beneficial ownership interests in the
assets of the Trust.
"Guarantee Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee.
"Guarantee Trustee" means The Bank of New York, until a successor Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Guarantee and thereafter means each such Successor Guarantee
Trustee.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Securities, to the extent not paid or made by
the Trust: (i) any accumulated and unpaid Distributions (as defined in the
Declaration) that are required to be paid on such Securities to the extent the
Trust shall have sufficient funds available therefor at the time, (ii) the
redemption price, including all accrued and unpaid Distributions to the date of
redemption with respect to any Securities called for redemption by the Trust, to
the extent the Trust shall have sufficient funds available therefor at the time,
and (iii) upon a voluntary or involuntary dissolution,
2
<PAGE>
winding-up or termination of the Trust (other than in connection with the
distribution of Debentures to the Holders in exchange for Securities as provided
in the Declaration), the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid Distributions on the Securities to the date of
payment, and (b) the amount of assets of the Trust remaining available for
distribution to Holders in liquidation of the Trust (in either case, the
"Liquidation Distribution"). If a Trust Enforcement Event has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under this Guarantee are subordinated to the rights of Holders of the
Capital Securities to receive payments hereunder.
"Holder" shall mean any holder of Securities, as registered on the books
and records of the Trust; provided, however, that, in determining whether the
Holders of the requisite percentage of Capital Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor or any other obligor on the Capital
Securities; and provided further, that in determining whether the Holders of the
requisite liquidation amount of Capital Securities have voted on any matter
provided for in this Guarantee, then for the purpose of such determination only
(and not for any other purpose hereunder), if the Capital Securities remain in
the form of one or more Global Certificates (as defined in the Declaration), the
term "Holders" shall mean the holder of the Global Certificate acting at the
direction of the Preferred Security Beneficial Owners (as defined in the
Declaration).
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.
"Indenture" means the Indenture, dated as of February 25, 1997, among the
Guarantor (the "Company") and The Bank of New York, as trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be issued
to the Property Trustee (as defined in the Declaration) of the Trust.
"Majority in Liquidation Amount of the Securities" means, except as
provided in the terms of the Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities, voting separately as a class, who are the record
holders of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities. In determining whether the
Holders of the requisite amount of Securities have voted, Securities which are
owned by the Guarantor or any Affiliate of the Guarantor shall be disregarded
for the purpose of any such determination.
"Officers' Certificate" means, with respect to any Person, a certificate
signed on behalf of such Person by two Authorized Officers (as defined in the
Declaration) of such Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee shall
include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
3
<PAGE>
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer on behalf of such Person in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
on behalf of such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer acting
on behalf of such Person, such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer within the Corporate Trust Office of the Guarantee Trustee, including
any vice president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. (a) This Guarantee is subject
to the provisions of the Trust Indenture Act that are required to be part of
this Guarantee and shall, to the extent applicable, be governed by such
provisions.
(b) If and to the extent that any provision of this Guarantee limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities. (a) The Guarantor shall provide
the Guarantee Trustee with a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Securities
("List of Holders"), (i) semi-annually, not later than January 31 and July 31 of
each year and current as of such date, and (ii) at such other times as
4
<PAGE>
the Guarantee Trustee may request in writing, within 30 days of receipt by the
Guarantor of a written request from the Guarantee Trustee for a List of Holders
as of a date no more than 15 days before such List of Holders is given to the
Guarantee Trustee; excluding from any such list names and addresses received by
the Guarantee Trustee in its capacity as Security Registrar (as defined in the
Indenture). The Guarantee Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders given to
it, provided that it may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by Guarantee Trustee. Within 60 days after May 15 of
each year (commencing with the year of the first anniversary of the issuance of
the Securities), the Guarantee Trustee shall provide to the Holders of the
Securities such reports as are required by Section 313 of the Trust Indenture
Act (if any) in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee. The Guarantor shall
provide to the Guarantee Trustee such documents, reports and information as
required by Section 314 (if any) of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent. The Guarantor
shall provide to the Guarantee Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Guarantee that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Guarantee Event of Default; Waiver. The Holders of a Majority
in Liquidation Amount of the Securities may, by vote or written consent, on
behalf of the Holders of all of the Securities, waive any past Guarantee Event
of Default and its consequences. Upon such waiver, any such Guarantee Event of
Default shall cease to exist, and any Guarantee Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee, but no such waiver shall extend to any subsequent or other default or
Guarantee Event of Default or impair any right consequent thereon.
SECTION 2.7 Guarantee Event of Default; Notice. (a) The Guarantee Trustee
shall, within 90 days after the occurrence of a Guarantee Event of Default,
transmit by mail, first class postage prepaid, to the Holders of the Securities,
notices of all Guarantee Events of Default actually known to a Responsible
Officer of the Guarantee Trustee, unless such defaults have been cured before
the giving of such notice; provided, that the Guarantee Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
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(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Guarantee Event of Default unless the Guarantee Trustee shall have received
written notice thereof or a Responsible Officer of the Guarantee Trustee charged
with the administration of the Declaration shall have obtained actual knowledge
thereof.
SECTION 2.8 Conflicting Interests. The Declaration shall be deemed to be
specifically described in this Guarantee for the purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 2.9 Disclosure of Information. The disclosure of information as to
the names and addresses of the Holders of the Securities in accordance with
Section 312 of the Trust Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any existing
law, or any law hereafter enacted which does not specifically refer to Section
312 of the Trust Indenture Act, nor shall the Guarantee Trustee be held
accountable by reason of mailing any material pursuant to a request made under
Section 312(b) of the Trust Indenture Act.
SECTION 2.10 Guarantee Trustee May File Proofs of Claim. Upon the
occurrence of a Guarantee Event of Default, the Guarantee Trustee is hereby
authorized to (a) recover judgment, in its own name and as trustee of an express
trust, against the Guarantor for the whole amount of any Guarantee Payments
remaining unpaid and (b) file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have its claims and those of the
Holders of the Securities allowed in any judicial proceedings relative to the
Guarantor, its creditors or its property.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee Trustee on behalf of the
Trust for the benefit of the Holders of the Securities, and the Guarantee
Trustee shall not transfer this Guarantee to any Person except a Holder of
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee.
The right, title and interest of the Guarantee Trustee in and to this Guarantee
shall automatically vest in any Successor Guarantee Trustee, and such vesting
and succession of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If a Guarantee Event of Default actually known to a Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee for the benefit of the Holders of the Securities.
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(c) The Guarantee Trustee, before the occurrence of any Guarantee Event of
Default and after the curing of all Guarantee Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee, and no implied covenants shall be read into this
Guarantee against the Guarantee Trustee. In case a Guarantee Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Guarantee Trustee, the Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Guarantee Event of Default and
after the curing or waiving of all such Guarantee Events of Default that
may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee, and the
Guarantee Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Guarantee, and no implied covenants or obligations shall be read into
this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee; but in
the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of
this Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee 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 not less than a Majority in Liquidation
Amount of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee; and
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(iv) no provision of this Guarantee shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Guarantee
or indemnity, reasonably satisfactory to the Guarantee Trustee, against
such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Guarantee Trustee. (a) Subject to the
provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely, and shall be fully
protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee shall be sufficiently evidenced by an Officers' Certificate;
(iii) Whenever, in the administration of this Guarantee, the Guarantee
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor;
(iv) The Guarantee Trustee shall have no duty to see to any recording,
filing or registration or any instrument (or any rerecording, refiling or
registration thereof);
(v) The Guarantee Trustee may consult with counsel, and the advice or
opinion of such counsel with respect to legal matters 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 accordance with
such advice or opinion. Such counsel may be counsel to the Guarantor or any
of its Affiliates and may include any of its employees. The Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Guarantee from any court of competent
jurisdiction;
(vi) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee at the request
or direction of any Holder, unless such Holder shall have provided to the
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Guarantee Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the
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Guarantee Trustee's agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Guarantee
Trustee; provided, that nothing contained in this Section 3.2(a)(vi) shall
be taken to relieve the Guarantee Trustee, upon the occurrence of a
Guarantee Event of Default, of its obligation to exercise the rights and
powers vested in it by this Guarantee;
(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, nominees, custodians or attorneys, and the Guarantee 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;
(ix) Any action taken by the Guarantee Trustee or its agents hereunder
shall bind the Holders of the Securities, and the signature of the
Guarantee Trustee or its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to inquire as to
the authority of the Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this Guarantee, both of which shall
be conclusively evidenced by the Guarantee Trustee's or its agent's taking
such action; and
(x) Whenever in the administration of this Guarantee the Guarantee
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Guarantee Trustee (i) may request instructions from the Holders of a
Majority in Liquidation Amount of the Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
(b) No provision of this Guarantee shall be deemed to impose any duty or
obligation on the Guarantee Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Guarantee Trustee shall be
construed to be a duty.
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SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee. The
recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Guarantee Trustee does not assume any responsibility for
their correctness. The Guarantee Trustee makes no representations as to the
validity or sufficiency of this Guarantee.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility.
(a) There shall be at all times a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), 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.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee.
(a) Subject to Section 4.1(b), the Guarantee Trustee may be appointed or
removed with or without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with Section
4.2(a) until a Successor Guarantee Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor.
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(c) The Guarantee Trustee appointed to office shall hold such office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 30 days after
delivery to the Guarantor of an instrument of removal or resignation, the
removed or resigning Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions to act
of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or resignation of the
Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall pay to the
Guarantee Trustee all amounts owing for fees and reimbursement of expenses which
have accrued to the date of such termination, removal or resignation.
(g) The Guarantor shall promptly notify the Holders of the resignation,
removal or appointment of the Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Trust), as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Trust to pay such
amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Guarantee and of
any liability to which it applies or may apply, presentment, demand for payment,
any right to require a proceeding first against the Trust or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
Notwithstanding anything to the contrary herein, the Guarantor retains all of
its rights
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under the Indenture to (i) extend the interest payment period on the Debentures
and the Guarantor shall not be obligated hereunder to make any Guarantee
Payments during any Extended Interest Payment Period (as defined in the
Indenture) with respect to the Distributions (as defined in the Declaration) on
the Securities, and (ii) change the maturity date of the Debentures to the
extent permitted by the Indenture.
