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As filed with the Securities and Exchange Commission on February 7, 1994
Registration No. 33-52053
Registration No. 33-52053
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
Registration Statement
Under the
Securities Act of 1933
-------------
BEAR STEARNS FINANCE LLC THE BEAR STEARNS COMPANIES INC.
(Exact name of registrant as (Exact name of guarantor as
specified in its charter) specified in its charter)
Cayman Islands Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
Applied for 13-3286161
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
c/o William J. Montgoris William J. Montgoris
Chief Operating Officer Chief Operating Officer
and Chief Financial Officer and Chief Financial Officer
The Bear Stearns Companies Inc. The Bear Stearns Companies Inc.
245 Park Avenue 245 Park Avenue
New York, New York 10167 New York, New York 10167
(212) 272-2000 (212) 272-2000
(Name, address, including zip code, and (Name and address, including zip
telephone number, including area code, code, and telephone number,
of principal executive offices and agent including area code, of
for service) principal executive offices and
agent for service)
Copies to:
Dennis J. Block, Esq. Michael Q. Rosenwasser, Esq.
Weil, Gotshal & Manges Andrews & Kurth L.L.P.
767 Fifth Avenue 425 Lexington Avenue
New York, New York 10153 New York, New York 10017
(212) 310-8000 (212) 850-2800
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [x]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum
Title of Each Class of Securities to Amount to be Offering Price Per Aggregate Offering Amount of
be Registered Registered(1) Unit(2) Price(2) Registration Fee
<S> <C> <C> <C> <C>
Exchangeable Preferred Income 20,000,000 shares $25 $500,000,000 $172,414
Cumulative Shares of Bear Stearns
Finance LLC
Backup Undertakings by The Bear ___ ___ ___ ___
Stearns Companies Inc. (3)
Preferred Stock of The Bear Stearns ___ ___ ___ ___
Companies Inc. (3)(4)
Depositary Shares (3)(4) ___ ___ ___ ___
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<FN>
(1) The number of Preferred Shares being registered hereby in such number of Preferred Shares, not to exceed 20,000,000,
as may from time to time be issued by Bear Stearns Finance LLC.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) No additional consideration will be received for the Backup Undertakings, Preferred Stock or Depositary Shares.
(4) There are also being registered hereunder such indeterminate number of (i) shares of Preferred Stock of The Bear
Stearns Companies Inc. issuable in exchange for the Guaranteed Exchangeable Preferred Shares of Bear Stearns Finance
LLC and (ii) Depositary Shares representing shares of that Preferred Stock.
The registrants hereby amend this registration statement on such date or dates as may be necessary to delay
its effective date until the registrants shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
</TABLE>
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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 FEBRUARY 7, 1994
PROSPECTUS
BEAR STEARNS FINANCE LLC
EXCHANGEABLE PREFERRED INCOME CUMULATIVE SHARES ("EPICS"*)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
THE BEAR STEARNS COMPANIES INC.
Bear Stearns Finance LLC (the "Company"), an exempted company
with limited duration incorporated under the laws of the Cayman
Islands, all of the outstanding Common Shares of which are owned,
directly and indirectly, by The Bear Stearns Companies Inc. (the
"Guarantor"), may offer from time to time, in one or more series, its
authorized but unissued Exchangeable Preferred Income Cumulative
Shares, par value $.01 per share (the "Preferred Shares"). Under
certain circumstances, but subject to certain conditions, the Company
may redeem all, but not less than all, of the Preferred Shares of any
series solely in exchange for Depositary Shares (the "Depositary
Shares"), each representing a fractional interest in a share of a
series of Preferred Stock, par value $1.00 per share (the "Guarantor
Preferred Stock"), of the Guarantor. See "Description of Preferred
Shares -- Mandatory Redemption." The total number of Preferred Shares
of all series to be issued under this Prospectus will not exceed
20,000,000.
The payment of dividends, if and to the extent declared out of
moneys held by the Company and lawfully available therefor, and
payments on liquidation or redemption with respect to the Preferred
Shares will be guaranteed (the "Guarantee") by the Guarantor to the
extent set forth herein. The Guarantee will rank junior to all
liabilities of the Guarantor and pari passu with the most senior
preferred or preference stock issued by the Guarantor. See "Bear
Stearns Finance LLC", "Description of Preferred Shares -- Mandatory
Redemption" and "Description of the Guarantee" for a description of
various contractual backup obligations of the Guarantor.
The Preferred Shares may be issued in amounts, at prices and on
other terms to be determined in light of market conditions at the time
of sale. Information relating to the specific number of shares,
title, stated value and liquidation preference of each share, issuance
price, dividend rate or method of calculation, dividend periods,
dividend payment dates, any redemption or sinking fund provisions, any
national securities exchange or other trading market on which the
Preferred Shares may be listed or registered, the terms of any
Depositary Shares representing shares in a series of Guarantor
Preferred Stock that may be issuable in exchange for the Preferred
Shares and other specific terms of each series of Preferred Shares in
respect of which this Prospectus is being delivered shall be set forth
in the applicable Prospectus Supplement (the "Prospectus Supplement").
_________________________
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.
_________________________
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The Preferred Shares may be offered through dealers, through
underwriters or through agents designated from time to time, as set
forth in the applicable Prospectus Supplement. The net proceeds to
the Company will be, in the case of a dealer, the sales price to such
dealer, in the case of an underwriter, the public offering price less
the applicable underwriting discount or commission, and, in the case
of an agent, the public offering price less the applicable agency
commission, in each case less other expenses attributable to issuance
and distribution. See "Plan of Distribution" for possible
indemnification arrangements for dealers, underwriters and agents.
This Prospectus and the applicable Prospectus Supplement may be
used by Bear, Stearns & Co. Inc. in connection with offers and sales
of Preferred Shares and Depositary Shares in market-making
transactions at negotiated prices related to prevailing market prices
at the time of sale or otherwise. Bear, Stearns & Co. Inc. may act as
a principal or agent in such transactions.
------------------------------
* An application is being filed by Bear, Stearns & Co. Inc. with the
United States Patent and Trademark Office for registration of the EPICS
servicemark.
BEAR, STEARNS & CO. INC.
The date of this Prospectus is February __, 1994
<PAGE>
<PAGE>
IN CONNECTION WITH THE OFFERING OF PREFERRED SHARES HEREUNDER,
THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE
OR MAINTAIN THE MARKET PRICES OF THOSE SECURITIES, OR OTHER SECURITIES
OF THE COMPANY, AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK
STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
-----------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER,
DEALER OR AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY SECURITIES BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR
IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED
TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
AVAILABLE INFORMATION
The Guarantor 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
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Guarantor with the
Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 or at its Regional Offices
located at the Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade Center,
13th Floor, New York, New York 10048, and copies of such material can
be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Reports, proxy statements and other information concerning the
Guarantor can also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a joint Registration
Statement filed by the Company and the Guarantor with the Commission
under the Securities Act of 1933, as amended (the "Securities Act").
This Prospectus omits certain of the information contained in the
Registration Statement in accordance with the rules and regulations of
the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to
the Company and the Guarantor. 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.
No separate financial statements of the Company have been
included herein. The Company and the Guarantor do not consider that
such financial statements would be material to holders of the
Preferred Shares because the Company is a newly organized special
purpose entity, has no operating history and no independent operations
and is not engaged in any activity other than the issuance of the
Preferred Shares and its common shares, and the lending of the net
proceeds thereof to the Guarantor or its subsidiaries. The Company is
an exempted company with limited duration incorporated under the laws
of the Cayman Islands and will be managed by the Guarantor which
directly and indirectly owns all of the Company's outstanding ordinary
shares (the "Common Shares"), which shares are nontransferable. The
Company has no physical assets located within the United States. As a
result, it may not be possible for investors to effect service of
process within the United States upon the Company or to enforce
against it in the United States courts judgments obtained in such
courts predicated upon civil liability provisions of the federal
securities laws of the United States. The Company has been advised by
its Cayman Islands legal counsel, Maples and Calder, that there may be
doubt as to the enforceability, in the Cayman Islands in original
actions or in actions for enforcement of
<PAGE>
<PAGE>
judgments of United States courts, of liabilities predicated solely
upon the federal securities laws of the United States.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Guarantor with the
Commission pursuant to Section 13 of the Exchange Act (File No. 1-
8989), are incorporated herein by reference: (i) the Annual Report on
Form 10-K (including the portions of the Guarantor's Annual Report to
Stockholders incorporated by reference therein) for the fiscal year
ended June 30, 1993 (the "1993 Form 10-K"), (ii) the Quarterly Report
on Form 10-Q for the quarterly period ended September 24, 1993 and
(iii) the Current Report on Form 8-K dated January 13, 1994. All
documents filed by the Guarantor pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the securities offered
hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such
documents.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any subsequently filed
document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Guarantor will provide without charge to each person to whom
a copy of this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all documents incorporated by
reference into this Prospectus except the exhibits to such documents
(unless such exhibits are specifically incorporated by reference in
such documents). Requests for such copies should be directed to
Corporate Communications Department, The Bear Stearns Companies Inc.,
245 Park Avenue, New York, New York 10167; telephone number (212) 272-
2000.
<PAGE>
<PAGE>
THE BEAR STEARNS COMPANIES INC.
The Guarantor is a holding company that, through its
subsidiaries, principally Bear, Stearns & Co. Inc. ("Bear Stearns")
and Bear, Stearns Securities Corp. ("BSSC") is a leading United States
investment banking, securities trading and brokerage firm serving
United States and foreign corporations, governments and institutional
and individual investors. The business of the Guarantor and its
subsidiaries includes market-making and trading in corporate, United
States government and agency, mortgage-related, asset-backed and
municipal securities and trading in options, futures, foreign
currencies, interest rate swaps and other derivative products;
securities and commodities arbitrage; securities, options and
commodities brokerage for domestic and international institutional and
individual clients; underwriting and distribution of securities,
arranging for the private placement of securities, assisting in
mergers and acquisitions and restructuring and providing other
financial advisory services, including advising on, and participating
in principal investments in, leveraged acquisitions; providing
securities clearance services; specialist activities in securities on
the floors of the New York Stock Exchange (the "NYSE"); customer
financing activities; securities lending activities; fiduciary
services; and providing other services, including real estate
brokerage, investment management and advisory activities, and
securities research.
The Guarantor's operations are conducted from its principal
offices in New York City, from domestic regional offices in Atlanta,
Boston, Chicago, Dallas, Los Angeles and San Francisco, from
representative offices in Geneva, Hong Kong and Shanghai, through
international subsidiaries in Frankfurt, Hong Kong, London and Paris,
through a branch office in Tokyo and through joint ventures with other
firms in Karachi, Madrid and Paris. The Guarantor's foreign offices
provide services and engage in investment activities involving foreign
clients and international transactions. The Guarantor's trust company
subsidiary, Custodial Trust Company, operates from offices in
Princeton, New Jersey.
Bear Stearns and BSSC are broker-dealers registered with the
Commission, futures commission merchants registered with the Commodity
Futures Trading Commission, members of the NYSE and all other
principal United States securities and commodities exchanges and
members of the National Association of Securities Dealers, Inc. (the
"NASD") and the National Futures Association. Bear Stearns is also
recognized as a "primary dealer" in United States government
securities designated by the Federal Reserve Bank of New York.
The Guarantor is incorporated in Delaware. The principal
executive office of the Guarantor is located at 245 Park Avenue, New
York, New York 10167; its telephone number is (212) 272-2000.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
The ratio of earnings to combined fixed charges and preferred
dividends of the Guarantor was 1.9 for the six months ended December
31, 1993 and 1.8, 1.6, 1.2, 1.2 and 1.3 for the fiscal years ended
June 30, 1993, 1992, 1991, 1990 and 1989, respectively. These ratios
were calculated by dividing the sum of fixed charges and preferred
dividends into the sum of earnings before taxes and fixed charges.
Fixed charges for these purposes consist of all interest expense and
certain other immaterial expenses. Preferred dividends represent the
pretax earnings necessary to cover the dividends on the Guarantor's
preferred stock assuming such earnings are taxed at the Guarantor's
consolidated effective tax rate.
BEAR STEARNS FINANCE LLC
The Company is an exempted company with limited duration
incorporated under the laws of the Cayman Islands. The Company's
registered offices are located c/o Maples and Calder, Ugland House,
P.O. Box 309, George Town, Grand Cayman, Cayman Islands, British West
Indies, telephone: (809) 949-8066. The Guarantor owns, directly and
indirectly, all of the outstanding Common Shares of the Company, which
shares are nontransferable. The Company exists solely for the purpose
of issuing preferred and common shares and lending the net proceeds
thereof to the Guarantor or its subsidiaries.
<PAGE>
<PAGE>
Pursuant to the Company's Memorandum of Association (the
"Memorandum") and the applicable provisions of the Companies Law
(Revised) of the Cayman Islands, the Guarantor, as the direct and
indirect owner of all of the Common Shares of the Company, has
unlimited liability for the debts and obligations of the Company, to
the extent not fully satisfied and discharged by the Company. That
liability on the part of the Guarantor is enforceable by the liquidator
of the Company in the event of its insolvent liquidation and is for the
benefit of third parties to whom the Company owes such debts and
obligations.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus
Supplement, the Company intends to lend to the Guarantor the net
proceeds from the issuance and sale of the Preferred Shares, together
with the proceeds from the issuance and sale of its Common Shares, to
be used by the Guarantor for general corporate purposes, which may
include additions to working capital, repayment of short-term
indebtedness and investments in, or extensions of credit to,
subsidiaries of the Guarantor.
DESCRIPTION OF PREFERRED SHARES
The following description of terms of the Preferred Shares sets
forth certain general terms and provisions of the Preferred Shares to
which any Prospectus Supplement may relate. The particular terms of
the Preferred Shares of a series and the extent, if any, to which such
general terms do not apply to such series of Preferred Shares will be
described in such Prospectus Supplement. The Prospectus Supplement
does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Memorandum, the Articles of
Association of the Company (the "Articles") and the resolutions
adopted, or to be adopted, by the Guarantor, in its capacity as the
direct and indirect owner of all of the Company's Common Shares (the
"Common Shareholder"), establishing the rights, preferences,
privileges, limitations and restrictions relating to the Preferred
Shares of any series or of a particular series. Copies of the
Memorandum and the Articles have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part.
GENERAL
The Company is authorized to issue up to 20,000,000 preference
shares, par value $.01 per share, in one or more series or classes,
with such dividend rights, liquidation preference per share,
redemption provisions, voting rights and other rights, preferences,
privileges, limitations and restrictions as shall be set forth in the
Articles and the resolutions providing for the issuance thereof
adopted by the Common Shareholder. All of the Preferred Shares, to be
issued in one or more series or classes, will rank pari passu with
each other with respect to participation in profits and assets. The
Articles as currently in effect do not permit the issuance of any
preference shares ranking, as to participation in the profits or the
assets of the Company, senior to the Preferred Shares.
The Preferred Shares of any series will be issued in registered
form only without dividend coupons. Registration of, and registration
of transfers of, the Preferred Shares of any series will be by book
entry only. The Preferred Shares shall have the dividend, liquidation,
redemption and voting rights set forth below unless otherwise
specified in the applicable Prospectus Supplement. Reference is made
to the Prospectus Supplement relating to the particular series of
Preferred Shares offered thereby for specific terms, including: (i)
the designation, stated value and liquidation preference of such
Preferred Shares and the number of shares offered; (ii) the dividend
rate or rates (or method of calculation) and the date or dates from
which dividends shall accrue; (iii) any redemption or sinking fund
provisions; (iv) the amount that shares of such series shall be
entitled to receive in the event of any liquidation, dissolution or
winding up of the Company; (v) the terms and conditions, if any, on
which shares of such series shall, at the option of the Company, be
exchangeable, or redeemable in exchange, for shares of stock of any
other class or classes, or other series of the same class, of the
Company or for shares of stock of any class, or series thereof, of the
Guarantor; (vi) the voting rights, if any, of shares of such series;
(vii) the conditions and restrictions, if any, on the payment of
dividends or on the making of other distributions on, or the purchase,
redemption or other acquisition by the Company of a class of stock of
the Company ranking junior to the shares of such series as to
dividends or upon liquidation; (viii) any additional dividend,
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<PAGE>
liquidation, redemption, sinking or retirement fund and other rights,
preferences, privileges, limitations and restrictions of such
Preferred Shares; and (ix) the terms upon which the proceeds from the
sale of the Preferred Shares of such series will be loaned to the
Guarantor or its subsidiaries. No series of Preferred Shares will be
convertible, at the option of the holders thereof, into shares of any
other class or series, whether of the Company or the Guarantor.
DIVIDENDS
Cumulative dividends on any series of Preferred Shares will
accrue from the date of original issue thereof and will be payable in
arrears at the dates specified in the Prospectus Supplement relating
to each such series. Payment of dividends is limited in relation to
the amount of funds held by the Company and legally available
therefor. See "Description of the Loans" in the Prospectus Supplement
and "Description of the Guarantee--General" below.
Dividends declared on the Preferred Shares of any series will be
payable to the record holders thereof as they appear on the register
for the Preferred Shares of such series on the relevant record date,
which, in each case, will be, unless otherwise specified in the
Prospectus Supplement relating to each such series, five Business Days
prior to the relevant payment date. Subject to any applicable fiscal
or other laws and regulations, each such payment will be made as
described under "Book-Entry Procedures and Settlement" below. In the
event that any date on which dividends are payable on the Preferred
Shares of any series is not a day on which banks in The City of New
York are open for business and on which foreign exchange dealings may
be conducted in The City of New York (a "Business Day"), then payment
of the dividend 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 is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
Dividends on the Preferred Shares of any series will be
cumulative. Dividends on the Preferred Shares of such series will be
declared by the Common Shareholder in any calendar year or portion
thereof to the extent that the Common Shareholder reasonably
anticipates that at the time of payment it will have, and will be paid
by the Company to the extent that at the time of proposed payment it
has, (x) earnings legally available for the payment of such dividends
and (y) cash in hand sufficient to permit such payments.
If dividends can be paid only in part on the Preferred Shares of
a particular series in any calendar year or portion thereof as a
result of the lack of sufficient funds legally available for the
payment of dividends, then such partial dividends shall be paid on the
respective dividend payment dates on a pro rata basis to holders of
such Preferred Shares.
If at any time dividends on the Preferred Shares are in arrears
for any dividend period, any dividend payments in respect thereof must
be applied in respect of all dividend periods in arrears, pro rata in
accordance with the respective amounts in arrears for each such period
in equal amounts for each such period.
Except as described herein and in the Prospectus Supplement
relating to the Preferred Shares of a particular series, holders of
the Preferred Shares will have no other right to participate in the
profits of the Company.
CERTAIN RESTRICTIONS ON THE COMPANY
If dividends have not been paid in full on the Preferred Shares
of any series, the Company shall not:
(i) pay, or declare and set aside for payment, any
dividends on any other preferred or preference shares of the
Company ranking pari passu with the Preferred Shares of such
series as regards participation in profits of the Company
("Company Dividend Parity Shares"), unless the amount of any
dividends declared on any Company Dividend Parity Shares is
paid<PAGE>
<PAGE>
on the Company Dividend Parity Shares and the Preferred
Shares of such series on a pro rata basis on the date such
dividends are paid on such Company Dividend Parity Shares,
so that
(x) (A) the aggregate amount of dividends paid on
the Preferred Shares of such series bears to (B) the
aggregate amount of dividends paid on such Company
Dividend Parity Shares the same ratio as
(y) (A) the aggregate of all accumulated arrears
of unpaid dividends in respect of the Preferred Shares
of such series bears to (B) the aggregate of all
accumulated arrears of unpaid dividends in respect of
such Company Dividend Parity Shares;
(ii) pay, or declare and set aside for payment, any
dividends on any shares of the Company ranking junior to the
Preferred Shares of such series as to dividends ("Company
Dividend Junior Shares"); or
(iii) redeem, purchase or otherwise acquire any
Company Dividend Parity Shares or Company Dividend Junior
Shares;
until, in each case, such time as all accumulated arrears of unpaid
dividends on the Preferred Shares of such series shall have been paid
in full for all dividend periods terminating on or prior to, in the
case of clauses (i) and (ii), such payment, and in the case of clause
(iii), the date of such redemption, purchase or acquisition. As of
the date of this Prospectus there are no Company Dividend Parity
Shares outstanding.
MANDATORY REDEMPTION
The proceeds from the repayment or any prepayment in cash of the
principal of any loan to the Guarantor of the proceeds from the
issuance of any series of Preferred Shares must be applied to redeem
the Preferred Shares of such series at the redemption price set forth
in the applicable Prospectus Supplement; provided that amounts so
repaid or prepaid may be loaned or reloaned to the Guarantor if at the
time of such new loan, and as determined in the judgment of the
Guarantor, in its capacity as Common Shareholder, and its financial
advisor (which may be an affiliate of the Guarantor), (a) the
Guarantor is not the subject of a pending case under the United States
Bankruptcy Code, (b) the Guarantor is not in default on any loan
pertaining to Preferred Shares of any other series ranking pari passu
with such series, (c) the Guarantor timely made all required monthly
payments on the repaid or prepaid loan for the immediately preceding
nine months, (d) the Company is not in arrearage on payments of
dividends on the Preferred Shares of such series, (e) the Guarantor is
expected to be able to make timely payment of principal and interest
on the new loan, (f) such new loan is being made on terms, and under
circumstances, that are no less favorable to the Company than those
that a lender would require for a similar loan to an unrelated party,
(g) such new loan is being made at a rate of interest sufficient to
provide monthly payments equal to or greater than the amount of
monthly dividends on the Preferred Shares of such series and (h) such
new loan is being made for a fixed term that is consistent with market
circumstances and the Guarantor's financial condition.
The loan agreement governing the loan by the Company to the
Guarantor of the proceeds from the issuance of each series of
Preferred Shares will accord to the Guarantor the right, at its option
but subject to certain conditions, to issue and deliver to the
Company, on any dividend payment date, in exchange for the note
evidencing such loan, shares of a newly-issued series of Guarantor
Preferred Stock (or Depositary Shares representing the same), all as
more fully set forth in the applicable Prospectus Supplement. Such
exchange option may not be exercised prior to the expiration of six
months following the date of the original issuance of such series. In
the event of such exchange, the Company shall be obligated to redeem,
as an entirety, the series of Preferred Shares the proceeds of which
were the subject of such loan, solely in exchange for shares of the
same series of Guarantor Preferred Stock (or Depositary Shares
representing the same) so delivered to the Company in exchange for the
promissory note, all upon such terms, and subject to<PAGE>
<PAGE>
such conditions, as shall be set forth in the resolutions creating
such series of Preferred Shares and in the applicable Prospectus
Supplement.
OPTIONAL REDEMPTION
The Preferred Shares of any series will be redeemable, if at all,
as specified in the Prospectus Supplement relating to such series.
Notice of any redemption of the Preferred Shares of any series
will be given by the Company by mail to each record holder to be
redeemed not fewer than 30 nor more than 60 days prior to the date
fixed for redemption thereof.
In the event that fewer than all the outstanding Preferred Shares
of a particular series are to be redeemed, the Preferred Shares of
such series to be redeemed will be selected as described under "Book-
Entry Procedures and Settlement" below. The Company will not redeem
fewer than all the outstanding Preferred Shares of a particular series
unless all accumulated arrears of unpaid dividends have been paid on
all Preferred Shares of such series for all monthly dividend periods
terminating on or prior to the date of redemption.
If the Company gives a notice of redemption in respect of
Preferred Shares of a particular series, then, by 12:00 noon, New York
time, on the redemption date, the Company will irrevocably deposit
with The Depository Trust Company ("DTC", which term as used herein,
includes any successor or alternate depository selected by the Company
or the Guarantor) funds sufficient to pay the applicable redemption
price, including an amount equal to all accumulated arrears and
accruals of unpaid dividends (whether or not declared) to the date
fixed for redemption, and will give DTC irrevocable instructions and
authority to pay the redemption price to the holders thereof. See
"Book-Entry Procedures and Settlement". If notice of redemption shall
have been given and funds deposited as required, then upon the date of
such deposit, all rights of holders of such Preferred Shares of a
series so called for redemption will cease, except the right of the
holders of such shares to receive the redemption price, plus
accumulated arrears and accruals of unpaid dividends, if any, but
without interest, and such shares will cease to be outstanding. In the
event that any date on which any payment in respect of the redemption
of Preferred Shares of any series 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 the event that
payment of the redemption price in respect of Preferred Shares of any
series is improperly withheld or refused and not paid either by the
Company or by the Guarantor pursuant to the Guarantee, dividends on
such shares will continue to accrue, at the then applicable rate, from
the redemption date to the date of payment of such redemption price.
Subject to the foregoing and applicable law (including, without
limitation, U.S. federal securities laws) the Guarantor or its
subsidiaries may at any time and from time to time purchase
outstanding Preferred Shares of any series by tender, in the open
market or by private agreement.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
Chemical Bank will act as registrar, transfer agent and paying
agent for the Preferred Shares (the "Paying Agent").
Registration of transfers of Preferred Shares of any series will
be effected without charge by or on behalf of the Company, but upon
payment (with the giving of such indemnity as the Company or the
Guarantor may require) in respect of any tax or other governmental
charges which may be imposed in relation to it.
