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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 1997
Registration No. 333-20873
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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REPUBLIC NEW YORK CORPORATION REPUBLIC NEW YORK CAPITAL II
(Exact name of registrant as specified (Exact name of registrant as
in its charter) specified in its charter)
MARYLAND DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
6712 6719
(Primary standard industrial (Primary standard industrial
classification code number) classification code number)
13-2764867 13-7106437
(I.R.S. employer (I.R.S. employer
identification no.) identification no.)
452 FIFTH AVENUE 452 FIFTH AVENUE
NEW YORK, NEW YORK 10018 NEW YORK, NEW YORK 10018
(212) 525-6100 (212) 525-6100
(Address, including zip code, and (Address, including zip code, and
telephone number, including area telephone number, including area
code, or registrant's code, of registrant's
principal executive offices) principal executive offices)
-------------
William F. Rosenblum, Jr., Esq.
Senior Vice President, Deputy General Counsel and Secretary
Republic New York Corporation
452 Fifth Avenue
New York, NY 10018
(212) 525-6100
(Name, address, including zip code, and telephone number, including
area code, of agent for service of each registrant)
----------------
- ----------------
The Registrants hereby amend this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
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 ____________________, 1997
PROSPECTUS REPUBLIC NEW YORK CAPITAL II
OFFER TO EXCHANGE ITS 7.53% CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 7.53% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
REPUBLIC NEW YORK CORPORATION
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED.
Republic New York Capital II, a trust formed under the laws of the
State of Delaware (the "Trust"), and Republic New York Corporation, a Maryland
corporation, as Depositor ("Republic" or the "Corporation"), hereby offer, upon
the terms and subject to the conditions set forth in this Prospectus (as the
same may be amended or supplemented from time to time, the "Prospectus") and in
the accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange up to $200,000,000 aggregate Liquidation Amount of its
7.53% Capital Securities (the "Exchange Capital Securities") which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement (as defined herein) of which this
Prospectus constitutes a part, for a like Liquidation Amount of its outstanding
7.53% Capital Securities (the "Old Capital Securities"), of which $200,000,000
aggregate Liquidation Amount is outstanding. Pursuant to the Exchange Offer, the
Corporation is also exchanging its guarantee of the payment of Distributions (as
defined herein) and payments on liquidation or redemption of the Old Capital
Securities (the "Old Guarantee") for a like guarantee of the Old Capital
Securities and the Exchange Capital Securities (the "Exchange Guarantee") and
all of its 7.53% Junior Subordinated Debt Securities (the "Old Junior
Subordinated Debt Securities"), of which $206,186,000 aggregate principal amount
is outstanding, for a like aggregate principal amount of its 7.53% Junior
Subordinated Debt Securities (the "Exchange Junior Subordinated Debt
Securities"), which Exchange Guarantee and Exchange Junior Subordinated Debt
Securities also have been registered under the Securities Act. The Old Capital
Securities, the Old Guarantee and the Old Junior Subordinated Debt Securities
are collectively referred to herein as the "Old Securities" and the Exchange
Capital Securities, the Exchange Guarantee and the Exchange Junior Subordinated
Debt Securities are collectively referred to herein as the "Exchange Securities"
and the exchange of the Old Securities for the Exchange Securities is
collectively referred to herein as the "Exchange".
The terms of the Exchange Securities are identical in all material
respects to the respective terms of the Old Securities, except that (i) the
Exchange Securities have been registered under the Securities Act and therefore
<PAGE> 3
will not be subject to certain restrictions on transfer applicable to the Old
Securities, (ii) the Exchange Capital Securities will not provide for any
increase in the Distribution rate thereon and (iii) the Exchange Junior
Subordinated Debt Securities will not provide for any increase in the interest
rate thereon. See "Description of the Exchange Securities" and "Description of
the Old Securities"
Each broker-dealer that receives Exchange Securities (as defined
herein) for its own account pursuant to the Exchange Offer must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Securities received in
exchange for Old Securities (as defined herein) acquired by such broker-dealer
as a result of market-making activities or other trading activities. The Trust
and the Corporation have agreed that they will make this Prospectus available to
any broker-dealer for use in connection with any such resale until the close of
business on the 180th day following the Expiration Date (as defined herein). See
"Plan of Distribution".
SEE "RISK FACTORS" COMMENCING ON PAGE 17 FOR CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY HOLDERS WHO TENDER OLD CAPITAL SECURITIES IN THE EXCHANGE OFFER.
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE EXCHANGE CAPITAL SECURITIES WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 EXCHANGE
CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF EXCHANGE CAPITAL
SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL
BE DEEMED NOT TO BE THE HOLDER OF SUCH EXCHANGE CAPITAL SECURITIES FOR ANY
PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH
EXCHANGE CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN SUCH EXCHANGE CAPITAL SECURITIES.
The date of this Prospectus is , 1997.
<PAGE> 4
The Exchange Capital Securities, the Exchange Junior Subordinated Debt
Securities and Exchange Guarantee are being offered for exchange in order to
satisfy certain obligations of the Corporation and the Trust under the
Registration Agreement dated December 4, 1996 (the "Registration Agreement")
among the Corporation, the Trust and the Initial Purchaser (as defined herein).
In the event that the Exchange Offer is consummated, any Old Capital Securities
which remain outstanding after consummation of the Exchange Offer and the
Exchange Capital Securities issued in the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Declaration (as defined herein).
The Exchange Capital Securities and the Old Capital Securities
(together, the "Capital Securities") represent beneficial ownership interests in
the Trust. The Corporation is the owner of all of the beneficial ownership
interests represented by common securities of the Trust (the "Common Securities"
and, collectively with the Capital Securities, the "Trust Securities"). Bankers
Trust Company is the Property Trustee of the Trust. The Trust exists for the
sole purposes of (i) issuing and selling the Trust Securities and effecting the
Exchange Offer for the Exchange Capital Securities, (ii) investing the proceeds
from the sale of the Old Capital Securities and the Common Securities in the Old
Junior Subordinated Debt Securities, (iii) exchanging the Old Junior
Subordinated Debt Securities for the Exchange Junior Subordinated Debt
Securities and (iv) engaging in other activities necessary, advisable or
incidental thereto. The Junior Subordinated Debt Securities will mature on
December 4, 2026 (the "Stated Maturity"). The Capital Securities will have a
preference under certain circumstances with respect to cash distributions and
amounts payable on liquidation or redemption over the Common Securities. See
"Description of the Exchange Securities--Description of Capital
Securities--Subordination of Common Securities."
As used herein, (i) the "Indenture" means the Junior Subordinated
Indenture, as amended and supplemented from time to time, between the
Corporation and Bankers Trust Company, as trustee (the "Debenture Trustee"),
(ii) the "Declaration" means the Amended and Restated Declaration of Trust
relating to the Trust among the Corporation, as Depositor, Bankers Trust
Company, as Property Trustee (the "Property Trustee"), Bankers Trust (Delaware),
as Delaware Trustee (the "Delaware Trustee"), and the Administrative Trustees
named therein (collectively, with the Property Trustee and the Delaware Trustee,
the "Issuer Trustees") and (iii) the "Guarantee Agreement" means the Guarantee
Agreement relating to the Guarantee between the Corporation and Bankers Trust
Company, as trustee (the "Guarantee Trustee"). In addition, as the context may
require, unless expressly stated otherwise, (i) "Capital Securities" includes
the Old Capital Securities and the Exchange Capital Securities, (ii) "Junior
Subordinated Debt Securities" includes the Old Junior Subordinated Debt
Securities and the Exchange Junior Subordinated Debt Securities and (iii)
"Guarantee" includes the Old Guarantee and the Exchange Guarantee.
Holders of the Capital Securities and the holder of the Common
Securities will be entitled to receive cumulative cash distributions, in each
case arising from the payment of interest on the Junior Subordinated Debt
Securities accruing from the date of original issuance, and payable
semi-annually in arrears on June 4 and December 4 of each year, commencing June
4, 1997, at the annual rate of 7.53% of the Liquidation Amount of $1,000 per
Capital Security and at the annual rate of 7.53% of the Liquidation Amount of
$1,000 per Common Security ("Distributions"). Subject to certain exceptions, the
Corporation has the right to defer payments of interest on the Junior
Subordinated Debt Securities at any time or from time to time for a period not
exceeding 10 consecutive semi-annual periods with respect to each deferral
period (each, an "Extension Period"); provided, however, that no Extension
Period may end on a date other than an Interest Payment Date (as defined herein)
or extend beyond the Stated Maturity of the Junior Subordinated Debt Securities.
No interest shall be due and payable during an Extension Period, except at the
end thereof. Upon the termination of any Extension Period and the payment of all
interest on the Junior Subordinated Debt Securities then accrued and unpaid
(together with interest thereon at the rate of 7.53%, compounded semi-annually,
to the extent permitted by applicable law), the Corporation may elect to begin a
new Extension Period, subject to the requirements described herein. If interest
payments on the Junior Subordinated Debt Securities are so deferred, during any
Extension Period,
2
<PAGE> 5
Distributions on the Trust Securities will also be deferred and the Corporation
will not be permitted, subject to certain exceptions described herein, to (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Corporation's capital
stock (which includes common and preferred stock), (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Corporation that rank pari passu with or junior in
interest to the Junior Subordinated Debt Securities or (iii) make any guarantee
payments with respect to any guarantee by the Corporation of the debt securities
of any subsidiary of the Corporation if such guarantee ranks pari passu with or
junior in interest to the Junior Subordinated Debt Securities except for certain
payments described in the section "Description of the Exchange
Securities--Description of Junior Subordinated Debt Securities--Option to Extend
Interest Payment Period". During an Extension Period, interest on the Junior
Subordinated Debt Securities will continue to accrue (and the amount of
Distributions to which holders of the Capital Securities are entitled will
accumulate) at the rate of 7.53% per annum, compounded semi-annually, and
holders of Capital Securities will be required to accrue interest income for
United States Federal income tax purposes. There is no limitation on the number
of times that the Corporation may elect to begin an Extension Period. See
"Description of the Exchange Securities--Description of Junior Subordinated Debt
Securities--Option to Extend Interest Payment Period" and "Certain Federal
Income Tax Consequences--Interest Income and Original Issue Discount."