SECTION 5.3 Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee shall be absolute and unconditional and shall remain in full
force and effect until the entire liquidation amount of all outstanding
Securities shall have been paid and such obligation shall in no way be affected
or impaired by reason of the happening from time to time of any event, including
without limitation, the following, whether or not with notice to, or the consent
of, the Guarantor:
(a) The release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Trust;
(b) The extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price (as defined in the Indenture),
Liquidation Distribution or any other sums payable under the terms of the
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with the Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures or any change to the maturity date of
the Debentures permitted by the Indenture);
(c) Any failure, omission, delay or lack of diligence on the part of the
Property Trustee or the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Property Trustee or the Holders
pursuant to the terms of the Securities, or any action on the part of the Trust
granting indulgence or extension of any kind;
(d) The voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) Any invalidity of, or defect or deficiency in, the Securities;
(f) The settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) Any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
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There shall be no obligation of the Guarantee Trustee or the Holders to
give notice to, or obtain consent of the Guarantor or any other Person with
respect to the happening of any of the foregoing.
No setoff, counterclaim, reduction or diminution of any obligation, or any
defense of any kind or nature that the Guarantor has or may have against any
Holder shall be available hereunder to the Guarantor against such Holder to
reduce the payments to it under this Guarantee.
SECTION 5.4 Rights of Holders.
(a) The Holders of a Majority in Liquidation Amount of the Securities have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee in respect of this Guarantee or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee.
(b) If the Guarantee Trustee fails to enforce this Guarantee, then any
Holder of Securities may, subject to the subordination provisions of Section
6.2, institute a legal proceeding directly against the Guarantor to enforce the
Guarantee Trustee's rights under this Guarantee without first instituting a
legal proceeding against the Trust, the Guarantee Trustee or any other person or
entity. Notwithstanding the foregoing, if the Guarantor has failed to make a
Guarantee Payment, a Holder of Securities may, subject to the subordination
provisions of Section 6.2, directly institute a proceeding against the Guarantor
for enforcement of the Guarantee for such payment to the Holder of the
Securities of the principal of or interest on the Debentures on or after the
respective due dates specified in the Debentures, and the amount of the payment
will be based on the Holder's pro rata share of the amount due and owing on all
of the Securities. The Guarantor hereby waives any right or remedy to require
that any action on this Guarantee be brought first against the Trust or any
other person or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of collection.
SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Securities against the Trust in respect of any amounts paid to such Holders by
the Guarantor under this Guarantee; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of law) be entitled
to enforce or exercise any right that it may acquire by way of subrogation of
any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee, if at the time of any such payment, any amounts
are due and unpaid under this Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the
Guarantee Trustee for the benefit of the Holders.
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SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Trust with respect to the Securities, and that the
Guarantor shall be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Guarantee notwithstanding the occurrence
of any event referred to in subsections 5.3(a) through 5.3(g), inclusive,
hereof.
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Securities remain outstanding, if there shall have occurred
a Guarantee Event of Default or a Trust Enforcement Event, then the Guarantor
shall not, and shall not permit any subsidiary of the Guarantor, to (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, the Guarantor's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities that rank pari passu with or junior to
the Debentures or make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor if such
guarantee ranks pari passu with or junior to the Debentures (other than (a)
dividends or distributions in common stock of the Guarantor, (b) payments under
this Guarantee and (c) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, and (d) purchases of common stock related to the issuance of
common stock or rights under any of the Company's benefit plans).
SECTION 6.2 Ranking.
This Guarantee will constitute an unsecured obligation of the Guarantor and
will rank subordinate and junior in right of payment to all other liabilities of
the Guarantor, except those liabilities of the Guarantor made pari passu or
subordinate by their terms.
If a Trust Enforcement Event has occurred and is continuing under the
Declaration, the rights of the holders of the Common Securities to receive
Guarantee Payments hereunder shall be subordinated to the rights of the holders
of the Securities to receive payment of all amounts due and owing hereunder.
ARTICLE 7
TERMINATION
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SECTION 7.1 Termination.
This Guarantee shall terminate upon (i) full payment of the Redemption
Price of all Securities, (ii) upon the distribution of the Debentures to the
Holders of all the Securities or (iii) upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Trust.
Notwithstanding the foregoing, this Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of Securities
must restore payment of any sums paid under the Securities or under this
Guarantee.
ARTICLE 8
INDEMNIFICATION
SECTION 8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Guarantee and in a
manner that such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Guarantee or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 8.2 Indemnification.
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against, or investigating, any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Guarantee and shall be subject to the same
limitations on the indemnitor's obligations and liabilities set forth in Section
9.4 of the Declaration.
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ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Securities then
outstanding.
SECTION 9.2 Amendments.
Except with respect to any changes that do not adversely affect the rights
of the Holders (in which case no consent of the Holders will be required), this
Guarantee may only be amended with the prior approval of the Holders of at least
a Majority in Liquidation Amount of the Securities. The provisions of Section
11.2 of the Declaration with respect to meetings of, and action by written
consent of the Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices.
All notices provided for in this Guarantee shall be in writing, duly signed
by the party giving such notice, and shall be delivered, telecopied or mailed by
registered or certified mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's mailing
address set forth below (or such other address as the Guarantee Trustee may give
notice of to the Guarantor and the Holders of the Securities):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Fax: (212) 815-5595
(b) If given to the Guarantor, at the Guarantor's mailing addresses set
forth below (or such other address as the Guarantor may give notice of to the
Guarantee Trustee and the Holders of the Securities):
The CIT Group Holdings, Inc.
1211 Avenue of the Americas
New York, New York 10036
Attn: Chief Financial Officer
Fax: (212) 536-1912
(c) If given to any Holder of Securities, at the address set forth on the
books and records of the Trust.
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All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit.
This Guarantee is solely for the benefit of the Holders of the Securities
and, subject to Section 3.1(a), is not separately transferable from the
Securities.
SECTION 9.5 Governing Law.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, this Guarantee is executed as of the day and year first
above written.
THE CIT GROUP HOLDINGS, INC.
as Guarantor
By:________________________________
Name:
Title:
THE BANK OF NEW YORK
as Guarantee Trustee
By:________________________________
Name:
Title:
18
Exhibit 23.1
Independent Auditors' Consent
The Board of Directors
The CIT Group Holdings, Inc.:
We consent to the use of our report dated January 18, 1996, relating to the
consolidated balance sheets of The CIT Group Holdings, Inc. and subsidiaries as
of December 31, 1995 and 1994, and the related consolidated statements of
income, changes in stockholders' equity, and cash flows for each of the years in
the three-year period ended December 31, 1995 incorporated by reference in this
Registration Statement on Form S-4 of CIT Capital Trust I and The CIT Group
Holdings, Inc., which report appears in the December 31, 1995 Annual Report on
Form 10-K of The CIT Group Holdings, Inc., and to the reference to our firm
under the heading "Experts" in the Registration Statement.
Our report on the consolidated financial statements refers to a change in the
method of accounting for postretirement benefits other than pensions in 1993.
/s/ KPMG Peat Marwick LLP
- - -------------------------------
KPMG Peat Marwick LLP
Short Hills, New Jersey
March 3, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of THE CIT GROUP HOLDINGS, INC., a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-4, for the registration of
the Corporation's guarantee of certain certificates of beneficial ownership
issued by CIT Capital Trust I, a wholly-owned subsidiary of the Corporation,
under said Act, which notes and certificates may be issued in an aggregate
principal amount of up to $250,000,000 (all in United States dollars or an
equivalent amount in another currency or composite currency), hereby constitutes
and appoints ALBERT R. GAMPER, JR., ERNEST D. STEIN, AND DONALD J. RAPSON his
true and lawful attorneys-in-fact and agents, and each of them with full power
to act without the others, for him and in his name, place, and stead, in any and
all capacities, to sign such Registration Statement and any and all amendments
thereof, with power where appropriate to affix the corporate seal of said
Corporation thereto and to attest to said seal, and to file such Registration
Statement and each such amendment, with all exhibits thereto, and any and all
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person and hereby ratifies and
confirms all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereby.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 28th
day of February, 1997.
/s/ Albert R. Gamper, Jr.
---------------------------
Albert R. Gamper, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of THE CIT GROUP HOLDINGS, INC., a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-4, for the registration of
the Corporation's guarantee of certain certificates of beneficial ownership
issued by CIT Capital Trust I, a wholly-owned subsidiary of the Corporation,
under said Act, which notes and certificates may be issued in an aggregate
principal amount of up to $250,000,000 (all in United States dollars or an
equivalent amount in another currency or composite currency), hereby constitutes
and appoints ALBERT R. GAMPER, JR., ERNEST D. STEIN, AND DONALD J. RAPSON his
true and lawful attorneys-in-fact and agents, and each of them with full power
to act without the others, for him and in his name, place, and stead, in any and
all capacities, to sign such Registration Statement and any and all amendments
thereof, with power where appropriate to affix the corporate seal of said
Corporation thereto and to attest to said seal, and to file such Registration
Statement and each such amendment, with all exhibits thereto, and any and all
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person and hereby ratifies and
confirms all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereby.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 28th
day of February, 1997.
/s/ Hisao Kohayashi
---------------------------
Hisao Kohayashi
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of THE CIT GROUP HOLDINGS, INC., a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-4, for the registration of
the Corporation's guarantee of certain certificates of beneficial ownership
issued by CIT Capital Trust I, a wholly-owned subsidiary of the Corporation,
under said Act, which notes and certificates may be issued in an aggregate
principal amount of up to $250,000,000 (all in United States dollars or an
equivalent amount in another currency or composite currency), hereby constitutes
and appoints ALBERT R. GAMPER, JR., ERNEST D. STEIN, AND DONALD J. RAPSON his
true and lawful attorneys-in-fact and agents, and each of them with full power
to act without the others, for him and in his name, place, and stead, in any and
all capacities, to sign such Registration Statement and any and all amendments
thereof, with power where appropriate to affix the corporate seal of said
Corporation thereto and to attest to said seal, and to file such Registration
Statement and each such amendment, with all exhibits thereto, and any and all
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person and hereby ratifies and
confirms all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereby.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 28th
day of February, 1997.