The Company will not be required to register or cause to be
registered the transfer of Preferred Shares of a particular series
after such Preferred Shares have been called for redemption.
<PAGE>
<PAGE>
Additional transfer restrictions, if any, relating to the
Preferred Shares of any series will be set forth in the Prospectus
Supplement relating to such series.
MISCELLANEOUS
Holders of Preferred Shares will have no preemptive rights.
DESCRIPTION OF THE GUARANTEE
Set forth below is condensed information concerning the guarantee
(the "Guarantee"), which will be executed and delivered by the
Guarantor for the benefit of the holders from time to time of
Preferred Shares. This summary contains all material information
concerning the Guarantee but does not purport to be complete.
References to provisions of the Guarantee are qualified in their
entirety by reference to the text of the Guarantee, a copy of which
has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part.
GENERAL
The Guarantor will irrevocably and unconditionally agree, to the
extent set forth herein, to pay in full, to the holders of the
Preferred Shares of any series, the Guarantee Payments (as defined
below) (except to the extent paid by the Company), as and when due,
regardless of any defense, right of set-off or counterclaim which the
Company may have or assert. The following payments to the extent not
paid by the Company (the "Guarantee Payments") will be subject to the
Guarantee (without duplication): (i) any accumulated arrears and
accruals of unpaid dividends which have been theretofore declared on
the Preferred Shares of such series out of moneys legally available
therefor, (ii) the redemption price (including all accumulated arrears
and accruals of unpaid dividends) payable with respect to Preferred Shares
of any series called for redemption by the Company as an optional
redemption or otherwise out of funds available to the Company, (iii) the
lesser of (a) the aggregate of the liquidation preference and all
accumulated arrears and accruals of unpaid dividends (whether or not
declared) to the date of payment and (b) the amount of remaining assets of
the Company and (iv) any Additional Amounts payable by the Company (as
defined below and more fully described in the applicable Prospectus
Supplement). 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 of Preferred Shares of any series or by
causing the Company to pay any such amounts to such holders.
CERTAIN COVENANTS
If, at any time that the Guarantor fails to comply with its
obligations under the Guarantee, any proposal by the management of the
Guarantor is made to declare dividends on any shares of the Guarantor
ranking junior to the Guarantor's obligations under the Guarantee as
to participation in profits, the Guarantor shall, or shall cause the
Company to, set aside for payment in a segregated account at the
office of the Paying Agent an amount equal to all accumulated arrears
of dividends payable on the Preferred Shares of such series out of
moneys held and legally available therefor and irrevocably instruct
the Paying Agent to pay such amounts as dividends payable on the
Preferred Shares of such series on the day following the date on which
such proposal is approved by all necessary persons. The Paying Agent
shall make such payment on such day unless it shall have received,
prior to 10:00 a.m., New York time, on such day, a certificate from
the Guarantor certifying that such proposal has not been approved by
all necessary persons. In such case, the amounts deposited in such
account shall be remitted forthwith to the Guarantor or the Company,
as the case may be. In all cases, any interest accrued on the amounts
deposited in such account shall be remitted by the Paying Agent to the
Guarantor or the Company, as the case may be.
In addition, if, at any time that the Guarantor fails to comply
with its obligations under the Guarantee, the Guarantor (or any
subsidiary of the Guarantor using funds provided by the Guarantor)
redeems or purchases or otherwise acquires any shares of the Guarantor
ranking junior to the Guarantor's obligations under the<PAGE>
<PAGE>
Guarantee as to participation in assets of the Guarantor upon liquidation,
all accumulated arrears of dividends payable on the Preferred Shares of
such series out of moneys held and legally available therefor shall
immediately become due and payable under the Guarantee; provided,
however, that no such payment shall be required if any such shares of
the Guarantor are redeemed, purchased or otherwise acquired pursuant
to any employee stock option plan of the Guarantor.
Neither the Guarantor, nor any subsidiary of the Guarantor using
funds provided by the Guarantor, shall redeem, purchase or acquire, or
pay a liquidation preference with respect to, any preferred or
preference stock of the Guarantor ranking pari passu with the
Guarantee, any preferred or preference stock of affiliates of the
Guarantor (including the Company) entitled to the benefits of a
guarantee of the Guarantor ranking pari passu with the Guarantee or
any preferred or preference stock of affiliates of the Guarantor
entitled to the benefits of a guarantee ranking junior to the
Guarantee as to participation in assets of the Guarantor upon
liquidation if at such time the Guarantor shall be in default with
respect to its obligations under the Guarantee.
Neither the Guarantor, nor any subsidiary of the Guarantor using
funds provided by the Guarantor, shall pay dividends, or make
guarantee payments with respect to dividends, on any preferred or
preference stock of affiliates of the Guarantor entitled to the
benefits of a guarantee ranking junior to the Guarantee as to
participation in profits of the Guarantor if at such time the
Guarantor shall be in default with respect to its obligations under
the Guarantee.
Pursuant to the Guarantee, the Guarantor will agree (i) to
maintain ownership, directly and indirectly, of 100% of the Common
Shares of the Company, (ii) not to voluntarily dissolve, wind-up or
liquidate the Company so long as any Preferred Shares are outstanding
and (iii) to use its reasonable efforts to cause the Company to remain
an exempted company with limited duration and otherwise continue to be
treated as a partnership for United States federal income tax
purposes.
If the Guarantor issues, following the date of this Prospectus,
any preferred or preference shares ranking senior to its obligations
under the Guarantee or enters into any guarantee in respect of any
preferred or preference shares of any affiliate of the Guarantor,
which guarantee would rank junior to all liabilities of the Guarantor
but senior to the Guarantee as regards rights in respect of dividends,
liquidation preference and distributions, and rights upon redemption,
then the Guarantee will be deemed to give the holders of Preferred
Shares such rights and entitlements as are contained in or attached to
such other preferred or preference stock or guarantee such that the
Guarantee ranks pari passu as to such rights and entitlements with any
such preferred or preference stock or other guarantee.
ADDITIONAL AMOUNTS
All Guarantee Payments will be made without withholding or
deduction for or on account of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed or
levied upon or as a result of such payment by or on behalf of the
Cayman Islands, or any authority therein or thereof having power to
tax, unless the withholding or deduction of such taxes, duties,
assessments or governmental charges is required by law. In that event,
the Guarantor will pay such additional amounts as may be necessary in
order that the net amounts received by the holders of the Preferred
Shares after such withholding or deduction will equal the amount which
would have been receivable in respect of the Preferred Shares in the
absence of such withholding or deduction (the "Additional Amounts"),
except that no such Additional Amounts will be payable to a holder of
the Preferred Shares (or a third party on his behalf) with respect to
any of the Preferred Shares:
(a) if such holder is liable for such taxes, duties,
assessments or governmental charges for which the withholding or
deduction was imposed in respect of the income from the Preferred
Shares by reason of such holder's having some connection with the
Cayman Islands, other than being a holder of the Preferred
Shares; or
(b) if the Company or the Guarantor has notified such holder
of the obligation to withhold taxes and requested but not
received from such holder a declaration of non-residence or other
similar<PAGE>
<PAGE>
claim for exemption, and such withholding or deduction
would not have been required had such declaration or similar
claim been received.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially and
adversely affect the rights of holders of Preferred Shares (in which
case no vote will be required), the Guarantee may be changed only with
the prior approval of the holders of not less than 66-2/3% of the
outstanding Preferred Shares given either in writing or by vote at a
duly constituted meeting of such holders. All guarantees and
agreements contained in the Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and
shall inure to the benefit of the holders of the Preferred Shares. The
quorum for any such meeting and the determination of the Preferred
Shares of each series entitled to vote shall be as set forth in the
Prospectus Supplement relating to that series.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and
effect as to the Preferred Shares of any series upon either (i) full
payment of the redemption price (including all accumulated arrears and
accruals of unpaid dividends) for all Preferred Shares of that series,
including any redemption in exchange for Guarantor Preferred Stock (or
Depositary Shares representing the same) or (ii) upon full payment of
the amounts payable upon liquidation of the Company. The Guarantee
will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Preferred Shares of any series must
restore payment of any sums paid under the Preferred Shares of such
series or under the Guarantee.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the
Guarantor and will rank (i) junior to all liabilities of the
Guarantor, (ii) pari passu with the most senior preferred or
preference stock issued by the Guarantor and with any guarantee
entered into by the Guarantor in respect of any preferred or
preference stock of any affiliate of the Guarantor and (iii) senior to
the Guarantor's common shares.
The Guarantee will constitute a guarantee of payment and not of
collection. A holder of Preferred Shares may enforce the Guarantee
directly against the Guarantor, and the Guarantor will waive any right
or remedy to require that any action be brought against the Company or
any other person or entity before proceeding against the Guarantor.
The Guarantee will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by the Company and
by complete performance of all obligations under the Guarantee.
GOVERNING LAW
The Guarantee will be governed and construed in accordance with
the laws of the State of New York.
DESCRIPTION OF GUARANTOR PREFERRED STOCK
The following description of the terms of the Guarantor Preferred
Stock sets forth certain general terms and provisions of the Guarantor
Preferred Stock to which any Prospectus Supplement may relate. The
particular terms of the Guarantor Preferred Stock and the extent, if
any, to which such general terms do not apply to such Guarantor
Preferred Stock will be described in such Prospectus Supplement. The
description of the terms of the Guarantor Preferred Stock set forth
below and in any Prospectus Supplement does not purport to be complete
and is subject to and qualified in its entirety by reference to the
Guarantor's Certificate of Incorporation, as amended (the "Certificate
of Incorporation"), including the Certificate of Designations (the
"Certificate of Designations") relating to the Guarantor Preferred
Stock. The Certificate of Incorporation and<PAGE>
<PAGE>
any such Certificate of Designations are filed as exhibits to or will
be incorporated by reference in the Registration Statement of which this
Prospectus forms a part.
GENERAL
The Guarantor is authorized by its Certificate of Incorporation
to issue 10,000,000 shares of Guarantor Preferred Stock which may be
issued from time to time in one or more series and, subject to the
provisions of the Certificate of Incorporation applicable to all
series of Guarantor Preferred Stock, shall have such designations,
voting powers, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
thereof, as shall be stated in the resolution or resolutions providing
for the issue thereof adopted by the Guarantor's Board of Directors
(the "Board of Directors") or a duly authorized committee thereof.
The Guarantor Preferred Stock shall have the dividend,
liquidation, redemption and voting rights set forth below unless
otherwise specified in the applicable Prospectus Supplement.
Reference is made to the Prospectus Supplement relating to the
particular series of Guarantor Preferred Stock for specific terms,
including: (i) the designation, stated value and liquidation
preference of such Guarantor Preferred Stock and the number of shares
offered; (ii) the dividend rate or rates (or method of calculation),
the date or dates from which dividends shall accrue, and whether such
dividends shall be cumulative or noncumulative and, if cumulative, the
dates from which dividends shall commence to cumulate; (iii) any
redemption or sinking fund provisions; (iv) the amount that shares of
such series shall be entitled to receive in the event of any
liquidation, dissolution or winding up of the Guarantor; (v) the terms
and conditions, if any, on which shares of such series shall be
exchangeable for shares of stock of any other class or classes, or
other series of the same class, of the Guarantor; (vi) the voting
rights, if any, of shares of such series in addition to those set
forth in "Voting Rights" below; (vii) the conditions and restrictions,
if any, on the payment of dividends or on the making of other
distributions on, or the purchase, redemption or other acquisition by
the Guarantor or any subsidiary, of the common stock or of any other
class of stock of the Guarantor ranking junior to the shares of such
series as to dividends or upon liquidation; (viii) the conditions and
restrictions, if any, on the creation of indebtedness of the
Guarantor, or any subsidiary, or on the issue of any additional stock
ranking on a parity with or prior to the shares of such series as to
dividends or upon liquidation; and (ix) any additional dividend,
liquidation, redemption, sinking or retirement fund and other rights,
preferences, privileges, limitations and restrictions of such
Guarantor Preferred Stock.
The Guarantor Preferred Stock will, when issued, be fully paid
and nonassessable. Unless otherwise specified in the applicable
Prospectus Supplement, the shares of each series of Guarantor
Preferred Stock will upon issuance rank on a parity in all respects
with the outstanding shares of the Guarantor's Adjustable Rate
Cumulative Preferred Stock, Series A, 7.88% Cumulative Preferred
Stock, Series B and 7.60% Cumulative Preferred Stock, Series C. As of
January 25, 1994, there were 881,450 shares of Adjustable Rate
Cumulative Preferred Stock, Series A, 937,500 shares of 7.88%
Cumulative Preferred Stock, Series B, and 500,000 shares of 7.60%
Cumulative Preferred Stock, Series C of the Guarantor outstanding with
an aggregate liquidation preference of $331,573,000. The Guarantor
Preferred Stock will have no preemptive rights to subscribe for any
additional securities that may be issued by the Guarantor.
DIVIDENDS
Unless otherwise set forth in the applicable Prospectus
Supplement, before any dividends may be declared or paid to the
holders of shares of the Common Stock, par value $1.00 per share, of
the Guarantor (the "Common Stock") or of any other capital stock of
the Guarantor ranking junior to any series of the Guarantor Preferred
Stock as to the payment of dividends, the holders of the Guarantor
Preferred Stock of that series will be entitled to receive, when and
as declared by the Board of Directors or a duly authorized committee
thereof, out of the net profits or net assets of the Guarantor legally
available therefor, dividends payable at such times and at such rates
as will be specified in the applicable Prospectus Supplement. Such
rates may be fixed or variable or both. If variable, the formula used
for determining the dividend rate for each dividend period will be
specified in the applicable Prospectus Supplement. Unless otherwise
set forth in the applicable<PAGE>
<PAGE>
Prospectus Supplement, dividends will be payable to the holders of record
as they appear on the stock transfer records of the Guarantor on such
dates as may be fixed by the Board of Directors or a duly authorized
committee thereof.
Dividends on any series of Guarantor Preferred Stock may be
cumulative or noncumulative, as specified in the applicable Prospectus
Supplement. If the Board of Directors fails to declare a dividend
payable on a dividend payment date on any series of Guarantor
Preferred Stock for which dividends are noncumulative ("Noncumulative
Guarantor Preferred Stock"), then the holders of the Guarantor
Preferred Stock of that series will have no right to receive a
dividend in respect of the dividend period relating to such dividend
payment date, and the Guarantor will have no obligation to pay the
dividend accrued for such period, whether or not dividends on that
series are declared or paid on any future dividend payment dates. If
dividends on any series of Guarantor Preferred Stock are not paid in
full or declared in full and sums set apart for the payment thereof,
then no dividends shall be declared and paid on that series unless
declared and paid ratably on all shares of every series of Guarantor
Preferred Stock then outstanding, including dividends accrued or in
arrears, if any, in proportion to the respective amounts that would be
payable per share if all such dividends were declared and paid in
full.
The Prospectus Supplement relating to a series of Guarantor
Preferred Stock will specify the conditions and restrictions, if any,
on the payment of dividends or on the making of other distributions
on, or the purchase, redemption or other acquisition by the Guarantor
or any subsidiary thereof, the Common Stock or of any other class of
stock of the Guarantor ranking junior to the shares of that series as
to dividends or upon liquidation and any other preferences, rights,
restrictions and qualifications that are not inconsistent with the
Certificate of Incorporation.
LIQUIDATION RIGHTS
Unless otherwise set forth in the applicable Prospectus
Supplement, upon any liquidation, dissolution or winding up of the
Guarantor (whether voluntary or involuntary), the holders of Guarantor
Preferred Stock of that series will be entitled to receive out of the
assets of the Guarantor available for distribution to its
stockholders, whether from capital, surplus or earnings, the amount
specified in the applicable Prospectus Supplement for that series,
together with all dividends accrued and unpaid, before any
distribution of the assets will be made to the holders of Common Stock
or any other class or series of shares ranking junior to that series
of Guarantor Preferred Stock upon liquidation, dissolution or winding
up, and will be entitled to no other or further distribution. If,
upon any liquidation, dissolution or winding up of the Guarantor, the
assets distributable among the holders of a series of Guarantor
Preferred Stock shall be insufficient to permit the payment in full to
the holders of that series of Guarantor Preferred Stock of all amounts
payable to those holders, then the entire assets of the Guarantor thus
distributable will be distributed ratably among the holders of that
series of in proportion to the respective amounts that would be
payable per share if those assets were sufficient to permit payment in
full.
Neither the consolidation, merger or other business combination
of the Guarantor with or into any other individual, firm, corporation
or other entity nor the sale, lease, exchange or conveyance of all or
any part of the property, assets or business of the Guarantor will be
deemed to be a liquidation, dissolution or winding up of the
Guarantor.
REDEMPTION
If so specified in the applicable Prospectus Supplement, any
series of Guarantor Preferred Stock may be redeemable, in whole or in
part, at the option of the Guarantor or pursuant to a retirement or
sinking fund or otherwise, on terms and at the times and the
redemption prices specified in that Prospectus Supplement. If less
than all shares of the series at the time outstanding are to be
redeemed, the shares to be redeemed will be selected pro rata or by
lot, in such manner as may be prescribed by resolution of the Board of
Directors.
<PAGE>
<PAGE>
Notice of any redemption of a series of Guarantor Preferred Stock
will be given by publication in a newspaper of general circulation in
the Borough of Manhattan, The City of New York, such publication to be
made not less than 30 nor more than 60 days prior to the redemption
date. A similar notice will be mailed by the Guarantor, postage
prepaid, not less than 30 nor more than 60 days prior to the
redemption date, addressed to the respective holders of record of
shares of that series at the addresses shown on the stock transfer
records of the Guarantor, but the mailing of such notice will not be a
condition of such redemption. In order to facilitate the redemption
of shares of Guarantor Preferred Stock, the Board of Directors may fix
a record date for the determination of the shares to be redeemed, and
such record date will be not more than 60 days nor less than 30 days
prior to the redemption date.
Prior to the redemption date, the Guarantor will deposit money
for the payment of the redemption price with a bank or trust company
doing business in the Borough of Manhattan, The City of New York, and
having a capital and surplus of at least $10,000,000. Unless the
Guarantor fails to make such deposit, on the redemption date, all
dividends on the series of Guarantor Preferred Stock called for
redemption will cease to accrue and all rights of the holders of
shares of that series as stockholders of the Guarantor shall cease,
except the right to receive the redemption price (but without
interest). Unless otherwise specified in the applicable Prospectus
Supplement, any monies so deposited which remain unclaimed by the
holders of the shares of that series at the end of six years after the
redemption date will become the property of, and will be paid by the
bank or trust company with which it has been so deposited to, the
Guarantor.
CONVERSION RIGHTS
Guarantor Preferred Stock will not be convertible into Common
Stock.
VOTING RIGHTS
Unless otherwise determined by the Board of Directors of the
Guarantor and set forth in the Prospectus Supplement applicable to a
particular series of Guarantor Preferred Stock, holders of the
Guarantor Preferred Stock of that series will not have any voting
rights except as set forth below or as otherwise from time to time
required by law. Whenever dividends on any series of Guarantor
Preferred Stock or any other class or series of stock ranking on a
parity with that series with respect to the payment of dividends shall
be in arrears for dividend periods, whether or not consecutive,
containing in the aggregate a number of months equivalent to six
calendar quarters, the holders of shares of that series (voting
separately as a class with all other series of Guarantor Preferred
Stock upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two of the
authorized number of directors of the Guarantor at the next annual
meeting of stockholders and at each subsequent meeting until all
dividends accumulated on that series have been fully paid or set apart
for payment. The term of office of all directors elected by the
holders of a series of Guarantor Preferred Stock shall terminate
immediately upon the termination of the right of the holders of that
series to vote for directors. Whenever the shares of a series are or
become entitled to vote, each holder of shares of that series will
have one vote for each share held.
So long as shares of any series of Guarantor Preferred Stock
remain outstanding, the Guarantor shall not, without the consent of
the holders of at least 66-2/3% of the shares of that series
outstanding at the time (voting separately as a class with all other
series of Guarantor Preferred Stock upon which like voting rights have
been conferred and are exercisable), (i) issue or increase the
authorized amount of any class or series of stock ranking senior
to the shares of that series as to dividends or upon liquidation or
(ii) amend, alter or repeal the provisions of the Guarantor's
Certificate of Incorporation or of the resolutions contained in the
Certificate of Designations, whether by merger, consolidation or
otherwise, so as to materially and adversely affect any power,
preference or special right of the outstanding shares of that series
or the holders thereof; provided however, that any increase in the
amount of the authorized Common Stock or authorized Guarantor Preferred
Stock or the creation and issuance of Common Stock or any other series
of Guarantor Preferred Stock ranking on a parity with or junior to a
series of Guarantor Preferred Stock as to dividends and upon liquidation
shall not be deemed to materially and adversely affect the powers,
preferences or special rights of the shares of that series.
<PAGE>
<PAGE>
Unless otherwise indicated in the applicable Prospectus
Supplement, the transfer agent, dividend disbursing agent and
registrar for each series of Guarantor Preferred Stock will be
Security Trust Company, N.A.
DESCRIPTION OF DEPOSITARY SHARES
The following summary and the summary in any Prospectus
Supplement of the terms and provisions of the Depositary Shares and
Depositary Receipts does not purport to be complete and is subject to
and qualified in its entirety by reference to the Deposit Agreement
relating to the applicable series of Guarantor Preferred Stock, which
will be filed as an exhibit to or incorporated by reference in the
Registration Statement of which this Prospectus forms a part.
GENERAL
The Guarantor, at its option, may elect to offer fractional
interests in shares of a series of Guarantor Preferred Stock, rather
than whole shares. If the option is exercised, the Guarantor will
provide for the issuance by a depositary of depositary receipts
("Depositary Receipts") evidencing depositary shares ("Depositary
Shares"), each of which will represent a fractional interest (to be
specified in the applicable Prospectus Supplement) in a share of a
particular series of the Guarantor Preferred Stock as more fully
described below.
If the Guarantor offers fractional shares of any series of
Guarantor Preferred Stock, those shares will be deposited under a
separate deposit agreement (a "Deposit Agreement") among the
Guarantor, a bank or trust company selected by the Guarantor and
having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000 (the "Depositary") and the
holders from time to time of the Depositary Receipts issued thereunder
by that Depositary. The applicable Prospectus Supplement will set
forth the name and address of the Depositary. Subject to the terms of
the Deposit Agreement, each owner of a Depositary Share will be
entitled, in proportion to the applicable fractional interest in a
share of Guarantor Preferred Stock underlying such Depositary Share,
to all the rights and preferences of the fractional share of Guarantor
Preferred Stock underlying such Depositary Share (including dividend,
voting, redemption and liquidation rights).
Pending the preparation of definitive engraved Depositary
Receipts, upon the written order of the Guarantor, the Depositary may
issue temporary Depositary Receipts substantially identical to (and
entitling the holders thereof to all the rights pertaining to) the
definitive Depositary Receipts but not in definitive form. Definitive
Depositary Receipts will be prepared thereafter without unreasonable
delay, and temporary Depositary Receipts will be exchangeable for
definitive Depositary Receipts at the Guarantor's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute to the holders of Depositary
Receipts evidencing Depositary Shares all cash dividends or other cash
distributions received in respect of the underlying fractional shares
of Guarantor Preferred Stock in proportion to their respective
holdings of the Depositary Shares on the relevant record date.
However, the Depositary will distribute only the amount that can be
distributed without attributing to any holder of Depositary Shares a
fraction of one cent, and any balance not so distributed will be held
by the Depositary (without liability for interest thereon) and will be
added to and treated as part of the next sum received by the
Depositary for distribution to holders of Depositary Receipts then
outstanding.
If the Guarantor distributes property other than cash in respect
of shares of Guarantor Preferred Stock deposited under a Deposit
Agreement, the Depositary will distribute the property received by it
to the record holders of Depositary Receipts evidencing the Depositary
Shares relating to those shares of Guarantor Preferred Stock, in
proportion, as nearly as may be practicable, to their respective
holdings of the Depositary Shares on the relevant record date, unless
the Depositary determines that it is not feasible to make such a
distribution, in<PAGE>
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which case the Depositary may, with the approval of
the Guarantor, adopt such method as it deems equitable and practicable
to give effect to the distribution, including the sale of the property
so received and distribution of the net proceeds from such sale to the
holders of the Depositary Receipts.
Each Deposit Agreement will also contain provisions relating to
the manner in which any subscription or similar rights offered by the
Guarantor to holders of the Guarantor Preferred Stock deposited under
such Deposit Agreement will be made available to holders of Depositary
Shares.
REDEMPTION OF DEPOSITARY SHARES
If the shares of Guarantor Preferred Stock deposited under a
Deposit Agreement are subject to redemption, in whole or in part,
then, upon any such redemption, the Depositary Shares relating to
those deposited shares will be redeemed from the proceeds received by
the Depositary as a result of the redemption. Whenever the Guarantor
redeems shares of Guarantor Preferred Stock held by a Depositary, the
Depositary will redeem as of the same redemption date the number of
Depositary Shares representing the shares of Guarantor Preferred Stock
so redeemed. The Depositary will mail the notice of redemption not
less than 20 and not more than 50 days prior to the date fixed for
redemption to the record holders of the Depositary Shares to be so
redeemed. The redemption price per Depositary Share will be equal to
the applicable fraction of the per share redemption price of the
Guarantor Preferred Stock underlying such Depositary Share. If less
than all the Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Depositary.