The Corporation has, through the Guarantee, the Declaration, the Junior
Subordinated Debt Securities and the Indenture, taken together, fully,
irrevocably and unconditionally guaranteed all of the Trust's obligations under
the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Junior Subordinated Debt Securities and the
Guarantee--Full and Unconditional Guarantee." The Corporation has agreed to
guarantee the payment of Distributions and payments on liquidation or redemption
of the Capital Securities, but only in each case to the extent of funds held by
the Trust, as described herein. See "Description of the Exchange
Securities--Description of Guarantee." If the Corporation does not make interest
payments on the Junior Subordinated Debt Securities held by the Trust, the Trust
will have insufficient funds to pay Distributions on the Capital Securities. The
Guarantee does not cover payment of Distributions when the Trust does not have
sufficient funds to pay such Distributions. In such event, a holder of Capital
Securities may institute a legal proceeding directly against the Corporation for
enforcement of payment to such holder of the principal of or interest on Junior
Subordinated Debt Securities having a principal amount equal to the aggregate
Liquidation Amount of the Capital Securities held by such holder (a "Direct
Action"). See "Description of the Exchange Securities--Description of the
Exchange Securities--Description of Junior Subordinated Debt
Securities--Enforcement of Certain Rights by Holders of Capital Securities." The
obligations of the Corporation under the Guarantee and the Junior Subordinated
Debt Securities are subordinate and junior in right of payment to all Senior
Debt (as defined herein) of the Corporation. See "Description of the Exchange
Securities--Description of Junior Subordinated Debt Securities--Subordination".
The Trust Securities are subject to mandatory redemption, (i) in whole,
but not in part, at the Stated Maturity of the Junior Subordinated Debt
Securities at a redemption price equal to the principal amount of, plus accrued
interest on, the Junior Subordinated Debt Securities (the "Maturity Redemption
Price") and (ii) in whole or in part on or after December 4, 2006
contemporaneously with the optional redemption by the Corporation of the Junior
Subordinated Debt Securities at a redemption price (the "Optional Redemption
Price") equal to the Optional Prepayment Price (as defined below). Either of the
Maturity Redemption Price or the Optional Redemption Price may be referred to
herein as the "Redemption Price". See "Description of the Exchange
Securities--Description of Capital Securities--Redemption." Subject to the
Corporation having received prior approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve") to do so if then required under
applicable capital guidelines or policies of the Federal Reserve, the Junior
Subordinated Debt Securities are redeemable at the option of the Corporation at
any time on or after December 4, 2006, in whole or in part, at a
3
<PAGE> 6
redemption price (the "Optional Prepayment Price") equal to 103.765% of the
principal amount thereof on December 4, 2006, declining ratably on each December
4 thereafter to 100% on or after December 4, 2016, plus accrued but unpaid
interest thereon to the date of redemption. See "Description of the Exchange
Securities--Description of Junior Subordinated Debt Securities--Optional
Redemption".
The Corporation, as the holder of the outstanding Common Securities,
has the right at any time (including, without limitation, upon the occurrence of
a Tax Event (as defined herein)) to terminate the Trust and cause a Like Amount
(as defined herein) of the Junior Subordinated Debt Securities to be distributed
to the holders of the Trust Securities upon liquidation of the Trust, subject to
prior approval of the Federal Reserve to do so if then required under applicable
capital guidelines or policies of the Federal Reserve. In the event of such a
termination of the Trust, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, the holders of the Capital Securities
generally will be entitled to receive a Liquidation Amount of $1,000 per Capital
Security plus accumulated and unpaid Distributions thereon to the date of
payment, which payment shall be in the form of a distribution of a Like Amount
of Junior Subordinated Debt Securities, subject to certain exceptions. In
addition, if the Junior Subordinated Debt Securities are distributed to the
holder of the Trust Securities as a result of the occurrence of a Tax Event and
such Tax Event continues notwithstanding such Distribution, the Corporation has
the right to prepay the Junior Subordinated Debt Securities in whole, but not in
part, at the Tax Event Prepayment Price. See "Description of the Exchange
Securities--Description of Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debt Securities" and "--Description of
Junior Subordinated Debt Securities--Tax Event Prepayment."
The Exchange Capital Securities will be issued, and Exchange Capital
Securities may be transferred, only in blocks having a Liquidation Amount of not
less than $100,000 (100 Exchange Capital Securities). Any transfer, sale or
other disposition of Exchange Capital Securities in a block having a Liquidation
Amount of less than $100,000 shall be deemed to be void and of no legal effect
whatsoever. Any such transferee shall be deemed not to be the holder of such
Exchange Capital Securities for any purpose, including but not limited to the
receipt of Distributions on such Exchange Capital Securities, and such
transferee shall be deemed to have no interest whatsoever in such Exchange
Capital Securities.
Based on existing interpretations by the staff of the Securities and
Exchange Commission (the "Commission") set forth in several no-action letters to
third parties and subject to the two immediately following sentences, the
Corporation and the Trust believe that the Exchange Capital Securities, the
Exchange Guarantee and, after the distribution thereof to the holders of the
Capital Securities, the Exchange Junior Subordinated Debt Securities issued
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act; provided, that, such Exchange Capital
Securities are acquired in the ordinary course of such holder's business and
such holder is not participating, and has no arrangement or understanding with
any person to participate, in a distribution (within the meaning of the
Securities Act) of the Exchange Capital Securities. However, any holder of Old
Capital Securities who is an "affiliate" of the Trust or the Corporation or who
intends to participate in the Exchange Offer for the purpose of distributing
Exchange Capital Securities, or any broker-dealer who purchased Old Capital
Securities from the Trust to resell pursuant to Rule 144A under the Securities
Act ("Rule 144A") or any other available exemption under the Securities Act, (a)
will not be able to rely on the interpretations of the staff of the Commission
set forth in the above-mentioned no-action letters, (b) will not be permitted or
entitled to tender such Old Capital Securities in the Exchange Offer and (c)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such Old Capital
Securities unless such sale is made pursuant to an exemption from such
requirements. In addition, as described below, if any broker-dealer holds Old
Capital Securities acquired for its own account as a result of market-making or
other trading activities and exchanges such Old Capital Securities for Exchange
Capital Securities, then such broker-dealer must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resales of such
Exchange Capital Securities.
4
<PAGE> 7
Each holder of Old Capital Securities who wishes to exchange Old
Capital Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an "affiliate" of the Trust or the
Corporation, (ii) any Exchange Capital Securities to be received by it are being
acquired in the ordinary course of its business and (iii) it has no arrangement
or understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities. Each
broker-dealer that receives Exchange Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it acquired the Old Capital
Securities for its own account as the result of market-making activities or
other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such Exchange Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Commission in the no-action
letters referred to above, the Corporation and the Trust believe that
broker-dealers who acquired Old Capital Securities for their own accounts as a
result of market-making activities or other trading activities may fulfill their
prospectus delivery requirements with respect to the Exchange Capital Securities
received upon exchange of such Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment from the original sale of the Old
Capital Securities) with the prospectus prepared for the Exchange Offer so long
as it contains a description of the plan of distribution with respect to the
resale of such Exchange Capital Securities. Accordingly, subject to certain
provisions set forth in the Registration Agreement, the Corporation and the
Trust have agreed that this Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of
such Exchange Capital Securities for a period commencing on the Expiration Date
and ending 180 days after the Expiration Date or, if earlier, when all such
Exchange Capital Securities have been disposed of by such broker-dealer. See
"Plan of Distribution." Any broker-dealer who is an "affiliate" of the Trust or
the Corporation may not rely on such no-action letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. See "The Exchange Offer--Resales of
Exchange Capital Securities."
Each broker-dealer who surrenders Old Capital Securities pursuant to
the Exchange Offer will be deemed to have agreed, by execution of the Letter of
Transmittal, that, upon receipt of notice from the Corporation or the Trust of
the occurrence of any event or the discovery of any fact which makes any
statement contained or incorporated by reference in this Prospectus untrue in
any material respect or which causes this Prospectus to omit to state a material
fact necessary in order to make the statements contained or incorporated by
reference herein, in light of the circumstances under which they were made, not
misleading or of the occurrence of certain other events specified in the
Registration Agreement, such broker-dealer will suspend the sale of Exchange
Capital Securities (or the Exchange Junior Subordinated Debt Securities, as
applicable) pursuant to this Prospectus until the Corporation or the Trust has
amended or supplemented this Prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented Prospectus to such
broker-dealer or the Corporation or the Trust has given notice that the sale of
the Exchange Capital Securities (or the Exchange Junior Subordinated Debt
Securities, as applicable) may be resumed.
Neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Commission would make
a similar determination with respect to the Exchange Offer as it has in such
no-action letters to third parties.
Prior to the Exchange Offer, there has been only a limited secondary
market and no public market for the Old Capital Securities. The Exchange Capital
Securities will be a new issue of securities for which there currently is no
market. Although the Initial Purchaser has informed the Corporation and the
Trust that it currently intends to make a market in the Exchange Capital
Securities, it is not obligated to do so, and any such market-making may be
discontinued at any time without notice. Accordingly, there can be no assurance
as to the development or liquidity of any market for the Exchange Capital
Securities. The Corporation and the Trust do not currently intend to apply for
listing of the Exchange Capital Securities on the New York Stock Exchange.
5
<PAGE> 8
Any Old Capital Securities not tendered and accepted in the Exchange
Offer will remain outstanding and will be entitled to all the same rights and
will be subject to the same limitations applicable to the Old Capital Securities
under the Declaration (except for those rights which terminate upon consummation
of the Exchange Offer). Following consummation of the Exchange Offer, the
holders of Old Capital Securities will continue to be subject to all of the
existing restrictions upon transfer thereof and neither the Corporation nor the
Trust will have any further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the Securities Act of
the Old Capital Securities held by them. To the extent that Old Capital
Securities are tendered and accepted in the Exchange Offer, a holder's ability
to sell untendered Old Capital Securities could be adversely affected. See "Risk
Factors--Consequences of a Failure to Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange prior to 5:00 p.m.,
New York City time, on , 1997 (such time on such date being hereinafter called
the "Expiration Date"), unless the Exchange Offer is extended by the Corporation
and the Trust (in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended). Tenders of Old Capital
Securities may be withdrawn at any time prior to 5:00 p.m., New York City time,
on the Expiration Date. The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain events and conditions which
may be waived by the Corporation or the Trust and to the terms and provisions of
the Registration Agreement. Old Capital Securities may be tendered in whole or
in part having a Liquidation Amount of not less than $100,000 (100 Old Capital
Securities) or any integral multiple of $1,000 Liquidation Amount (1 Old Capital
Security) in excess thereof. The Corporation has agreed to pay all expenses of
the Exchange Offer. See "The Exchange Offer--Fees and Expenses." Each Exchange
Capital Security will pay cumulative Distributions from the most recent
Distribution Date (as defined herein) on the Old Capital Securities surrendered
in exchange for such Exchange Capital Securities or, if no Distribution Date has
occurred, from December 4, 1996. Holders of the Old Capital Securities whose Old
Capital Securities are accepted for exchange will not receive accumulated
Distributions on such Old Capital Securities for any period, and will be deemed
to have waived the right to receive such Distributions. See "Risk
Factors--Consequences of a Failure to Exchange Old Capital Securities." This
Prospectus, together with the Letter of Transmittal, is being sent to all
registered holders of Old Capital Securities as of , 1997.
Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the Exchange Capital Securities offered hereby. No
dealer-manager is being used in connection with this Exchange Offer. See "Use of
Proceeds From Sale of Old Capital Securities" and "Plan of Distribution."
----------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE CORPORATION OR THE TRUST. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF
ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY
PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF.
6
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Incorporation of Certain Documents by Reference ...................... 8
Summary .............................................................. 10
Risk Factors ......................................................... 17
Ratios of Earnings to Fixed Charges .................................. 23
Use of Proceeds from Sale of Old Capital Securities .................. 23
Capitalization ....................................................... 24
Dividend History ..................................................... 24
Republic New York Capital II ......................................... 25
Republic New York Corporation ........................................ 26
The Exchange Offer ................................................... 27
Description of the Exchange Securities ............................... 36
Description of the Old Securities .................................... 61
Relationship Among the Capital Securities, the Junior Subordinated
Debt Securities and the Guarantee ................................... 63
Certain Federal Income Tax Consequences .............................. 63
Plan of Distribution ................................................. 69
Validity of the Exchange Securities .................................. 69
Experts .............................................................. 69
</TABLE>
7
<PAGE> 10
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can also
be obtained at prescribed rates by writing to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
information may also be accessed electronically by means of the Commission's
home page on the Internet (http://www.sec.gov.). In addition, such reports,
proxy statements and other information concerning the Corporation can be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005, on which exchange securities of the Corporation are
listed.
No separate financial statements of the Trust have been included
herein. The Corporation and the Trust do not consider that such financial
statements would be material to holders of the Capital Securities because the
Trust is a newly formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets the Junior Subordinated Debt
Securities and issuing the Trust Securities. See "Republic New York Capital II"
and "Description of the Exchange Securities." In addition, the Corporation does
not expect that the Trust will file reports under the Exchange Act with the
Commission.
This Prospectus constitutes a part of a registration statement on Form
S-4 (the "Registration Statement") filed by the Corporation and the Trust with
the Commission under the Securities Act. This Prospectus does not contain all
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Corporation, the
Trust and the Exchange Securities. Any statements contained herein concerning
the provisions of any document are not necessarily complete, and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:
1. The Corporation's Annual Report on Form 10-K for the years ended December
31, 1995 and 1996;
2. The Corporation's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996; and
3. The Corporation's Current Reports on Form 8-K dated March 15, 1996 (as
amended by Form 8-K/A on April 22, 1996) and January 27, 1997.
Each document or report filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is 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
8
<PAGE> 11
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.
As used herein, the terms "Prospectus" and "herein" mean this
Prospectus, including the documents incorporated or deemed to be incorporated
herein by reference, as the same may be amended, supplemented or otherwise
modified from time to time. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein do not purport to
be complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document. The
Corporation will provide without charge to any person to whom this Prospectus is
delivered, on the written or oral request of such person, a copy of any or all
of the foregoing documents incorporated by reference herein (other than exhibits
not specifically incorporated by reference into the texts of such documents).
Requests for such documents should be directed to:
Republic New York Corporation
452 Fifth Avenue
New York, New York 10018
Telephone (212) 525-6100
Attention: Office of the Secretary
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST TO THE ABOVE ADDRESS. IN ORDER TO ENSURE TIMELY DELIVERY OF DOCUMENTS,
ANY REQUEST SHOULD BE MADE BY MAY 22, 1997.
9
<PAGE> 12
SUMMARY
The following summary is qualified in its entirety by, and is subject
to, the more detailed information and financial statements contained elsewhere
and incorporated by reference in this Prospectus.
REPUBLIC NEW YORK CAPITAL II
The Trust is a statutory business trust formed under Delaware law
pursuant to (i) the Declaration and (ii) the filing of a certificate of trust
with the Delaware Secretary of State on November 26, 1996. The Trust's business
and affairs are conducted by the Issuer Trustees: Bankers Trust Company, as
Property Trustee, Bankers Trust (Delaware), as Delaware Trustee, and two
individual Administrative Trustees who are employees or officers of or
affiliated with the Corporation. The Trust exists for the exclusive purposes of
(i) issuing and selling the Trust Securities and effecting the Exchange Offer
for the Exchange Capital Securities, (ii) using the proceeds from the sale of
the Old Capital Securities and the Common Securities to acquire the Old Junior
Subordinated Debt Securities, (iii) exchanging the Old Junior Subordinated Debt
Securities for the Exchange Subordinated Debt Securities in the Exchange Offer
and (iv) engaging in only those other activities necessary, advisable or
incidental thereto. Accordingly, the Exchange Junior Subordinated Debt
Securities will be the sole assets of the Trust, and payments under the Exchange
Junior Subordinated Debt Securities and the expense provisions under the
Indenture will be the sole revenues of the Trust. All of the Common Securities
are and will be owned directly or indirectly by the Corporation.
REPUBLIC NEW YORK CORPORATION
Republic New York Corporation is a bank holding company incorporated
under the laws of Maryland in 1973 and registered with the Federal Reserve
pursuant to the United States Bank Holding Company Act of 1956, as amended. The
Corporation's principal asset is the capital stock of Republic National Bank of
New York (the "Bank"). Management expects that the Bank will remain the
Corporation's principal asset and source of revenue and net income for the
foreseeable future. Based on total assets at September 30, 1996, the Corporation
was the seventeenth largest bank holding company in the United States.
The principal executive offices of the Corporation are located at 452
Fifth Avenue, New York, New York 10018 (telephone: 212-525-6100).
Mr. Edmond J. Safra is a principal stockholder of the Corporation,
owning approximately 27.7% of the Corporation's outstanding common stock through
his ownership of all the outstanding shares of Saban S.A., which owns directly
or indirectly 15,229,036 shares of the Corporation's common stock, and of
another corporation which owns 29,776 shares of the Corporation's common stock.
Mr. Safra, through Saban S.A. and a subsidiary thereof, has approval of the
Federal Reserve, through April 28, 1997, to acquire up to 1,730,400 additional
shares of common stock of the Corporation in the open market and through
privately negotiated transactions, which, if all such shares of common stock
were acquired, would result in his ownership of approximately 30.9% of the
Corporation's outstanding common stock.
The Corporation is a legal entity separate and distinct from the Bank
and its other subsidiaries and affiliates. Because the Corporation is a holding
company, its rights and the rights of its creditors and stockholders, including
the holders of the Junior Subordinated Debt Securities and the Guarantee, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of such subsidiary's
creditors, except to the extent that the Corporation may itself be a creditor
with recognized claims against such subsidiary, in which case it will share in
such assets with other creditors.
There are various legal limitations on the extent to which the
Corporation's bank subsidiaries may extend credit, pay dividends or otherwise
supply funds to the Corporation. The approval of the Office
10
<PAGE> 13
of the Comptroller of the Currency is required if total dividends declared by a
national bank in any calendar year exceed net profits for that year combined
with its retained net profits for the preceding two years. In addition,
dividends for such a bank may not be paid in excess of such bank's undivided
profits. In determining whether and to what extent to pay dividends, each bank
subsidiary must also consider the effect of dividend payments on applicable
risk-based capital and leverage ratio requirements, as well as policy statements
of the federal regulatory agencies that indicate that banking organizations
should generally pay dividends out of current operating earnings.
The Corporation also derives dividends from its non-bank subsidiaries.
These subsidiaries are not subject to regulatory restrictions on their payment
of dividends to the Corporation. In addition, there are numerous governmental
requirements and regulations that affect the activities of the Corporation and
its bank and non-bank subsidiaries.
Under long-standing policy of the Federal Reserve, a bank holding
company is expected to act as a source of financial strength for its subsidiary
banks and to commit resources to support such banks. As a result of that policy,
the Corporation may be required to commit resources to its subsidiary banks in
circumstances where it might not otherwise do so.
THE EXCHANGE OFFER
The Exchange Offer............ Up to $200,000,000 aggregate Liquidation Amount
of Exchange Capital Securities are being offered
in exchange for a like aggregate Liquidation
Amount of Old Capital Securities. Old Capital
Securities may be tendered for exchange in whole
or in part in a Liquidation Amount of $100,000
(100 Old Capital Securities) or any integral
multiple of $1,000 in excess thereof. The
Corporation and the Trust are making the
Exchange Offer in order to satisfy their
obligations under the Registration Agreement
relating to the Old Capital Securities. For a
description of the procedures for tendering Old
Capital Securities, see "The Exchange
Offer-Procedures for Tendering Old Capital
Securities."
Expiration Date............... 5:00 p.m., New York City time, on ____________,
1997 unless the Exchange Offer is extended by
the Corporation and the Trust, in which case the
term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is
extended. See "The Exchange Offer--Expiration
Date; Extensions; Amendments."
Conditions to the
Exchange Offer............... The Exchange Offer is subject to certain
conditions, which may be waived by the
Corporation and the Trust in their sole
discretion. The Exchange Offer is not
conditioned upon any minimum Liquidation Amount
of Old Capital Securities being tendered. See
"The Exchange Offer--Conditions to the Exchange
Offer."
The Corporation and the Trust reserve the right
in their sole and absolute discretion, subject
to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old
Capital Securities for exchange, (ii) to
terminate the Exchange Offer if certain
specified conditions have not been satisfied,
(iii) to extend the Expiration Date of the
Exchange Offer and
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<PAGE> 14
retain all Old Capital Securities tendered
pursuant to the Exchange Offer, subject,
however, to the right of holders of Old Capital
Securities to withdraw their tendered Old
Capital Securities, or (iv) to waive any
condition or otherwise amend the terms of the
Exchange Offer in any respect. See "The Exchange
Offer--Expiration Date; Extensions; Amendments."