/s/ Takasuke Kaneko
---------------------------
Takasuke Kaneko
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of THE CIT GROUP HOLDINGS, INC., a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-4, for the registration of
the Corporation's guarantee of certain certificates of beneficial ownership
issued by CIT Capital Trust I, a wholly-owned subsidiary of the Corporation,
under said Act, which notes and certificates may be issued in an aggregate
principal amount of up to $250,000,000 (all in United States dollars or an
equivalent amount in another currency or composite currency), hereby constitutes
and appoints ALBERT R. GAMPER, JR., ERNEST D. STEIN, AND DONALD J. RAPSON his
true and lawful attorneys-in-fact and agents, and each of them with full power
to act without the others, for him and in his name, place, and stead, in any and
all capacities, to sign such Registration Statement and any and all amendments
thereof, with power where appropriate to affix the corporate seal of said
Corporation thereto and to attest to said seal, and to file such Registration
Statement and each such amendment, with all exhibits thereto, and any and all
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person and hereby ratifies and
confirms all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereby.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 28th
day of February, 1997.
/s/ Kenji Nakamura
---------------------------
Kenji Nakamura
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of THE CIT GROUP HOLDINGS, INC., a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-4, for the registration of
the Corporation's guarantee of certain certificates of beneficial ownership
issued by CIT Capital Trust I, a wholly-owned subsidiary of the Corporation,
under said Act, which notes and certificates may be issued in an aggregate
principal amount of up to $250,000,000 (all in United States dollars or an
equivalent amount in another currency or composite currency), hereby constitutes
and appoints ALBERT R. GAMPER, JR., ERNEST D. STEIN, AND DONALD J. RAPSON his
true and lawful attorneys-in-fact and agents, and each of them with full power
to act without the others, for him and in his name, place, and stead, in any and
all capacities, to sign such Registration Statement and any and all amendments
thereof, with power where appropriate to affix the corporate seal of said
Corporation thereto and to attest to said seal, and to file such Registration
Statement and each such amendment, with all exhibits thereto, and any and all
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person and hereby ratifies and
confirms all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereby.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 28th
day of February, 1997.
/s/ Joseph A.Pollicino
---------------------------
Joseph A.Pollicino
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of THE CIT GROUP HOLDINGS, INC., a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-4, for the registration of
the Corporation's guarantee of certain certificates of beneficial ownership
issued by CIT Capital Trust I, a wholly-owned subsidiary of the Corporation,
under said Act, which notes and certificates may be issued in an aggregate
principal amount of up to $250,000,000 (all in United States dollars or an
equivalent amount in another currency or composite currency), hereby constitutes
and appoints ALBERT R. GAMPER, JR., ERNEST D. STEIN, AND DONALD J. RAPSON his
true and lawful attorneys-in-fact and agents, and each of them with full power
to act without the others, for him and in his name, place, and stead, in any and
all capacities, to sign such Registration Statement and any and all amendments
thereof, with power where appropriate to affix the corporate seal of said
Corporation thereto and to attest to said seal, and to file such Registration
Statement and each such amendment, with all exhibits thereto, and any and all
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person and hereby ratifies and
confirms all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereby.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 28th
day of February, 1997.
/s/ Paul N. Roth
---------------------------
Paul N. Roth
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of THE CIT GROUP HOLDINGS, INC., a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-4, for the registration of
the Corporation's guarantee of certain certificates of beneficial ownership
issued by CIT Capital Trust I, a wholly-owned subsidiary of the Corporation,
under said Act, which notes and certificates may be issued in an aggregate
principal amount of up to $250,000,000 (all in United States dollars or an
equivalent amount in another currency or composite currency), hereby constitutes
and appoints ALBERT R. GAMPER, JR., ERNEST D. STEIN, AND DONALD J. RAPSON his
true and lawful attorneys-in-fact and agents, and each of them with full power
to act without the others, for him and in his name, place, and stead, in any and
all capacities, to sign such Registration Statement and any and all amendments
thereof, with power where appropriate to affix the corporate seal of said
Corporation thereto and to attest to said seal, and to file such Registration
Statement and each such amendment, with all exhibits thereto, and any and all
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person and hereby ratifies and
confirms all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereby.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 28th
day of February, 1997.
/s/ Peter J. Tobin
---------------------------
Peter J. Tobin
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of THE CIT GROUP HOLDINGS, INC., a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-4, for the registration of
the Corporation's guarantee of certain certificates of beneficial ownership
issued by CIT Capital Trust I, a wholly-owned subsidiary of the Corporation,
under said Act, which notes and certificates may be issued in an aggregate
principal amount of up to $250,000,000 (all in United States dollars or an
equivalent amount in another currency or composite currency), hereby constitutes
and appoints ALBERT R. GAMPER, JR., ERNEST D. STEIN, AND DONALD J. RAPSON his
true and lawful attorneys-in-fact and agents, and each of them with full power
to act without the others, for him and in his name, place, and stead, in any and
all capacities, to sign such Registration Statement and any and all amendments
thereof, with power where appropriate to affix the corporate seal of said
Corporation thereto and to attest to said seal, and to file such Registration
Statement and each such amendment, with all exhibits thereto, and any and all
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person and hereby ratifies and
confirms all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereby.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 28th
day of February, 1997.
/s/ Keiji Torii
---------------------------
Keiji Torii
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of THE CIT GROUP HOLDINGS, INC., a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-4, for the registration of
the Corporation's guarantee of certain certificates of beneficial ownership
issued by CIT Capital Trust I, a wholly-owned subsidiary of the Corporation,
under said Act, which notes and certificates may be issued in an aggregate
principal amount of up to $250,000,000 (all in United States dollars or an
equivalent amount in another currency or composite currency), hereby constitutes
and appoints ALBERT R. GAMPER, JR., ERNEST D. STEIN, AND DONALD J. RAPSON his
true and lawful attorneys-in-fact and agents, and each of them with full power
to act without the others, for him and in his name, place, and stead, in any and
all capacities, to sign such Registration Statement and any and all amendments
thereof, with power where appropriate to affix the corporate seal of said
Corporation thereto and to attest to said seal, and to file such Registration
Statement and each such amendment, with all exhibits thereto, and any and all
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person and hereby ratifies and
confirms all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereby.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 28th
day of February, 1997.
/s/ Yukihara Uno
---------------------------
Yukihara Uno
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of THE CIT GROUP HOLDINGS, INC., a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-4, for the registration of
the Corporation's guarantee of certain certificates of beneficial ownership
issued by CIT Capital Trust I, a wholly-owned subsidiary of the Corporation,
under said Act, which notes and certificates may be issued in an aggregate
principal amount of up to $250,000,000 (all in United States dollars or an
equivalent amount in another currency or composite currency), hereby constitutes
and appoints ALBERT R. GAMPER, JR., ERNEST D. STEIN, AND DONALD J. RAPSON his
true and lawful attorneys-in-fact and agents, and each of them with full power
to act without the others, for him and in his name, place, and stead, in any and
all capacities, to sign such Registration Statement and any and all amendments
thereof, with power where appropriate to affix the corporate seal of said
Corporation thereto and to attest to said seal, and to file such Registration
Statement and each such amendment, with all exhibits thereto, and any and all
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person and hereby ratifies and
confirms all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereby.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 28th
day of February, 1997.
/s/ Yasuo Tsunemi
---------------------------
Yasuo Tsunemi
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) |__|
---------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------
CIT CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware 52-6841645
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1211 Avenue of the Americas
New York, New York 10036
(Address of principal executive offices) (Zip code)
---------------------
7.70% Preferred Capital Securities
(Title of the indenture securities)
================================================================================
<PAGE>
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
- - --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
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 27th day of February, 1997.
THE BANK OF NEW YORK
By: /S/MARY LAGUMINA
-----------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
- - --------------------------------------------------------------------------------
Exhibit 7 to Form T-1
CONSOLIDATED REPORT OF CONDITION OF
The Bank of New York
of 48 Wall Street, New York, New York 10286
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1996, published in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................... $ 4,404,522
Interest-bearing balances ........................... 732,833
Securities:
Held to maturity securities ........................... 789,964
Available-for-sale securities ......................... 2,005,509
Federal Funds sold in domestic offices of the
bank:
Federal funds sold .................................. 3,364,836
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ $28,726,602
Less: Allowance for loan and lease losses ........... 584,525
Less: Allocated transfer risk reserve ............... 429
-----------
Loans and leases, net of unearned income,
allowance, and reserve ............................ 28,143,648
Assets held in Trading accounts....................... 1,004,242
Premises and fixed assets (including capitalized
leases) ............................................... 605,668
Other real estate owned ............................... 41,238
Investments in unconsolidated subsidiaries and
associated companies ................................ 205,031
Customer's liability to this bank on acceptances
outstanding ......................................... 949,154
Intangible assets ..................................... 490,524
Other assets .......................................... 1,305,839
-----------
TOTAL ASSETS .......................................... $44,043,010
===========
- 5 -
<PAGE>
LIABILITIES
Deposits
In domestic offices .................................. $20,441,318
Noninterest-bearing ..................................$ 8,158,472
Interest-bearing ..................................... 12,282,846
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ......................................... 11,710,903
Noninterest-bearing ..................................$ 46,182
Interest-bearing ..................................... 11,664,721
Federal funds purchased in
domestic offices of the bank
Federal funds purchased .............................. 1,565,288
Demand notes issued to the U.S. Treasury ............... 293,186
Trading liabilities .................................... 826,856
Other Borrowed money:
With original maturity of one year or less ........... 2,103,443
With original maturity of more than one year ........... 20,766
Bank's liability on acceptances executed and outstanding 951,116
Subordinated notes and debentures ...................... 1,020,400
Other liabilities ...................................... 1,522,884
-----------
TOTAL LIABILITIES ...................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock ........................................... 942,284
Surplus ................................................ 525,666
Undivided profits and capital reserves ................. 2,129,376
Net unrealized holding gains (losses)
on available-for-sale securities ....................... (2,073)
Cumulative foreign currency translation adjustments .... (8,403)
-----------
TOTAL EQUITY CAPITAL ................................... 3,586,850
-----------
TOTAL LIABILITIES AND EQUITY CAPITAL.................... $44,043,010
===========
I, Robert E. Keifman, Senior Vice President & Comptroller of the above-named
bank, do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
ROBERT E. Keifman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J CARTER BACOT )
THOMAS A. RENYI ) DIRECTORS
ALAN R. GRIFFITH )
- - --------------------------------------------------------------------------------
- 6 -
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) |__|
-------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-------------------
THE CIT GROUP HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2994534
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1211 Avenue of the Americas
New York, New York 10036
(Address of principal executive offices) (Zip code)
------------------
Guarantee of Preferred Capital Securities of
CIT Capital Trust I
(Title of the indenture securities)
================================================================================
<PAGE>
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
- - --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
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 27th day of February, 1997.