If notice of redemption shall have been given as described above,
from and after the date fixed for redemption, unless the Guarantor
shall have failed to redeem the shares of Guarantor Preferred Stock so
called for redemption, the Depositary Shares so called for redemption
will no longer be deemed to be outstanding, and all rights of the
holders of such Depositary Shares will cease, except for the right to
receive the monies payable upon such redemption and any money or other
property to which the holders of such Depositary Shares were entitled
upon such redemption, upon surrender to the Depositary of the
Depositary Receipts evidencing such Depositary Shares.
VOTING RIGHTS
As soon as practicable after receipt of notice of any meeting at
which the holders of shares of Guarantor Preferred Stock deposited
under a Deposit Agreement are entitled to vote, the Depositary will
mail the information contained in that notice of meeting (and any
accompanying proxy materials) to the holders of the Depositary Shares
relating to such Guarantor Preferred Stock as of the record date for
such meeting. Each such holder will be entitled, subject to any
applicable restrictions, to instruct the Depositary as to the exercise
of the voting rights of the Guarantor Preferred Stock represented by
such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the Guarantor Preferred Stock
represented by those Depositary Shares in accordance with the holder's
instructions, and the Guarantor will agree to take all action deemed
necessary by the Depositary to enable the Depositary to do so. The
Depositary will abstain from voting shares of Guarantor Preferred
Stock deposited under a Deposit Agreement as to which it has not
received specific instructions from the holders of the Depositary
Shares representing those shares.
WITHDRAWAL OF STOCK
Upon surrender of Depositary Receipts at the principal office of
the relevant Depositary (unless the Depositary Shares evidenced
thereby have previously been called for redemption), and subject to
the terms of the related Deposit Agreement, the owner of the
Depositary Shares evidenced thereby shall be entitled to delivery of
whole shares of Guarantor Preferred Stock and all money and other
property, if any, represented by those Depositary Shares. Fractional
shares of Guarantor Preferred Stock will not be delivered. If the
Depositary Receipts surrendered by the holder evidence Depositary
Shares in excess of those representing the number of whole shares of
Guarantor Preferred Stock to be withdrawn, the Depositary will deliver
to the holder
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at the same time a new Depositary Receipt evidencing the Depositary
Shares. Holders of shares of Guarantor Preferred Stock thus withdrawn
will not thereafter be entitled to deposit such shares under a Deposit
Agreement or to receive Depositary Shares therefor. The Guarantor
does not expect that there will be any public trading market for the
Guarantor Preferred Stock, except as represented by Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing any Depositary Shares
and any provision of a Deposit Agreement may at any time and from time
to time be amended by agreement between the Guarantor and the
Depositary. However, any amendment that materially and adversely
alters the rights of the existing holders of Depositary Shares will
not be effective unless and until approved by the holders of at least
a majority of the Depositary Shares then outstanding under that
Deposit Agreement. Each Deposit Agreement will provide that each
holder of Depositary Shares at the time an amendment becomes effective
who continues to hold those Depositary Shares will be deemed to have
consented to the amendment and will be bound thereby. Except as may
be necessary to comply with any mandatory provisions of applicable
law, no amendment may impair the right, subject to the terms of the
related Deposit Agreement, of any holder of any Depositary Shares to
surrender the Depositary Receipt evidencing those Depositary Shares to
the Depositary together with instructions to deliver to the holder the
whole shares of Guarantor Preferred Stock represented by the
surrendered Depositary Shares and all money and other property, if
any, represented thereby. A Deposit Agreement may be terminated by
the Guarantor or the Depositary only if (i) all outstanding Depositary
Shares issued thereunder have been redeemed or (ii) there has been a
final distribution in respect of the Guarantor Preferred Stock
relating to those Depositary Shares in connection with any
liquidation, dissolution or winding up of the Guarantor and the amount
received by the Depositary as a result of that distribution has been
distributed by the Depositary to the holders of those Depositary
Shares.
CHARGES OF DEPOSITARY
The Guarantor will pay all transfer and other taxes and
governmental charges arising solely from the existence of the
depositary arrangements. The Guarantor will pay charges of any
Depositary in connection with the initial deposit of Guarantor
Preferred Stock and the initial issuance of the relevant Depositary
Shares and any redemption of such Guarantor Preferred Stock. Holders
of Depositary Shares will pay any other taxes and charges incurred for
their accounts as are provided in the relevant Deposit Agreement.
MISCELLANEOUS
Each Depositary will forward to the holders of Depositary Shares
issued by that Depositary all reports and communications from the
Guarantor that are delivered to the Depositary and that the Guarantor
is required to furnish to the holders of the Guarantor Preferred Stock
held by the Depositary. In addition, each Depositary will make
available for inspection by the holders of those Depositary Shares, at
the principal office of such Depositary and at such other places as it
may from time to time deem advisable, all reports and communications
received from the Guarantor that are received by such Depositary as
the holder of Guarantor Preferred Stock.
Neither any Depositary nor the Guarantor will assume any
obligation or will be subject to any liability under a Deposit
Agreement to holders of the Depositary Shares other than for its
negligence or willful misconduct. Neither any Depositary nor the
Guarantor will be liable if it is prevented or delayed by law or any
circumstance beyond its control in performing its obligations under a
Deposit Agreement. The obligations of the Guarantor and any
Depositary under a Deposit Agreement will be limited to performance in
good faith of their duties thereunder, and they will not be obligated
to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Guarantor Preferred Stock unless satisfactory
indemnity is furnished. The Guarantor and any Depositary may rely on
written advice of counsel or accountants, on information provided by
persons presenting Guarantor Preferred Stock for deposit, holders of
Depositary Shares or other persons believed in good faith to be
competent to give such information and on documents believed to be
genuine and to have been signed or presented by the proper party or
parties.
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RESIGNATION AND REMOVAL OF DEPOSITARY
A Depositary may resign at any time by delivering to the
Guarantor notice of its election to do so, and the Guarantor may at
any time remove any Depositary, any such resignation or removal to
take effect upon the appointment of a successor Depositary and its
acceptance of such appointment. Such successor Depositary must be
appointed within 60 days after delivery of the notice of resignation
or removal and must be a bank or trust company having its principal
office in the United States of America and having a combined capital
and surplus of at least $50,000,000.
FEDERAL INCOME TAX CONSEQUENCES
Owners of the Depositary Shares will be treated for federal
income tax purposes as if they were owners of the Guarantor Preferred
Stock represented by such Depositary Shares.
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Each series of Preferred Shares and each series of Guarantor
Preferred Stock (or Depositary Shares representing the same)
(collectively, the "Securities") may be issued in certificated or
book-entry form, as specified in the applicable Prospectus Supplement.
The Securities issued in book-entry form from the perspective of the
beneficial owners thereof (the "Securityholders") will be issued in
the form of a single global stock certificate or a single global
Depositary Receipt (as the case may be) registered in the name of the
nominee of DTC.
DTC is a limited-purpose trust company created to hold securities
for its participating organizations (the "Participants") and to
facilitate the clearance and settlement of transactions in those
securities between Participants through electronic book-entry changes
in the accounts of the Participants. Participants include securities
brokers and dealers, banks and trust companies, clearing corporations
and certain other organizations. Access to DTC's system is also
available to others (such as banks, brokers, dealers and trust
companies) that clear through or maintain a custodial relationship
with a Participant, either directly or indirectly ("Indirect
Participants"). Persons who are not Participants or Indirect
Participants may beneficially own securities held by DTC only through
Participants or Indirect Participants.
DTC's nominee for all purposes will be considered the sole owner
or holder of the securities held in book-entry form. Owners of
beneficial interests in the global stock certificate or Depositary
Receipt will not be entitled to have the Securities registered in
their names, will not receive or be entitled to receive physical
delivery of the Securities in definitive form, and will not be
considered the holders thereof under the Memorandum, Certificate of
Incorporation or any Deposit Agreement.
Neither the Guarantor nor the Depositary will have any
responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the
global stock certificate or Depositary Receipt, or for maintaining,
supervising or reviewing any records relating to such beneficial
ownership interests.
A Securityholder's ownership of the Securities issued in book-
entry form will be recorded on or through the records of the brokerage
firm or other entity that maintains that Securityholder's account. In
turn, the total number of shares of the Securities held by an
individual brokerage firm or other entity for its clients will be
maintained on the records of DTC in the name of that brokerage firm or
other entity (or in the name of a Participant that acts as agent for
the Securityholder's brokerage firm or other entity if it is not a
Participant). Therefore, a Securityholder must rely upon the records
of the Securityholder's brokerage firm or other entity to evidence the
Securityholder's ownership of the Securities and transfer of ownership
of those Securities may be effected only through the brokerage firm or
other entity that maintains the Securityholder's account.
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If less than all of the Preferred Shares of any series are being
redeemed, DTC's practice is to determine by lot the amount of the
interest of each participant in such series to be redeemed.
Dividends or other distributions payable in respect of the
Securities will be paid by the Guarantor or the Depositary, as the
case may be, to DTC. DTC will be responsible for crediting the amount
of payments that it receives to the accounts of the Participants in
accordance with their respective standard procedures, which currently
provide for payment in next-day funds. Each Participant will be
responsible for disbursing the payments for which it is so credited
to the Securityholders that it represents and to each brokerage firm
or other entity for which it acts as agent. Each such brokerage firm or
other entity will be responsible for disbursing funds to the
Securityholders that it represents. It is suggested that any purchaser
of the Securities with accounts at more than one brokerage firm or
other entity effect transactions in the Securities only through the
brokerage firm or firms or other entity or entities that hold such
purchaser's Securities.
If DTC is at any time unwilling or unable to continue as
depository in respect of a global certificate or global Depositary
Receipt and a successor depository is not appointed by the Guarantor
or the Depositary, as the case may be, within 90 days, the Guarantor
will issue Securities, as the case may be, in definitive form in
exchange for the global stock certificate or global Depositary
Receipt. In addition, the Guarantor may determine at any time not to
have the Securities represented by a global stock certificate or
global Depositary Receipt (as the case may be), and, in such event,
will issue the Securities in definitive form in exchange for such
global stock certificate or global Depositary Receipt. In either
instance, an owner of a beneficial interest in the global stock
certificate or global Depositary Receipt will be entitled to have the
Securities equal in aggregate amount to that beneficial interest
registered in its name and will be entitled to physical delivery of a
definitive certificate or other instrument evidencing such Securities.
The registered holder of the Securities will be entitled to receive
the dividends or other distributions or, if applicable, the redemption
price payable in respect of such Securities, upon surrender of the
certificate (or Depositary Receipt) evidencing such Securities to the
Guarantor or the Depositary (as the case may be), in accordance with
the procedures set forth in the Memorandum, Certificate of
Incorporation or Deposit Agreement (as the case may be).
LIMITATIONS AFFECTING SECURITIES HOLDERS
There are no exchange control laws or regulations in effect under
current Cayman Islands legislation.
TAXATION
UNITED STATES
The following is a summary of the principal U.S. federal income
tax consequences, based on the advice of Weil, Gotshal & Manges, of
the purchase, ownership, and disposition of the Preferred Shares, to a
holder that is a citizen or resident of the United States, a
corporation, partnership, or other entity created or organized under
the laws of the United States, an estate or trust the income of which
is subject to U.S. federal income taxation regardless of source, or a
person that is otherwise subject to U.S. federal income tax on a net
income basis with respect to the Preferred Shares (a "U.S. Holder").
Because the Preferred Shares will be offered and sold only to
investors that are U.S. Holders, this summary does not address the
U.S. federal income tax consequences to persons other than U.S.
Holders.
This summary is based on the U.S. federal income tax laws,
regulations, and ruling and decisions now in effect, all of which are
subject to change, possibly on a retroactive basis. This summary
considers only initial U.S. Holders that hold the Preferred Shares as
capital assets, and does not address the tax consequences applicable
to investors that may be subject to special tax rules such as banks,
insurance companies, dealers in stocks, tax exempt persons, persons
that will hold the Preferred Shares as a position in a "straddle," as
part of a "synthetic security" or "hedge," or as part of a "conversion
transaction" or other integrated investment. This summary also does
not address the tax consequences to persons that have a functional
currency other than the<PAGE>
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U.S. dollar. It does not include any description of the tax laws
of any state or local government or of any foreign government that
may be applicable to the Preferred Shares or the holders thereof.
For a description of certain consequences with respect to the tax
laws of the Cayman Islands, see the discussion below under the
heading "Cayman Islands."
INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS IN DETERMINING
THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF HOLDING THE PREFERRED
SHARES AS WELL AS THE APPLICATION OF ANY STATE, LOCAL OR FOREIGN TAX
LAWS.
Income from the Preferred Shares
In the opinion of Weil, Gotshal & Manges, the Company will be
treated as a partnership for U.S. federal income tax purposes. Such
opinion relies, in part, upon the opinion of Maples and Calder as to
certain matters of Cayman Islands law. Copies of the opinions of
Weil, Gotshal & Manges and Maples and Calder have been filed as
exhibits to the Registration Statement of which this Prospectus is a
part. Each holder of the Preferred Shares (a "Shareholder") will be
required to include in his gross income his distributive share of the
Company's net income, which generally will be an amount equal to the
dividends on the Preferred Shares held by such Shareholder. A
Shareholder's distributive share of such income should not exceed such
dividends on the Preferred Shares, except in the limited circumstances
described below under "Potential Extension of the Payment Period" and
"Use of Convention." Any amount so included in a Shareholder's gross
income will increase his tax basis in the Preferred Shares and the
amount of cash dividends to the Shareholder will reduce his tax basis
in the Preferred Shares. No portion of such income will be eligible
for the dividends- received deduction.
Disposition of the Preferred Shares
Except as described below under "Redemption of the Preferred
Shares in Exchange for Guarantor Preferred Stock," gain or loss will
be recognized on a sale, exchange or other disposition of the
Preferred Shares (including a distribution of cash in redemption of
all of a Shareholder's Preferred Shares) equal to the difference
between the amount realized and the Shareholder's tax basis in the
Preferred Shares disposed of. In the case of a cash distribution in
partial redemption of a Shareholder's Preferred Shares, no loss will
be recognized, the Shareholder's tax basis in the Preferred Shares
will be reduced by the amount of the distribution, and the Shareholder
will recognize gain to the extent, if any, that the amount of the
distribution exceeds his tax basis in the Preferred Shares. Gain or
loss recognized by a Shareholder on the sale or exchange (or on a
distribution of cash in redemption) of a Preferred Share held for more
than one year will generally be long-term capital gain or loss.
Redemption of the Preferred Shares in Exchange for Guarantor Preferred
Stock
The Guarantor will have the right, subject to certain conditions,
to issue and deliver to the Company, in exchange for the note
evidencing the loan of the proceeds from the sale of each series of
Preferred Shares (the "Loan Note"), shares of a series of Guarantor
Preferred Stock (or Depositary Shares representing the same). As
noted under "Description of Preferred Shares -- Mandatory Redemption,"
in the event of such exchange, the Company is obligated to redeem such
series of Preferred Shares, as an entirety, solely in exchange for
shares of the same series of Guarantor Preferred Stock (or Depositary
Shares representing the same) so delivered to the Company by the
Guarantor. Such exchange and redemption will not cause the Company to
recognize taxable gain or loss.
If the fair market value of the Guarantor Preferred Stock (or
Depositary Shares) received by a Shareholder upon such redemption
exceeds the Shareholder's tax basis in the Preferred Shares so
redeemed, the Shareholder may be required to recognize taxable income
or gain in an amount equal to such excess. Alternatively, if the
Shareholder's tax basis in the Preferred Shares exceeds the fair
market value<PAGE>
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of the Guarantor Preferred Stock (or Depository Shares)
received upon such redemption, the Shareholder may recognize a loss
(or expense item) in an amount equal to such excess. If such a loss
(or expense item) is recognized, its deductibility by a Shareholder
may be subject to limitations (such as the limitation on deductibility
of capital losses), the application of which will depend upon the
Shareholder's personal tax situation. A Shareholder's aggregate tax
basis in the Guarantor Preferred Stock (or Depositary Shares
representing the same) received upon such redemption should be equal
to such Shareholder's aggregate tax basis in the Preferred Shares so
redeemed, increased by any gain recognized upon the redemption
exchange and reduced by any loss (or expense item) referred to above
recognized upon such redemption.
It is possible that the Internal Revenue Service could take the
position that the Company should be disregarded and that each
Shareholder should be treated as holding an interest in the Loan Note
held by the Company, rather than the Preferred Shares. In that event,
upon the Company's redemption of Preferred Shares in exchange for
Guarantor Preferred Stock (or Depositary Shares representing the same)
following the Guarantor's delivery of such Guarantor Preferred Stock
(or Depositary Shares) in exchange for the Loan Note, each Shareholder
should be treated as exchanging debt of the Guarantor for stock in the
Guarantor. Such an exchange should be treated as a non-taxable exchange
to each Shareholder (except to the extent any stock received is allocable
to accrued but unpaid interest) and should result in the Shareholder
receiving an aggregate tax basis in the stock so received (other than
any portion of such stock allocable to accrued but unpaid interest)
which should be equal to such Shareholder's aggregate tax basis in its
Preferred Shares. Any Guarantor Preferred Stock (or Depositary Shares
representing the same) received by a Shareholder which is allocable to
accrued but unpaid interest would be taxable to such Shareholder as a
payment of such interest in accordance with such Shareholder's federal
income tax accounting method and the Shareholder would take a fair
market value tax basis in such Guarantor Preferred Stock (or
Depositary Shares).
If the Preferred Shares are redeemed in exchange for Guarantor
Preferred Stock (or Depositary Shares), any distributions paid on the
Guarantor Preferred Stock (or Depositary Shares) will be taxable to a
U.S. Holder as ordinary dividend income to the extent of the
Guarantor's current and accumulated earnings and profits. To the
extent that the amount of distributions paid on such Guarantor
Preferred Stock (or Depositary Shares) exceeds the Guarantor's current
and accumulated earnings and profits (as determined for U.S. federal
income tax purposes), such excess distributions will be treated first
as a return of capital (reducing the U.S. Holder's adjusted tax basis
in such Guarantor Preferred Stock (or Depositary Shares)), and then as
capital gain. Such capital gain would be long-term capital gain if
the U.S. Holder's holding period for the Guarantor Preferred Stock (or
Depositary Shares) exceeds one year. To the extent that distributions
on the Guarantor Preferred Stock (or Depositary Shares) are treated as
dividends, a U.S. Holder that is a corporation may be eligible for the
70% dividends-received deduction, subject to certain limitations and
certain holding period requirements (although the benefit of such
deduction may be reduced or eliminated by the alternative minimum
tax). The dividends-received deduction may also be reduced if the
Guarantor Preferred Stock is considered "debt financed."
A U.S. Holder of Guarantor Preferred Stock (or Depositary Shares)
will recognize capital gain or loss on the sale or other disposition
thereof equal to the difference between the amount realized and the
U.S. Holder's tax basis therefor. Gain or loss recognized by a U.S.
Holder on the sale or exchange of Guarantor Preferred Stock (or
Depositary Shares) held for more than one year generally will be
capital gain or loss. A redemption of the Guarantor Preferred Stock
(or Depositary Shares) for cash will generally be treated as a sale or
exchange resulting in capital gain or loss unless the U.S. Holder owns
other shares of stock of the Guarantor and certain other conditions
apply, in which case such redemption will be treated as a distribution
(as described in the preceding paragraph).
Potential Extension of the Payment Period
Under the terms of the agreement governing the Loan Note, the
Guarantor may be permitted to extend the interest payment period of
the Loan Note. In the event that the Guarantor exercises that right,
the Guarantor may not declare dividends on any shares of its preferred
or common stock and, therefore, the likelihood of extension of the
payment period is, in the view of the Guarantor, remote. If the
payment period<PAGE>
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is extended, the Company will continue to accrue income equal to the
amount of the interest payment due at the end of the extended payment
period over the term of the extended payment period.
Accrued income for any month will be allocated but not
distributed to holders of record of the Preferred Shares on the record
date for dividends in respect of such month. As a result, U.S.
Holders of record during an extended interest payment period will be
required to include in gross income an amount equal to the dividends
accrued on the Preferred Shares in advance of the receipt of such
dividend in cash. The subsequent receipt of cash in respect of such
dividend will not also be includible in gross income.
Use of Convention
The Company will adopt a convention under which all of the net
income accrued by the Company in any calendar month will be allocated
to Shareholders of record on the record date for dividends in respect
of such month. It is unclear whether this convention will be
respected for federal income tax purposes. If it is not respected,
the distributive share of the Company's net income allocable to
Preferred Shares in respect of a month in which such shares are sold
may be allocated between the seller and the purchaser on some other
basis. Any amount so allocated to the Shareholder, whether as seller
or purchaser, would be includible in the Shareholder's income and
would increase his tax basis in the Preferred Shares.
Company Information Returns and Audit Procedures
The Guarantor, in its capacity as Common Shareholder of the
Company, will furnish each holder with a Schedule K-1 setting forth
each holder's allocable share of the income of the Company. The
Schedule K-1 will be furnished within 90 days after the close of the
Company's taxable year.
Any person who holds Preferred Shares as a nominee for another
person is required by law to furnish to the Company: (a) the name,
address, and taxpayer identification number of the beneficial owners
and the nominee; (b) notice of whether the beneficial owner is (i) a
person that is not a United States person, (ii) a foreign government,
an international organization, or any wholly owned agency or
instrumentality of either of the foregoing, or (iii) a tax-exempt
entity; (c) the amount and description of Preferred Shares held,
acquired, or transferred for the beneficial owners; and (d) certain
information including the dates of acquisitions and transfers, means
of acquisitions and transfers, and acquisition cost for purchases, as
well as the amount of net proceeds from sales. Brokers and financial
institutions are required to furnish additional information, including
certain information on Preferred Shares that they acquire, hold, or
transfer for their own account. A penalty of $50 per failure (up to a
maximum of $100,000 per calendar year) is imposed by the Internal
Revenue Code for failure to report such information to the Company.
The nominee is required to supply the beneficial owner of the
Preferred Shares with the information furnished to the Company.
CAYMAN ISLANDS
The following discussion is a summary of certain Cayman Islands
tax consequences, based on the advice of Maples and Calder, of the
purchase, disposition or ownership of the Preferred Shares.
Payment of dividends on the Preferred Shares will not be subject
to any withholding under the tax laws of the Cayman Islands. There
are no taxes in the Cayman Islands on income, profits, capital gains
or turnover, nor are there any inheritance, estate, or gift taxes or
duties in the Cayman Islands. There is no applicable stamp duty on
the issuance of any shares, and no stamp duty is payable on the
transfer or redemption of shares in the Company. The Company has
applied for and will be issued an undertaking by the Governor of the
Cayman Islands stating that the Company is exempt, for a period of
twenty years from the date of its incorporation, January 27, 1994,
from the payment of any taxes or duties which may be imposed in the
future on profits, income, capital gains, assets or appreciations and
any such tax or duty or tax in the nature of estate duty or
inheritance tax payable on the shares, debentures or other obligations
of the Company.
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PLAN OF DISTRIBUTION
The Company may sell the Preferred Shares in any of three ways:
(i) to underwriters (including Bear Stearns) or dealers, who may act
directly or through a syndicate represented by one or more managing
underwriters (including Bear Stearns); (ii) through broker-dealers
(including Bear Stearns) designated by the Company to act on its
behalf as agents; or (iii) directly to one or more purchasers. Each
Prospectus Supplement will set forth the manner and terms of the
offering of the Preferred Shares covered thereby, including (i)
whether that offering is being made to underwriters or through agents;
(ii) any underwriting discounts, dealer concessions, agency
commissions and any other items that may be deemed to constitute
underwriters', dealers' or agents' compensation, and (iii) the
purchase price or initial public offering price of the Preferred
Shares and the anticipated proceeds to the Company from the sale of
the Preferred Shares.
When Preferred Shares are to be sold to underwriters, unless
otherwise set forth in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase those Preferred Shares
will be subject to certain conditions precedent but the underwriters
will be obligated to purchase all of the Preferred Shares if any are
purchased. The Preferred Shares will be acquired by the underwriters
for their own account and may be resold by the underwriters, either
directly to the public or to securities dealers, from time to time in
one or more transactions, including negotiated transactions, either at
a fixed public offering price or at varying prices determined at the
time of sale. The initial public offering price, if any, and any
concessions allowed or reallowed to dealers, may be changed from time
to time.
To the extent that any Preferred Shares underwritten by Bear
Stearns are not resold by Bear Stearns for an amount at least equal to
the public offering price thereof, the proceeds from the offering of
those Preferred Shares will be reduced. Bear Stearns intends to resell
any of those Preferred Shares from time to time following termination of
the offering at varying prices related to prevailing market prices at the
time of sale, subject to applicable prospectus delivery requirements.
Unless otherwise indicated in the applicable Prospectus
Supplement, when Preferred Shares are sold through an agent, the
designated agent will agree, for the period of its appointment as
agent, to use its best efforts to sell the Preferred Shares for the
Company's account and will receive commissions from the Company as set
forth in the applicable Prospectus Supplement.