Withdrawal Rights............. Tenders of Old Capital Securities may be
withdrawn at any time prior to 5:00 p.m., New
York City time, on the Expiration Date by
delivering a written notice of such withdrawal
to the Exchange Agent in conformity with certain
procedures set forth below under "The Exchange
Offer--Withdrawal Rights."
Procedures for Tendering Old
Capital Securities........... Tendering holders of Old Capital Securities must
complete and sign a Letter of Transmittal in
accordance with the instructions contained
therein and forward the same by mail, facsimile
or hand delivery, together with any other
required documents, to the Exchange Agent,
either with the Old Capital Securities to be
tendered or in compliance with the specified
procedures for guaranteed delivery of such Old
Capital Securities. Certain brokers, dealers,
commercial banks, trust companies and other
nominees may also effect tenders by book-entry
transfer. Holders of Old Capital Securities
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
are urged to contact such person promptly if
they wish to tender Old Capital Securities
pursuant to the Exchange Offer. See "The
Exchange Offer--Procedures for Tendering Old
Capital Securities."
Letters of Transmittal and certificates
representing Old Capital Securities should not
be sent to the Corporation or the Trust. Such
documents should only be sent to the Exchange
Agent. Questions regarding how to tender and
requests for information should be directed to
the Exchange Agent. See "The Exchange
Offer--Exchange Agent."
Resales of Exchange Capital
Securities................... Based on existing interpretations by the staff
of the Commission and subject to the two
immediately following sentences, the Corporation
and the Trust believe that the Exchange Capital
Securities, the Exchange Guarantee and, after
the distribution thereof to the holders of the
Capital Securities, the Exchange Junior
Subordinated Debt Securities issued pursuant to
the Exchange Offer may be offered for resale,
resold and otherwise transferred by a holder
thereof (other than a holder who is a
broker-dealer) without further compliance with
the registration and prospectus delivery
requirements of the Securities Act; provided,
that, such Exchange Capital Securities are
acquired in the ordinary course of such holder's
business and such holder is not participating,
and has no arrangement or understanding with any
person to participate, in a distribution (within
the
12
<PAGE> 15
meaning of the Securities Act) of the Exchange
Capital Securities. However, any holder of Old
Capital Securities who is an "affiliate" of the
Trust or the Corporation or who intends to
participate in the Exchange Offer for the
purpose of distributing the Exchange Capital
Securities, or any broker-dealer who purchased
the Old Capital Securities from the Trust to
resell pursuant to Rule 144A or any other
available exemption under the Securities Act,
(a) will not be able to rely on the
interpretations of the staff of the Commission
set forth in the above-mentioned no-action
letters, (b) will not be permitted or entitled
to tender such Old Capital Securities in the
Exchange Offer and (c) must comply with the
registration and prospectus delivery
requirements of the Securities Act in connection
with any sale or other transfer of such Old
Capital Securities unless such sale is made
pursuant to an exemption from such requirements.
In addition, as described below, if any
broker-dealer holds Old Capital Securities
acquired for its own account as a result of
market-making or other trading activities and
exchanges such Old Capital Securities for
Exchange Capital Securities, then such
broker-dealer must deliver a prospectus meeting
the requirements of the Securities Act in
connection with any resales of such Exchange
Capital Securities.
Each holder of Old Capital Securities who wishes
to exchange Old Capital Securities for Exchange
Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an
"affiliate" of the Trust or the Corporation,
(ii) any Exchange Capital Securities to be
received by it are being acquired in the
ordinary course of its business and (iii) it has
no arrangement or understanding with any person
to participate in a distribution (within the
meaning of the Securities Act) of such Exchange
Capital Securities. Each broker-dealer that
receives Exchange Capital Securities for its own
account pursuant to the Exchange Offer must
acknowledge that it acquired the Old Capital
Securities for its own account as the result of
market-making activities or other trading
activities and must agree that it will deliver a
prospectus meeting the requirements of the
Securities Act in connection with any resale of
such Exchange Capital Securities. The Letter of
Transmittal states that by so acknowledging and
by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. Based on the position taken by
the staff of the Commission in the no-action
letters referred to above, the Corporation and
the Trust believe that broker-dealers who
acquired Old Capital Securities for their own
accounts as a result of market-making activities
or other trading activities may fulfill their
prospectus delivery requirements with respect to
the Exchange Capital Securities received upon
exchange of such Old Capital Securities (other
than Old Capital Securities which represent an
unsold allotment from the original sale of the
Old Capital Securities) with the prospectus
prepared for the Exchange Offer so long as it
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<PAGE> 16
contains a description of the plan of
distribution with respect to the resale of such
Exchange Capital Securities. Accordingly,
subject to certain provisions set forth in the
Registration Agreement and to the limitations
described below under "The Exchange
Offer--Resales of Exchange Capital Securities",
the Corporation and the Trust have agreed that
this Prospectus, as it may be amended or
supplemented from time to time, may be used by a
broker-dealer in connection with resales of such
Exchange Capital Securities for a period
commencing on the Expiration Date and ending 180
days after the Expiration Date or, if earlier,
when all such Exchange Capital Securities have
been disposed of by such broker-dealer. See
"Plan of Distribution." Any broker-dealer who is
an "affiliate" of the Corporation or the Trust
may not rely on such no-action letters and must
comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any resale transaction. See "The
Exchange Offer--Resales of Exchange Capital
Securities."
Neither the Corporation nor the Trust has sought
its own interpretive letter and there can be no
assurance that the staff of the Commission would
make a similar determination with respect to the
Exchange Offer as it has in such no-action
letters to third parties.
Exchange Agent................ The exchange agent with respect to the Exchange
Offer is Bankers Trust Company (the "Exchange
Agent"). The addresses, and telephone and
facsimile numbers, of the Exchange Agent are set
forth in "The Exchange Offer--Exchange Agent"
and in the Letter of Transmittal.
Use of Proceeds............... Neither the Corporation nor the Trust will
receive any cash proceeds from the issuance of
the Exchange Capital Securities offered hereby.
See "Use of Proceeds From Sale of Old Capital
Securities".
Certain Federal Income Tax
Consequences................ Holders of Old Capital Securities should review
the information set forth under "Certain Federal
Income Tax Consequences" prior to tendering Old
Capital Securities in the Exchange Offer.
THE EXCHANGE CAPITAL SECURITIES
Securities Offered............ Up to $200,000,000 aggregate Liquidation Amount
of the Trust's 7.53% Capital Securities which
have been registered under the Securities Act
(Liquidation Amount $1,000 per Capital
Security). The Exchange Capital Securities will
be issued and the Old Capital Securities were
issued under the Declaration. The Exchange
Capital Securities and any Old Capital
Securities which remain outstanding after
consummation of the Exchange Offer will
constitute a single series of Capital Securities
under the Declaration and,
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<PAGE> 17
accordingly, will vote together as a single
class for purposes of determining whether
holders of the requisite percentage in
outstanding Liquidation Amount thereof have
taken certain actions or exercised certain
rights under the Declaration. See "Description
of the Exchange Securities--Description of
Capital Securities--General." The terms of the
Exchange Capital Securities are identical in all
material respects to the terms of the Old
Capital Securities, except that the Exchange
Capital Securities have been registered under
the Securities Act and therefore are not subject
to certain restrictions on transfer applicable
to the Old Capital Securities and will not
provide for any increase in the Distribution
rate thereon. See "The Exchange Offer--Purpose
and Effect of the Exchange Offer," "Description
of the Exchange Securities" and "Description of
the Old Securities."
Distribution Dates............ June 4 and December 4 of each year, commencing
on the first such date following the original
issuance of the Exchange Capital Securities.
Extension Periods............. Distributions on the Exchange Capital Securities
will be deferred for the duration of any
Extension Period elected by the Corporation with
respect to the payment of interest on the Junior
Subordinated Debt Securities. No Extension
Period will exceed 10 consecutive semi-annual
periods or extend beyond the Stated Maturity.
See "Description of the Exchange
Securities--Description of Junior Subordinated
Debt Securities--Option to Extend Interest
Payment Period" and "Certain Federal Income Tax
Consequences--Interest Income and Original Issue
Discount."
Ranking....................... The Exchange Capital Securities will rank pari
passu, and payments thereon will be made pro
rata, with the Old Capital Securities and the
Common Securities except as described under
"Description of the Exchange
Securities--Description of Capital
Securities--Subordination of Common Securities."
The Exchange Junior Subordinated Debt Securities
will rank pari passu with the Old Junior
Subordinated Debt Securities and all other
junior subordinated debt securities issued by
the Corporation pursuant to the Indenture with
substantially similar subordination terms
("Other Debentures") and which have been or will
be issued and sold to other trusts established
by the Corporation, in each case similar to the
Trust ("Other Trusts"), and are unsecured and
subordinate and junior in right of payment to
the extent and in the manner set forth in the
Indenture to all Senior Debt of the Corporation.
See "Description of the Exchange
Securities--Description of Junior Subordinated
Debt Securities." The Exchange Guarantee will
rank pari passu with all other guarantees issued
by the Corporation with respect to capital
securities issued by Other Trusts ("Other
Guarantees") and will constitute an unsecured
obligation of the Corporation and will rank
subordinate and junior in right of payment to
the extent and in the manner set forth in the
Guarantee
15
<PAGE> 18
Agreement to all Senior Debt of the Corporation.
See "Description of the Exchange
Securities--Description of Guarantee."
Redemption.................... The Trust Securities are subject to mandatory
redemption (i) in whole (but not in part) upon
the repayment in full at the Stated Maturity of
the Junior Subordinated Debt Securities and (ii)
in whole or in part at any time on or after
December 4, 2006 contemporaneously with any
optional redemption by the Corporation of the
Junior Subordinated Debt Securities, in each
case at the applicable Redemption Price. See
"Description of the Exchange
Securities--Description of Capital
Securities--Redemption."
Rating........................ The Exchange Capital Securities are expected to
retain the "A+" rating issued by Standard &
Poor's Ratings Services and the "a1" rating
issued by Moody's Investors Services, Inc. in
respect of the Old Capital Securities. A
security rating is not a recommendation to buy,
sell or hold securities and may be subject to
revision or withdrawal at any time by the
assigning rating organization.