THE BANK OF NEW YORK
By: /S/MARY LAGUMINA
--------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
- - --------------------------------------------------------------------------------
Exhibit 7 to Form T-1
CONSOLIDATED REPORT OF CONDITION OF
The Bank of New York
of 48 Wall Street, New York, New York 10286
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1996, published in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................... $ 4,404,522
Interest-bearing balances ........................... 732,833
Securities:
Held to maturity securities ........................... 789,964
Available-for-sale securities ......................... 2,005,509
Federal Funds sold in domestic offices of the
bank:
Federal funds sold .................................. 3,364,836
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ $28,726,602
Less: Allowance for loan and lease losses ........... 584,525
Less: Allocated transfer risk reserve ............... 429
-----------
Loans and leases, net of unearned income,
allowance, and reserve ............................ 28,143,648
Assets held in Trading accounts....................... 1,004,242
Premises and fixed assets (including capitalized
leases) ............................................... 605,668
Other real estate owned ............................... 41,238
Investments in unconsolidated subsidiaries and
associated companies ................................ 205,031
Customer's liability to this bank on acceptances
outstanding ......................................... 949,154
Intangible assets ..................................... 490,524
Other assets .......................................... 1,305,839
-----------
TOTAL ASSETS .......................................... $44,043,010
===========
- 5 -
<PAGE>
LIABILITIES
Deposits
In domestic offices .................................. $20,441,318
Noninterest-bearing ..................................$ 8,158,472
Interest-bearing ..................................... 12,282,846
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ......................................... 11,710,903
Noninterest-bearing ..................................$ 46,182
Interest-bearing ..................................... 11,664,721
Federal funds purchased in
domestic offices of the bank
Federal funds purchased .............................. 1,565,288
Demand notes issued to the U.S. Treasury ............... 293,186
Trading liabilities .................................... 826,856
Other Borrowed money:
With original maturity of one year or less ........... 2,103,443
With original maturity of more than one year ........... 20,766
Bank's liability on acceptances executed and outstanding 951,116
Subordinated notes and debentures ...................... 1,020,400
Other liabilities ...................................... 1,522,884
-----------
TOTAL LIABILITIES ...................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock ........................................... 942,284
Surplus ................................................ 525,666
Undivided profits and capital reserves ................. 2,129,376
Net unrealized holding gains (losses)
on available-for-sale securities ....................... (2,073)
Cumulative foreign currency translation adjustments .... (8,403)
-----------
TOTAL EQUITY CAPITAL ................................... 3,586,850
-----------
TOTAL LIABILITIES AND EQUITY CAPITAL.................... $44,043,010
===========
I, Robert E. Keifman, Senior Vice President & Comptroller of the above-named
bank, do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
ROBERT E. Keifman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J CARTER BACOT )
THOMAS A. RENYI ) DIRECTORS
ALAN R. GRIFFITH )
- - --------------------------------------------------------------------------------
- 6 -
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) |__|
---------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------
THE CIT GROUP HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2994534
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1211 Avenue of the Americas
New York, New York 10036
(Address of principal executive offices) (Zip code)
---------------------
7.70% Junior Subordinated Debentures due 2027
(Title of the indenture securities)
================================================================================
<PAGE>
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
- - -----------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
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 27th day of February, 1997.
THE BANK OF NEW YORK
By: /S/MARY LAGUMINA
-------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
- - --------------------------------------------------------------------------------
Exhibit 7 to Form T-1
CONSOLIDATED REPORT OF CONDITION OF
The Bank of New York
of 48 Wall Street, New York, New York 10286
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1996, published in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................... $ 4,404,522
Interest-bearing balances ........................... 732,833
Securities:
Held to maturity securities ........................... 789,964
Available-for-sale securities ......................... 2,005,509
Federal Funds sold in domestic offices of the
bank:
Federal funds sold .................................. 3,364,836
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ $28,726,602
Less: Allowance for loan and lease losses ........... 584,525
Less: Allocated transfer risk reserve ............... 429
-----------
Loans and leases, net of unearned income,
allowance, and reserve ............................ 28,143,648
Assets held in Trading accounts....................... 1,004,242
Premises and fixed assets (including capitalized
leases) ............................................... 605,668
Other real estate owned ............................... 41,238
Investments in unconsolidated subsidiaries and
associated companies ................................ 205,031
Customer's liability to this bank on acceptances
outstanding ......................................... 949,154
Intangible assets ..................................... 490,524
Other assets .......................................... 1,305,839
-----------
TOTAL ASSETS .......................................... $44,043,010
===========
- 5 -
<PAGE>
LIABILITIES
Deposits
In domestic offices .................................. $20,441,318
Noninterest-bearing ..................................$ 8,158,472
Interest-bearing ..................................... 12,282,846
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ......................................... 11,710,903
Noninterest-bearing ..................................$ 46,182
Interest-bearing ..................................... 11,664,721
Federal funds purchased in
domestic offices of the bank
Federal funds purchased .............................. 1,565,288
Demand notes issued to the U.S. Treasury ............... 293,186
Trading liabilities .................................... 826,856
Other Borrowed money:
With original maturity of one year or less ........... 2,103,443
With original maturity of more than one year ........... 20,766
Bank's liability on acceptances executed and outstanding 951,116
Subordinated notes and debentures ...................... 1,020,400
Other liabilities ...................................... 1,522,884
-----------
TOTAL LIABILITIES ...................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock ........................................... 942,284
Surplus ................................................ 525,666
Undivided profits and capital reserves ................. 2,129,376
Net unrealized holding gains (losses)
on available-for-sale securities ....................... (2,073)
Cumulative foreign currency translation adjustments .... (8,403)
-----------
TOTAL EQUITY CAPITAL ................................... 3,586,850
-----------
TOTAL LIABILITIES AND EQUITY CAPITAL.................... $44,043,010
===========
I, Robert E. Keifman, Senior Vice President & Comptroller of the above-named
bank, do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
ROBERT E. Keifman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J CARTER BACOT )
THOMAS A. RENYI ) DIRECTORS
ALAN R. GRIFFITH )
- - --------------------------------------------------------------------------------
- 6 -
EXHIBIT 99.1
FORM OF LETTER OF TRANSMITTAL
<PAGE>
LETTER OF TRANSMITTAL
CIT CAPITAL TRUST I
OFFER TO EXCHANGE ITS 7.70% PREFERRED CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 7.70% PREFERRED CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER PREFERRED CAPITAL SECURITY)
PURSUANT TO THE PROSPECTUS DATED, 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON , 1997, UNLESS THE OFFER
IS EXTENDED.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE BANK OF NEW YORK
BY MAIL/OVERNIGHT DELIVERY/HAND:
THE BANK OF NEW YORK
101 Barclay Street
Floor 21 West
New York, New York 10286
ATTN: Corporate Trust Administration
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(212) 815-
FACSIMILE TRANSMISSIONS:
(212) 815-5595
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Capital
Securities (as defined below) either if Old Capital Securities are to be
forwarded herewith or if tenders of Old Capital Securities are to be made by
book-entry transfer to an account maintained by The Bank of New York (the
"Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in "The Exchange Offer -- Procedures for Tendering Old
Capital Securities" in the Prospectus.
Holders of Old Capital Securities whose certificates (the "Certificates")
for such Old Capital Securities are not immediately available or who cannot
deliver their Certificates and all other required documents to the Exchange
Agent on or prior to the Expiration Date (as defined in the Prospectus) or who
cannot complete the procedures for book-entry transfer on a timely basis, must
tender their Old Capital Securities according to the guaranteed delivery
procedures set forth in "The Exchange Offer -- Procedures for Tendering Old
Capital Securities" in the Prospectus.
<PAGE>
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ALL TENDERING HOLDERS COMPLETE THIS BOX:
Please Print Name Please Show Old Capital Principal Amount Beneficial
and Address of Certificate Securities of Old Capital Holders and
Registered Holder Number(s) Tendered Securities Names in
(Need Not Be (Attach additional Tendered (If Which such
Completed By list if needed.) Principal Amount Securities are
Book-Entry of Old Capital held.
Holders) Securities is Less
than All.)*
</TABLE>
* All Old Capital Securities held shall be deemed tendered unless a lesser
number is specified in this column.
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
[] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE
FOLLOWING:
</TABLE>
Name of Tendering Institution: DTC Account Number:
Transaction Code Number:
<TABLE>
<S> <C>
[] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD
CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY
PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
</TABLE>
Name of Registered Holders(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution: DTC Account Number:
Transaction Code Number:
<PAGE>
<TABLE>
<S> <C>
[] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD CAPITAL SECURITIES
ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE.
[] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL SECURITIES FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING
BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10
COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
</TABLE>
Name: Address:
Ladies and Gentlemen:
The undersigned hereby tenders to CIT Capital Trust I, a Delaware business
trust (the "Trust") and The CIT Group Holdings, Inc., a Delaware Corporation, as
Depositor ("the Company"), the above described aggregate Liquidation Amount of
the Trust's 7.70% Preferred Capital Securities due February 15, 2027 (the "Old
Capital Securities") in exchange for a like aggregate Liquidation Amount of the
Trust's 7.70% Capital Securities due February 15, 2027 (the "New Capital
Securities") which have been registered under the Securities Act of 1933 (the
"Securities Act"), upon the terms and subject to the conditions set forth in the
Prospectus dated , 1997 (as the same may be amended or supplemented
from time to time, the "Prospectus"), receipt of which is acknowledged, and in
this Letter of Transmittal (which, together with the Prospectus, constitute the
"Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of the
Company and the Trust in connection with the Exchange Offer) with respect to the
tendered Old Capital Securities, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest),
subject only to the right of withdrawal described in the Prospectus, to (i)
deliver Certificates for Old Capital Securities to the Company or the Trust
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Trust, upon receipt by the Exchange Agent, as the
undersigned's agent, of the New Capital Securities to be issued in exchange for
such Old Capital Securities, (ii) present Certificates for such Old Capital
Securities for transfer, and to transfer the Old Capital Securities on the books
of the Trust, and (iii) receive for the account of the Trust all benefits and
otherwise exercise all rights of beneficial ownership of such Old Capital
Securities, all in accordance with the terms and conditions of the Exchange
Offer.