Underwriters and agents participating in any distribution of
Preferred Shares may be deemed "underwriters" within the meaning of
the Securities Act and any discounts or commissions they receive in
connection therewith may be deemed to be underwriting compensation for
the purposes of the Securities Act. Those underwriters and agents may
be entitled, under their agreements with the Company and the
Guarantor, to indemnification by the Company and the Guarantor against
certain civil liabilities, including liabilities under the Securities
Act, or to contribution by the Company and the Guarantor to payments
that they may be required to make in respect of those civil
liabilities. Various of those underwriters or agents may be customers
of, engage in transactions with or perform services for the Guarantor
or its affiliates in the ordinary course of business.
Following the initial distribution of any series of Preferred
Shares, Bear Stearns may offer and sell previously issued Preferred
Shares of that series from time to time in the course of its business
as a broker-dealer. Bear Stearns may act as principal or agent in
those transactions. This Prospectus and the Prospectus Supplement
applicable to those Preferred Shares will be used by Bear Stearns in
connection with those transactions. Sales will be made at prices
related to prevailing prices at the time of sale.
Each distribution of Preferred Shares will conform to the
requirements set forth in the applicable sections of Schedule E to the
By-laws of the NASD.
<PAGE>
<PAGE>
ERISA CONSIDERATIONS
Section 4975 of the Internal Revenue Code of 1986, as amended
(the "Code"), prohibits the borrowing of money, the sale of property
and certain other transactions involving the assets of plans that are
qualified under the Code ("Qualified Plans") or individual retirement
accounts ("IRAs") and persons who have certain specified relationships
to them. Section 406 of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), prohibits similar transactions
involving employee benefit plans that are subject to ERISA ("ERISA
Plans"). Qualified Plans, IRAs and ERISA Plans are hereinafter
collectively referred to as "Plans."
Persons who have such specified relationships are referred to as
"parties in interest" under ERISA and as "disqualified persons" under
the Code. "Parties in interest" and "disqualified persons" encompass
a wide range of persons, including any fiduciary (e.g., investment
----
manager, trustee or custodian), any person providing services (e.g., a
----
broker), the Plan sponsor, an employee organization any of whose
members are covered by the Plan, and certain persons related to or
affiliated with any of the foregoing.
The Guarantor, Bear Stearns and/or BSSC each is considered a
"party in interest" or "disqualified person" with respect to many
Plans, including IRAs established with any of them. The purchase
and/or holding of Preferred Shares or Depositary Shares representing a
series of Guarantor Preferred Stock by a Plan with respect to which
the Guarantor, Bear Stearns and/or BSSC is a fiduciary and/or a
service provider (or otherwise is a "party in interest" or
"disqualified person") would constitute or result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code,
unless such Preferred Shares or Depositary Shares representing a
series of Guarantor Preferred Stock are acquired or held pursuant to
and in accordance with an applicable statutory or administrative
exemption. An IRA that engages in a non-exempt prohibited transaction
could forfeit its tax-exempt status under Section 408 of the Code.
Applicable exemptions may include the exemption for services
under Section 408(b)(2) of ERISA and certain prohibited transaction
class exemptions (e.g., Prohibited Transaction Class Exemption 84-14
----
relating to qualified professional asset managers and Prohibited
Transaction Class Exemptions 75-1 and 86-128 relating to securities
transactions involving employee benefit plans and broker-dealers).
In accordance with ERISA's general fiduciary requirement, a
fiduciary with respect to any ERISA Plan who is considering the
purchase of Preferred Shares on behalf of such plan should determine
whether such purchase is permitted under the governing plan document
and is prudent and appropriate for the ERISA Plan in view of its
overall investment policy and the composition and diversification of
its portfolio. No IRA established with the Guarantor, Bear Stearns,
and/or BSSC should acquire any Preferred Shares or Depositary Shares
representing a series of Guarantor Preferred Stock and other Plans
established with the Guarantor, Bear Stearns and/or BSSC should
consult with counsel prior to making any such acquisition.
EXPERTS
The consolidated financial statements and the related financial
statement schedules incorporated by reference from the Company's 1993
Form 10-K have been audited by Deloitte & Touche, independent
auditors, as stated in their reports, which are incorporated herein by
reference, and have been so incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting and
auditing.
VALIDITY OF SECURITIES
The validity of the Preferred Shares will be passed upon by
Maples and Calder, Cayman Islands counsel to the Company. The
validity of the Guarantee relating to the Preferred Shares and
validity of the Guarantor Preferred Stock (and Depositary Shares
evidencing the same) will be passed upon on behalf of the Company and
the Guarantor by Weil, Gotshal & Manges (a partnership including
professional corporations), New York, New York, and on behalf of any
underwriters or agents by Andrews & Kurth L.L.P., New York, New York.
As to all matters of Cayman Islands law, Weil, Gotshal & Manges and
Andrews & Kurth L.L.P. will rely upon the opinion of Maples and
Calder.
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in
connection with the issuance and distribution of the securities being
registered.
SEC registration fee . . . . . . . . . . . . . . $172,414
Accounting fees . . . . . . . . . . . . . . . . . 15,000
Legal fees and expenses . . . . . . . . . . . . . 100,000
Blue Sky fees and expenses (including legal fees) 25,000
Printing and engraving fees . . . . . . . . . . . 25,000
NASD filing fee . . . . . . . . . . . . . . . . . 30,500
Miscellaneous . . . . . . . . . . . . . . . . . . 32,086
--------
Total . . . . . . . . . . . . . . . . . . . $400,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to section 145 of the Delaware General
Corporation Law which provides for indemnification of directors and
officers in certain circumstances.
Article VIII of the Restated Certificate of Incorporation of The
Bear Stearns Companies Inc. provides for indemnification of directors
and officers of The Bear Stearns Companies, Inc. against certain
liabilities incurred as a result of their duties as such and also
provides for the elimination of the monetary liability of directors
for certain actions as such, which Restated Certificate of
Incorporation is filed as Exhibit 4(a) to the Registration Statement
Form S-8 (No. 33-49979) filed August 13, 1993.
The Bear Stearns Companies Inc. has in effect reimbursement
insurance for directors' and officers' liability claims and directors'
and officers' liability insurance indemnifying, respectively, the
directors and officers of The Bear Stearns Companies Inc. within
specific limits for certain liabilities incurred by them, subject to
the conditions and exclusions and deductible provisions of the
policies.
For the undertaking with respect to indemnification, see Item 17
herein.
ITEM 16. EXHIBITS.
1 - Form of Underwriting Agreement.
3.1 - Memorandum of Association of Bear Stearns Finance LLC.
3.2 - Articles of Association of Bear Stearns Finance LLC.
4.1 - Form of Payment and Guarantee Agreement of The Bear
Stearns Companies Inc.
4.2 - Form of Loan Agreement between Bear Stearns Finance LLC
and The Bear Stearns Companies Inc.
4.3 - Restated Certificate of Incorporation, as amended, of
The Bear Stearns Companies Inc. (incorporated by
reference to Exhibit 4(a) to its Registration Statement
on Form S-8 (No. 33-49979)).
4.4 - Amended and Restated By-Laws of The Bear Stearns
Companies Inc. (incorporated by reference to Exhibit
3(b) to its Annual Report on Form 10-K for the fiscal
year ended June 30, 1991).
II-1<PAGE>
<PAGE>
4.5 - Form of Deposit Agreement (incorporated by reference to
Exhibit 4(d) to the Registration Statement on Form S-3
(No. 33-59140) of The Bear Stearns Companies Inc).
5.1 - Opinion of Maples and Calder as to legality of the
Preferred Shares.
5.2 - Opinion of Weil, Gotshal & Manges as to legality of the
Guarantee and the Guarantor Preferred Stock.
8.1 - Opinion of Maples and Calder as to tax matters
(included in Exhibit 5.1).
8.2 - Opinion of Weil, Gotshal & Manges as to tax matters.
12 - Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.*
23.1 - Consent of Deloitte & Touche.*
23.2 - Consent of Maples and Calder (included in Exhibit 5.1).
23.3 - Consents of Weil, Gotshal & Manges (included in
Exhibits 5.2 and 8.2).
24.1 - Powers of attorney (included in the signature pages to
the Registration Statement).*
--------------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
Each of the registrants hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the Securities registered hereby, a post-effective
amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this
Registration Statement;
(iii) to include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs
(1)(i) and (1)(ii) above do not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by The Bear Stearns Companies Inc.
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the Securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the Securities being registered which remain unsold
at the termination of the offering.
(4) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of The Bear Stearns Companies
Inc.'s annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to
II-2<PAGE>
<PAGE>
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and
the offering of such Securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) 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 provisions referred to in
Item 15 of this registration statement, 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 such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered hereby, each registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in such Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
<PAGE>
SIGNATURES OF BEAR STEARNS FINANCE LLC
Pursuant to the requirements of the Securities Act of 1933, Bear
Stearns Finance LLC hereby certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3
and has duly caused this amendment to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, State of New York, on the 7th day of February,
1994.
BEAR STEARNS FINANCE LLC
Attest: By: THE BEAR STEARNS COMPANIES INC., as
Common Shareholder
By: /s/ Kenneth Edlow By: /s/ William J. Montgoris
-------------------------- -----------------------------
Kenneth Edlow William J. Montgoris
Secretary of Common Shareholder Chief Operating Officer and
Chief Financial Officer of Common
Shareholder
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ William J. Montgoris Chief Operating Officer February 7, 1994
------------------------
William J. Montgoris and Chief Financial
Officer of Common
Shareholder (Principal
Executive Officer of
Bear Stearns Finance LLC)
* Treasurer of Common February 7, 1994
----------------------
Michael Minikes Shareholder(Principal
Financial Officer of
Bear Stearns Finance LLC)
* Senior Vice President- February 7, 1994
----------------------
Samuel L. Molinaro, Jr. Finance of Common
Shareholder (Principal
Accounting Officer of
Bear Stearns Finance LLC)
II-4<PAGE>
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
Authorized Representative
in the United States:
/s/William J. Montgoris Chief Operating Officer February 7, 1994
-------------------------
William J. Montgoris and Chief Financial Officer
of Common Shareholder
*By:/s/ William J. Montgoris
------------------------
William J. Montgoris
Attorney-in-fact
II-5<PAGE>
<PAGE>
SIGNATURES OF THE BEAR STEARNS COMPANIES INC.
Pursuant to the requirements of the Securities Act of 1933,
The Bear Stearns Companies Inc. hereby certifies that it has
reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York,
on the 7th day of February, 1994.
THE BEAR STEARNS COMPANIES INC.
By: /s/ William J. Montgoris
-----------------------------
William J. Montgoris
Chief Operating Officer and
Chief Financial Officer
Pursuant to the requirements of the Securities Act
of 1933, this amendment to the registration statement has been signed
by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman of the Board February 7, 1994
-------------------------
Alan C. Greenberg and Director
* President and Chief February 7, 1994
-------------------------
James E. Cayne Executive Officer
(Principal Executive
Officer); Director
* Executive Vice President; February 7, 1994
-------------------------
Michael L. Tarnopol Director
* Executive Vice President; February 7, 1994
-------------------------
Vincent J. Mattone Director
Executive Vice President;
-------------------------
John C. Sites, Jr. Director
* Executive Vice President; February 7, 1994
------------------------
Alan D. Schwartz Director
II-6<PAGE>
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
* Executive Vice President; February 7, 1994
------------------------
Warren J. Spector Director
/s/William J. Montgoris Chief Operating Officer February 7, 1994
------------------------
William J. Montgoris and Chief Financial Officer
(Principal Financial
Officer)
* Treasurer; Director February 7, 1994
------------------------
Michael Minikes
* Director February , 1994
------------------------
E. Garrett Bewkes, III
* Director February 7, 1994
------------------------
Denis A. Bovin
Director
------------------------
Peter Cherasia
* Director February 7, 1994
-------------------------
Michael R. Dabney
* Director February 7, 1994
-------------------------
Kevin Finnerty
Director
-------------------------
Grace J. Fippinger
* Director February 7, 1994
-------------------------
Carl D. Glickman
Director
------------------------
Thomas R. Green
II-7<PAGE>
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
Director
--------------------------
Donald J. Harrington, C.M.
* Director February 7, 1994
--------------------------
Richard Harriton
* Director February 7, 1994
--------------------------
Nancy E. Havens-Hasty
* Director February 7, 1994
--------------------------
Jonathan Ilany
* Director February 7, 1994
--------------------------
Daniel L. Keating
Director
--------------------------
John W. Kluge
* Director February 7, 1994
--------------------------
David A. Liebowitz
* Director February 7, 1994
--------------------------
Bruce M. Lisman
Director
--------------------------
Matthew J. Mancuso
* Director February 7, 1994
--------------------------
Donald Mullen
Director
--------------------------
Frank T. Nickell
II-8<PAGE>
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
* Director February 7, 1994
--------------------------
R. Blaine Roberts
* Director February 7, 1994
--------------------------
E. John Rosenwald, Jr.
Director
--------------------------
Frederic V. Salerno
* Director February 7, 1994
--------------------------
Robert M. Steinberg
Director
--------------------------
Fred Wilpon
* Director February 7, 1994
--------------------------
Uzi Zucker
* Controller February 7, 1994
--------------------------
Michael J. Abatemarco
* Senior Vice President- February 7, 1994
--------------------------
Samuel L. Molinaro, Jr. Finance (Principal
Accounting Officer)
*By:/s/ William J. Montgoris
------------------------
William J. Montgoris
Attorney-in-fact
II-9<PAGE>
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
1 - Form of Underwriting Agreement.
3.1 - Memorandum of Association of Bear Stearns Finance LLC.
3.2 - Articles of Association of Bear Stearns Finance LLC.
4.1 - Form of Payment and Guarantee Agreement of The Bear
Stearns Companies Inc.
4.2 - Form of Loan Agreement between Bear Stearns Finance LLC
and The Bear Stearns Companies Inc.
4.3 - Restated Certificate of Incorporation, as amended, of
The Bear Stearns Companies Inc. (incorporated by
reference to Exhibit 4(a) to its Registration Statement
on Form S-8 (No. 33-49979)).
4.4 - Amended and Restated By-Laws of The Bear Stearns
Companies Inc. (incorporated by reference to Exhibit
3(b) to its Annual Report on Form 10-K for the fiscal
year ended June 30, 1991).
4.5 - Form of Deposit Agreement (incorporated by reference to
Exhibit 4(d) to the Registration Statement on Form S-3
(No. 33-59140) of The Bear Stearns Companies Inc).
5.1 - Opinion of Maples and Calder as to legality of the
Preferred Shares.
5.2 - Opinion of Weil, Gotshal & Manges as to legality of the
Guarantee and the Guarantor Preferred Stock.
8.1 - Opinion of Maples and Calder as to tax matters
(included in Exhibit 5.1).
8.2 - Opinion of Weil, Gotshal & Manges as to tax matters.
12 - Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.*
23.1 - Consent of Deloitte & Touche.*
23.2 - Consent of Maples and Calder (included in Exhibit 5.1).
23.3 - Consents of Weil, Gotshal & Manges (included in
Exhibits 5.2 and 8.2).
24.1 - Powers of attorney (included in the signature pages to
the Registration Statement).*
--------------------
* Previously filed.
<PAGE>
____________ Shares
BEAR STEARNS FINANCE LLC
__% Exchangeable Preferred Income Cumulative Shares, Series __
(Liquidation Preference $25 Per Share)
FORM OF UNDERWRITING AGREEMENT
[date]
--------------------------------
<PAGE>
<PAGE>
____________ Shares
BEAR STEARNS FINANCE LLC
__% Exchangeable Preferred Income Cumulative Shares, Series __
(Liquidation Preference $25 Per Share)
_____________________________________________
FORM OF UNDERWRITING AGREEMENT
[date]
--------------------------
To the several Underwriters named in Schedule I hereto
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Dear Sirs:
Bear Stearns Finance LLC, an exempted company with limited
duration incorporated under the laws of the Cayman Islands (the
Company ), proposes to issue and sell to the several Underwriters
named in Schedule I hereto (the Underwriters ) an aggregate of
_______ of the Company's __% Exchangeable Preferred Income Cumulative
Shares, Series __ (the Shares ). The payment of dividends on the
Shares, as well as distributions on redemption and liquidation, will
be guaranteed, to the extent set forth in the Final Prospectus (as
defined in Section 1(b) hereof), by The Bear Stearns Companies Inc., a
Delaware corporation (the Guarantor ) (the obligations of the Company
in respect of such guarantee being referred to herein as the Backup
Undertakings ). The Shares, together with the related Backup
Undertakings, are sometimes referred to collectively as the
Securities . Capitalized terms used but not separately defined
herein are defined in the Final Prospectus and used herein as so
defined.
The Securities are more fully described in the Final Prospectus
referred to below and in Schedule II attached hereto.
1. Representations and Warranties of the Company and the
Guarantor. Each of the Company and the Guarantor jointly and severally
represents and warrants to, and agrees with, the
<PAGE>
<PAGE>
several Underwriters as set forth below in this Section 1. Certain
terms used in this Section 1 are defined in paragraph (b) hereof.
(a) The Company and the Guarantor meet the requirements for
the use of Form S-3 under the Securities Act of 1933, as amended (the
1933 Act ), and have prepared and filed with the Securities and
Exchange Commission (the Commission ) pursuant to the 1933 Act and
the rules and regulations promulgated by the Commission thereunder
(the Regulations ), a registration statement (the file number of
which is set forth in Schedule II hereto) on such Form, including a
basic prospectus, for registration under the 1933 Act of the offering
and sale of the Shares and the Backup Undertakings. The Company and
the Guarantor have filed one or more amendments to such registration
statement as may have been required to be filed through the date
hereof, and may have used a Preliminary Final Prospectus, each of
which, if any, has previously been furnished to you. Such registration
statement, as so amended, has become effective. The offering of the
Shares is a Delayed Offering and, accordingly, it is not necessary
that any further information with respect to the Shares and the
offering thereof required by the 1933 Act and the Regulations to be
included in the Final Prospectus have been included in an amendment to
such registration statement prior to the Effective Date. The Company
and the Guarantor will next file with the Commission pursuant to Rules
415 and 424(b)(2), (3) or (5) a final supplement to the form of
prospectus included in such registration statement relating to the
Shares and the offering thereof. As filed, such final prospectus
supplement shall include all required information with respect to the
Shares and the offering thereof and, except to the extent the
Underwriters shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other
changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Company and the Guarantor have
advised you, prior to the Execution Time, will be included or made
therein.
(b) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term the Effective Date shall
mean each date that the Registration Statement and any post-effective
amendment or amendments thereto became or become effective. Execution
Time shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. Basic Prospectus shall mean the
prospectus referred to in paragraph (a) above contained in the
Registration Statement at the Effective Date including any Preliminary
Final Prospectus. Preliminary Final Prospectus shall mean any
preliminary prospectus supplement to the Basic Prospectus which
describes the Shares and the offering thereof and is used prior to
filing of the Final Prospectus. Final Prospectus shall mean the
prospectus supplement relating to the Shares that is first filed
pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus. Registration Statement shall mean the various
parts of the registration statement referred to in paragraph (a)
above, including all exhibits thereto and the documents incorporated
by reference in the Final Prospectus contained in such Registration
Statement at the time such part of the Registration Statement becomes
effective, each as amended at the Execution Time (or, if not effective
at the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Time (as such term is hereinafter
defined), shall also mean such registration statement as so amended.
Rule 415, Rule 424 and Regulation
2
<PAGE>
<PAGE>
S-K refer to such rules or regulation under the 1933 Act. Any refer-
ence herein to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed
to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, as of the
date of such Registration Statement, Basic Prospectus, Preliminary
Final Prospectus, or Final Prospectus, as the case may be; and any
reference to any amendment or supplement with respect to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include any documents filed under the Securities Exchange Act of 1934,
as amended (the 1934 Act ), and incorporated by reference in such
Registration Statement, Basic Prospectus, Preliminary Final
Prospectus, or Final Prospectus, as the case may be, and any reference
to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Guarantor filed pursuant
to Section 13(a) or 15(d) of the 1934 Act after the Effective Date
that is incorporated by reference in such Registration Statement. A
Delayed Offering shall mean an offering of securities pursuant to
Rule 415 which does not commence promptly after the effective date of
a registration statement, with the result that only information
required pursuant to Rule 415 need be included in such registration
statement at the effective date thereof with respect to the securities
so offered.
(c) Each of the Company and the Guarantor has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation with corporate
power and authority to own, lease and operate its respective
properties and to conduct its respective businesses as described in
the Final Prospectus and any amendment or supplement thereto; and each
of the Company and the Guarantor is duly qualified as a foreign
corporation to transact business, and is in good standing, in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the operations, business, or properties of
the Company or on the Guarantor and its subsidiaries considered as one
enterprise.
(d) The Company has the corporate power and authority to
enter into this underwriting agreement (this Agreement ) and to
issue, sell and deliver the Shares, and the Guarantor has the
corporate power and authority to enter into this Agreement and to
issue the Backup Undertakings and the Guarantor Preferred Stock. This
Agreement has been duly and validly authorized, executed and delivered
by each of the Company and the Guarantor, is a valid and binding
agreement of each of the Company and the Guarantor and is enforceable
as to each of the Company and the Guarantor in accordance with its
terms.
(e) On the Effective Date, and at all times subsequent
thereto to and including the Closing Time (as such term is defined in
Section 2), and during such longer period as the Final Prospectus may
be required to be delivered in connection with sales by the
Underwriters or a dealer, and during such longer period until any
post-effective amendment to the Registration Statement shall become
effective, the Registration Statement (including any post-effective
amendment) and the Final Prospectus (as amended or as supplemented if
the Company and the Guarantor shall have filed with
3
<PAGE>
<PAGE>
the Commission any amendment or supplement to the Registration
Statement or the Final Prospectus) will contain all statements which
are required to be stated therein in accordance with the 1933 Act and
the Regulations, will comply with the requirements of the 1933 Act and
the Regulations, and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein in the light of
the circumstances in which they were made not misleading, and no event
will have occurred which should have been set forth in an amendment or
supplement to the Registration Statement or the Final Prospectus which
has not then been set forth in such an amendment or supplement; and
each Basic Prospectus and each Preliminary Final Prospectus, as of the
date filed with the Commission, did not include any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein in light of
the circumstances in which they were made not misleading; provided,
however, that neither the Company nor the Guarantor makes any
representations and warranties as to information contained in or
omitted from the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus, or the Final Prospectus made in reliance
upon and in conformity with information furnished to the Company or
the Guarantor in writing by any Underwriter expressly for use in the
Registration Statement or such Basic Prospectus, Preliminary Final
Prospectus, or Final Prospectus, as set forth in Section 6(b).
(f) Neither the Commission nor the blue sky or securities
authority of any jurisdiction has issued an order (a Stop Order )
suspending the effectiveness of the Registration Statement, preventing
or suspending the use of the Basic Prospectus, any Preliminary Final
Prospectus, the Final Prospectus, the Registration Statement, or any
amendment or supplement hereto, refusing to permit the effectiveness
of the Registration Statement, suspending the registration or
qualification of the Securities, nor has any of such authorities
instituted or, to the knowledge of the Company or the Guarantor,
threatened to institute any proceedings with respect to a Stop Order
in any jurisdiction in which the Shares are to be sold or in which the
Securities may be issued, nor, with respect to accuracy at the Closing
Time, has there been any Stop Order instituted or, to the knowledge of
the Company or the Guarantor, threatened on or after the effective
date of the Registration Statement in any jurisdiction.
(g) The documents incorporated by reference in the Final
Prospectus and any amendment or supplement thereto (the Incorporated
Documents ), at the time they were or hereafter are filed with the
Commission, complied, or when so filed will comply, in all material
respects with the requirements of the 1933 Act or the 1934 Act, as
applicable, and the rules and regulations thereunder and did not and
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they are made, not misleading.
(h) Since the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, except
as otherwise stated therein or contemplated thereby, there has been no
material adverse change in, or any adverse development which
materially affects, the financial condition, results of operations,
business or properties of the Company or of the Guarantor and its
subsidiaries considered as one enterprise.
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(i) The Company has no subsidiaries; except for Bear,
Stearns & Co. Inc. ( Bear Stearns ) and Bear, Stearns Securities Corp.
( BSSC ), no subsidiary of the Guarantor is a significant subsidiary
as defined in Rule 405 of Regulation C of the Regulations; each of
Bear Stearns and BSSC has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Final Prospectus and any amendment or
supplement thereto and is duly qualified as a foreign corporation to
transact business, and is in good standing, in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
effect on the operations, business or properties of the Guarantor and
its subsidiaries considered as one enterprise; and all of the issued
and outstanding capital stock of Bear Stearns and BSSC has been duly
authorized and validly issued and is fully paid and nonassessable and
was not issued in violation of or subject to preemptive rights, and,
except for directors' qualifying shares, is owned directly or
indirectly by the Guarantor free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or other defect of title
whatsoever.
(j) The Shares have been duly authorized (or will have been
so authorized prior to each issuance of Shares) by the Company and
when the Shares have been issued and delivered against payment
therefor as provided in this Agreement, such Shares will have been
duly and validly issued and fully paid and non-assessable; the Backup
Undertakings and the Guarantor Preferred Stock have been duly
authorized (or will have been so authorized prior to each issuance
thereof) by the Guarantor, and when the Guarantor Preferred Stock has
been issued as provided in this Agreement, such Guarantor Preferred
Stock will have been duly and validly issued and fully paid and non-
assessable; and when the Backup Undertakings have been issued as
provided in this Agreement, such the Backup Undertakings will have
been duly executed, issued and delivered, will constitute valid and
legally binding obligations of the Guarantor and will be enforceable
as to the Guarantor in accordance with their terms. The Securities
will conform to the descriptions thereof contained in the Final
Prospectus.