Absence of Market for the
Exchange Capital Securities.. The Exchange Capital Securities will be a new
issue of securities for which there currently is
no market. Although Deutsche Morgan Grenfell
Inc., the initial purchaser of the Old Capital
Securities (the "Initial Purchaser"), has
informed the Corporation and the Trust that it
currently intends to make a market in the
Exchange Capital Securities, it is not obligated
to do so, and any such market making may be
discontinued at any time without notice.
Accordingly, there can be no assurance as to the
development or liquidity of any market for the
Exchange Capital Securities. The Trust and the
Corporation do not currently intend to apply for
listing of the Exchange Capital Securities on
the New York Stock Exchange.
For further information regarding the Exchange Securities, see
"Description of the Exchange Securities" and "Certain Federal Income Tax
Consequences."
Holders tendering Old Capital Securities in the Exchange Offer should
carefully consider the matters set forth under "Risk Factors."
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<PAGE> 19
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating the Exchange Capital
Securities before deciding whether to accept the Exchange Offer.
RANKING OF OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR SUBORDINATED DEBT
SECURITIES
The obligations of the Corporation under the Guarantee and pursuant to
the Junior Subordinated Debt Securities are unsecured and rank subordinate and
junior in right of payment to all Senior Debt (which, as defined, includes all
outstanding subordinated debt of the Corporation) of the Corporation. At
December 31, 1996, the aggregate outstanding Senior Debt of the Corporation was
approximately $1.0 billion. Because the Corporation is a bank holding company,
the right of the Corporation to participate in any distribution of assets of any
subsidiary, including the Bank, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Capital
Securities to benefit indirectly from such distribution), is subject to the
prior claims of creditors of such subsidiary, except to the extent that the
Corporation may itself be recognized as a creditor of such subsidiary.
Accordingly, the Junior Subordinated Debt Securities and the Guarantee will be
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and holders of Junior Subordinated Debt Securities
and beneficiaries of the Guarantee should look only to the assets of the
Corporation for payments thereon. See "Republic New York Corporation." None of
the Indenture, the Guarantee or the Declaration places any limitation on the
amount of secured or unsecured debt, including Senior Debt, that may be incurred
by the Corporation. See "Description of the Exchange Securities--Description of
Junior Subordinated Debt Securities--Subordination" and "--Description of
Guarantee--Status of the Guarantee."
The ability of the Trust to pay amounts due on the Capital Securities
is solely dependent upon the Corporation making payments on the Junior
Subordinated Debt Securities as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
So long as no Debenture Event of Default (as defined herein) has
occurred and is continuing, the Corporation has the right under the Indenture to
defer the payment of interest on the Junior Subordinated Debt Securities at any
time or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period; provided, however, that no
Extension Period may extend beyond the Stated Maturity of the Junior
Subordinated Debt Securities. As a consequence of any such deferral, semi-annual
Distributions on the Capital Securities by the Trust will also be deferred (and
the amount of Distributions to which holders of the Capital Securities are
entitled will accumulate additional Distributions thereon at the rate of 7.53%
per annum, compounded semi-annually) from the relevant payment date for such
Distributions during any such Extension Period. During any Extension Period, the
Corporation may not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Corporation's capital stock (which includes common and preferred stock),
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including Other
Debentures) that rank pari passu in all respects with or junior in interest to
the Junior Subordinated Debt Securities or (iii) make any guarantee payments
with respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including Other Guarantees) if such guarantee
ranks pari passu in all respects with or junior in interest to the Junior
Subordinated Debt Securities (other than (a) dividends or distributions in
common stock of the Corporation, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of the Corporation's common stock in connection with the
satisfaction by the Corporation of its obligations under any employee benefit
plan or any other contractual obligation of the Corporation (other than a
contractual obligation ranking pari passu in all respects with or junior to the
Junior Subordinated Debt Securities), (e) as a result of a reclassification of
17
<PAGE> 20
the Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock or (f) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged).
Prior to the termination of any Extension Period, the Corporation may further
extend such Extension Period; provided that such extension does not cause such
Extension Period to exceed 10 consecutive semi-annual periods or to extend
beyond the Stated Maturity. Upon the termination of any Extension Period and the
payment of all interest then accrued and unpaid on the Junior Subordinated Debt
Securities (together with interest thereon at the annual rate of 7.53%,
compounded semi-annually, to the extent permitted by applicable law), the
Corporation may elect to begin a new Extension Period, subject to the above
requirements. There is no limitation on the number of times that the Corporation
may elect to begin an Extension Period. See "Description of the Exchange
Securities--Description of Capital Securities--Distributions" and "--Description
of Junior Subordinated Debt Securities--Option to Extend Interest Payment
Period."
Because the Corporation believes that the likelihood of its exercising
its option to defer payments of interest is remote, the Junior Subordinated Debt
Securities will be treated under Treasury regulations as issued without
"original issue discount" ("OID") for United States Federal income tax purposes.
As a result, holders of Capital Securities generally will include their
allocable share of the interest on the Junior Subordinated Debt Securities in
taxable income under their own methods of tax accounting (i.e., cash or
accrual). Under the Treasury regulations, however, if the Corporation exercises
its right to defer payments of interest, the Junior Subordinated Debt Securities
will become original issue discount instruments and holders of Junior
Subordinated Debt Securities and, consequently, holders of Capital Securities
will be required to include their pro rata share of original issue discount in
gross income as it accrues for United States Federal income tax purposes in
advance of the receipt of cash attributable to such interest income. See
"Certain United States Federal Income Tax Consequences--Interest Income and
Original Issue Discount" and "--Sales or Redemption of Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debt Securities in the future, the market
price of the Capital Securities is likely to be affected. A holder that disposes
of its Capital Securities during an Extension Period, therefore, might not
receive the same return on its investment as a holder that continues to hold its
Capital Securities. In addition, as a result of the existence of the
Corporation's right to defer interest payments on the Junior Subordinated Debt
Securities, the market price of the Capital Securities (which represent
beneficial ownership interests in the Trust holding the Junior Subordinated Debt
Securities as its sole assets) may be more volatile than the market prices of
other securities on which original issue discount accrues that are not subject
to such deferrals.
TAX EVENT REDEMPTION; POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES
Upon the occurrence and continuation of a Tax Event, the Corporation
has the right to terminate the Trust and distribute a Like Amount of the Junior
Subordinated Debt Securities to the holders of the Trust Securities in
liquidation of the Trust within 90 days following the occurrence of such Tax
Event and, if a Tax Event continues notwithstanding the taking of such actions,
to redeem the Junior Subordinated Debt Securities in whole (but not in part) at
the Tax Event Prepayment Price (as defined herein). The exercise of such right
is subject to the Corporation having received prior approval of the Federal
Reserve to do so if then required under applicable capital guidelines or
policies of the Federal Reserve. See "Description of the Exchange
Securities--Description of Junior Subordinated Debt Securities--Tax Event
Prepayment" and "--Description of Capital Securities--Liquidation of the Trust
and Distribution of Junior Subordinated Debt Securities."
A "Tax Event" means the receipt by the Corporation of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced proposed change) in, the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial
18
<PAGE> 21
decision interpreting or applying such laws or regulations, which amendment or
change is effective or which proposed change, pronouncement or decision is
announced on or after the date on which the Old Junior Subordinated Debt
Securities were issued, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date of such opinion, subject to
United States Federal income tax with respect to income received or accrued on
the Junior Subordinated Debt Securities, (ii) interest payable by the
Corporation on the Junior Subordinated Debt Securities is not, or within 90 days
of the date of such opinion will not be, deductible by the Corporation, in whole
or in part, for United States Federal income tax purposes, or (iii) the Trust
is, or will be within 90 days of the date of such opinion, subject to more than
a de minimis amount of other taxes, duties or other governmental charges.
On March 19, 1996, during the 104th Congress, the Revenue
Reconciliation Bill of 1996 (the "Bill") was introduced. The Bill would have,
among other things, generally denied interest deductions for interest on an
instrument issued by a corporation that has a maximum term of more than 20 years
and that is not shown as indebtedness on the separate balance sheet of the
issuer or, when the instrument is issued to a related party (other than a
corporation), when the holder or some other related party issues a related
instrument that is not shown as indebtedness on the issuer's consolidated
balance sheet. The above-described provision of the Bill was proposed to be
effective generally for instruments issued on or after December 7, 1995. If this
provision were to apply to the Junior Subordinated Debt Securities, the
Corporation would be unable to deduct interest on the Junior Subordinated Debt
Securities. However, on March 29, 1996, the Chairmen of the Senate Finance and
House Ways and Means Committees issued a joint statement (the "Joint Statement")
to the effect that it was their intention that the effective date of the Bill,
if enacted, would be no earlier than the date of appropriate Congressional
action. In addition, subsequent to the publication of the Joint Statement,
Senator Daniel Patrick Moynihan and Representatives Sam M. Gibbons and Charles
B. Rangel wrote letters to Treasury Department officials concurring with the
views expressed in the Joint Statement (the "Letters"). If the principles
contained in the Joint Statement and the Letters were followed, any proposed
legislation in this area that is subsequently enacted would not adversely affect
the ability of the Corporation to deduct interest on the Junior Subordinated
Debt Securities. The 104th Congress adjourned without enacting the Bill.
Legislation was subsequently proposed, however, by the United States Department
of the Treasury on February 6, 1997, as part of President Clinton's Fiscal 1998
Budget Proposal (the "Proposed Legislation"). The Proposed Legislation contained
a provision (similar to the provision of the Bill described above) which
generally would deny the interest deduction for interest paid or accrued on an
instrument issued by a corporation that (i) has a maximum term of more than 15
years and (ii) is not shown as indebtedness on the separate balance sheet of the
issuer or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a related
instrument that is not shown as indebtedness on the issuer's consolidated
balance sheet. This provision is proposed to be effective generally for
instruments issued on or after the date of the first Congressional committee
action on the Proposed Legislation. If this provision were to apply to the
Junior Subordinated Debt Securities, the Corporation would not be able to deduct
the interest on the Junior Subordinated Debt Securities. As of April 28, 1997,
no Congressional committee action has been taken on the Proposed Legislation.