THE UNDERSIGNED HEREBY REPRESENT(S) AND WARRANT(S) THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE COMPANY, THE TRUST OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT
AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE UNDERSIGNED
WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT.
THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE
OFFER.
<PAGE>
The name(s) and address(es) of the registered holder(s) of the Old Capital
Securities tendered hereby should be printed above, if they are not already set
forth above, as they appear on the Certificates representing such Old Capital
Securities. The Certificate number(s) and the Old Capital Securities that the
undersigned wishes to tender should be indicated in the appropriate boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to the
Exchange Offer for any reason, or if Certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, Certificates for
such nonexchanged or nontendered Old Capital Securities will be returned (or, in
the case of Old Capital Securities tendered by book-entry transfer, such Old
Capital Securities will be credited to an account maintained at DTC), without
expense to the tendering holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities pursuant
to any one of the procedures described in "The Exchange Offer -- Procedures for
Tendering Old Capital Securities" in the Prospectus and in the instruction,
hereto will, upon the Company's and the Trust's acceptance for exchange of such
tendered Old Capital Securities, constitute a binding agreement between the
undersigned, the Company and the Trust upon the terms and subject to the
conditions of the Exchange Offer. The undersigned recognizes that, under certain
circumstances set forth in the Prospectus, the Company and the Trust may not be
required to accept for exchange any of the Old Capital Securities tendered
hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions," below, the undersigned hereby directs that the New Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, that such New Capital Securities
be credited to the account indicated above maintained at DTC. If applicable,
substitute Certificates representing Old Capital Securities not exchanged or not
accepted for exchange will be issued to the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, will be credited to the account
indicated above maintained at DTC. Similarly, unless otherwise indicated under
"Special Delivery Instructions," please deliver New Capital Securities to the
undersigned at the address shown below the undersigned's signature.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE
UNDERSIGNED IS NOT AN "AFFILIATE" OF THE COMPANY OR THE TRUST, (II) ANY NEW
CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE
ORDINARY COURSE OF ITS BUSINESS, (III) THE UNDERSIGNED HAS NO ARRANGEMENT OR
UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE
EXCHANGE OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE
UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW CAPITAL SECURITIES. BY
TENDERING OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING
THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD CAPITAL SECURITIES WHICH IS A
BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE
LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE
SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A) SUCH OLD CAPITAL
SECURITIES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE, OR (B) SUCH OLD
CAPITAL SECURITIES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL
DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING
THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW
CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
<PAGE>
THE COMPANY AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE PROVISIONS OF
THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS
DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW CAPITAL SECURITIES RECEIVED IN
EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE SUCH OLD CAPITAL SECURITIES WERE
ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF
MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 180
DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED
CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH NEW
CAPITAL SECURITIES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN
THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD CAPITAL SECURITIES FOR ITS OWN
ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH OLD CAPITAL SECURITIES AND
EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM
THE COMPANY OR THE TRUST OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY
FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE
PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT
TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR
INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS
SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER
WILL SUSPEND THE SALE OF NEW CAPITAL SECURITIES PURSUANT TO THE PROSPECTUS UNTIL
THE COMPANY AND THE TRUST HAVE AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT
SUCH MISSTATEMENT OR OMISSION AND HAS FURNISHED COPIES OF THE AMENDED OR
SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR THE COMPANY OR THE
TRUST HAS GIVEN NOTICE THAT THE SALE OF THE NEW CAPITAL SECURITIES MAY BE
RESUMED, AS THE CASE MAY BE. IF THE COMPANY OR THE TRUST GIVES SUCH NOTICE TO
SUSPEND THE SALE OF THE NEW CAPITAL SECURITIES, IT SHALL EXTEND THE 90-DAY
PERIOD REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED
TO USE THE PROSPECTUS IN CONNECTION WITH THE RESALE OF NEW CAPITAL SECURITIES BY
THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING
OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL
HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO
PERMIT RESALES OF THE NEW CAPITAL SECURITIES OR TO AND INCLUDING THE DATE ON
WHICH THE COMPANY OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF NEW CAPITAL
SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accrued interest on such Old Capital Securities
for any period from and after the last Interest Payment Date to which interest
has been paid or duly provided for on such Old Capital Securities prior to the
original issue date of the New Capital Securities or, if no such interest has
been paid or duly provided for, will not receive any accrued interest on such
Old Capital Securities, and the undersigned waives the right to receive any
interest on such Old Capital Securities accrued from and after such Interest
Payment Date or, if no such interest has been paid or duly provided for, from
and after February 25, 1997.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
<PAGE>
Please be advised that the Company is registering the New Capital
Securities in reliance on the position of the Staff enunciated in Exxon Capital
Holdings Corp. (available April 13, 1989) and Morgan Stanley & Co. Incorporated
(available June 5, 1991). In addition, the Company has authorized us to inform
you as follows: The Company has not entered into any arrangement or
understanding with any person to distribute the Exchange Notes to be received in
the Exchange Offer and, to the best of its information and belief, each person
participating in the Exchange Offer is acquiring the New Capital Securities in
its ordinary course of business and has no arrangement or understanding with any
person to participate in the distribution of the Exchange Notes to be received
in the Exchange Offer. In this regard, the Company will make each person
participating in the Exchange Offer aware that if such person is participating
in the Exchange Offer for the purpose of distributing the Exchange Notes to be
acquired in the Exchange Offer, such person (a) could not rely on the Staff
position enunciated in Exxon Capital or interpretative letters to similar effect
and (b) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with a secondary resale transaction. The
Company acknowledges that such a secondary resale transaction by such person
participating in the Exchange Offer for the purpose of distributing the New
Capital Securities should be covered by an effective registration statement
containing the selling securityholder information required by Item 507 of
Regulation S-K. Furthermore, the Company will include in the transmittal letter
to be executed by an exchange offeree in order to participate in the Exchange
Offer (x) an acknowledgement that if such exchange offeree is a broker-dealer
that will receive New Capital Securities for its own account in exchange for
Notes that were acquired as a result of market-making activities or other
trading activities, it will deliver a prospectus in connection with any resale
of such New Capital Securities and (y) a statement that by so acknowledging and
by delivering a prospectus, such exchange offeree will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act.
<PAGE>
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated:
--------------------- , 1997
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old Capital Securities hereby tendered or on a security
position listing, or by any person(s) authorized to become the registered
holder(s) by endorsements and documents transmitted herewith (including such
options of counsel, certifications and other information as may be required by
the Trust or the Trustee for the Old Capital Securities to comply with the
restrictions on transfer applicable to the Old Capital Securities). If signature
is by an attorney-in-fact, executor, administrator, trustee, guardian, officer
of a corporation or another acting in a fiduciary capacity or representative
capacity, please set forth the signer's full title. See Instruction 5.
Name(s)
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
- - --------------------------------------------------------------------------------
Address:
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Telephone Number
- - --------------------------------------------------------------------------------
Tax ID Number
- - --------------------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
- - --------------------------------------------------------------------------------
AUTHORIZED SIGNATURE
Date:
--------------------- , 199
----
Name of Firm:
- - --------------------------------------------------------------------------------
Capacity (full title):
- - --------------------------------------------------------------------------------
(PLEASE PRINT)
Address:
- - --------------------------------------------------------------------------------
-------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
- - ---------------------------------------------------------------------------
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, AND 6)
To be completed ONLY if the New Capital Securities are to be issued in the
name of someone other than the registered holder of the Old Capital Securities
whose name(s) appear(s) above.
Issue New Capital Securities to:
[ ] Old Capital Securities not tendered
[ ] Exchange Capital Securities to:
Name(s)
- - -------------------------------------------
Address
- - ---------------------------------------------
------------------------------------------------------
------------------------------------------------------
(INCLUDE ZIP CODE)
Telephone
Number
- - -------------------------------------------
Tax ID
Number
- - -------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, AND 6)
To be completed ONLY if New Capital Securities are to be sent to someone other
than the registered holder of the Old Capital Securities whose name(s) appear(s)
above, or such registered holder(s) at an address other than that shown above.
Mail New Capital Securities to:
[ ] Old Capital Securities not tendered
[ ] Exchange Capital Securities to:
Name(s)
- - -------------------------------------------
Address
- - ---------------------------------------------
------------------------------------------------------
------------------------------------------------------
(INCLUDE ZIP CODE)
Telephone
Number
- - -------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth in "The Exchange
Offer -- Procedures for Tendering Old Capital Securities" in the Prospectus.
Certificates, or timely confirmation of a book-entry transfer of such Old
Capital Securities into the Exchange Agent's account at DTC, as well as this
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein on or prior to the Expiration Date.
Holders who wish to tender their Old Capital Securities and (i) whose Old
Capital Securities are not immediately available or (ii) who cannot deliver
their Old Capital Securities, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or (iii) who
cannot complete the procedures for delivery by book-entry transfer on a timely
basis, may tender their Old Capital Securities by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in "The Exchange Offer -- Procedures for Tendering Old
Capital Securities" in the Prospectus. Pursuant to such procedures: (i) such
tender must be made by or through an Eligible Institution (as defined below);
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Company, must be received by the
Exchange Agent on or prior to the Expiration Date; and (iii) the Certificates
(or a book-entry confirmation (as defined in the Prospectus)) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within five New York Stock Exchange, Inc. trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer -- Procedures for Tendering Old Capital Securities" in the
Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old Capital
Securities to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or
prior to the Expiration Date. As used herein and in the Prospectus, "Eligible
Institution" means a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as "an eligible guarantor institution," including (as such terms
are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither the Company nor the Trust will accept any alternative, conditional
or contingent tenders. Each tendering holder, by execution of a Letter of
Transmittal (or facsimile thereof), waives any right to receive any notice of
the acceptance of such tender.