(k) The execution, delivery and performance of this
Agreement, the issuance and sale of the Shares, the issuance of the
Backup Undertakings and the Guarantor Preferred Stock and the
consummation by the Company and the Guarantor of the transactions
contemplated hereby will not (A) conflict with or result in a breach
of any of the terms and provisions of, or constitute a default or an
event which with notice or lapse of time, or both, would constitute a
default) or require consent under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or of the Guarantor or any of its subsidiaries
considered as one enterprise pursuant to, the terms of any contract,
agreement, indenture, mortgage, loan agreement, note, lease or other
instrument, franchise, license or permit to which the Company or the
Guarantor or any of its subsidiaries is a party or by which the
Company or the Guarantor or any of its subsidiaries or the respective
properties or assets of the Company, the Guarantor or any of its
subsidiaries may be bound or subject, or (B) violate or conflict with
any provision of the Memorandum of Association or Articles of
Association of the Company or the certificate of incorporation or
by-laws of the Guarantor or any of its subsidiaries, or any law,
judgment, decree, order,
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statute, rule or regulation of any court in any public, governmental
or regulatory agency or body or any arbitrator having jurisdiction
over the Company or the Guarantor or any of its subsidiaries, or any
of the respective properties or assets of the Company, the Guarantor
or any of its subsidiaries. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or
with any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or the Guarantor or any of
its subsidiaries, or any of the respective properties or assets of the
Company, the Guarantor or any of its subsidiaries, is required for the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, including the
issuance, sale and delivery of the Shares and the issuance of the
Backup Undertakings are the Guarantor Preferred Stock, except for (1)
such as may be required under state and foreign securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by
the Underwriters and (2) such as have been made or obtained or will be
made or obtained before the Closing Time under the 1933 Act.
(l) There are no holders of securities of the Company, the
Guarantor or any subsidiary of the Guarantor who, pursuant to any
agreement, understanding or otherwise, have any right to have
securities of the Company or the Guarantor or any subsidiary
registered under the 1933 Act in connection with the offering
contemplated by the Final Prospectus.
(m) Deloitte & Touche, the accountants who certified the
financial statements included or incorporated by reference in the
Guarantor's most recent Annual Report on Form 10-K, which is
incorporated by reference in the Final Prospectus, were independent
public accountants at the time such statements were certified and
during the periods covered by such statements as required by the 1933
Act and the Regulations.
(n) The financial statements of the Guarantor and its
consolidated subsidiaries included or incorporated by reference in the
Registration Statement and the Final Prospectus, and any amendment or
supplement thereto, present fairly the consolidated financial position
of the Guarantor and its consolidated subsidiaries as at the dates
indicated and the consolidated results of their operations for the
periods specified; and said financial statements have been prepared in
conformity with generally accepted accounting principles in the United
States (except to the extent that certain footnote disclosures
regarding any stub period may have been omitted in accordance with the
1934 Act and the rules and regulations thereunder) applied on a
consistent basis.
(o) Except as may be set forth in the Final Prospectus,
there is no action, suit or proceeding before or by any court or
governmental agency or body or arbitrator, domestic or foreign, now
pending, or, to the knowledge of the Company or the Guarantor,
threatened against or affecting, the Company, the Guarantor, Bear
Stearns or BSSC, except those which do not and in the future will not
have a material adverse effect on the financial condition, results of
operations, business or properties of the Company, or of the Guarantor
and its subsidiaries considered as one enterprise, or which is
required to be disclosed in the Registration Statement or the Final
Prospectus; and there are no contracts or documents of the Company,
the Guarantor, Bear Stearns or BSSC which are required to
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be filed as exhibits to the Registration Statement by the 1933 Act or
the Regulations which have not been so filed.
(p) The Company, the Guarantor, Bear Stearns and BSSC
possess such certificates, authorities or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them or the failure
to obtain which, individually or in the aggregate, would have a
material adverse effect on the financial condition, results of
operations, business or properties of the Company or the Guarantor and
its subsidiaries considered as one enterprise, and neither the
Company, the Guarantor, Bear Stearns nor BSSC has received any notice
of proceedings relating to the revocation or modification of any such
certificate, authority or permit which, singly or in the aggregate, if
the subject of any unfavorable decision, ruling or finding, would
materially and adversely affect the financial condition, results of
operations, business or properties of the Company, or of the Guarantor
and its subsidiaries considered as one enterprise.
2. Purchase, Sale and Delivery of the Shares. On the basis of
the representations, warranties, covenants, and agreements of the
Company and the Guarantor herein contained, but subject to the terms
and conditions herein set forth, the Company agrees to sell to the
several Underwriters, and the Underwriters, severally and not jointly,
agree to purchase from the Company, at the purchase price set forth in
Schedule II attached hereto, the number of Shares set forth opposite
the respective names of the Underwriters in Schedule I hereto. The
Guarantor agrees to issue the Backup Undertakings concurrently with
the issue and sale of Shares as contemplated herein. Shares to be
purchased by the Underwriters are herein sometimes called the Under-
writers' Shares.
Except as otherwise provided in this Section 2, payment of the
purchase price for, and delivery of, the Underwriters' Shares to be
purchased by the Underwriters as set forth on Schedule I attached
hereto shall be made at the offices of Bear Stearns or at such other
place in the New York City metropolitan area as you shall determine
and advise the Company and the Guarantor in writing at least two
business days prior to the Closing Time, on the date and at the time
specified in Schedule II attached hereto (unless postponed in
accordance with the provisions of Section 8), or such other time and
date as shall be agreed upon by you and the Company (such time and
date being referred to as the Closing Time ). Payment shall be made
to the Company and the Guarantor by wire transfer of federal funds
payable to the account of the Company specified by it against delivery
to you for the respective accounts of the Underwriters of the
Underwriters' Shares to be purchased by them. The Shares shall be in
temporary or definitive form (and, if in temporary form, exchangeable
for the Shares in definitive form, when prepared, without charge) and
shall be in such denominations and registered in such names as you may
request in writing at least two business day's prior to Closing Time,
provided that such Shares may be represented by a global certificate
registered in the name of Cede & Co. as nominee of The Depository
Trust Company ( Cede ) or to such other accounts as you may direct.
Such Shares, in either definitive or temporary form, will be made
available for examination and packaging by you on or before the first
business day prior to Closing Time unless represented by a global
certificate.
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3. Covenants of the Company and the Guarantor. The Company and
the Guarantor jointly and severally covenant and agree with the
several Underwriters as follows:
(a) The Company and the Guarantor will use their best
efforts to cause the Registration Statement, if not effective at the
Execution Time, to become effective as promptly as possible. The
Company or the Guarantor will notify you immediately, and confirm such
notice in writing, (i) when the Registration Statement (including any
amendments thereto) becomes effective, (ii) of any request by the
Commission for any amendment of or supplement to the Registration
Statement or the Final Prospectus or for any additional information,
(iii) of the issuance by the Commission of a Stop Order suspending the
effectiveness of the Registration Statement (including any
post-effective amendment thereto) or of the initiation, or the
threatening, of any proceedings therefor, (iv) of the receipt of any
comments from the Commission and (v) of the receipt by the Company or
the Guarantor of any notification with respect to the suspension of
the qualification of the Shares for sale or the issuance of the Backup
Undertakings in any jurisdiction or the initiation, or threatening, of
any proceeding for that purpose. If the Commission shall propose or
enter a Stop Order at any time, the Company and the Guarantor will
make every reasonable effort to prevent the issuance of any such Stop
Order and, if issued, to obtain the withdrawal of such order as soon
as possible. Neither the Company nor the Guarantor will file any
amendment to the Registration Statement or any amendment of or
supplement to the Final Prospectus before or after the Effective Date
to which you shall reasonably object in writing after being given
advance notice of such intention to file and furnished in advance a
copy thereof.
(b) During the time when a prospectus relating to the
Securities is required to be delivered hereunder or under the 1933 Act
or the Regulations, the Company and the Guarantor will comply so far
as each is able with all requirements imposed upon it by the 1933 Act,
as now existing and as hereafter amended, and by the Regulations, as
from time to time in force, so far as necessary to permit the
continuance of sales of, or dealing in, the Securities in accordance
with the provisions thereof and the Final Prospectus. If at any time
when a prospectus relating to the Securities is required to be
delivered under the 1933 Act, any event shall have occurred as a
result of which, in the judgment of the Company, the Guarantor, you or
your counsel, the Final Prospectus as then amended or supplemented
includes an untrue statement of a material fact or omits to state any
material fact required to be stated herein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary at any time to
amend or supplement the Final Prospectus or Registration Statement to
comply with the 1933 Act or the Regulations, the Company and the
Guarantor will notify you promptly and prepare and file with the
Commission an appropriate amendment or supplement (in form and
substance satisfactory to you) which will correct such statement or
omission and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible and will
deliver to the several Underwriters, without charge, such number of
copies thereof as may be reasonably requested by the Underwriters;
provided that the Company and the Guarantor will promptly notify you
if such judgment has been reached by it.
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(c) The Company or the Guarantor will promptly deliver to
you a copy of the Registration Statement, including exhibits and all
amendments thereto, and the Company or the Guarantor will promptly
deliver without charge to you such number of copies of the Basic
Prospectus, any Preliminary Final Prospectus, the Final Prospectus,
the Registration Statement, and all amendments of and supplements to
such documents, if any, as may be reasonably requested by the
Underwriters.
(d) The Company and the Guarantor will endeavor in good
faith, in cooperation with you to timely qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
you may designate and to maintain such qualification in effect for so
long as required for the distribution thereof; provided that in no
event shall the Company or the Guarantor be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to
take action which would subject it to general service of process in
any jurisdiction where it is not now so subject or to conduct its
business in a manner in which it is not currently so conducting its
business.
(e) The Guarantor will make generally available (within the
meaning of Section 11(a) of the 1933 Act and Rule 158 of the
Regulations) to its security holders and to you as soon as practicable
an earnings statement which need not be audited but which shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158
of the Regulations.
(f) The Company and the Guarantor, during the period when
the Final Prospectus is required to be delivered under the 1933 Act,
will file promptly all documents required to be filed with the
Commission pursuant to Section 13 or 14 of the 1934 Act.
(g) During the period of one year after the date hereof,
the Guarantor will furnish to you (i) as soon as publicly available, a
copy of each Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Current Report on Form 8-K, annual report to stockholders and
definitive proxy statement of the Guarantor filed with the Commission
under the 1934 Act or mailed to stockholders and (ii) from time to
time, such other information concerning the Guarantor as you may
reasonably request.
(h) The Company will apply the proceeds from the sale of
the Shares as set forth under the caption Use of Proceeds in the
Final Prospectus.
(i) Prior to the Closing Time, the Guarantor shall furnish
to you, as soon as they have been prepared, copies of any unaudited
interim consolidated financial statements of the Guarantor and its
subsidiaries, for any periods subsequent to the periods covered by the
financial statements appearing or incorporated by reference in the
Registration Statement and the Final Prospectus.
(j) Neither the Company nor the Guarantor will file any
amendment or supplement to the Registration Statement or the Final
Prospectus at any time, whether before or after the effective date of
the Registration Statement, unless such filing shall comply with the
1933 Act and
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the Regulations and unless you shall previously have been advised of
such filing and furnished with a copy thereof, and you and your
counsel shall have approved such filing.
(k) The Company and the Guarantor will comply with all
provisions of all undertakings contained in the Registration
Statement.
(l) The Company and the Guarantor consent to the use of the
Final Prospectus or any amendment or supplement thereto by you and by
all dealers to whom the Shares may be sold, both in connection with
the offering or sale of the Shares and for such period of time
thereafter as the Final Prospectus is required by law to be delivered
in connection therewith.
4. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is
terminated, the Company and the Guarantor hereby covenant and agree
with the several Underwriters that the Company or the Guarantor will
pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's and the Guarantor's counsel and accountants
in connection with the registration of the Securities under the 1933
Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus, the Final Prospectus and
amendments and supplements thereto and the mailing and delivering of
copies thereof to the Underwriters and dealers; (ii) all costs and
expenses related to the issuance and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon;
(iii) the cost of printing or producing this Agreement, any Blue Sky
and legal investment memoranda and any other documents in connection
with the offering, purchase, sale and delivery of the Shares; (iv) all
expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section
3(d) hereof, including the fees, disbursements and expenses of counsel
for the Underwriters in connection with such qualification and in
connection with the Blue Sky and legal investment memoranda; (v) any
fees charged by securities rating agencies for rating the Shares; (vi)
any filing fees incident to any required reviews by the National
Association of Securities Dealers, Inc. (the NASD ) of the terms of
the sale of the Shares if the Shares are so rated; (vii) the costs and
expenses of any qualified independent underwriter which may be
required by the rules and regulations of the NASD; (viii) all costs
and expenses incident to listing the Shares on the New York Stock
Exchange, Inc. ( NYSE ) or other national securities exchange; (ix)
the cost of preparing certificates for the Shares and the cost and
charges of The Depository Trust Company, Inc. and its nominee for
acting as depository for the Shares and otherwise effecting any book
entry ownership system for the Shares; (x) the cost and charges of any
transfer agent, calculation agent, registrar, or disbursing agent; and
(xi) all other costs and expenses incident to the performance of the
Company's or the Guarantor's obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section and in Sections 6
and 7 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of its counsel, transfer taxes on the
resale of any of the Shares by them and any advertising expenses
connected with any offers they may make.
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If this Agreement is entered into and the purchase of Shares by
the Underwriters pursuant to this Agreement is not consummated because
any condition to the obligations of the Underwriters set forth in
Section 5 hereof is not satisfied, because of any termination pursuant
to Section 10(b) hereof or because of any refusal, inability or
failure on the part of the Company or the Guarantor to perform any
agreement herein or comply with any provision hereof other than by
reason of a default by the Underwriters, the Company or the Guarantor
will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Shares.
5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Shares, as
provided herein, shall be subject to the continuing accuracy of the
representations and warranties of the Company and the Guarantor herein
contained, as of the date hereof and at the Closing Time, to the
absence from any certificates, opinions, written statements or letters
furnished to you pursuant to this Section 5 or to Andrews & Kurth
L.L.P. ( Underwriters' Counsel ) pursuant to this Section 5 of any
misstatement or omission, to the performance by the Company and the
Guarantor of their respective obligations hereunder in all material
respects and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, the Registration Statement shall have
become effective not later than 6:00 p.m., New York City time, on the
date of this Agreement or such later date and time as shall be
consented to in writing by you, and, if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule
424(b).
(b) At the Closing Time (i) no Stop Order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued under the 1933 Act, and no proceeding under the 1933
Act or the 1934 Act therefor shall have been initiated or threatened
by the Commission, or, with respect to the filing of any Form 8-A
under the 1934 Act, by any national securities exchange; and all
requests for additional information on the part of the Commission
shall have been complied with or such requests shall have been
otherwise satisfied; (ii) the rating assigned by any nationally
recognized securities rating agency to any debt securities, preferred
stock or other obligations of the Guarantor as of the date of this
Agreement shall not have been lowered since the execution of this
Agreement and no such agency shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the debt securities or preferred stock of the
Guarantor; and (iii) since the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus, except as otherwise stated therein or contemplated
thereby, there shall not have been any material adverse change in, or
any adverse development which materially affects, the financial
condition, results of operations, business or properties of the
Company or the Guarantor and its subsidiaries considered as one
enterprise, the effect of which is in your reasonable judgment so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares on the
terms and in the manner contemplated in the Final Prospectus.
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(c) At the Closing Time, you shall have received the
opinion of Weil, Gotshal & Manges, counsel for the Company and the
Guarantor, dated the date of delivery, substantially in the form set
forth in Schedule III hereto, addressed to the Underwriters and in
form and scope reasonably satisfactory to Underwriters' Counsel.
(d) At the Closing Time, you shall have received the
opinion of Weil, Gotshal & Manges, special tax counsel for the Company
and the Guarantor, dated the date of delivery, substantially in the
form set forth in Schedule IV hereto, addressed to the Underwriters
and in form and scope reasonably satisfactory to Underwriters'
Counsel.
(e) At the Closing Time, you shall have received the
opinion of Maples and Calder, Cayman Islands counsel for the Company
and the Guarantor, dated the date of delivery, substantially in the
form set forth in Schedule V hereto, addressed to the Underwriters and
in form and scope reasonably satisfactory to Underwriters' Counsel.
(f) At the Closing Time, you shall have received the
opinion of Mark E. Lehman, Esq., Senior Managing Director of the
Guarantor's Legal & Compliance Department, dated the date of delivery,
substantially in the form set forth in Schedule VI hereto, addressed
to the Underwriters and in form and scope reasonably satisfactory to
Underwriters' Counsel.
(g) At the Closing Time, you shall have received a
certificate of the Chief Financial Officer or the Controller of the
Company and of the Guarantor, dated the date of delivery, to the
effect that the conditions set forth in subsections (a) and (b) of
this Section 5 have been satisfied, that as of the date hereof and at
the date of delivery, the representations and warranties of the
Company and the Guarantor set forth in Section 1 hereof are accurate,
and that at the date of delivery, the obligations of the Company and
the Guarantor to be performed hereunder on or prior thereto have been
duly performed in all material respects.
(h) At the Closing Time, you shall have received a letter
from Deloitte & Touche, independent public accountants for the
Guarantor and its subsidiaries, dated the date of delivery,
substantially in the form set forth in Schedule VII hereto, addressed
to the Underwriters and in form and scope reasonably satisfactory to
you.
(i) The Underwriters shall have received from Underwriters'
Counsel an opinion, dated the Closing Time, with respect to the
Guarantor Preferred Stock and the Depositary Shares evidencing the
same the Registration Statement, the Final Prospectus, and any
amendments or supplements to the Registration Statement or Final
Prospectus and such other related matters, as you may reasonably
require, and the Company and the Guarantor shall have furnished to
Underwriters' Counsel such documents as they request for the purpose
of enabling them to pass upon such matters.
(j) All proceedings taken in connection with the sale or
issuance of the Securities as contemplated herein shall be
satisfactory in form and scope to you and to Underwriters' Counsel,
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and prior to the Closing Time, the Company and the Guarantor shall
have furnished to you such further information, certificates and
documents as you may reasonably request.
(k) The NASD, upon review of the terms of the public
offering of the Shares, shall have no objections to the fairness of
the underwriting terms and arrangements of the offering.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement, or if any
of the certificates, opinions, written statements or letters furnished
to you or to Underwriters' Counsel pursuant to this Section 5 shall
not be in all material respects reasonably satisfactory in form and
scope to you and to Underwriters' Counsel, all your obligations
hereunder may be cancelled by you at, or at any time prior to, the
Closing Time. Notice of such cancellation shall be given to the
Company and the Guarantor in writing, or by telephone, telex or
telecopy, confirmed in writing.
6. Indemnification.
(a) The Company and the Guarantor agree, jointly and
severally, to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against
any and all losses, liabilities, claims, damages and out-of-pocket
expenses whatsoever, joint or several (including but not limited to
attorneys' fees and any and all expenses whatsoever reasonably
incurred in investing, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), as and when
incurred, to which you or any such person may become subject under the
1933 Act, the 1934 Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or any related Basic Prospectus, Preliminary
Final Prospectus, or Final Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the
case of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, in light of the circumstances under which they were
made) not misleading or (ii) any breach of any representation,
warranty, covenant or agreement of the Company or the Guarantor
contained in this Agreement; provided, however, that neither the
Company nor the Guarantor will be liable to any Underwriter or any
person so controlling such Underwriter in any such case to the extent,
but only to the extent, that any such loss, liability, claim, damage
or expense arises out of or is based upon (x) any such untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written
information furnished to the Company or the Guarantor by or on behalf
of any Underwriter through you expressly for use therein, such written
information being as set forth in the penultimate sentence of
subsection (b) below or (y) any failure of such Underwriter to deliver
the Final Prospectus to a purchaser of Shares as required by
applicable law. This indemnity agreement will be in addition to any
liability which the Company and the Guarantor may otherwise have,
including under this Agreement.
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(b) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company and the Guarantor, each of
their respective directors, each of their respective officers who
shall have signed the Registration Statement, and each other person,
if any, who controls the Company or the Guarantor within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against
any losses, liabilities, claims, damages and expenses whatsoever,
joint and several (including but not limited to attorneys' fees and
any and all out-of-pocket expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement of any claim or litigation), as and when
incurred, to which they or any of them may become subject under the
1933 Act, the 1934 Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, or any related Basic Prospectus, Preliminary
Final Prospectus or Final Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the
case of a Basic Prospectus, Preliminary Final Prospectus or Final
Prospectus, in light of the circumstances under which they were made)
not misleading, in each case to the extent, but only to the extent,
that any such loss, liability, claim, damage or expense arises out of
or is based upon any such untrue statement or alleged untrue statement
or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company or the
Guarantor by or on behalf of such Underwriter through you expressly
for use therein. For all purposes of this Agreement, the amounts of
the selling concession and reallowance set forth in the Final
Prospectus constitute the only information furnished in writing by or
on behalf of any Underwriter expressly for inclusion in any Basic
Prospectus or Preliminary Final Prospectus, the Final Prospectus, or
the Registration Statement (as from time to time amended or
supplemented), or any amendment or supplement thereto. This indemnity
will be in addition to any liability which any Underwriter may
otherwise have, including under this Agreement; provided, however,
that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discounts and commissions
received by such Underwriter.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection,
notify each party against whom indemnification is to be sought in
writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent that it has been
prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is
brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume
the defense thereof with counsel satisfactory to such indemnified
party. Notwithstanding the foregoing, the indemnified party or parties
shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the
expense
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of such indemnified party or parties unless (i) the employment of such
counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action,
(ii) the indemnifying parties shall not have employed counsel to have
charge of the defense of such action within a reasonable time after
notice of commencement of the action, or (iii) such indemnified party
or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which
case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties,
it being understood, however, that the indemnifying party shall not,
in connection with any one such claim, action or proceeding or
separate but substantially similar or related claims, actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of
more than one separate firm (together with appropriate local counsel)
at any time for the indemnified party or parties, which firm shall be
designated in writing by the indemnified party or parties, unless such
indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from
or additional to those available to one or all of the other
indemnified parties (in which case the indemnifying party shall be
liable for the fees and expenses of only one additional separate firm
(together with appropriate local counsel) for such indemnified party
or parties at any time), in any of which event such fees and expenses
shall be borne by the indemnifying parties. Anything in this Section
6 to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim or action effected without its
written consent; provided, however, that such consent was not
unreasonably withheld.
7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6
hereof is for any reason held to be unavailable from the Company and
the Guarantor or is insufficient to hold harmless a party indemnified
thereunder, the Company, the Guarantor and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and
out-of-pocket expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and
other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted,
but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company or the Guarantor, any
contribution received by the Company or the Guarantor from persons,
other than the Underwriters, who may also be liable for contribution,
including persons who control the Company or the Guarantor within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act, officers of the Company or the Guarantor who signed the Regis-
tration Statement and directors of the Company or the Guarantor) to
which the Company, the Guarantor and one or more of the Underwriters
may be subject, in such proportions as is appropriate to reflect the
relative benefits received by the Company and the Guarantor on the one
hand and the Underwriters on the other from the offering of the Shares
or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 6 hereof, in such
proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the
Guarantor on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative
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benefits received by the Company and the Guarantor on the one hand and
the Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company bear to the underwriting discounts and
commissions received be the Underwriters, respectively, in each case
as set forth in the table on the cover page of the Final Prospectus.
The relative fault of the Company and the Guarantor on the one hand
and of the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Guarantor or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Guarantor and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 7, (i) in no case shall
any Underwriter be liable or responsible for any amount in excess of
the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act
shall have the same rights to contribution as such Underwriter, and
each person, if any, who controls the Company or the Guarantor within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act, each officer of the Company and of the Guarantor who shall have
signed the Registration Statement and each director of the Company and
the Guarantor shall have the same rights to contribution as the
Company and the Guarantor, subject in each case to clauses (i) and
(ii) of the preceding sentence of this Section 7. Any party entitled
to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party
or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have
under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its
consent; provided, however, that such consent was not unreasonably
withheld.
8. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default at the
Closing Time, in its or their obligation to purchase Shares hereunder
and if the number of Shares with respect to which such default relates
does not (after giving effect to arrangements, if any, made by you
pursuant to subsection (b) below) exceed in the aggregate 10% of the
number of Shares which all Underwriters have agreed to purchase
hereunder then such number of Shares to which the default relates
shall be purchased by the non-defaulting Underwriters in proportion to
their respective commitments hereunder.
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(b) If such default relates to more than 10% of the number
of Shares, you may in your discretion arrange for yourself or for
another party or parties (including any non-defaulting Underwriter or
Underwriters who so agree) to purchase such principal amount of Shares
to which such default relates on the terms contained herein. If within
five calendar days after such a default you do not arrange for the
purchase of such principal amount of Shares to which such default
relates as provided in this Section 8, this Agreement shall thereupon
terminate, without liability on the part of the Company or the
Guarantor with respect thereto (except in each case as provided in
Sections 4, 6 and 7 hereof) or the several Underwriters, but nothing
in this Agreement shall relieve a defaulting Underwriter or
Underwriters of its or their liability, if any, to the other several
Underwriters and the Company and the Guarantor for damages occasioned
by its or their default hereunder.