There can be no assurance that Proposed Legislation or future legislative
proposals or final legislation will not affect the ability of the Corporation to
deduct interest on the Junior Subordinated Debt Securities. Such a change could
give rise to a Tax Event, which would permit the Corporation to terminate the
Trust and distribute the Junior Subordinated Debt Securities to the holders of
the Trust Securities upon liquidation of the Trust (and, if a Tax Event
continued to exist notwithstanding the taking of such actions, to prepay the
Junior Subordinated Debt Securities), as described more fully under "Description
of the Exchange Securities--Description of Capital Securities--Liquidation of
the Trust and Distribution of Junior Subordinated Debt Securities" and
"--Description of Junior Subordinated Debt Securities--Tax Event Prepayment."
LIQUIDATION DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES
Upon liquidation of the Trust and certain other events, the Junior
Subordinated Debt Securities may be distributed to holders of the Capital
Securities. Under current United States Federal income tax
19
<PAGE> 22
law and interpretations thereof and assuming, as expected, that the Trust is
treated as a grantor trust for United States Federal income tax purposes, a
distribution by the Trust of the Junior Subordinated Debt Securities pursuant to
a liquidation of the Trust will not be a taxable event to the Trust or to
holders of the Capital Securities and will result in a holder of the Capital
Securities receiving directly such holder's pro rata share of the Junior
Subordinated Debt Securities (previously held indirectly through the Trust). If,
however, the liquidation of the Trust were to occur because the Trust is subject
to United States Federal income tax with respect to income accrued or received
on the Junior Subordinated Debt Securities as a result of the occurrence of a
Tax Event or otherwise, the distribution of Junior Subordinated Debt Securities
to holders of the Capital Securities by the Trust could be a taxable event to
the Trust and each holder, and holders of the Capital Securities may be required
to recognize gain or loss as if they had exchanged their Capital Securities for
the Junior Subordinated Debt Securities they received upon the liquidation of
the Trust. See "Certain Federal Income Tax Consequences--Distribution of Junior
Subordinated Debt Securities to Holders of Capital Securities."
MARKET PRICES
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debt Securities that may be distributed in
exchange for the Capital Securities if a liquidation of the Trust occurs.
Accordingly, the Capital Securities that an investor may hold, or the Junior
Subordinated Debt Securities that a holder of Capital Securities may receive
upon liquidation of the Trust, may trade at a discount to the price that the
investor paid to purchase the Capital Securities. See "Description of the
Exchange Securities--Description of Capital Securities--Liquidation of the Trust
and Distribution of Junior Subordinated Debt Securities" and "--Description of
Junior Subordinated Debt Securities--General."
RIGHTS UNDER THE GUARANTEE
The Guarantee guarantees to the holders of the Trust Securities the
following payments, to the extent not paid by the Trust: (i) any accumulated and
unpaid Distributions required to be paid on the Trust Securities, to the extent
that the Trust has funds on hand available therefor at such time, (ii) the
applicable Redemption Price with respect to any Trust Securities called for
redemption, to the extent that the Trust has funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary dissolution, winding-up or
liquidation of the Trust (unless the Junior Subordinated Debt Securities are
distributed to holders of the Trust Securities), the lesser of (a) the aggregate
of the Liquidation Amount and all accumulated and unpaid Distributions to the
date of payment, to the extent that the Trust has funds on hand available
therefor at such time, and (b) the amount of assets of the Trust remaining
available for distribution to holders of the Trust Securities after the
satisfaction of liabilities to creditors of the Trust as provided by applicable
law.
The holders of not less than a majority in aggregate Liquidation Amount
of the Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee (as
defined herein) in respect of the Guarantee or to direct the exercise of any
trust power conferred upon the Guarantee Trustee under the Guarantee. Any holder
of the Capital Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Guarantee without first instituting
a legal proceeding against the Trust or any other person or entity. If the
Corporation were to default on its obligation to pay amounts payable under the
Junior Subordinated Debt Securities, the Trust would lack funds for the payment
of Distributions or amounts payable on redemption of the Capital Securities or
otherwise, and, in such event, holders of the Capital Securities would not be
able to rely upon the Guarantee for payment of such amounts. Instead, in the
event a Debenture Event of Default shall have occurred and be continuing and
such event is attributable to the failure of the Corporation to pay principal of
or interest on the Junior
20
<PAGE> 23
Subordinated Debt Securities on the applicable payment date, a holder of Capital
Securities may institute a Direct Action. Notwithstanding any payments made to a
holder of Capital Securities by the Corporation in connection with a Direct
Action, the Corporation shall remain obligated to pay the principal of and
interest on the Junior Subordinated Debt Securities, and the Corporation shall
be subrogated to the rights of the holder of such Capital Securities with
respect to payments on the Capital Securities to the extent of any payments made
by the Corporation to such holder in any Direct Action. Except as described
herein, holders of Capital Securities will not be able to exercise directly any
other remedy available to the holders of the Junior Subordinated Debt Securities
or assert directly any other rights in respect of the Junior Subordinated Debt
Securities. See "Description of the Exchange Securities--Description of Junior
Subordinated Debt Securities--Enforcement of Certain Rights by Holders of
Capital Securities," "--Description of Junior Subordinated Debt
Securities--Debenture Events of Default" and "--Description of Guarantee." The
Declaration provides that each holder of Trust Securities by acceptance thereof
agrees to the provisions of the Guarantee and the Indenture. Bankers Trust
Company acts as Guarantee Trustee under the Guarantee and holds the Guarantee
for the benefit of the holders of the Trust Securities. Bankers Trust Company
also acts as Property Trustee under the Declaration and Debenture Trustee under
the Indenture.
LIMITED VOTING RIGHTS
Holders of the Capital Securities will generally have limited voting
rights relating only to the modification of the Capital Securities, the
dissolution, winding-up or liquidation of the Trust, and the exercise of the
Trust's rights as holder of Junior Subordinated Debt Securities. The right to
vote to appoint, remove or replace the Property Trustee or the Delaware Trustee
is vested exclusively in the holder of the Common Securities except upon the
occurrence of certain events described herein. The Property Trustee, the
Administrative Trustees and the Corporation may amend the Declaration without
the consent of holders of the Capital Securities to ensure that the Trust will
be classified for United States Federal income tax purposes as a grantor trust
even if such action adversely affects the interests of such holders. See
"Description of the Exchange Securities--Description of Capital
Securities--Removal of Issuer Trustees" and "--Voting Rights; Amendment of the
Declaration."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
in each case in compliance with certain other conditions and restrictions. Old
Capital Securities which remain outstanding after consummation of the Exchange
Offer will continue to bear a legend reflecting such restrictions on transfer.
In addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Agreement (subject to certain limited
exceptions). The Corporation and the Trust do not intend to register under the
Securities Act any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer (subject to such limited exceptions, if
applicable).
The Registration Agreement provides, under certain circumstances, for
additional interest to become payable in respect of the Old Junior Subordinated
Debt Securities as liquidated damages, and for corresponding additional
Distributions to become payable in respect of the Old Capital Securities.
Following consummation of the Exchange Offer, the Old Capital Securities will
not be entitled to any increase in the Distribution rate thereon.
To the extent that Old Capital Securities are tendered and accepted in
the Exchange Offer, a holder's ability to sell untendered Old Capital Securities
could be adversely affected. In addition, any trading market for Old Capital
Securities which remain outstanding after the Exchange Offer could be adversely
affected.
The Exchange Capital Securities and any Old Capital Securities which
remain outstanding after consummation of the Exchange Offer will constitute a
single series of Capital Securities under the
21
<PAGE> 24
Declaration and, accordingly, will vote together as a single class for purposes
of determining whether holders of the requisite percentage in outstanding
Liquidation Amount thereof have taken certain actions or exercised certain
rights under the Declaration. See "Description of the Exchange
Securities--Description of Capital Securities--General."
ABSENCE OF PUBLIC MARKET
The Old Capital Securities were issued to, and the Corporation believes
are currently owned by, a relatively small number of beneficial owners. The Old
Capital Securities have not been registered under the Securities Act and will be
subject to restrictions on transferability to the extent that they are not
exchanged for the Exchange Capital Securities. Although the Exchange Capital
Securities will generally be permitted to be resold or otherwise transferred by
the holders thereof without compliance with the registration requirements under
the Securities Act, they will constitute a new issue of securities with no
established trading market. Capital Securities may be transferred by the holders
thereof only in blocks having a Liquidation Amount of not less than $100,000
(100 Capital Securities). The Corporation and the Trust have been advised by the
Initial Purchaser that the Initial Purchaser presently intends to make a market
in the Exchange Capital Securities and the Old Capital Securities. However, the
Initial Purchaser is not obligated to do so and any market-making activity with
respect to the Exchange Capital Securities or the Old Capital Securities may be
discontinued at any time without notice. In addition, such market-making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act. Accordingly, no assurance can be given that an active public or
other market will develop for the Exchange Capital Securities or the Old Capital
Securities or as to the liquidity of or the trading market for the Exchange
Capital Securities or the Old Capital Securities. If an active public market
does not exist for the Exchange Capital Securities or the Old Capital
Securities, as the case may be, the market price and liquidity of such Capital
Securities may be adversely affected.
Future trading prices of the Capital Securities will depend on many
factors, including, among other things, prevailing interest rates, results of
operations of the Corporation and the market for similar securities. Under
certain circumstances, the Capital Securities may trade at a discount.
Notwithstanding the registration of the Exchange Capital Securities in
the Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of
the Securities Act) of the Corporation or the Trust may publicly offer for sale
or resell the Exchange Securities only in compliance with the provisions of Rule
144 under the Securities Act.
Each broker-dealer that receives Exchange Capital Securities for its
own account in exchange for Old Capital Securities, where such Old Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
See "Plan of Distribution."
EXCHANGE OFFER PROCEDURES
Issuance of Exchange Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after timely receipt
by the Trust of such Old Capital Securities, a properly completed and duly
executed Letter of Transmittal and all other required documents. Therefore,
holders of Old Capital Securities desiring to tender such Old Capital Securities
in exchange for Exchange Capital Securities should allow sufficient time to
ensure timely delivery. The Trust is under no duty to give notification of
defects or irregularities with respect to the tenders of Old Capital Securities
for exchange.
22
<PAGE> 25
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges
of the Corporation for the respective periods indicated.