<PAGE>
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this document, shall include any participant
in DTC whose name appears on a security position listing as the owner of
the Old Capital Securities) of Old Capital Securities tendered herewith,
unless such holder(s) has completed either the box entitled "Special
Issuance Instructions" or the box entitled "Special Delivery Instructions"
above, or
(ii) such Old Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s)on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the Certificate
number(s)and/or the principal amount of Old Capital Securities and any other
required information should be listed on a separate signed schedule which is
attached to this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. If less than all the Old Capital
Securities evidenced by any Certificate submitted are to be tendered,fill in the
principal amount of Old Capital Securities which are to be tendered in the box
entitled "Principal Amount of Old Capital Securities Tendered (if less than
all)." In such case, new Certificate(s) for the remainder of the Old Capital
Securities that were evidenced by your old Certificate(s) will only be sent to
the holder of the Old Capital Security, promptly after the Expiration Date. All
Old Capital Securities represented by Certificates delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital Securities
maybe withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth above or in the
Prospectus on or prior to the Expiration Date. Any such notice of withdrawal
must specify the name of the person who tendered the Old Capital Securities to
be withdrawn, the aggregate principal amount of Old Capital Securities to be
withdrawn, and (if Certificates for Old Capital Securities have been
tendered)the name of the registered holder of the Old Capital Securities as set
forth on the Certificate for the Old Capital Securities, if different from that
of the person who tendered such Old Capital Securities. If Certificates for the
Old Capital Securities have been delivered or otherwise identified to the
Exchange Agent, then prior to the physical release of such Certificates for the
Old Capital Securities, the tendering holder must submit the serial numbers
shown on the particular Certificates for the Old Capital Securities to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution, except in the case of Old Capital Securities tendered for
the account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth in "The
Exchange Offer -- Procedures for Tendering Old Capital Securities," the notice
of withdrawal must specify the name and number of the account at DTC to be
credited with the withdrawal of Old Capital Securities, in which case a notice
of withdrawal will be effective if delivered to the Exchange Agent by written,
telegraphic, telex or facsimile transmission. Withdrawals of tenders of Old
Capital Securities may not be rescinded. Old Capital Securities properly
withdrawn will not be deemed validly tendered for purposes of the Exchange
Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described in the Prospectus
under "The Exchange Offer -- Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company and the
Trust, in their sole discretion, whose determination shall be final
<PAGE>
and binding on all parties. The Company and the Trust, any affiliates or assigns
of the Company and the Trust,the Exchange Agent or any other person shall not be
under any duty to give any notification of any irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification. Any
Old Capital Securities which have been tendered but which are withdrawn will be
returned to the holder thereof without cost to such holder promptly after
withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Old
Capital Securities tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Old Capital Securities tendered hereby are owned of record by
two or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Capital Securities are registered in different
name(s)on several Certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal (or facsimiles thereof) as there
are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to the Company and the Trust, in their sole discretion, of such
persons' authority to so act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Old Capital Securities listed and transmitted hereby, no endorsement(s) of
Certificate(s) or separate bond power(s) are required unless New Capital
Securities are to be issued in the name of a person other than the registered
holder(s). Signature(s) on such Certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Capital Securities listed, the Certificates must
be endorsed or accompanied by appropriate bond powers, signed exactly as the
name or names of the registered owner(s) appear(s) on the Certificates, and also
must be accompanied by such opinions of counsel, certifications and other
information as the Company, the Trust or the Trustee for the Old Capital
Securities may require in accordance with the restrictions on transfer
applicable to the Old Capital Securities. Signatures on such Certificates or
bond powers must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Capital Securities
are to be issued in the name of a person other than the signer of this Letter of
Transmittal, or if New Capital Securities are to be sent to someone other than
the signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be
completed.Certificates for Old Capital Securities not exchanged will be returned
by mail or, if tendered by book-entry transfer, by crediting the account
indicated above maintained at DTC. See Instruction 4.
7. IRREGULARITIES. The Company and the Trust will determine, in their sole
discretion, all questions as to the form of documents, validity,
eligibility(including time of receipt) and acceptance for exchange of any tender
of Old Capital Securities, which determination shall be final and binding on all
parties. The Company and the Trust reserve the absolute right to reject any and
all tenders determined by either of them not to be in proper form or the
acceptance of which, or exchange for, may, in the view of counsel to the Company
and the Trust, be unlawful. The Company and the Trust also reserve the absolute
right, subject to applicable law, to waive any of the conditions of the Exchange
Offer set forth in the Prospectus under "The Exchange Offer -- Certain
Conditions to the Exchange Offer" or any conditions or irregularity in any
tender of Old Capital Securities of any particular holder whether or not similar
conditions or irregularities are waived in the case of other holders. The
Company's and the Trust's interpretation of the terms and conditions of the
Exchange Offer (including this Letter of Transmittal and the instructions
hereto) will be final and binding. No tender of Old Capital Securities will be
deemed to have been validly made until all irregularities with respect to such
tender have been cured or waived. The Company, the Trust, any affiliates or
assigns of the Company,
<PAGE>
the Trust, the Exchange Agent, or any other person shall not be under any duty
to give notification of any irregularities in tenders or incur any liability for
failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at its address and
telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a holder whose tendered Old Capital Securities are accepted for
exchange is required to provide the Exchange Agent with such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the holder or other payee to a $50 penalty. In
addition, payments to such holders or other payees with respect to Old Capital
Securities exchanged pursuant to the Exchange Offer may be subject to 31% backup
withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day
period,amounts withheld will be remitted to the IRS as backup withholding. In
addition, 31% of all payments made thereafter will be withheld and remitted to
the IRS until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the transfers
attached to, or endorsed on, the Old Capital Securities. If the Old Capital
Securities are registered in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W8,
signed under penalties of perjury, attesting to that holder's exempt
status.Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather,the
U.S. Federal income tax liability of a person subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any
Certificate(s)representing Old Capital Securities have been lost, destroyed or
stolen, the holder should promptly notify the Exchange Agent. The holder will
then be instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
<PAGE>
11. SECURITY TRANSFER TAXES. Holders who tender their Old Capital
Securities for exchange will not be obligated to pay any transfer taxes in
connection therewith. If, however, New Capital Securities are to be delivered
to, or are to be issued in the name of, any person other than the registered
holder of the Old Capital Securities tendered, or if a transfer tax is imposed
for any reason other than the exchange of Old Capital Securities in connection
with the Exchange Offer, then the amount of any such transfer tax (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE
EXPIRATION DATE.
<PAGE>
TO BE COMPLETED BY ALL
TENDERING SECURITY HOLDERS
(SEE INSTRUCTION 9)
PAYER'S NAME: THE BANK OF NEW YORK
SUBSTITUTE FORM W-9
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYOR'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN) AND CERTIFICATION
PART 1 -- PLEASE PROVIDE YOUR TIN ON THE LINE AT RIGHT AND CERTIFY BY SIGNING
AND DATING BELOW
TIN
- - ------------------------------------------
Social Security Number or Employer Identification Number
NAME
ADDRESS
CITY STATE ZIP CODE
PART 2
Awaiting
TIN [ ]
PART 3 -- CERTIFICATION
UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT (1) the number shown on this form
is my correct taxpayer identification number (or I am waiting for a number to be
issued to me), (2) I am not subject to backup withholding either because (i) I
am exempt from backup withholding, (ii) I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (iii) the IRS has notified me
that I am no longer subject to backup withholding, and (3) any other information
provided on this form is true and correct.
SIGNATURE DATE
You must cross out item (iii) in Part (2) above if you have been notified by the
IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return and you have not been notified by the
IRS that you are no longer subject to backup withholding.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the
<PAGE>
time of payment, 31% of all payments made to me on account of the New Capital
Securities shall be retained until I provide a taxpayer identification number to
the Exchange Agent and that, if I do not provide my taxpayer identification
number within 60 days, such retained amounts shall be remitted to the Internal
Revenue Service as backup withholding and 31% of all reportable payments made to
me thereafter will be withheld and remitted to the Internal Revenue Service
until I provide a taxpayer identification number.
Signature Date , 1997
EXHIBIT 99.2
FORM OF NOTICE OF GUARANTEED DELIVERY
<PAGE>
NOTICE OF GUARANTEED DELIVERY FOR TENDER OF 7.70% PREFERRED CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER TRUST CAPITAL SECURITY)
OF
CIT CAPITAL TRUST I
FULLY AND UNCONDITIONALLY GUARANTEED BY THE CIT GROUP HOLDINGS, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Trust's (as defined below) 7.70% Preferred Capital
Securities due February 15, 2027 (the "Old Capital Securities") are not
immediately available, (ii) Old Capital Securities, the Letter of Transmittal
and all other required documents cannot be delivered to The Bank of New York
(the "Exchange Agent") on or prior to the Expiration Date (as defined in the
Prospectus referred to below) or (iii) the procedures for delivery by book-entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand, overnight courier or mail, or transmitted by
facsimile transmission, to the Exchange Agent. See "The Exchange Offer --
Procedures for Tendering Old Capital Securities" in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE BANK OF NEW YORK
BY MAIL/OVERNIGHT DELIVERY/HAND:
101 BARCLAY STREET
FLOOR 21 WEST
NEW YORK, NEW YORK 10286
ATTN: CORPORATE TRUST ADMINISTRATION
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(212) 815-
FACSIMILE TRANSMISSIONS:
(212) 815-5595
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE
TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF
A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN
"ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE
MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER
OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to CIT Capital Trust I, a Delaware business
trust (the "Trust"), upon the terms and subject to the conditions set forth in
the Prospectus dated , 1997 (as the same may be amended or supplemented from
time to time, the "Prospectus"), and the related Letter of Transmittal (which
together constitute the "Exchange Offer"), receipt of which is hereby
acknowledged, the aggregate principal amount of Old Capital Securities set forth
below pursuant to the guaranteed delivery procedures set forth in the Prospectus
under the caption "The Exchange Offer -- Procedures for Tendering Old Capital
Securities."