(c) If the number of Shares to which the default relates is
to be purchased by the nondefaulting Underwriters, or is to be
purchased by another party or parties as aforesaid, you or the Company
or the Guarantor shall have the right to postpone the Closing Time for
a period, not exceeding five business days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Final Prospectus or in any other documents and
arrangements, and the Company and the Guarantor agree to file promptly
any amendment or supplement to the Registration Statement or the Final
Prospectus which, in the opinion of Underwriters' Counsel, may thereby
be made necessary or advisable. The term Underwriter as used in this
agreement shall include any party substituted under this Section 8
with like effect as if it had originally been a party to this
Agreement with respect to such Shares.
9. Survival of Representations and Agreements. All
representations, warranties, covenants and agreements of the
Underwriters, the Company and the Guarantor contained in this Agree-
ment, including the representations and warranties contained in
Section 1, the agreements contained in Section 4, the indemnity
agreements contained in Section 6 and the contribution agreements
contained in Section 7, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling person thereof or by or on behalf of
the Company, the Guarantor, any of their respective officers and
directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the several
Underwriters. The representations contained in Section 1 and the
agreements contained in Sections 4, 6, 7, 9 and 12 hereof shall
survive the termination of this Agreement including pursuant to
Section 10 hereof.
Anything herein to the contrary notwithstanding, the indemnity
agreement of the Company and the Guarantor in subsection (a) of
Section 6 hereof, the representations and warranties in subsections
(b), (c) and (f) of Section 1 hereof and any representation or
warranty as to the accuracy of the Registration Statement or the Final
Prospectus contained in any certificate furnished by the Company or
the Guarantor pursuant to Section 5 hereof, insofar as they may
constitute a basis for indemnification for liabilities (other than
payment by the Company or the Guarantor of expenses incurred or paid
in the successful defense of any action, suit or proceeding) arising
under the 1933 Act, shall not extend to the extent of and interest
therein of a controlling person or partner of an Underwriter who is a
director, officer or controlling person of the Company or the
Guarantor when
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the Registration Statement has become effective, except in each case
to the extent that an interest of such character shall have been
determined by a court of appropriate jurisdiction as not against
public policy as expressed in the 1933 Act. Unless in the opinion of
counsel for the Company or the Guarantor the matter has been settled
by controlling precedent, the Company or the Guarantor will, if a
claim for such indemnification as asserted, submit to a court of
appropriate jurisdiction the question whether such interest is against
public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
10. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective as of the time,
after the Registration Statement becomes effective, of the release by
you for publication of the first newspaper advertisement which is
subsequently published relating to the Shares or the time, after the
Registration Statement becomes effective, when the Shares are first
released by you for offering to you or dealers by letter or telegram,
whichever shall first occur. You or the Company or the Guarantor may
prevent this Agreement from becoming effective without liability of
any party to any other party, except as noted below in this Section
10, by giving the notice indicated in Section 10(c) before the time
this Agreement becomes effective.
(b) You shall have the right to terminate this Agreement at
any time prior to the Closing Time if, after the date hereof: (i) any
domestic or international event or act or occurrence has materially
disrupted, or in your opinion will in the immediate future materially
disrupt, the securities markets; (ii) a general suspension of, or a
general limitation on prices for, trading in securities on the NYSE or
the American Stock Exchange or in the over-the-counter market shall
have occurred; (iii) a banking moratorium shall have been declared
either by Federal or New York State authorities; (iv) there shall have
occurred any outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the
United States or on the United States is such as to make it, in the
judgment of the Underwriters, inadvisable to market the Shares on the
terms contemplated by the Final Prospectus; (v) any restriction
materially adversely affecting the distribution of the Shares which
was not in effect on the date hereof shall have become effective; or
(vi) there shall have been such change in the market for the
securities of the Company or the Guarantor or securities in general or
in political, financial or economic conditions as in your judgment
makes it inadvisable to proceed with the offering, sale and delivery
of the Shares on the terms contemplated by the Final Prospectus.
(c) Any notice of termination pursuant to this Section 10
shall be by telephone, telex, or telegraph, confirmed in writing by
letter.
11. Notice. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if
sent to you, shall be mailed, delivered, or telexed or telecopied and
confirmed in writing, to such Underwriter c/o Bear, Stearns & Co.
Inc., 245 Park Avenue, New York, N.Y. 10167, Attention: Corporate
Finance Department; if sent to the Company or the Guarantor, shall be
mailed, delivered, or telexed or telecopied and confirmed in writing
to the
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Company or the Guarantor, c/o the Guarantor, 245 Park Avenue, New
York, NY 10167, Attention: Chief Financial Officer.
12. Parties. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the several Underwriters, the Company,
the Guarantor and the controlling persons, directors, officers,
employees and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provision
herein contained. The term successors and assigns shall not include
a purchaser, in its capacity as such, of Shares from any of the
Underwriters. Notwithstanding anything contained in this Agreement to
the contrary, all of the obligations of the Underwriters hereunder are
several and not joint.
13. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
14. Construction. This Agreement shall be construed in
accordance with the laws of the State of New York without regard to
principles of conflicts of law.
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THE COMPANIES LAW
-----------------
(REVISED)
---------
MEMORANDUM OF ASSOCIATION
OF
BEAR STEARNS FINANCE LLC
1. The name of the Company is BEAR STEARNS FINANCE LLC.
2. The Registered Office of the Company shall be at the
offices of Maples and Calder, Attorneys-at-Law, P.O. Box 309, George
Town, Grand Cayman, Cayman Islands, British West Indies or at such
other place as the Common Shareholders may from time to time decide.
3. The objects for which the Company is established are
unrestricted.
4. Except as prohibited or limited by the Companies Law
(Revised), the Company shall have full power and authority to carry
out any object and shall have and be capable of from time to time and
at all times exercising any and all of the powers at any time or from
time to time exercisable by a natural person or body corporate in
doing in any part of the world whether as principal, agent, contractor
or otherwise whatever may be considered by it necessary for the
attainment of its objects and
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whatever else may be considered by it as incidental or conducive
thereto or consequential thereon, including, but without in any way
restricting the generality of the foregoing, the power to make any
alterations or amendments to this Memorandum of Association and the
Articles of Association of the Company considered necessary or
convenient in the manner set out in the Articles of Association of the
Company, and the power to do any of the following acts or things, viz:
to pay all expenses of and incidental to the promotion, formation and
incorporation of the Company; to register the Company to do business
in any other jurisdiction; to sell, lease or dispose of any property
of the Company; to draw, make, accept, endorse, discount, execute and
issue promissory notes, debentures, bills of exchange, bills of
lading, warrants and other negotiable or transferable instruments; to
lend money or other assets and to act as guarantors; to borrow or
raise money on the security of the undertaking or on all or any of the
assets of the Company including uncalled capital or without security;
to invest monies of the Company in such manner as the Common
Shareholders determine; to promote other companies; to sell the
undertaking of the Company for cash or any other consideration; to
distribute assets in specie to Members of the Company; to make
charitable or benevolent donations; to pay pensions or gratuities or
provide other benefits in cash or kind to officers, employees, past or
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present and their families; to purchase officers liability insurance
to carry on any trade or business and generally to do all acts and
things which, in the opinion of the Common Shareholders, may be
conveniently or profitably or usefully acquired and dealt with,
carried on, executed or done by the Company in connection with the
business aforesaid PROVIDED THAT the Company shall only carry on the
businesses for which a licence is required under the laws of the
Cayman Islands when so licensed under the terms of such laws.
5. The liability of each Preferred Shareholder is limited
to the amount from time to time unpaid on such Preferred Shareholder's
shares. The liability of a Common Shareholder in the event of the
winding up and dissolution of the Company shall be unlimited.
6. The share capital of the Company is US$205,000 divided
into 5,000 Common Shares of a nominal or par value of US$1.00 each and
20,000,000 Preferred Shares of a nominal or par value US$0.01 each
with power for the Company insofar as is permitted by law, to redeem
or purchase any of its shares and to increase or reduce the said
capital subject to the provisions of the Companies Law (Revised) and
the Articles of Association and to issue any part of its capital,
whether original, redeemed or increased with or without any
preference, priority or special privilege or subject to any
postponement of rights or to any
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conditions or restrictions and so that unless the conditions of issue
shall otherwise expressly declare every issue of shares whether
declared to be preference or otherwise shall be subject to the powers
hereinbefore contained.
7. If the Company is registered as exempted, its
operations will be carried on subject to the provisions of Section 192
of the Companies Law (Revised) and, subject to the provisions of the
Companies Law (Revised) and the Articles of Association, it shall have
the power to register by way of continuation as a body corporate
limited by shares under the laws of any jurisdiction outside the
Cayman Islands and to be deregistered in the Cayman Islands.
WE the several persons whose names and addresses are
subscribed are desirous of being formed into a company in pursuance of
this Memorandum of Association and we respectively agree to take the
number of shares in the capital of the Company set opposite our
respective names.
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DATED the 27th day of January, 1994
SIGNATURE and ADDRESS NUMBER OF
OF EACH SUBSCRIBER SHARES TAKEN
------------------ ------------
/s/ John F. Dyke Two Common Shares for a
-------------------------------
The Bear Stearns Companies Inc. Subscription Price of of
John F. Dyke, US$1.00 each
by its attorney-in-fact
/s/ Faith J. Andrigal Zamora
-------------------------------
Witness to the above signatures
I, Cindy Y. Jefferson Deputy Registrar of Companies in and
for the Cayman Islands HEREBY CERTIFY that this is a true and correct
copy of the Memorandum of Association of this Company duly
incorporated on the 27th day of January, 1994
/s/ Cindy Y. Jefferson
-----------------------------
DEPUTY REGISTRAR OF COMPANIES
5
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THE COMPANIES LAW (REVISED)
ARTICLES OF ASSOCIATION
OF
BEAR STEARNS FINANCE LLC
INTERPRETATION
(1) In these Regulations the following words and
expressions shall, where not inconsistent with the context, have the
following meanings respectively and Table A of the Law shall be
excluded:
"Auditor" includes any individual or
partnership;
"Common Shares" means ordinary shares of US$1.00
each in the capital of the company
the holder or holders of which will
have unlimited liability;
"Common Shareholder" means the holder of a Common Share;
"Former Member" means a person who was a member but
who has ceased to be a member by
virtue of Regulation 15;
"Member" means the person, body corporate or
partnership registered in the
Register of Members as the holder
of Common Shares or Preferred
Shares in the Company, and when two
or more persons are so registered
as joint holders of shares, means
the person whose name stands first
in the Register of Members as one
of such joint holders;
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"Notice" means written notice unless
otherwise specifically stated;
"Preferred Shares" means shares of US$0.01 each and
issued pursuant to Regulation 10;
"Preferred Shareholder" means the holder of a Preferred
Share;
"Register of Members" means the Register of Members kept
in accordance with Regulation 14;
"the Law" means the Companies Law (Revised)
and any statutory modification
thereof for the time being in
force;
"the Company" means BEAR STEARNS FINANCE LLC;
"Secretary" means the person appointed to
perform the duties of Secretary of
the Company and includes any
Assistant or Acting Secretary;
"share" shall where the context so admits
include a Common Share and a
Preferred Share.
"Special Resolution" shall bear the meaning set forth in
Section 59 of the Law.
"Transfer" means with respect to any Common
Shares, the transfer, sale,
assignment, mortgage, creation or
permission to subsist of any
pledge, lien, charge or encumbrance
over, grant of any option, interest
or other rights in, or other
disposition of any such shares, any
part thereof, any interest therein,
whether by agreement, operation of
law or otherwise.
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(2) In these Regulations, unless there be something in the
subject or context inconsistent with such construction, words
importing the plural number shall be deemed to include the singular
number.
(3) Expressions referring to writing shall, unless the
contrary intention appears, be construed including printing,
lithography, photography and other modes of representing words in a
visible form.
(4) Unless the context otherwise requires, words or
expressions contained in these Regulations shall bear the same meaning
as in the Companies Law (Revised) or any statutory modification
thereof in force for the time being.
SHARES
(5) Subject to the provisions of these Regulations the
unissued shares of the Company (whether forming part of the original
or any increased authorised capital) shall be at the disposal of the
Common Shareholders who may offer, allot, grant options over or
otherwise dispose of them to such persons at such times and for such
consideration and upon such terms and conditions as they may determine
consistent with these Regulations PROVIDED THAT no shares may be
issued ranking as to participation in the profits or assets of the
Company senior to the Preferred Shares.
(6) No share shall be issued except as fully paid up.
(7) The name and address of every person being the holder
of registered shares, their class or series and the date when they
became or ceased to become a Member shall be entered in the Register
of Members.
(8) Every person whose name is entered as a Member in the
Register of Members being the holder of registered shares, may
request, and the Company shall issue thereto, a certificate specifying
the share or shares held and the par value thereof, provided that in
respect of a registered nominative share, or shares, held jointly by
several persons the Company shall not be bound to issue more than one
certificate, and delivery of a certificate for a share to one of
several joint holders shall be sufficient delivery to all.
(9) Any Member receiving a share certificate shall
indemnify and hold the Company harmless from any loss or liability
which it may incur by reason of wrongful or fraudulent use or
representation made by any person by virtue of the
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possession of such certificate. If a certificate is worn out or lost
it may be renewed on production of the worn-out certificate, or on
satisfactory proof of its loss together with such indemnity as the
Common Shareholders may require.
SHARE CAPITAL
(10) Without prejudice to any special rights previously
conferred on the holders of any existing shares or class or series of
shares, any share in the Company may be issued with such preferred,
deferred or other special rights or such restrictions, whether in
regard to dividend, voting, return of capital or otherwise as the
Company may from time to time by Special Resolution determine.
(11) Subject to the provisions of the Companies Law
(Revised), shares may be issued on terms that they are liable to be
redeemed on such terms and in the manner as the Company by Special
Resolution before the issue of the shares may determine.
VARIATION OF RIGHTS AND CLASS MEETINGS
(12) If at any time the authorised share capital is divided
into different classes or series of shares, the rights attached to any
existing class or series (unless otherwise provided by the terms of
issue of the shares of that class or series) may only be varied or
abrogated with the consent in writing of a Member or Members holding
interests aggregating at least two thirds of the issued shares or
series of shares which may be affected by such variation or with the
sanction of a Special Resolution at a separate class meeting of the
holders of shares so affected. To every such class meeting the
provisions of these Regulations relating to General Meetings shall
apply but so that the necessary quorum shall be one or more persons
holding or representing by proxy at least two thirds of the issued
shares or series of shares so affected.
(13) The rights conferred upon the holders of the shares of
any class or series issued with preferred or other rights shall not,
unless otherwise expressly provided by the terms of issue of the
shares of that class or series, be deemed to be varied by the creation
or issue of further shares of that class or series or of any other
class or series, pre-existing or otherwise. The holders of the shares
of any class or series shall not have any preemptive right to purchase
or subscribe for any shares of the Company unless expressly provided
by the terms of the issue of the shares of that class.
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REGISTRATION OF MEMBERS
(14) The Company shall keep in one or more books a Register
of its Members and shall enter therein the following particulars, that
is to say:
(a) the name and address of each Member, the number of
shares held by him and the amount paid or agreed to be
considered to be paid on such shares;
(b) the date on which each person was entered in the
Register of Members; and
(c) the date on which any person ceased to be a Member.
CESSATION OF MEMBERSHIP OF COMMON SHAREHOLDERS
(15) A Common Shareholder ceases to be a Member of the
Company upon the happening of any one or more of the following events:
(a) the death, bankruptcy, insanity, retirement,
resignation, withdrawal, expulsion, termination,
cessation or dissolution of such Common Shareholder;
(b) if such Common Shareholder makes any assignment for the
benefit of his creditors or files a petition
voluntarily for bankruptcy under the laws of any
country or files a petition seeking for himself any
arrangement, re-organisation, amalgamation,
composition, re-adjustment, liquidation, dissolution or
similar relief under any law or regulation;
(c) if such Common Shareholder files an answer or other
pleading admitting or failing to contest the material
allegation of a petition filed against him in any
proceedings of a nature described in the immediately
preceding paragraph of this Regulation;
(d) if such Common Shareholder seeks consents to or
acquiesces in the appointment of a trustee, receiver or
liquidator of himself or all or a substantial part of
his properties;
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(e) any proceedings of a nature mentioned in the foregoing
paragraphs of this Regulation occurs without the
consent of such Common Shareholders and is not
dismissed or vacated within 120 days;
(f) if such Common Shareholder attempts to make a Transfer
of any of his shares in breach of the provisions of
these Regulations.
TRANSFER
(16) The Transfer of any Common Shares in the Company is
prohibited absolutely.
(17) Any Transfer of any Common Shares or other interest in
the Company in breach of these Regulations shall be void and of no
effect.
GENERAL MEETINGS
(18) Any Common Shareholder may convene a General Meeting
of the Company for the purpose of:-
(a) considering and if thought fit passing of a Special
Resolution to alter or amend the Memorandum or Articles
of Association of the Company or its authorised share
capital or to require the Company to be dissolved; or
(b) to consider any matter in connection with the
management of the Company's affairs;
(19) Fourteen days Notice in writing, by telex or facsimile
of a general meeting shall be given to each of the Members entitled to
vote at such meeting (which notice may be waived in writing) and
mailed to each Member entitled to vote at his address as registered in
the Register of Members by air mail (if appropriate) and such Notice
shall state the time place and as far as practicable the objects of
the Meeting.
(20) The accidental omission to give Notice of a meeting to
or the non-receipt of Notice of a meeting by any person entitled to
receive Notice shall not invalidate the proceedings at that meeting.
(21) A meeting of the Company shall, notwithstanding that
it is called by shorter Notice than that specified in these
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Regulations, be deemed to have been properly called if it is so agreed
by all the Members entitled to attend and vote thereat.
PROCEEDINGS AT GENERAL MEETINGS
(22) (a) At any General Meeting of the Company, the Members
present in person or by proxy shall elect a Chairman of
the Meeting.
(b) At any General Meeting of the Company one or more
Members entitled to vote present in person or
representing in person or by proxy in excess of 50% of
the outstanding voting shares of the share capital of
the Company entitled to vote at such meeting shall form
a quorum for the transaction of business; if within
half an hour from the time appointed for the meeting a
quorum is not present, the meeting shall stand
adjourned to the following day at the same time as the
Chairman may determine.
(c) The Chairman may, with the consent of any meeting
at which a quorum is present (and shall if so directed
by the meeting), adjourn the meeting from time to time
and from place to place, and only the business left
unfinished at the meeting from which the Members
present in person or represented by proxy have
adjourned shall be dealt with. It shall not be
necessary to give any notice of the adjourned meeting
or of the business to be transacted at the adjourned
meeting; save and except for a meeting adjourned sine
die, when Notice of the adjourned meeting shall be
given as in the case of an original meeting.
(23) (a) Subject to any rights or restrictions lawfully
attached to any class or series of shares, at any
Meeting of the Company each Member shall be entitled to
one vote for each share held by him and such vote may
be given in person or by proxy.
(b) At any meeting of the Company other than in
respect of a matter requiring a Special Resolution any
question proposed for the consideration of the Members
shall be decided on a simple majority of the votes of
Members entitled to vote and such majority shall be
ascertained in accordance with the provisions of these
Regulations.
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(c) At any meeting of the Company a declaration by the
Chairman that a question proposed for consideration
has, on a show of hands, been carried, or carried
unanimously or by a particular majority or lost and an
entry to that effect in a book containing the minutes
of the proceedings of the Company shall be conclusive
evidence of that fact without proof of the number or
proportion of the votes recorded in favour of or
against such question.
(24) When a vote is taken by ballot each Member entitled to
vote shall be furnished with a ballot paper on which he shall record
his vote in such manner as shall be determined at the meeting having
regard to the nature of the questions on which the vote is taken; and
each ballot paper shall be signed, initialled or otherwise marked so
as to identify the voter. At the conclusion of the ballot the ballot
paper shall be examined by the Chairman with assistance of a Member
appointed for the purpose, and the result of the ballot shall be
declared by the Chairman.
(25) An instrument appointing a proxy shall be in writing
under the hand of a Member or his attorney duly authorised in writing
or, if the Member is a corporation either under seal or under the hand
of an officer or attorney of the corporation duly authorised, and
shall be in the following form or such other form as the Common
Shareholders may from time to time approve:
BEAR STEARNS FINANCE LLC
P R O X Y
I/We __________________________________________________
of ________________________________________________ the holder of
_______________________________________ shares in the above named
Company hereby appoint ______________________________________ of
__________________________________________________ or failing him
______________________________________________________________ of
______________________________________________________________ or
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failing him __________________________________________________ of
_________________________________________ as my/our proxy to vote
on my/our behalf at the __________________ general meeting of the
Company to be held on the ____ day of _____________ 19__, and at
any adjournment thereof.
Dated this ____ day of
________________ 19__
Signed by the above named
_____________________________________
in the presence of
_____________________________________
Witness
_____________________________________
(26) Any corporation which is a Member of the Company may
by resolution of its directors authorise such persons as it thinks fit
to act as its representative at any meeting of the Members of the
Company and the person so authorised shall be entitled to exercise the
same powers on behalf of the corporation which he represents as that
corporation could exercise if it were an individual Member of the
Company.
WRITTEN RESOLUTIONS
(27) (a) A resolution in writing (whether on one or more
separate papers) duly signed by Members holding a
simple majority of the shares entitled to vote on the
matter shall be deemed a valid resolution of General
Meeting or class meeting as the case may be.
(b) A resolution in writing (whether on one or more
separate papers) duly signed by Members
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holding a two-thirds majority of the shares entitled to
vote on the matter shall be deemed a valid Special
Resolution of the General Meeting or class meeting as
the case may be.
MINUTES
(28) The Chairman shall cause minutes to be duly entered in
books provided for the purpose of all resolutions and proceedings of
each meeting of the Company, provided that any minute of such meeting,
if purporting to be signed by the Chairman shall be sufficient
evidence of the proceedings without any further proof of the facts
therein stated, and further provided that when all the Members
entitled to vote in person or by proxy sign the minutes of meeting,
the same shall be deemed to have been duly held notwithstanding that
the Members have not actually come together or that there may have
been technical defects in the proceedings, and a resolution in writing
in one or more parts signed by all the Members entitled to vote shall
be as valid and effectual as if it has been passed at a meeting duly
called and constituted.
MANAGEMENT
(29) The business of the Company shall be managed and
conducted by the Common Shareholders in their capacity as holders of
Common Shares by ordinary resolution (to the exclusion of the
Preference Shareholders and the holders of shares of any other class).
Without prejudice to the generality of the foregoing, they shall have
the following powers and duties:
(a) to pay commissions conferred or permitted by the
Companies Law (Revised) on the sale and allotment of shares;
(b) to call meetings of Preference Shareholders or any
class or series thereof;
(c) to issue and allot shares;
(d) to pay all expenses occurred in forming and registering
the Company;
(e) to manage and supervise the affairs of the Company;
(f) to borrow money on behalf of the Company and to
mortgage or charge all or any part of its undertaking
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property and assets both present and future including
uncalled capital and to issue debenture, debenture stock and
other securities whether outright or as collateral security
for any debt liability or obligation of the Company;
(g) to lend money, with or without security, to any person
including any one or more of the Common Shareholders;
(h) to declare and pay dividends on shares;
(i) to set aside out of profits any amount which shall in
their discretion be required as a reserve or reserves;
(j) to redeem or repurchase on behalf of the Company shares
which may be redeemed or repurchased on behalf of the
Company;
(k) to appoint officers, attorneys and agents on behalf of
the Company;
(l) to act as liquidator if the Company is dissolved
pursuant to Regulation 51;
(m) to execute all documents and hold all meetings
otherwise required of directors of a company and to act
pursuant to Sections 183 and 193 of the Companies Law
(Revised);
(n) to institute, bring, prosecute and defend proceedings
in the name of the Company;
(o) to perform such other duties and to exercise all other
powers of the Company.
(30) A Common Shareholder of the Company may hold other
office or place of profit with the Company and may be paid such extra
remuneration therefor whether by way of salary commission
participation of profits or otherwise.
(31) The Common Shareholders shall not, by virtue of their
management of the Company's affairs, be deemed to assume any fiduciary
responsibility to the Company or the other Members. The Common
Shareholders shall not be under any responsibility to the Company or
its other Members except in the case of their own actual fraud or
wilful default.
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(32) A Common Shareholder may be party to or otherwise
interested in any transaction or arrangement with the Company or in
which the Company is otherwise interested and shall not be accountable
to the Company for any benefit which he derives from any such office
or from any such transaction or arrangement and no such transaction or
arrangement shall be avoidable on the grounds of such interest or
benefit.
(33) The Common Shareholders may delegate any of their
powers and duties to other persons and any such delegation may be made
subject to any conditions the Common Shareholders may impose and
either collaterally with or to the exclusion of the powers of the
Common Shareholders and any such delegation may be revoked or altered.