Consolidated Ratios of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding Interest on Deposits 1.66 1.94 1.96 1.79 1.98
Including Interest on Deposits 1.26 1.39 1.37 1.24 1.31
</TABLE>
For the purpose of computing the consolidated ratios of earnings to
fixed charges, earnings represent consolidated income before income taxes plus
fixed charges. Fixed charges excluding interest on deposits consist of interest
on long-term debt and short-term borrowings and one-third of rental expense
(which is deemed representative of the interest factor). Fixed charges including
interest on deposits consist of the foregoing items plus interest on deposits.
USE OF PROCEEDS FROM SALE OF OLD CAPITAL SECURITIES
Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the Exchange Capital Securities offered hereby. In
consideration for issuing the Exchange Capital Securities in exchange for Old
Capital Securities as described in this Prospectus, the Trust will receive Old
Capital Securities in like Liquidation Amount. The Old Capital Securities
surrendered in exchange for the Exchange Capital Securities will be retired and
canceled.
The net proceeds to the Trust from the offering of the Old Capital
Securities was $200,000,000 (before deducting expenses associated with the
offering). All of the proceeds from the sale of the Old Capital Securities were
invested by the Trust in the Old Junior Subordinated Debt Securities. The
Corporation has applied the net proceeds from the sale of the Old Junior
Subordinated Debt Securities to its general funds to be used by its management
for general corporate purposes, including, from time to time, the redemption or
the purchase, in the open market or in privately negotiated transactions, of
outstanding indebtedness or preferred stock of the Corporation and the making of
advances to its subsidiaries, principally the Bank. Pending such application,
the net proceeds may be used to make short-term investments or reduce short-term
borrowings.
Management anticipates that the Corporation may, from time to time,
engage in additional equity or debt financings.
23
<PAGE> 26
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation and its subsidiaries as of December 31, 1996 and as adjusted to give
effect to certain transactions to be effective subsequent to such date. The
following data should be read in conjunction with the consolidated financial
statements and notes thereto of the Corporation and its subsidiaries
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
December 31, 1996
-----------------
Actual As Adjusted
------ -----------
(in millions)
(unaudited)
<S> <C> <C>
Deposits $31,726 $31,726
Short-term borrowings 5,447 5,447
Total long-term debt 3,899 3,899
------- -------
Total debt 41,072 41,072
Company-obligated manditorily redeemable preferred securities 350 350
of subsidiary trusts(1)
STOCKHOLDERS' EQUITY:
Preferred stock(2) 556 400
Common stock--$5.00 par value--150,000,000 shares authorized,
55,009,549 shares outstanding 275 275
Surplus 502 502
Retained earnings 1,919 1,919
Net unrealized appreciation on securities available for sale,
net of taxes 55 55
------- -------
Total stockholders' equity 3,307 3,151
------- -------
TOTAL CAPITALIZATION $44,729 $44,573
======= =======
</TABLE>
(1) The company-obligated manditorily redeemable preferred securities of
subsidiary trusts consist of the Old Capital Securities and capital
securities issued by a subsidiary trust other than the Trust. The Trust
is a wholly-owned subsidiary of the Corporation and holds the Junior
Subordinated Debt Securities as its sole assets; the other subsidiary
trust which issued company-obligated manditorily redeemable capital
securities is also a wholly-owned subsidiary of the Corporation and also
holds junior subordinated debt securities as its sole assets.
(2) The Corporation intends to redeem preferred stock outstanding in an
aggregate amount of $155.8 million during the first quarter of 1997.
DIVIDEND HISTORY
The Corporation has paid a regular quarterly dividend on its Common
Stock since such payment began in 1975.
24
<PAGE> 27
REPUBLIC NEW YORK CAPITAL II
The Trust is a statutory business trust formed under Delaware law
pursuant to (i) the original declaration of trust executed by the Corporation,
as Depositor, Bankers Trust (Delaware), as Delaware Trustee, and the
administrative trustees named therein, which original declaration of trust was
amended and restated and executed by the Corporation, as Depositor, Bankers
Trust Company, as Property Trustee, Bankers Trust (Delaware), as Delaware
Trustee, and the Administrative Trustees named therein on December 4, 1996 (the
"Declaration"), and (ii) the filing of a certificate of trust with the Delaware
Secretary of State on November 26, 1996. The Trust exists for the exclusive
purposes of (i) issuing and selling the Trust Securities and effecting the
Exchange Offer for the Exchange Capital Securities, (ii) using the proceeds from
the sale of the Trust Securities to acquire the Old Junior Subordinated Debt
Securities, (iii) exchanging the Old Junior Subordinated Debt Securities for
Exchange Junior Subordinated Debt Securities in the Exchange Offer and (iv)
engaging in only those other activities necessary, advisable or incidental
thereto. Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money or issue debt or mortgage or pledge any of its
assets. Accordingly, the Junior Subordinated Debt Securities will be the sole
assets of the Trust, and payments under the Junior Subordinated Debt Securities
and the expense provisions under the Indenture will be the sole revenues of the
Trust. All of the Common Securities are and will be owned directly or indirectly
by the Corporation. The Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Capital Securities, except that upon the
occurrence and continuance of an Event of Default (as defined herein) under the
Declaration resulting from a Debenture Event of Default, the rights of the
Corporation as holder of the Common Securities to payment in respect of
Distributions and payments on account of the liquidation of the Trust or the
redemption or other acquisition of the Common Securities will be subordinated to
the rights of the holders of the Capital Securities. See "Description of the
Exchange Securities--Description of Capital Securities--Subordination of Common
Securities." The Corporation acquired the Common Securities in an aggregate
Liquidation Amount equal to 3% of the total capital of the Trust. The Trust has
a term of 54 years, but may terminate earlier as provided in the Declaration.
The Trust's business and affairs are conducted by its trustees, each appointed
by the Corporation as holder of the Common Securities. The trustees for the
Trust are Bankers Trust Company, as the Property Trustee, Bankers Trust
(Delaware), as the Delaware Trustee, and two individual trustees as
Administrative Trustees who are employees or officers of or affiliated with the
Corporation (collectively, the "Issuer Trustees"). Bankers Trust Company, as
Property Trustee, will act as sole indenture trustee under the Declaration.
Bankers Trust Company also acts as trustee under the Guarantee Agreement and the
Indenture. See "Description of the Exchange Securities--Description of Junior
Subordinated Debt Securities" and "--Description of Guarantee." The holder of
the Common Securities of the Trust, or the holders of a majority in Liquidation
Amount of the Capital Securities if an Event of Default under the Declaration
resulting from a Debenture Event of Default has occurred and is continuing, will
be entitled to appoint, remove or replace the Property Trustee and/or the
Delaware Trustee. In no event will the holders of the Capital Securities have
the right to vote to appoint, remove or replace the Administrative Trustees;
such voting rights are vested exclusively in the holder of the Common
Securities. The duties and obligations of each Issuer Trustee are governed by
the Declaration. Pursuant to the expense provisions under the Indenture, the
Corporation will pay all fees and expenses related to the Exchange Offer and
will pay, directly or indirectly, all ongoing costs, expenses and liabilities of
the Trust. See "Description of the Exchange Securities--Description of Capital
Securities--Expenses and Taxes." The principal executive office of the Trust is
care of:
Republic New York Corporation
452 Fifth Avenue
New York, New York 10018
Telephone: (212) 525-6100
Attention: Office of the Secretary
25
<PAGE> 28
REPUBLIC NEW YORK CORPORATION
Republic New York Corporation is a bank holding company incorporated
under the laws of Maryland in 1973 and registered with the Federal Reserve
pursuant to the United States Bank Holding Company Act of 1956, as amended. The
Corporation's principal asset is the capital stock of the Bank. Management
expects that the Bank will remain the Corporation's principal asset and source
of revenue and net income in the foreseeable future. Based on total assets at
September 30, 1996, the Corporation was the seventeenth largest bank holding
company in the United States.
The principal executive offices of the Corporation are located at 452
Fifth Avenue, New York, New York 10018 (telephone: 212-525-6100).
Mr. Edmond J. Safra is a principal stockholder of the Corporation,
owning approximately 27.7% of the Corporation's outstanding common stock through
his ownership of all the outstanding shares of Saban S.A., which owns directly
or indirectly 15,229,036 shares of the Corporation's common stock, and of
another corporation which owns 29,776 shares of the Corporation's common stock.
Mr. Safra, through Saban S.A. and a subsidiary thereof, has approval of the
Federal Reserve, through April 28, 1997, to acquire up to 1,730,400 additional
shares of common stock of the Corporation in the open market and through
privately negotiated transactions, which, if all such shares of common stock
were acquired, would result in his ownership of approximately 30.9% of the
Corporation's outstanding common stock.
The Corporation is a legal entity separate and distinct from the Bank
and its other subsidiaries and affiliates. Because the Corporation is a holding
company, its rights and the rights of its creditors and stockholders, including
the holders of the Junior Subordinated Debt Securities and the Guarantee, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of such subsidiary's
creditors, except to the extent that the Corporation may itself be a creditor
with recognized claims against such subsidiary, in which case it will share in
such assets with other creditors.
There are various legal limitations on the extent to which the
Corporation's bank subsidiaries may extend credit, pay dividends or otherwise
supply funds to the Corporation. The approval of the Office of the Comptroller
of the Currency is required if total dividends declared by a national bank in
any calendar year exceed net profits for that year combined with its retained
net profits for the preceding two years. In addition, dividends for such a bank
may not be paid in excess of such bank's undivided profits. In determining
whether and to what extent to pay dividends, each bank subsidiary must also
consider the effect of dividend payments on applicable risk-based capital and
leverage ratio requirements, as well as policy statements of the federal
regulatory agencies that indicate that banking organizations should generally
pay dividends out of current operating earnings.
The Corporation also derives dividends from its non-bank subsidiaries.
These subsidiaries are not subject to regulatory restrictions on their payment
of dividends to the Corporation. In addition, there are numerous governmental
requirements and regulations that affect the activities of the Corporation and
its bank and non-bank subsidiaries.
Under long-standing policy of the Federal Reserve, a bank holding
company is expected to act as a source of financial strength for its subsidiary
banks and to commit resources to support such banks. As a result of that policy,
the Corporation may be required to commit resources to its subsidiary banks in
circumstances where it might not otherwise do so.