Name(s) of Registered Holder(s):
- - ----------------------------------------------
Aggregate Principal Amount Tendered:
- - -----------------------------------------
Certificate No(s).:
- - ---------------------------------------------------------------
Address(es):
- - ---------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Area Code and Telephone Number(s):
- - -----------------------------------------
If Old Capital Securities will be tendered by book-entry transfer, provide the
following information:
Signature(s):
- - ---------------------------------------------------------------------
DTC Account Number:
- - ---------------------------------------------------------
Date:
- - -----------------------------------------------------------------------------
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at its address set forth above, either the Old Capital
Securities tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Old Capital Securities to the Exchange Agent's
account at The Depositary Trust Company ("DTC"), pursuant to the procedures for
book-entry transfer set forth in the Prospectus, in either case together with
one or more properly completed and duly executed Letter(s) of Transmittal (or
facsimile thereof) and any other required documents within five business days
after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Capital Securities tendered hereby to the Exchange Agent
within the time period set forth above and that failure to do so could result in
a financial loss to the undersigned.
Name of Firm:
--------------------------------
Authorized Signature:
---------------------------
Title:
---------------------------------------
Address:
-------------------------------------
-------------------------------------
Telephone Number:
----------------------------
Date:
---------------------------------------
NOTE: DO NOT SEND OLD CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED
DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE
PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY
EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
EXHIBIT 99.3
FORM OF EXCHANGE AGENT AGREEMENT
<PAGE>
FORM OF EXCHANGE AGENT AGREEMENT
March , 1997
The Bank of New York
Attention: Corporate Trust Administration
101 Barclay Street
Floor 21 West
New York, New York 10286
Ladies and Gentlemen:
The CIT Group Holdings, Inc.,o a Delaware corporation, as Depositor ("the
Company") and CIT CAPITAL TRUST I, a Delaware business trust (the "Trust")
hereby appoint The Bank of New York ("BONY") to act as exchange agent (the
"Exchange Agent") in connection with an exchange offer by the Company and the
Trust to exchange up to $250,000,000 aggregate Liquidation Amount of the Trust's
7.70% Preferred Capital Securities due February 15, 2027 (the "New Capital
Securities"), which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for a like aggregate Liquidation Amount of the
Trust's outstanding 7.70% Preferred Capital Securities due February 15, 2027
(the "Old Capital Securities" and together with the New Capital Securities, the
"Capital Securities"). The terms and conditions of the exchange offer are set
forth in a Prospectus dated , 1997 (as the same may be amended or supplemented
from time to time, the "Prospectus") and in the related Letter of Transmittal,
which together constitute the "Exchange Offer." The registered holders of the
Capital Securities are hereinafter referred to as the "Holders." Capitalized
terms used herein and not defined shall have the respective meanings described
thereto in the Prospectus.
On the basis of the representations, warranties and agreements of the
Company, the Trust and BONY contained herein and subject to the terms and
conditions hereof, the following sets forth the agreement between the Company,
the Trust and BONY, as Exchange Agent for the Exchange Offer:
1. APPOINTMENT AND DUTIES AS EXCHANGE AGENT.
a. The Company and the Trust hereby authorize BONY to act as Exchange Agent
in connection with the Exchange Offer and BONY agrees to act as Exchange Agent
in connection with the Exchange Offer. As Exchange Agent, BONY will perform
those services as are outlined herein, including, but not limited to, accepting
tenders of Old Capital Securities, and communicating generally regarding the
Exchange Offer with brokers, dealers, commercial banks, trust companies and
other persons, including Holders of the Old Capital Securities.
b. The Company and the Trust acknowledge and agree that BONY has been
retained pursuant to this Agreement to act solely as Exchange Agent in
connection with the Exchange Offer, and in such capacity, BONY shall perform
such duties in good faith as are outlined herein.
c. BONY will examine each of the Letters of Transmittal and certificates
for Old Capital Securities and any other documents delivered or mailed to BONY
by or for Holders of the Old Capital Securities, and any book-entry
confirmations (as defined in the Prospectus) received by BONY with
respect to the Old Capital Securities, to ascertain whether:
(i) the Letters of Transmittal and any such other documents are duly
executed and properly completed in accordance with the instructions set
forth therein and that such book-entry confirmations are in due and proper
form and contain the information required to be set forth therein,
(ii) the Old Capital Securities have otherwise been properly tendered,
and
(iii) Holders have provided their correct Tax Identification Number or
required certification. Determination of all questions as to validity,
form, eligibility and acceptance for exchange of any Old Capital Securities
shall be made by the Company or the Trust, whose determination shall be
final and
<PAGE>
binding. In each case where the Letters of Transmittal or any other
documents have been improperly completed or executed or where book-entry
confirmations are not in due and proper form or omit certain information,
or any of the certificates for Old Capital Securities are not in proper
form for transfer or some other irregularity in connection with the tender
or acceptance of the Old Capital Securities exists, BONY will endeavor upon
request of the Company or the Trust to advise the tendering Holders of the
irregularity and to take any other action as the Company or the Trust may
request to cause such irregularity to be corrected. Notwithstanding the
above, BONY shall not be under any duty to give any notification of any
irregularities in tenders or incur any liability for failure to give any
such notification.
d. With the approval of the President, any Senior Vice President, any
Executive Vice President, or any Vice President of the Company, (such approval,
if given orally, to be confirmed in writing) or any other party designated by
any such officer, BONY is authorized to waive any irregularities in connection
with any tender of Old Capital Securities pursuant to the Exchange Offer.
e. Tenders of Old Capital Securities may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer" and Old Capital Securities shall be considered properly tendered
only when tendered in accordance with such procedures set forth therein.
Notwithstanding the provisions of this paragraph, Old Capital Securities which
the President, any Senior Vice President, any Executive Vice President, or any
Vice President or any other designated officer of the Company, shall approve
(such approval, if given orally, to be confirmed in writing) as having been
properly tendered shall be considered to be properly tendered.
f. BONY shall advise the Company and the Trust with respect to any Old
Capital Securities received as soon as possible after 5:00 p.m., New York City
Time, on the Expiration Date and accept its instructions with respect to
disposition of such Old Capital Securities.
g. BONY shall deliver certificates for Old Capital Securities tendered in
part to the transfer agent for split-up and shall return any untendered Old
Capital Securities or Old Capital Securities which have not been accepted by the
Company and the Trust to the Holders promptly after the expiration or
termination of the Exchange Offer.
h. Upon acceptance by the Company and the Trust of any Old Capital
Securities duly tendered pursuant to the Exchange Offer (such acceptance if
given orally, to be confirmed in writing), the Company and the Trust will cause
New Capital Securities in exchange therefor to be issued as promptly as possible
and BONY will deliver such New Capital Securities on behalf of the Company and
the Trust at the rate of $100,000 (100 Capital Securities) principal amount of
New Capital Securities for each $100,000 principal amount of Old Capital
Securities tendered as promptly as possible after acceptance by the Company and
the Trust of the Old Capital Securities for exchange and notice (such notice if
given orally, to be confirmed in writing) of such acceptance by the Company and
the Trust. Unless otherwise instructed by the Company or the Trust, BONY shall
issue New Capital Securities only in denominations of $100,000 (100 Capital
Securities) or any integral multiple of $1,000 in excess thereof.
i. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Capital Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time on or prior to the Expiration Date in
accordance with the terms of the Exchange Offer.
j. Notice of any decision by the Company and the Trust not to exchange any
Old Capital Securities tendered shall be given by the Company or the Trust
either orally (if given orally, to be confirmed in writing) or in a written
notice to BONY.
k. If, pursuant to the Exchange Offer, the Company and the Trust do not
accept for exchange all or part of the Old Capital Securities tendered because
of an invalid tender, the occurrence of certain other events set forth in the
Prospectus under the caption "The Exchange Offer -- Certain Conditions to the
Exchange Offer" or otherwise, BONY shall, upon notice from the Company and the
Trust (such notice if given orally, to be confirmed in writing), promptly after
the expiration or termination of the Exchange Offer return such certificates for
unaccepted Old Capital Securities (or effect appropriate book-entry transfer),
together with
<PAGE>
any related required documents and the Letters of Transmittal relating thereto
that are in BONY's possession, to the persons who deposited such certificates.
l. Certificates for reissued Old Capital Securities, unaccepted Old Capital
Securities or New Capital Securities shall be forwarded by (a) first-class
certified mail, return receipt requested under a blanket surety bond obtained by
BONY protecting BONY, the Company and the Trust from loss or liability arising
out of the non-receipt or non-delivery of such certificates or (b) by registered
mail insured by BONY separately for the replacement value of each such
certificate.
m. BONY is not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, commercial bank, trust
company or other nominee or to engage or use any person to solicit tenders.
n. As Exchange Agent, BONY:
(i) shall have no duties or obligations other than those specifically
set forth herein or as may be subsequently agreed to in writing;
(ii) will make no representations and will have no responsibilities as
to the validity, value or genuineness of any of the certificates for the
Old Capital Securities deposited pursuant to the Exchange Offer, and will
not be required to and will make no representation as to the validity,
value or genuineness of the Exchange Offer;
(iii) shall not be obligated to take any legal action hereunder which
might in BONY's reasonable judgment involve any expense or liability,
unless BONY shall have been furnished with indemnity satisfactory to it and
additional fees for the taking of such action;
(iv) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to BONY and reasonably
believed by BONY to be genuine and to have been signed by the proper party
or parties;
(v) may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due execution
and validity and effectiveness of its provisions, but also as to the truth
and accuracy of any information contained therein, which FSB believes in
good faith to be genuine and to have been signed or represented by a proper
person or persons acting in a fiduciary or representative capacity;
(vi) may rely on and shall be protected in acting upon written or oral
instructions from the President, any Senior Vice President, any Executive
Vice President, any Vice President, or any other designated officer of the
Company;
(vii) may consult with its own counsel with respect to any questions
relating to BONY's duties and responsibilities and the advice of such
counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by BONY hereunder in
good faith and in accordance with the advice of such counsel; and
(viii) shall not advise any person tendering Old Capital Securities
pursuant to the Exchange Offer as to whether to tender or refrain from
tendering all or any portion of its Old Capital Securities or as to the
market value, decline or appreciation in market value of any Old Capital
Securities that may or may not occur as a result of the Exchange Offer or
as to the market value of the New Capital Securities. BONY shall take such
action as may from time to time be requested by the Company or the Trust to
furnish copies of the Prospectus, Letter of Transmittal and the Notice of
Guaranteed Delivery or such other forms as may be approved from time to
time by the Company and the Trust, to all persons requesting such documents
and to accept and comply with telephone requests for information relating
to the Exchange Offer. The Company and the Trust will furnish you with
copies of such documents at your request. Notwithstanding the foregoing, it
is understood that the Company and the Trust will be primarily responsible
for supplying copies of the Prospectus, the Letter of Transmittal and the
Notice of Guaranteed Delivery and responding to requests for confirmation.