(34) The Company will be treated as a partnership for U.S.
federal income tax purposes, and the Common Shareholders shall select
a Common Shareholder to serve as the "Tax Matters Partner" as that
term is defined in the U.S. Internal Revenue Code.
(35) The Common Shareholders will at all times own Common
Shares of the Company representing, in their reasonable judgment, at
least twenty one percent (21%) of the total value of the Company.
OFFICERS
(36) The Common Shareholders will be entitled to appoint
any of their officers and directors to perform any of the rights or
duties set out in these Regulations.
(37) The Common Shareholders shall appoint the Company
Secretary.
CUSTODIAN
(38) The Common Shareholders may appoint a custodian or
trustee for the safe keeping of all moneys, assets and securities of
the Company with such powers and duties in respect thereof as may be
specified in such appointment and such custodian or trustee shall be
subject to audit by the Auditors of the Company.
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DIVIDENDS
(39) The Common Shareholders may declare dividends to be
paid to the Members, in proportion to their shares, out of the surplus
or profits including unrealised profits of the Company.
(40) The Common Shareholders may from time to time before
declaring a dividend set aside out of the surplus or profits of the
Company such sums as they think proper as a reserve fund to be used to
meet contingencies or for equalising dividends or for any other
special purpose.
(41) To the extent that there are profits available for
distribution in any accounting period, preferential dividends,
(including preferential dividends which may have fallen in arrears),
shall be paid to the Preferred Shareholders in accordance with the
terms of the issue of Preferred Shares.
(42) No dividends shall be paid on the Common Shares at any
time when any preferential dividends shall have fallen into arrears.
(43) Dividends may be declared to the fullest extent
permitted by Law including out of current profits, retained earnings
or the Company's share premium account.
ACCOUNTS AND FINANCIAL STATEMENTS
(44) The Common Shareholders shall cause true accounts to
be kept of all transactions of the Company in such manner as to show
the assets and liabilities of the Company for the time being.
(45) The financial year end of the Company shall be
determined by the Common Shareholders and failing such determination
the financial year end shall be 31st December.
(46) Each Member may demand and shall receive from the
Common Shareholders true and full information regarding the state of
the business and financial condition of the Company.
(47) The Common Shareholders shall have power to appoint
and dismiss the Auditor from time to time.
(48) The duties and remuneration of the Auditor shall be
fixed by the Common Shareholders or in such manner as the Common
Shareholders may determine.
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(49) The Company will adopt a convention for U.S. federal
income tax purposes under which all of the income accrued by the
Company in any calendar month will be allocated to shareholders of
record, including Preferred Shareholders, on the last day of the
month.
WINDING UP AND DISSOLUTION
(50) The Company shall be considered to have commenced
voluntary winding up and dissolution automatically and without the
requirement of any other act:
(a) on the termination of the period commencing on the date
of incorporation of the Company and terminating on the
one hundred and fifteenth anniversary of the date of
incorporation of the Company;
(b) if the Common Shareholders of the Company pass a
Special Resolution requiring the Company to be wound up
and dissolved;
(c) upon any Common Shareholder ceasing to be a Member
pursuant to Regulation 15; or
(d) upon the occurrence of any breach of Regulation 35.
(51) On winding up and dissolution of the Company the
balance of the assets available for distribution and subject to any
special rights or restrictions attaching to any class or series of
shares shall be applied in paying to the Former Members who were
Members immediately preceding the commencement of winding up and
dissolution of the Company the amounts paid up on the shares held by
them and the surplus shall belong to such Former Members according to
the respective number of shares held by them.
LIQUIDATOR
(52) When the Company is in winding up and dissolution by
virtue of Regulation 49, the Common Shareholders shall act as
liquidator or joint liquidators in the event that there shall be more
than one.
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NOTICES
(53) Unless otherwise herein or by law expressly provided,
a Notice may be served by the Company on any Member either personally
or by telex or facsimile to his registered address or by sending it
using air mail (if appropriate) through the post prepaid in an
envelope addressed to such Member at his address as registered in the
Register of Members.
(54) Any Notice required to be given to the Members shall
with respect to any shares held jointly by two or more persons be
given to all such persons.
(55) Any Notice shall be deemed to have been served at the
time when the same would be delivered in the ordinary course of
transmission, and in proving such service it shall be sufficient to
prove that the Notice was properly addressed and prepaid, if posted,
and the time when it was posted or transmitted by telex or facsimile
as the case may be.
SEAL OF THE COMPANY
(56) The Seal of the Company shall not be affixed to any
instrument except over the signature of at least one Common
Shareholder and the Secretary or by some person appointed by the
Common Shareholders, provided that the Secretary may affix the Seal of
the Company over his signature only to any authenticated copies of
these Regulations, the Memorandum of Association, the minutes of any
meetings or any other document required to be authenticated by him and
to any instrument which the Common Shareholders have specifically
approved beforehand.
ALTERATION OF REGULATIONS
(57) No Regulation shall be rescinded, altered or amended,
and no new Regulation shall be made until the same has been proposed
and passed as a Special Resolution at a General Meeting duly convened.
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DATED the 27th day of January, 1994
SIGNATURE and ADDRESS
OF EACH SUBSCRIBER
------------------
/s/ John F. Dyke
--------------------------------
The Bear Stearns Companies Inc.
of John F. Dyke,
by its attorney-in-fact
/s/ Faith J. Andrigal Zamora
-------------------------------
Witness to the above signatures
I, Cindy Y. Jefferson Deputy Registrar of Companies in and
for the Cayman Islands HEREBY CERTIFY that this is a true and correct
copy of the Memorandum of Association of this Company duly
incorporated on the 27th day of January, 1994
/s/ Cindy Y. Jefferson
-----------------------------
DEPUTY REGISTRAR OF COMPANIES
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PAYMENT AND GUARANTEE AGREEMENT
THIS PAYMENT AND GUARANTEE AGREEMENT ( Guarantee
Agreement ), dated as of _____________________, 1994, is executed and
delivered by The Bear Stearns Companies Inc., a Delaware corporation
(the Guarantor ), for the benefit of the Holders (as defined below)
from time to time of the Preferred Shares (as defined below) of Bear
Stearns Finance LLC, an exempted company with limited duration
incorporated under the laws of the Cayman Islands (the Issuer ).
WHEREAS, the Issuer has authorized the creation of up to
20,000,000 shares of Preferred Shares which may be issued from time to
time by the Issuer (the Preferred Shares );
WHEREAS, it is intended that the proceeds of the issuance of
the Preferred Shares will be loaned to the Guarantor;
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Shares, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders.
ARTICLE I.
As used in this Guarantee Agreement, the terms set forth
shall, unless the context otherwise requires, have the following
meanings.
Guarantee Payments shall mean the following items, without
duplication, to the extent not paid by the Issuer: (i) any accumulated
arrears and accruals of unpaid dividends which have been theretofore
declared on the Preferred Shares of any series out of funds legally
available therefor, (ii) the redemption price (including all
accumulated arrears and accruals of unpaid dividends to the date of
payment) payable with respect to Preferred Shares of any series called
for redemption by the Issuer as an optional redemption or otherwise
out of funds legally available to the Issuer, (iii) the lesser of (a)
the aggregate of the liquidation preference per Preferred Share and
all accumulated arrears and accruals of unpaid dividends (whether or
not declared) to the date of payment and (b) the amount of remaining
assets of the Issuer after satisfaction of other parties having claims
which, as a matter law, are prior to those of the Holders and (iv) any
Additional Amounts (as defined below) payable by the Issuer.
Holder shall mean any holder from time to time of any
Preferred Shares of any series of the Issuer; provided, however, that
in determining whether the Holders of the requisite percentage of
Preferred Shares have given any request, notice, consent or waiver
hereunder, Holder shall not include the Guarantor or any entity
owned 20% or more by the Guarantor, either directly or indirectly.
Loan Agreement shall mean the agreement, dated the date
hereof, pursuant to which the Issuer will loan to the Guarantor the
proceeds received by the Issuer from the issuance and sale of a series
of its Preferred Shares and the Common Shares.
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Loans shall mean the loans from the Issuer to the
Guarantor pursuant to the Loan Agreement.
Paying Agent shall mean Chemical Bank, as registrar,
transfer agent and paying agent.
ARTICLE II.
SECTION 2.01. (a) The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee
Payments (except to the extent paid by the Issuer) as and when due,
regardless of any defense, right of set-off or counterclaim which the
Issuer may have or assert. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required
amount by the Guarantor to the Holders or by causing the Issuer to pay
any such amount to the Holders.
(b) All Guarantee Payments shall be made without
withholding or deduction for or on account of any present or future
taxes, duties, assessments or governmental charges of whatever nature
imposed or levied upon or as a result of such payment by or on behalf
of the Cayman Islands, or any authority therein or thereof having
power to tax, unless the withholding or deduction of such taxes,
duties, assessments or governmental charges is required by law. In
that event, the Guarantor shall pay such additional amounts as may be
necessary in order that the net amounts received by the Holders after
such withholding or deduction will equal the amount which would have
been receivable in respect of the Preferred Shares in the absence of
such withholding or deduction ( Additional Amounts ), except that no
such Additional Amounts will be payable to any Holder (or a third
party on his behalf) with respect to any of the Preferred Shares:
(i) if such Holder is liable for such taxes,
duties, assessments or governmental charges for which the withholding
or deduction was imposed in respect of the income from the Preferred
Shares by reason of such Holder's having some connection with the
Cayman Islands, other than being a Holder; or
(ii) if the Issuer or the Guarantor has notified
such Holder of the obligation to withhold taxes and requested but not
received from such Holder a declaration of non-residence or other
similar claim for exemption, and such withholding or deduction would
have not been required had such declaration or similar claim been
received.
SECTION 2.02. The Guarantor hereby waives notice of
acceptance of this Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 2.03. The obligations, covenants, agreements and
duties of the Guarantor under this Guarantee Agreement shall in no way
be affected or impaired by reason of the happening from time to time
of any of the following:
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(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition relating to
the Preferred Shares to be performed or observed by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the dividends, redemption price,
liquidation distributions or any other sums payable under the terms of
the Preferred Shares or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Shares;
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Shares, or any action on the part of the Issuer
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 Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, any
of the Preferred Shares; or
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any
of the foregoing.
SECTION 2.04. This is a guarantee of payment and not of
collection. A Holder may enforce this Guarantee Agreement directly
against the Guarantor, and the Guarantor will waive any right or
remedy to require that any action be brought against the Issuer or any
other person or entity before proceeding against the Guarantor.
Subject to Section 2.05 hereof, all waivers herein contained shall be
without prejudice to the Holders' right at the Holders' option to
proceed against the Issuer, whether by separate action or by joinder.
The Guarantor agrees that this Guarantee Agreement shall not be
discharged except by payment of the Guarantee Payments in full (to the
extent not paid by the Issuer) and by complete performance of all
obligations of the Guarantor contained in this Guarantee Agreement.
SECTION 2.05. The Guarantor shall be subrogated to all
rights (if any) of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee
Agreement and shall have the right to waive payment of any amount in
respect of which payment has been made to the Holders by the Guarantor
pursuant to Section 2.01 hereof; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of
law) exercise any rights which it may acquire by way of subrogation or
any indemnity, reimbursement or other agreement, in all cases as a
result of a payment under this Guarantee Agreement, if at the time of
any such payment, any amounts are due and unpaid under this Guarantee
Agreement. If any amount shall be paid to the
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Guarantor in violation of the preceding sentence, the Guarantor agrees
to pay over such amount to the Holders.
SECTION 2.06. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer
with respect to the Preferred Shares and that the Guarantor shall be
liable as principal and sole debtor hereunder to make Guarantee
Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections
(a) through (f), inclusive, of Section 2.03 hereof.
ARTICLE III.
If the Guarantor elects, pursuant to the terms of the Loan
Agreement, to issue and deliver to the Issuer, in exchange for the
Note (as defined in the Loan Agreement), freely transferable
Depositary Shares (as defined in the Loan Agreement) and, in
connection therewith, the number of Depositary Shares so delivered by
the Guarantor in exchange for the Note (the "Prepayment Shares") is
less than the number of Depositary Shares required to be issued by the
Issuer to redeem all outstanding shares of any series of Preferred
Shares (the "Required Shares"), then the Guarantor shall be obligated
to issue, and the Guarantor hereby agrees to so issue to the Issuer, a
number of additional Depositary Shares that, when added to the number
of Prepayment Shares, equals the number of the Required Shares.
ARTICLE IV.
SECTION 4.01. So long as any Preferred Shares of any series
remain outstanding, if at such time the Guarantor shall be in default
with respect to its obligations under this Guarantee Agreement,
neither the Guarantor nor any subsidiary of the Guarantor using funds
provided by the Guarantor shall redeem, purchase or acquire or pay a
liquidation preference with respect to, (a) any preferred or
preference stock of the Guarantor ranking pari passu with this
Guarantee Agreement, (b) any preferred or preference stock of
affiliates of the Guarantor (including the Company) entitled to the
benefits of a guarantee of the Guarantor ranking pari passu with this
Guarantee Agreement, (c) any preferred or preference stock of
affiliates of the Guarantor entitled to the benefits of a guarantee
ranking junior to this Guarantee Agreement as to participation in
assets of the Guarantor upon liquidation or (d) any other security of
the Guarantor ranking junior to this Guarantee Agreement. The
Guarantor shall take all actions necessary to ensure the compliance of
its subsidiaries with this Section 4.01.
SECTION 4.02. The Guarantor covenants, so long as any
Preferred Shares of any series remain outstanding: (i) to maintain
ownership, directly and indirectly, of 100% of the Common Shares; (ii)
to cause at least 21% of the total value (initially measured by
shareholders' equity determined in accordance with generally accepted
accounting principles) of the Issuer and at least 21% of all interests
in the capital, income, gain, loss, deduction and credit of the Issuer
to be represented by Common Shares; (iii) not to voluntarily dissolve,
wind-up or liquidate the Issuer; and (iv) to use its reasonable
efforts to cause the Issuer to remain an exempted company with limited
duration and otherwise continue to be treated as a partnership for
United States federal income tax purposes.
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SECTION 4.03. If, at any time that the Guarantor fails to
comply with its obligations under this Guarantee Agreement, any
proposal by the management of the Guarantor is made to declare
dividends on any shares of the Guarantor ranking junior to the
Guarantor's obligations under this Guarantee Agreement as to
participation in profits, the Guarantor shall, or shall cause the
Issuer to, set aside for payment in a segregated account at the office
of the paying agent with respect to the Preferred Shares of such
series (the "Paying Agent"), an amount equal to all accumulated
arrears of dividends payable on the Preferred Shares of such series
out of moneys held and legally available therefor and irrevocably
instruct the Paying Agent to pay such amounts as dividends payable on
the Preferred Shares of such series on the day following the date on
which such proposal is approved by all necessary persons. The Paying
Agent shall make such payment on such day unless it shall have
received, prior to 10:00 a.m., New York time, on such day, a
certificate from the Guarantor certifying that such proposal has not
been approved by all necessary persons. In such case, the amounts
deposited in such account shall be remitted forthwith to the Guarantor
or the Issuer, as the case may be. In all cases, any interest accrued
on the amounts deposited in such account shall be remitted by the
Paying Agent to the Guarantor or the Issuer, as the case may be.
SECTION 4.04. If, at any time that the Guarantor fails to
comply with its obligations under this Guarantee Agreement, the
Guarantor (or any subsidiary of the Guarantor using funds provided by
the Guarantor) redeems or purchases or otherwise acquires any shares
of the Guarantor ranking junior to the Guarantor's obligations under
this Guarantee Agreement as to participation in assets of the
Guarantor upon liquidation, all accumulated arrears of dividends
payable on the Preferred Shares of such series out of moneys held and
legally available therefor shall immediately become due and payable
under this Guarantee Agreement; provided, however, that no such
payment shall be required if any such shares of the Guarantor are
redeemed, purchased or otherwise acquired pursuant to any employee
stock option plan of the Guarantor.
SECTION 4.05. Neither the Guarantor, nor any subsidiary of
the Guarantor using funds provided by the Guarantor, shall pay
dividends, or make guarantee payments with respect to dividends, on
any preferred or preference stock of affiliates of the Guarantor
entitled to the benefits of a guarantee ranking junior to this
Guarantee Agreement as to participation in profits of the Guarantor if
at such time the Guarantor shall be in default with respect to its
obligations under this Guarantee Agreement.
SECTION 4.06. If the Guarantor issues, at any time, any
preferred or preference shares ranking senior to its obligations under
this Guarantee Agreement or enters into any guarantee in respect of
any preferred or preference shares of any affiliate of the Guarantor,
which guarantee would rank junior to all liabilities of the Guarantor
but senior to this Guarantee Agreement as regards rights in respect of
dividends, liquidation preference and distributions, and rights upon
redemption, then this Guarantee Agreement will be deemed to give the
holders of Preferred Shares such rights and entitlements as are
contained in or attached to such other preferred or preference stock
or guarantee such that this Guarantee Agreement ranks pari passu as to
such rights and entitlements with any such preferred or preference
stock or other guarantee.
SECTION 4.07. This Guarantee Agreement will constitute an
unsecured obligation to the Guarantor and will rank (i) junior in
right of payment to all liabilities of the Guarantor, (ii) pari passu
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with the most senior preferred or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or
preference stock of any affiliate of the Guarantor and (iii) senior to
the Guarantor's common shares.
ARTICLE V.
This Guarantee Agreement shall terminate and be of no
further force and effect as to a series of Preferred Shares upon full
payment of the redemption price (including all accumulated arrears and
accruals of unpaid dividends and including redemption in connection
with any exchange of a series of Preferred Shares of the Issuer with a
series of Preferred Shares (or depositary shares representing such
Preferred Shares) of the Guarantor) of all outstanding Preferred
Shares of that series or upon full payment of the amounts payable to
the Holders upon liquidation of the Issuer; provided, however, that
this Guarantee Agreement shall continue to be effective or shall be
reinstated, as the case may be, with respect to such series if at any
time any Holder of Preferred Shares of such series must restore
payment of any sums paid under the Preferred Shares of such series or
under this Guarantee Agreement for any reason whatsoever.
ARTICLE VI.
SECTION 6.01. All guarantees and agreements contained in
this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders. The Guarantor shall not assign
its obligations hereunder without the prior approval of the Holders of
not less than 66-2/3% in liquidation preference of all Preferred
Shares then outstanding given either in writing or by vote at a duly
constituted meeting of such Holders.
SECTION 6.02. Except with respect to any changes which do
not materially and adversely affect the rights of Holders (in which
case no vote will be required), this Guarantee Agreement may only be
amended by an instrument in writing signed by the Guarantor with the
prior approval of the Holders of not less than 66-2/3% in liquidation
preference of all Preferred Shares then outstanding given either in
writing or by vote at a duly constituted meeting of such Holders.
SECTION 6.03. Any notice, request or other communication
required or permitted to be given hereunder to the Guarantor shall be
given in writing by delivering the same against receipt therefor by
facsimile transmission (confirmed by mail) or telex, addressed to the
Guarantor, as follows (and if so given, shall be deemed given when
mailed or upon receipt of any answer-back, if sent by telex), to it:
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The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
Facsimile No: (212) 272-3087
Attention: William J. Montgoris
Chief Operating Officer and
Chief Financial Officer
Any notice, request or other communication required or
permitted to be given hereunder to the Holders shall be given by the
Guarantor in the same manner as notices sent by the Issuer to the
Holders.
SECTION 6.04. The masculine and neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 6.05. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from the
Preferred Shares.
SECTION 6.06. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
THIS PAYMENT AND GUARANTEE AGREEMENT is executed as of the
day and year first above written.
THE BEAR STEARNS COMPANIES INC.
By:
-------------------------------
Name: William J. Montgoris
Title: Chief Operating Officer
and Chief Financial Officer
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LOAN AGREEMENT
LOAN AGREEMENT, dated as of _______________, 1994, between
The Bear Stearns Companies Inc., a Delaware corporation (the
Parent ), and Bear Stearns Finance LLC, an exempted company with
limited duration incorporated under the laws of the Cayman Islands
( Finance ).
WHEREAS, the primary purpose for which Finance was formed is
to finance the business operations of the Parent, and consistent
therewith, the Parent has asked Finance to make a loan to the Parent
in the principal amount of $________; and
WHEREAS, Finance intends to make the aforementioned loan to
the Parent, on the terms and conditions hereinafter stated.
NOW THEREFORE, the Parent and Finance hereby agree as
follows:
ARTICLE I.
THE LOAN
Section 1.01. The Loan. Subject to the terms and
conditions herein, (a) Finance agrees to make a loan to the Parent on
the date hereof in the principal amount of $____________ in next-day
funds. Such loan shall be referred to herein as the Loan. The Loan
shall be evidenced by a promissory note (the "Note") of the Parent to
Finance, in substantially the form of Exhibit A hereto.
Section 1.02. Term of the Loan. The entire principal
amount of the Loan outstanding shall become due and payable, together
with any accrued and unpaid interest thereon, including Additional
Interest as defined below, if any, on the earliest of (a) the Maturity
Date (as hereinafter defined), (b) the date upon which the Parent
shall be dissolved or liquidated, (c) the date upon which Finance
shall be dissolved or liquidated, or (d) the date of acceleration of
the Loan pursuant to Section 7.01 hereof; provided that all or any
portion of the principal amount repaid or prepaid by the Parent may be
loaned or reloaned to the Parent if at the time of such new loan, and
as determined in the judgment of the Parent, in its capacity as the
direct and indirect holder (the "Common Shareholder") of all of the
ordinary shares, par value $1.00 per share (the "Common Shares") of
Finance, and the Parent's financial advisor (which may be an affiliate
of the Parent), (i) the Parent is not the subject of a pending case
under the United States Bankruptcy Code, (ii) the Parent is not in
default on any loan pertaining to preferred shares of Finance of any
series ranking pari passu with the ___% Exchangeable Preferred Income
Cumulative Shares, Series A issued by Finance (the "Series A Shares"),
(iii) the Parent has made all required monthly payments of interest on
the Loan for the immediately preceding nine months, (iv) Finance is
not in arrearage on payments of dividends on the Series A Shares, (v)
the Parent is expected to be able to make timely payment of principal
and interest on such new loan, (vi) such new loan is being made on
terms, and under circumstances, that
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are no less favorable to Finance than those that a lender would
require for a similar loan to an unrelated party, (vii) such new loan
is being made at a rate of interest sufficient to provide monthly
payments equal to or greater than the amount of monthly dividend
payments required in respect of the Series A Shares, (viii) such new
loan is being made for a fixed term that is consistent with market
circumstances and the Parent's financial condition and (ix) in any
event, the final maturity of such new loan shall not be later than the
ninetieth anniversary of the original issuance of the Series A Shares.
The Loan shall mature on , 2024 (the "Maturity Date").
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Section 1.03. Optional Prepayment. The Parent shall have
the right to prepay the loan, without premium or penalty,
(a) in whole or in part (together with any accrued
but unpaid interest, including Additional Interest, if any, on the
portion being prepaid) at any time on or after ______________ ___,
1999;
(b) in whole (together with all accrued and unpaid
interest, including Additional Interest, if any, thereon) at any time
after the date hereof if the Parent is or would be required to pay any
Additional Interest on the Loan pursuant to the terms of this
Agreement or, if such requirement shall relate only to a portion of
the Loan, the portion of the Loan affected by such requirement
(together with all accrued and unpaid interest, including Additional
Interest on the portion being prepaid); provided that the Parent shall
not have the right to prepay the loan as a result of the payment of
Additional Interest pursuant to clause (ii) of Section 2.02 hereof
unless the payment of such Additional Interest is imposed by reason of
a Change of Law (as defined in paragraph (c) below). Furthermore, in
no event shall the Parent have the right to prepay the Loan, or any
portion thereof, under this clause (b) based on (i) a technical
obligation to pay Additional Interest because of a withholding
obligation to the extent the Parent would not incur any penalties,
interest or tax under Cayman Islands law if the Parent did not
withhold, or (ii) a de minimis obligation to pay Additional Interest;
or
(c) in whole (together with all accrued and unpaid
interest, including Additional Interest, if any, thereon) at any time
if the Parent is advised by independent legal counsel that there has
occurred a change in law or regulation, or a written change in
interpretation of law or regulation, by any legislative body, court,
governmental agency or regulatory authority (a "Change of Law"), the
effect of which change is that (i) Finance is considered an
"investment company" under the Investment Company of 1940, as amended
(the "1940 Act"), or ownership of Finance's common shares ("Common
Shares") will cause the Parent to be considered an "investment
company" under the 1940 Act or (ii) more than an insubstantial risk
exists that the interest payments provided for hereunder will not be
deemed to be interest under the Internal Revenue Code.
Section 1.04. Exchange Right. On any interest payment date
after , 1994, Parent shall have the right to issue and
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deliver to Finance, in exchange for the Note, freely transferable
Depository Shares representing a fractional interest in a new issue of
the Parent's Preferred Stock, par value $1.00 per share (the Parent
Preferred Stock ), having a fair market
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value, as determined by the Parent's financial advisor (which may be
an affiliate of the Parent), equal to the unpaid principal balance of
the Note, plus all accrued and unpaid interest thereon (including
Additional Interest, if any) to the date of such exchange.