<PAGE>
p. BONY shall advise orally and promptly thereafter confirm in writing to
the Company and the Trust and such other person or persons as the Company and
the Trust may request, daily (and more frequently during the week immediately
preceding the Expiration Date and if otherwise reasonably requested) up to and
including the Expiration Date, the aggregate principal amount of Old Capital
Securities which have been tendered pursuant to the terms of the Exchange Offer
and the items received by BONY pursuant to the Exchange Offer and this
Agreement. In addition, BONY will also provide, and cooperate in making
available to the Company and the Trust, or any such other person or persons upon
request (such request if made orally, to be confirmed in writing) made from time
to time, such other information in its possession as the Company and the Trust
may reasonably request. Such cooperation shall include, without limitation, the
granting by BONY to the Company and the Trust, and such person or persons as the
Company and the Trust may request, access to those persons on Wilmington Trust's
staff who are responsible for receiving tenders, in order to ensure that
immediately prior to the Expiration Date the Company and the Trust shall have
received adequate information in sufficient detail to enable the Company and the
Trust to decide whether to extend the Exchange Offer. BONY shall prepare a final
list of all persons whose tenders were accepted, the aggregate principal amount
of Old Capital Securities tendered, the aggregate principal amount of Old
Capital Securities accepted and deliver said list to the Company and the Trust.
q. Letters of Transmittal, book-entry confirmations and Notices of
Guaranteed Delivery shall be stamped by BONY as to the date and the time of
receipt thereof and shall be preserved by BONY for a period of time at least
equal to the period of time BONY preserves other records pertaining to the
transfer of securities, or one year, whichever is longer, and thereafter shall
be delivered by BONY to the Company and the Trust. BONY shall dispose of unused
Letters of Transmittal and other surplus materials by returning them to the
Company or the Trust.
r. BONY hereby expressly waives any lien, encumbrance or right of set-off
whatsoever that BONY may have with respect to funds deposited with it for the
payment of transfer taxes by reasons of amounts, if any, borrowed by the Company
or the Trust, or any of its or their subsidiaries or affiliates pursuant to any
loan or credit agreement with BONY or for compensation owed to BONY hereunder or
for any other matter.
2. COMPENSATION.
$ will be payable to BONY in its capacity as Exchange Agent;
provided, that BONY reserves the right to receive reimbursement from the Company
for any reasonable out-of-pocket expenses incurred as Exchange Agent in
performing the services described herein.
3. INDEMNIFICATION.
a. The Company and the Trust hereby agree to protect, defend, indemnify and
hold harmless BONY against and from any and all costs, losses, liabilities,
taxes, expenses (including reasonable counsel fees and disbursements) and claims
imposed upon or asserted against BONY on account of any action taken or omitted
to be taken by BONY in connection with its acceptance of or performance of its
duties under this Agreement and the documents related thereto as well as the
reasonable costs and expenses of defending itself against any claim or liability
arising out of or relating to this Agreement and the documents related thereto.
This indemnification shall survive the release, discharge, termination, and/or
satisfaction of this Agreement. Anything in this Agreement to the contrary
notwithstanding, neither the Company nor the Trust shall be liable for
indemnification or otherwise for any loss, liability, cost or expense to the
extent arising out of BONY's bad faith, gross negligence or willful misconduct.
In no case shall the Company or the Trust be liable under this indemnification
agreement with respect to any claim against BONY until the Company and the Trust
shall be notified by BONY, by letter, of the written assertion of a claim
against BONY or of any other action commenced against BONY, promptly after BONY
shall have received any such written assertion or shall have been served with a
summons in connection therewith, provided, that, BONY's failure to give such
notice shall not excuse the Company or the Trust from its obligations hereunder.
The Company and the Trust shall be entitled to participate at their own expense
in the defense of any such claim or other action, and, if the Company and the
Trust so elect, the Company or the Trust may assume the defense of any pending
or threatened action against BONY in respect of which indemnification may be
sought hereunder with counsel reasonably acceptable to BONY,
<PAGE>
in which case the Company or the Trust, as applicable, shall not thereafter
be responsible for the fees and disbursements of legal counsel for BONY under
this paragraph; provided that the Company and the Trust shall not be entitled to
assume the defense of any such action if the named parties to such action
include the Company or the Trust and BONY and representation of the parties by
the same legal counsel would, in the written opinion of counsel for BONY, be
inappropriate due to actual or potential conflicting interests between them. It
is understood that neither the Company nor the Trust shall be liable under this
paragraph for the fees and disbursements of more than one legal counsel for
BONY. In the event that the Company or the Trust shall assume the defense of any
such suit with counsel reasonably acceptable to BONY, the Company or the Trust,
as applicable, shall not therewith be liable for the fees and expenses of any
counsel retained by BONY.
b. BONY agrees that, without the prior written consent of the Company and
the Trust (which consent shall not be unreasonably withheld), it will not
settle, compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding in respect of which indemnification could
be sought in accordance with the indemnification provisions of this Agreement
(whether or not BONY, the Company or the Trust or any of its directors, officers
and controlling persons is an actual or potential party to such claim, action or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Company or the Trust and its directors, officers
and controlling persons from all liability arising out of such claim, action or
proceeding.
c. The Company agrees to indemnify and hold harmless the Trust from and
against any and all losses, claims, damages and liabilities whatsoever, as due
from the Trust under this Section.
4. TAX INFORMATION.
The Company and the Trust shall arrange to comply with all requirements
under the tax laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company and the Trust understand that they are required, in
certain instances, to deduct 31% with respect to interest paid on the New
Capital Securities and proceeds from the sale, exchange, redemption or
retirement of the New Capital Securities from Holders who have not supplied
their correct Taxpayer Identification Number or required certification. Such
funds will be turned over to the Internal Revenue Service. BONY shall notify the
Company and the Trust of any Holder who has failed to supply such Taxpayer
Identification Number or certification.
5. GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Delaware applicable to contracts executed in and to be
performed in that state.
6. NOTICES.
Any communication or notice provided for hereunder shall be in writing and
shall be given (and shall be deemed to have been given upon receipt) by delivery
in person, telecopy, or overnight delivery or by registered or certified mail
(postage prepaid, return receipt requested) to the applicable party at the
addresses indicated below:
<TABLE>
<S> <C>
If to the Company: The CIT Group Holdings, Inc.
1211 Avenue of the Americas
Attn: Chief Financial Officer
Telephone: (212)536-1950
Facsimile: (212)536-1912
</TABLE>
<PAGE>
<TABLE>
<S> <C>
If to BONY: The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Telephone: (212)815-
Facsimile: (212)815-5595
If to the Trust: The CIT Group Holdings, Inc.
1211 Avenue of the Americas
New York, New York 10036
Attn: Chief Financial Officer
Telephone: (212)536-1950
Facsimile: (212)536-1912
</TABLE>
or, as to each party, at such other address as shall be designated by such party
in a written notice complying as to delivery with the terms of this Section.
7. PARTIES IN INTEREST.
This Agreement shall be binding upon and inure solely to the benefit of
each party hereto and nothing in this Agreement, express or implied, is intended
to or shall confer upon any other person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement. Without limitation to
the foregoing, the parties hereto expressly agree that no holder of Old Capital
Securities or New Capital Securities shall have any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
8. COUNTERPARTS; SEVERABILITY.
This Agreement may be executed in one or more counterparts, and by
different parties hereto on separate counterparts, each of which when so
executed shall be deemed an original, and all of such counterparts shall
together constitute one and the same agreement. If any term or other provision
of this Agreement or the application thereof is invalid, illegal or incapable of
being enforced by any rule of law, or public policy, all other provisions of
this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the agreements contained herein is not affected
in any manner adverse to any party. Upon such determination that any term or
provision or the application thereof is invalid, illegal or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the agreements contained herein may be performed
as originally contemplated to the fullest extent possible.
9. CAPTIONS.
The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
10. ENTIRE AGREEMENT; AMENDMENT.
This Agreement constitutes the entire understanding of the parties hereto
with respect to the subject matter hereof. This Agreement may not be amended or
modified nor may any provision hereof be waived except in writing signed by each
party to be bound thereby.
<PAGE>
11. TERMINATION.
This Agreement shall terminate upon the earlier of (a) the 90th day
following the expiration, withdrawal, or termination of the Exchange Offer, (b)
the close of business on the date of actual receipt of written notice by BONY
from the Company and the Trust stating that this Agreement is terminated, (c)
one year following the date of this Agreement, or (d) the time and date on which
this Agreement shall be terminated by mutual consent of the parties hereto.
12. MISCELLANEOUS.
BONY hereby acknowledges receipt of the Prospectus and the Letter of
Transmittal and the Notice of Guaranteed Delivery and further acknowledges that
it has examined each of them. Any inconsistency between this Agreement, on the
one hand, and the Prospectus and the Letter of Transmittal and the Notice of
Guaranteed Delivery (as they may be amended or supplemented from time to time),
on the other hand, shall be resolved in favor of the latter three documents,
except with respect to the duties, liabilities and indemnification of FSB as
Exchange Agent which shall be controlled by this Agreement.
Kindly indicate your willingness to act as Exchange Agent and FSB's
acceptance of the foregoing provisions by signing in the space provided below
for that purpose and returning to the Company a copy of this Agreement so
signed, whereupon this Agreement and FSB's acceptance shall constitute a binding
agreement between FSB, the Company and the Trust.
Very truly yours,
THE CIT GROUP HOLDINGS, INC.
By:
--------------------------------------
Name:
Title:
CIT CAPITAL TRUST I
By:
--------------------------------------
Name:
Title:
Accepted as of the date first above written:
THE BANK OF NEW YORK
By:
--------------------------------------
Name:
Title: Authorized Executive Officer