Notwithstanding the foregoing, such exchange may be made only if, on
the date that the Parent gives to the Company notice of its intention
to effect such exchange and on the date of such exchange, (i) the
Parent is not in default on any loan made by the Company to the
Parent, (ii) the Parent is not in default under any mortgage,
indenture or other instrument in respect of indebtedness for borrowed
money in excess of $10,000,000 that has been or could be declared due
and payable prior to maturity, (iii) the Parent has not generally
failed to pay its debts as such debts become due, or admitted in
writing its inability to pay its debts generally, or made a general
assignment for the benefit of creditors, or voluntarily filed a
petition for relief or reorganization under the United States
Bankruptcy Code, (iv) no proceeding has been instituted against the
Parent seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of the Parent or its
debt under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee or other similar
official, which proceeding has not theretofore been stayed or
dismissed, and (v) there have been fully satisfied such additional
conditions as may be set forth in a supplement or addendum to this
agreement. The Parent shall give Finance written notice of its
intention to effect such exchange not less than seventy-five (75) days
nor more than ninety (90) days prior to the intended date of such
exchange.
ARTICLE II.
INTEREST
Section 2.01. Interest on the Loan. The Loan shall bear
interest at an annual rate of ___% from the date it is made until
maturity. Such interest shall be payable on the last day of each
calendar month of each year, commencing __________ ____, 1994. If any
date on which interest is payable on the Loan is not a Business Day
(as defined below), then 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),
except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such
date. A Business Day shall mean any day other than a day on which
banks in The City of New York are open for business and on which
foreign exchange dealings may be conducted in The City of New York.
Section 2.02. Additional Interest. If at any time following
the date hereof, (i) Finance shall be required to pay any Additional
Amounts (as defined in the Prospectus, dated February 7, 1994,
relating to the Preferred Shares of Finance) in respect of the Series
A Shares, (ii) the Parent shall be required to withhold or deduct any
amounts, for or on account of any taxes, duties or governmental
charges of whatever nature imposed by the United States of America (or
any political subdivision thereof or therein), from the interest
payments to be made by the Parent on the Loan, or
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(iii) Finance shall be required to pay, with respect to its income
derived from the interest payments on the Loan, any amounts, for or on
account of any taxes, duties or governmental charges of whatever
nature imposed by the Cayman Islands (or any political subdivision
thereof or therein), or any other taxing authority, then, in any such
case, the Parent will pay as interest such additional amounts
( Additional Interest ) as may be necessary in order that the net
amounts received and retained by Finance after paying such Additional
Amounts, or after such withholding or deduction or the payment of such
taxes, duties, assessments or governmental charges, as the case may
be, shall result in Finance's having such funds as it would have had
in the absence of the obligation to pay such Additional Amounts, or
such withholding or deduction or the payment of such taxes, duties,
assessments or governmental charges, as the case may be. The
obligation to pay Additional Interest as a consequence of
circumstances described in clauses (ii) or (iii) above shall be
reduced proportionately to the extent that (x) the Parent or Finance
has notified holders of Series A Shares of the obligation to withhold
taxes and requested but not received from such holders declarations of
nonresidence or other similar claim for exemption and (y) such
withholding or deduction would not have been required had such
declaration or similar claim been received.
Section 2.03. Extension of Interest Payment Period.
Notwithstanding the provisions of Section 2.01 hereof, the Parent
shall have the right at any time during the term of the Loan, so long
as the Parent is not in default in the payment of interest on the
Loan, to extend the interest payment period by a further period, not
to exceed nine months, at the end of which further period the Parent
shall pay all interest then accrued and unpaid (together with interest
thereon at the rate specified for the loans to the extent permitted by
applicable law); provided that, during any such extended interest
payment period, the Parent shall not declare or pay any dividend on,
or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its common or preferred stock or make any guarantee
payments with respect to the foregoing (other than payments under any
guarantee of the Series A Shares). Prior to the termination of any
such extended interest payment period, the Parent may further extend
the interest payment period, provided that such further extension of
the interest payment period, together with all prior extensions
thereof, shall not exceed an aggregate of nine months. The Parent
shall give Finance notice of its election to extend the interest
payment period one Business Day prior to the earlier of (i) the date
Finance declares the related dividend or (ii) the date Finance is
required to give notice of the record or payment date of such related
dividend to the New York Stock Exchange or other applicable self-
regulatory organization, but in any event not less than five Business
Days prior to such record date.
ARTICLE III.
PAYMENTS
Section 3.01. Method and Date of Payment. Each payment by
the Parent of principal and interest (including Additional Interest)
on the Loan shall be made to Finance in lawful money of the United
States, in next-day funds for principal payments and in same day funds
for interest payments, at such place and to such account as may be
designated by Finance.
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Section 3.02. Set-off. Notwithstanding anything to the
contrary herein, the Parent shall have the right to set-off any
payment it is otherwise required to make hereunder with and to the
extent the Parent has theretofore made, or is concurrently on the date
of such payment making, a payment under any guarantee of the Series A
Shares.
ARTICLE IV.
SUBORDINATION
Section 4.01. Subordination. The Parent and Finance
covenant and agree that the Loan is subordinate and junior in right of
payment to all Senior Indebtedness as provided herein. The term
Senior Indebtedness shall mean the principal, premium, if any, and
interest on (i) all indebtedness of the Parent (other than ordinary
trade credit and other accounts payable arising in the ordinary course
of business), whether outstanding on the date hereof or hereafter
created, incurred or assumed, which is for money borrowed, or
evidenced by a note or similar instrument given in connection with the
acquisition of any business, properties or assets, including
securities, (ii) any indebtedness of others of the kinds described in
the preceding clause (i) for the payment of which the Parent is
responsible or liable (directly or indirectly, contingently or non-
contingently) as guarantor or otherwise and (iii) amendments,
renewals, extensions and refundings of any such indebtedness, unless
in any instrument or instruments evidencing or securing such
indebtedness or pursuant to which the same is outstanding, or in any
such amendment, renewal, extension or refunding, it is expressly
provided that such indebtedness is not superior in right of payment to
the Loan. Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of these subordination
provisions irrespective of any amendment, modification or waiver of
any term of the Senior Indebtedness or extension or renewal of the
Senior Indebtedness.
If (i) the Parent shall default in the payment of any
principal, or premium, if any, or interest on any Senior Indebtedness
when the same becomes due and payable, whether at maturity or at a
date fixed for prepayment or declaration or otherwise or (ii) an event
of default occurs with respect to any Senior Indebtedness permitting
the holders thereof to accelerate the maturity thereof and written
notice of such event of default is given to the Guarantor by the
holders of Senior Indebtedness, then unless and until such default in
payment or event of default shall have been cured or waived or shall
have ceased to exist, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) shall be made or agreed
to be made on account of the Loan or interest thereon or in respect of
any repayment, redemption, retirement, purchase or other acquisition
of the Loan. The Parent will give prompt written notice to Finance of
any default in the payment of any Senior Indebtedness.
In the event of (i) any insolvency, bankruptcy,
receivership, liquidation, reorganization, composition or other
similar proceeding relating to the Parent or its property or for the
benefit of its creditors, (ii) any proceeding for the liquidation,
dissolution or other winding up of the Parent, voluntary or
involuntary, whether or not involving insolvency or bankruptcy
proceedings, (iii) any assignment by the Parent for the benefit of
creditors, or (iv) any other marshalling of the
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assets of the Parent, all Senior Indebtedness (including, without
limitation, interest accruing after the commencement of any such
proceeding, assignment or marshalling of assets) shall first be paid
in full before any payment or distribution, whether in cash,
securities or other property, shall be made by the Guarantor on
account of the Loan. In any such event, any payment or distribution,
whether in cash, securities or other property (other than securities
of the Parent or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinate,
at least to the extent provided in these subordination provisions with
respect to the indebtedness evidenced by the Loan, to the payment of
all Senior Indebtedness at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for these subordination
provisions) be payable or deliverable in respect of the Loan
(including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the
Parent being subordinated to the payment of the Loan) shall be paid or
delivered directly to the holders of Senior Indebtedness or to their
representative, or to the trustee under the indenture or agreement (if
any) pursuant to which such Senior Indebtedness may have been issued,
in accordance with the priorities then existing among such holders
until all Senior Indebtedness shall have been paid in full. No
present or future holder of any Senior Indebtedness shall be
prejudiced in the right to enforce subordination of the indebtedness
constituting the Loan by any act or failure to act on the part of the
Parent.
Senior Indebtedness shall not be deemed to have been paid in
full unless the holders thereof shall have received cash, securities
or other property equal to the amount of such Senior Indebtedness then
outstanding. Upon the payment in full of all Senior Indebtedness,
Finance shall be subrogated to all the rights of any holders of Senior
Indebtedness to receive any further payments or distributions
applicable to the Senior Indebtedness until the Loan shall have been
paid in full, and such payments or distribution of cash, securities or
other property received by Finance, by reason of such subrogation,
which otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between the Parent and its creditors other
than the holders of Senior Indebtedness on the one hand, and Finance,
on the other, be deemed to be a payment by the Parent on account of
Senior Indebtedness, and not on account of the Loan.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties. The Parent
represents and warrants to Finance that:
(a) Good Standing. The Parent is a corporation duly
incorporated and validly existing under the laws of the State of
Delaware, with full power and authority to own its properties and
conduct its business as now being conducted.
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(b) Power and Authority. The Parent has full power
and authority to enter into this Agreement and to incur and perform
the obligations provided for herein, all of which have been duly
authorized by all proper and necessary action.
(c) No Conflict. The execution and delivery of this
Agreement and the performance by the Parent of all its obligations
hereunder 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 Parent is a party or by which the Parent is
bound or subject, nor will this Agreement result in a violation of the
provisions of the Parent's Certificate of Incorporation or By-laws.
(d) Binding Agreement. This Agreement constitutes
the valid and legally binding obligation of the Parent enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
ARTICLE VI.
COVENANTS
Section 6.01. Covenants. (a) The Parent agrees (i) that
it shall not declare or pay any dividend on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its
capital stock, or make any guarantee payments with respect to the
foregoing (other than payments pursuant to any guarantee of the Series
A Shares) if at such time (x) there shall have occurred any event
that, with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder or (y) the Parent shall be in
default with respect to its payment or other obligations under any
guarantee of the Series A Shares, (ii) to maintain ownership, directly
and indirectly, of 100% of the Common Shares of Finance, (iii) to
cause at least 21% of the total value (initially measured by
shareholders' equity determined in accordance with generally accepted
accounting principles) of Finance and at least 21% of all interest in
the capital, income, gain, loss, deduction and credit of Finance to be
represented by Common Shares, (iv) not to voluntarily dissolve, wind-
up or liquidate Finance as long as the Series A Shares are
outstanding, (v) to timely perform all of its duties as Common
Shareholder of Finance, and (vi) to use its best efforts to cause
Finance to remain an exempted company with limited duration and
otherwise continue to be treated as a partnership for United States
federal income tax purposes.
(b) The Parent agrees that its obligations under this
Agreement will also be for the benefit of the holders from time to
time of Series A Shares, and the Parent acknowledges and agrees that
such holders will be entitled to enforce this Agreement directly
against the Parent.
(c) The Parent agrees not to permit another entity to
merge with or into it unless: (i) at such time no Event of Default
hereunder has occurred and is continuing, or would occur
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as a result of such merger, and (ii) the Parent is the survivor of
such merger or the corporation formed by or resulting from such merger
shall expressly assume payment of the principal of and premium, if
any, and interest on (and any Additional Interest payable in respect
of) the Loan.
ARTICLE VII.
EVENTS OF DEFAULT
Section 7.01. Events of Default. If one or more of the
following events (each an Event of Default ) shall occur and be
continuing:
(a) default in the payment of interest on the Loan
(including any Additional Interest) when due that continues for 10
days (whether by virtue of the provisions described under Article IV
hereof or otherwise); provided, however, that a valid extension of the
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interest payment period by the Parent pursuant to Section 2.03 hereof
shall not constitute a default in the payment of interest for this
purpose; or
(b) default in the payment of principal on the Loan
when due (whether by virtue of the provisions described under Article
IV hereof or otherwise); or
(c) the dissolution, winding up or liquidation of
Finance; or
(d) the bankruptcy, insolvency or liquidation of the
Parent; or
(e) breach of any covenants contained herein
continued for 30 days after notice to the Parent from any holder of
the Series A Shares;
then, (i) in the case of clauses (a), (b) and (e), and at any time
thereafter during the continuance of such event, Finance will have the
right to declare the principal of and the interest on the Loan to be
forthwith due and payable, and (ii) in the case of clauses (c) and (d)
the principal of and interest on the Loan (including any Additional
Interest and any interest subject to an extension of the interest
payment period) and any other amounts payable on the Loan shall
automatically become due and payable, whereupon in either case the
same shall become and be forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything in this Agreement to the
contrary notwithstanding. The Parent expressly acknowledges that
under the terms of the Series A Shares, the holders of the outstanding
Series A Shares shall have the right to appoint a trustee, which
trustee shall be authorized to exercise Finance's right to accelerate
the principal amount of the Loan and to enforce the Company's other
rights under this Agreement, and the Parent agrees to cooperate with
such trustee.
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ARTICLE VIII.
MISCELLANEOUS
Section 8.01. Notices. All notices hereunder shall be
deemed given by a party hereto if in writing and delivered personally
or by telegram or facsimile transmission or by registered or certified
mail (return receipt requested) to the other party at the following
address for such party (or at such other address as shall be specified
by like notice):
If to Finance, to:
Bear Stearns Finance LLC
c/o The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
Fax No.: (212) 272-3087
Attention: Chief Operating Officer
If to the Parent, to:
The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
Fax No.: (212) 272-3087
Attention: Chief Operating Officer
Any notice given by mail or telegram or facsimile
transmission shall be effective when received.
Section 8.02. Binding Effect. The Parent shall have the
right at all times to assign any of its rights or obligations under
this Agreement to a direct or indirect wholly owned subsidiary of the
Parent; provided, however, that, in the event of any such assignment,
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the Parent shall remain jointly and severally liable for all such
obligations; and provided further that the Parent shall receive an
opinion of legal counsel that the effect of any such assignment does
not cause the Company to be deemed an investment company as defined
under the 1940 Act and does not cause interest payments provided for
hereunder to cease to be deemed interest under the Internal Revenue
Code. Finance may not assign any of its rights hereunder without the
prior written consent of the Parent. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the Parent
and Finance and their respective successors and assigns. Any
assignment by the Parent or Finance in contravention of the provisions
will be null and void. This Agreement may not otherwise be assigned
by the Parent or Finance.
9
<PAGE>
<PAGE>
Section 8.03. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
Section 8.04. Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
Section 8.05. Amendments. This Agreement may be amended by
mutual consent of the parties in the manner the parties shall agree;
provided, however, that, so long as any of the Series A Shares remain
-------- -------
outstanding, no such amendment shall be made that materially and
adversely affects the holders of the Series A Shares, no termination
of this Agreement shall occur, and no Event of Default or compliance
with any covenant under this Agreement may be waived by Finance,
without the prior approval of the holders of at least 66-2/3% of the
outstanding Series A Shares, unless and until the Loan and all accrued
and unpaid interest thereon (including Additional Interest, if any)
shall have been paid in full.
IN WITNESS WHEREOF, the parties hereto have caused THIS LOAN
AGREEMENT to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.
THE BEAR STEARNS COMPANIES INC.
By:
---------------------------
Name:
Title:
BEAR STEARNS FINANCE LLC
By: The Bear Stearns Companies Inc.,
as Common Shareholder
By:
---------------------------
Name:
Title:
10
<PAGE>
<PAGE>
EXHIBIT A
PROMISSORY NOTE
U.S. $ Dated: , 1994
-------------- ------------
FOR VALUE RECEIVED, the undersigned, THE BEAR STEARNS
COMPANIES INC., a Delaware corporation (the "Borrower"), HEREBY
PROMISES TO PAY to THE BEAR STEARNS FINANCE LLC, an exempted company
with limited duration incorporated under the laws of the Cayman
Islands (the "Lender"), or its registered assigns the principal sum of
United States Dollars ($ ), or if
------------------ --------------
less, the unpaid principal amount of the Loan (as defined in the Loan
Agreement referred to below) of the Lender to the Borrower, payable at
such times, and in such amounts, as are specified in the Loan
Agreement.
The Borrower promises to pay (i) interest on the unpaid
principal amount of the Loan from the date hereof until such principal
amount is paid in full, at such interest rates, and payable at such
times, as are specified in the Loan Agreement and (ii) Additional
Interest (as defined in the Loan Agreement referred to below), if any.
Both principal and interest are payable in lawful money of
the United States of America in immediately available funds.
This Promissory Note is the Note referred to in, and is
entitled to the benefits of, the Loan Agreement, dated as of
---------
, 1994 (said Agreement, as it may be amended or otherwise modified
--
from time to time, being the "Loan Agreement"), between the Borrower
and the Lender. The Loan Agreement, among other things, (i) provides
for the Loan of the Lender in an amount not to exceed the United
States Dollar amount first above mentioned, the indebtedness of the
Borrower resulting from such Loan being evidenced by this Note, (ii)
contains provisions for acceleration of the maturity of the unpaid
principal amount of this Note upon the happening of certain stated
events and also for prepayments on account of the principal hereof
prior to the maturity hereof upon the terms and conditions therein
specified, and (iii) contains provisions regarding the subordination
of the Loan to Senior Indebtedness (as defined in the Loan Agreement)
of the Borrower.
Demand, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower.
This Note shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
THE BEAR STEARNS COMPANIES INC.
By:
------------------------
Title:
<PAGE>
MAPLES AND CALDER
ATTORNEYS-AT-LAW
4th February 1994
Bear Stearns Finance LLC
Ugland House
P.O. Box 309
Grand Canyon
Cayman Islands
British West Indies
The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
U.S.A.
Dear Sirs,
RE: BEAR STEARNS FINANCE LLC
-----------------------------
We have acted as Cayman Islands counsel for The Bear Stearns Companies
Inc. ("Bear Stearns") and Bear Stearns Finance LLC ("the Company") in
connection with the proposed issue and sale by the Company of up to
20,000,000 Exchangeable Preferred Income Cumulative Shares of par
value US$0.01 each ("the Preferred Shares") and the guarantee of
certain payment obligations of the Company with respect to such
Preferred Shares by Bear Stearns (the "Guarantee").
We have assisted in the preparation of the Registration Statement on
Form S-3 (the "Registration Statement") filed with the Securities and
Exchange Commission on matters of Cayman Islands law with respect to
the said Preferred Shares and the Guarantee.
Based upon a review of its corporate records in our possession, we are
of the opinion that the Company has been duly incorporated and is
validly existing and in good standing under the laws of the Cayman
Islands. We are further of the opinion that, when the terms of each
series of Preferred Shares are determined by the Company in accordance
with its Articles of Association and on receipt of the purchase price
and the registration of the holders of the Preferred Shares as such in
the Register of Shareholders of the Company, such Preferred Shares
will be legally issued, fully paid and non-assessable.
PO Box 309 Ugland House South Church Street Grand Cayman Cayman Islands
British West Indies Telephone: 809-949-8066 Telecopier: 809-949-8080
Telex: CP (0293) 4212
<PAGE>
<PAGE>
MAPLES and CALDER
2
We confirm our opinion as set forth under the captions "Taxation" in
the Prospectus constituting part of the Company's and Bear Stearns'
Registration Statement on Form S-3.
In our opinion:
(i) the death, bankruptcy, insanity, retirement, resignation,
withdrawal, expulsion, termination, cessation or dissolution of any
holder of Common Shares will cause the commencement of the voluntary
winding up and dissolution of the Company automatically and without
the requirement of any other act;
(ii) the holders of the Common Shares will be personally liable
for the debts of or claims against the Company to the extent that the
assets of the Company are insufficient to satisfy such debts or
claims;
(iii) the restrictions provided in the Memorandum of Association
on the transferability of Common Shares are enforceable;
(iv) the authority to make management decisions rests with the
holders of the Common Shares in their capacity as holders of Common
Shares of the Company.
We hereby consent to the use of our name under the captions "Taxation"
and "Validity of Securities" in the Prospectus constituting part of
the Registration Statement and to the filing of this consent as an
exhibit thereto.
We further consent to the use of this opinion as an exhibit to
applications to the securities commissioners of various states of the
United States for registration or qualification of the Preferred
Shares.
Yours faithfully,
MAPLES and CALDER
<PAGE>
WEIL, GOTSHAL & MANGES
A Partnership Including Professional Corporations
767 Fifth Avenue New York, NY 10153-0119
(212) 310-8000
Fax: (212) 310-8007
Writer's Direct Line February 7, 1994
The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
Bear Stearns Finance LLC
c/o The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
Gentlemen:
We have acted as United States counsel to Bear Stearns
Finance LLC, an exempted company with limited duration incorporated
under the laws of the Cayman Islands (the "Company") and as counsel to
The Bear Stearns Companies Inc., a Delaware corporation (the
"Guarantor"), in connection with the preparation and filing by the
Company with the Securities and Exchange Commission of a Registration
Statement on Form S-3 and one amendment thereto (collectively, the
"Registration Statement") under the Securities Act of 1933, as
amended, relating to the proposed offering in one or more series of up
to 20,000,000 Exchangeable Preferred Income Cumulative Shares, $.01
par value (the "Preferred Shares"), of the Company. Terms defined in
the Registration Statement and not otherwise defined herein are used
herein with the meanings as therein so defined.
In so acting, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such
corporate records, agreements, documents and other instruments and
such certificates or comparable documents of officers and
representatives of the Guarantor and the Company, and have made such
inquiries of such officers and representatives, as we have deemed
relevant and necessary as a basis for the opinions hereinafter set
forth.
In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all
<PAGE>
<PAGE>
The Bear Stearns Companies Inc.
Bear Stearns Finance LLC
February 7, 1994
Page 2
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. We have
further assumed that all documents examined by us in the form of
drafts will, when executed by the requisite signatories thereto,
conform in substance and form in all material respects to the drafts
that we have examined. As to all questions of fact material to this
opinion that have not been independently established, we have relied
upon certificates of officers and representatives of the Company and
the Guarantor.
Based upon the foregoing, we are of the opinion that:
(i) The Guarantor has been duly incorporated and is a
validly existing corporation under the laws of the State of
Delaware.
(ii) The Guarantee has been duly authorized by all requisite
corporate action of the Guarantor and will, when made,
constitute a legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance
with its terms, subject to applicable bankruptcy,
insolvency, fraudulent, conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding
at law or in equity).
(iii) Subject to the taking of the additional proceedings
contemplated by the Prospectus, the shares of Guarantor
Preferred Stock issuable, as contemplated by the Prospectus,
in exchange for the Guarantor's promissory note to the
Company, when issued and delivered as contemplated by the
Prospectus, will be validly issued, fully paid and non-
assessable.
This opinion is limited in all respects to the laws of the
State of New York, the corporate laws of the State of Delaware and the
federal laws of the United States, and we express no opinion as to the
effect on the matters covered by this opinion of the laws of any other
jurisdiction.
<PAGE>
<PAGE>
The Bear Stearns Companies Inc.
Bear Stearns Finance LLC
February 7, 1994
Page 3
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the references to our
firm under the captions "Taxation" and "Validity of Securities" in the
Prospectus.
We further consent to the use of this opinion as an exhibit
to applications to the securities commissioners of various states of
the United States for registration or qualification of the Preferred
Shares and the Guarantor Preferred Stock.
This opinion is rendered solely for your benefit in
connection with the transactions described above. This opinion may
not be used or relied upon by any other person and may not be
disclosed, quoted, filed with a governmental agency or otherwise
referred to without our prior written consent except as noted above.
Very truly yours,
/s/ Weil, Gotshal & Manges
<PAGE>
WEIL, GOTSHAL & MANGES
A Partnership Including Professional Corporations
767 Fifth Avenue New York, NY 10153-0119
(212) 310-8000
Fax: (212) 310-8007
Writer's Direct Line
February 7, 1994
The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
Bear Stearns Finance LLC
c/o The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
Gentlemen:
We have acted as special United States tax counsel in connection
with the proposed issuance and sale by Bear Stearns Finance LLC (the
"Company") of up to 20,000,000 of the Company's Exchangeable Preferred
Income Cumulative Shares (the "Preferred Shares") and the Guarantees
of such Preferred Shares by the Bear Stearns Companies Inc. (the
"Guarantor").
We have participated in the preparation of the Registration
Statement on Form S-3 with respect to said Preferred Shares and
Guarantees to be filed with the Securities and Exchange Commission.
We hereby confirm our opinion as set forth under the caption
"TAXATION" in the Prospectus constituting part of the Company's and
the Guarantor's Registration Statement on Form S-3. This opinion
relies on the opinion of Maples and Calder (attached as Exhibit 5.1 to
the Registration Statement) and assumes (i) that the Memorandum of
Association and the Articles of Association of the Company are
enforceable in accordance with their terms and (ii) the initial and
continuing accuracy of the facts, representations and assumptions set
forth in the Prospectus.
We hereby consent to the use of our name, including under the
caption "TAXATION", in the Prospectus constituting part of the Form S-
3 Registration Statement of the Company and the Guarantor relating to
the preferred shares of the Company guaranteed to the extent set forth
in the Prospectus by the Guarantor, and to the filing of this consent
as an exhibit thereto.
Very truly yours,
/s/ Weil, Gotshal & Manges