26
<PAGE> 29
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the
Corporation and the Trust entered into the Registration Agreement with the
Initial Purchaser, pursuant to which the Corporation and the Trust agreed, among
other things, to file and to use their reasonable efforts to cause to become
effective with the Commission a registration statement with respect to the
exchange of the Old Capital Securities for capital securities with terms
identical in all material respects to the terms of the Old Capital Securities. A
copy of the Registration Agreement has been filed as an Exhibit to the
Registration Statement of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations
of the Corporation and the Trust under the Registration Agreement. The form and
terms of the Exchange Capital Securities are the same as the form and terms of
the Old Capital Securities except that the Exchange Capital Securities have been
registered under the Securities Act and therefore will not be subject to certain
restrictions on transfer applicable to the Old Capital Securities and will not
provide for any increase in the Distribution rate thereon. In that regard, the
Old Capital Securities provide, among other things, that, if the Exchange Offer
is not consummated within a specified period after the date the Old Capital
Securities were issued, the Distribution rate borne by the Old Capital
Securities will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any increase in the Distribution rate thereon
or any further registration rights under the Registration Agreement, except
under limited circumstances. See "Risk Factors--Consequences of a Failure to
Exchange Old Capital Securities" and "Description of the Old Securities."
The Exchange Offer is not being made to, nor will the Corporation or
the Trust accept tenders for exchange from, holders of Old Capital Securities in
any jurisdiction in which the Exchange Offer or the acceptance thereof would not
be in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect
to the Exchange Offer means any person in whose name the Old Capital Securities
are registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by The Depository Trust Company
("DTC") who desires to deliver such Old Capital Securities by book-entry
transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange, as soon
as practicable after the date hereof, the Old Guarantee for the Exchange
Guarantee and all of the Old Junior Subordinated Debt Securities, of which
$206,186,000 aggregate principal amount is outstanding, for a like aggregate
principal amount of the Exchange Junior Subordinated Debt Securities. The
Exchange Guarantee and the Exchange Junior Subordinated Debt Securities have
been registered under the Securities Act.
TERMS OF THE EXCHANGE
The Corporation and the Trust hereby offer, upon the terms and subject
to the conditions set forth in this Prospectus and in the accompanying Letter of
Transmittal, to exchange up to $200,000,000 aggregate Liquidation Amount of
Exchange Capital Securities for a like aggregate Liquidation Amount of Old
Capital Securities properly tendered prior to 5:00 p.m., New York City time, on
the Expiration Date and not properly withdrawn in accordance with the procedures
described below. The Trust will issue, promptly after the Expiration Date, an
aggregate Liquidation Amount of up to $200,000,000 of Exchange Capital
Securities in exchange for a like Liquidation Amount of outstanding Old Capital
Securities tendered and accepted in connection with the Exchange Offer. Holders
may tender their Old Capital Securities in whole or in part in a Liquidation
Amount of not less than $100,000 or any integral multiple of $1,000 in excess
thereof.
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The Exchange Offer is not conditioned upon any minimum Liquidation
Amount of Old Capital Securities being tendered. As of the date of this
Prospectus, $200,000,000 aggregate Liquidation Amount of the Old Capital
Securities is outstanding.
Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital Securities
which are not tendered or are tendered but not accepted in connection with the
Exchange Offer will remain outstanding and be entitled to the benefits of the
Declaration, but will not be entitled to any increase in the Distribution rate
thereon or any further registration rights under the Registration Agreement,
except under limited circumstances. See "Risk Factors--Consequences of a Failure
to Exchange Old Capital Securities" and "Description of the Old Securities".
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital Securities
will be returned, without expense, to the tendering holder thereof promptly
after the Expiration Date.
Holders who tender Old Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Capital Securities in connection with the
Exchange Offer. The Corporation will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See "--Fees and Expenses".
NEITHER THE BOARD OF DIRECTORS OF THE CORPORATION NOR THE TRUSTEES OF
THE TRUST MAKE ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO
WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD
CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES
MUST MAKE THEIR OWN DECISION BASED ON THEIR OWN FINANCIAL POSITION AND
REQUIREMENTS WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE
AGGREGATE LIQUIDATION AMOUNT OF OLD CAPITAL SECURITIES TO TENDER AFTER READING
THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR
ADVISERS, IF ANY.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
__________, 1997 unless the Exchange Offer is extended by the Corporation and
the Trust (in which case the term "Expiration Date" shall mean the latest date
and time to which the Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right in their sole
and absolute discretion, subject to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old Capital Securities for exchange,
(ii) to terminate the Exchange Offer (whether or not any Old Capital Securities
have theretofore been accepted for exchange) if the Corporation and the Trust
determine, in their sole and absolute discretion, that any of the events or
conditions referred to under "--Conditions to the Exchange Offer" have occurred
or exist or have not been satisfied, (iii) to extend the Expiration Date of the
Exchange Offer and retain all Old Capital Securities tendered pursuant to the
Exchange Offer, subject, however, to the right of holders of Old Capital
Securities to withdraw their tendered Old Capital Securities as described under
"--Withdrawal Rights," and (iv) to waive any condition or otherwise amend the
terms of the Exchange Offer in any respect. If the Exchange Offer is amended in
a manner determined by the Corporation and the Trust to constitute a material
change, or if the Corporation and the Trust waive a material condition of the
Exchange Offer, the Corporation or the Trust will promptly disclose such
amendment or waiver by means of a prospectus supplement that will be distributed
to the registered holders of the Old Capital Securities, and the Corporation and
the Trust will extend the Exchange Offer to the extent required by applicable
law.
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Any such delay in acceptance, extension, termination or amendment will
be followed promptly by oral or written notice thereof to the Exchange Agent and
by making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation or the Trust may choose to make any public
announcement and subject to applicable law, neither the Corporation nor the
Trust shall have any obligation to publish, advertise or otherwise communicate
any such public announcement other than by issuing a release to an appropriate
news agency.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
VALID TENDER. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees and any other required documents, must be
received by the Exchange Agent at one of its addresses set forth under
"--Exchange Agent". In addition, either (i) certificates for such Old Capital
Securities must be received by the Exchange Agent or (ii) a timely confirmation
of a book-entry transfer ("Book-Entry Confirmation") of such Old Capital
Securities, if that procedure is available, into the Exchange Agent's account at
DTC pursuant to the procedure for book-entry transfer described below, must be
received by the Exchange Agent, in each case prior to 5:00 p.m., New York City
time, on the Expiration Date or (iii) the holder must comply with the guaranteed
delivery procedures set forth below.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
The tender by a holder of Old Capital Securities that is not withdrawn
before 5:00 p.m., New York City time, on the Expiration Date will constitute an
agreement between such holder and the Corporation and the Trust in accordance
with the terms and subject to the conditions set forth herein and in the Letter
of Transmittal.
Any beneficial owner whose Old Capital Securities are registered in the
name of a broker, dealer, commercial bank, trust company, or other nominee and
who wishes to tender should contact the registered holder promptly and instruct
such registered holder to tender on the beneficial owner's behalf. If the
beneficial owner wishes to tender on his own behalf, the owner must, prior to
completing and executing the Letter of Transmittal and delivering Old Capital
Securities certificates, either make appropriate arrangements to register
ownership of the Old Capital Securities in such beneficial owner's name or
obtain a properly completed bond power from the registered holder. The transfer
of registered ownership may take considerable time.
If less than all of the Old Capital Securities held by a holder are
tendered, such tendering holder should fill in the amount of Old Capital
Securities being tendered in the appropriate box on the Letter of Transmittal.
The entire amount of Old Capital Securities delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated.
SIGNATURES. Certificates for the Old Capital Securities need not be
endorsed and signature guarantees on the Letter of Transmittal, or a notice of
withdrawal, as the case may be, are unnecessary unless (a) a certificate for the
Old Capital Securities is registered in a name other than that of the person
surrendering the certificate or (b) such registered holder completes the box
entitled "Special Issuance Instructions" or "Special Delivery Instructions" in
the Letter of Transmittal. In the case of (a) or (b) above, such certificates
for Old Capital Securities must be duly endorsed or accompanied by a properly
executed bond power, with the endorsement or signature on the bond power and on
the Letter of Transmittal
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guaranteed by a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as an "eligible guarantor institution," including (as such terms
are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association (each, an "Eligible Institution"), unless
surrendered on behalf of such Eligible Institution. See Instruction 1 to the
Letter of Transmittal.
If any Letter of Transmittal, endorsement, bond power, power of
attorney, or any other document required by the Letter of Transmittal is signed
by a trustee, attorney-in-fact, officer of a corporation or other person acting
in a fiduciary or representative capacity, such person should so indicate when
signing, and unless waived by the Corporation or the Trust, proper evidence
satisfactory to the Corporation or the Trust, in its sole discretion, of such
person's authority to so act must be submitted.
DETERMINATION OF VALIDITY. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Corporation and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by them not to be in proper form or the acceptance of which, or
exchange for, may, in the view of counsel to the Corporation and the Trust, be
unlawful. The Corporation and the Trust also reserve the absolute right, subject
to applicable law, to waive any of the conditions of the Exchange Offer as set
forth under "--Conditions to the Exchange Offer" or any condition or
irregularity in any tender of Old Capital Securities of any particular holder,
whether or not similar conditions or irregularities are waived in the case of
other holders.
The Corporation's and the Trust's interpretation of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the Corporation,
the Trust, any affiliates or assigns of the Corporation, the Exchange Agent nor
any other person shall be under any duty to give any notification of any
irregularities in tenders or incur any liability for failure to give any such
notification.
ACCEPTANCE OF OLD CAPITAL SECURITIES FOR EXCHANGE; DELIVERY OF EXCHANGE
CAPITAL SECURITIES. Upon the terms and subject to the conditions of the Exchange
Offer, the Corporation and the Trust will exchange, and will issue to the
Exchange Agent, Exchange Capital Securities for Old Capital Securities validly
tendered and not withdrawn (pursuant to the withdrawal rights described under
"--Withdrawal of Tenders") promptly after the Expiration Date.
In all cases, delivery of Exchange Capital Securities in exchange for
Old Capital Securities tendered and accepted for exchange pursuant to the
Exchange Offer will be made only after timely receipt by the Exchange Agent of
(i) Old Capital Securities or a Book-Entry Confirmation (as defined below), (ii)
the Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and (iii) any other documents
required by the Letter of Transmittal.
Subject to the terms and conditions of the Exchange Offer, the
Corporation and the Trust will be deemed to have accepted for exchange, and
thereby exchanged, Old Capital Securities validly tendered and not withdrawn as,
if and when the Corporation or the Trust gives oral or written notice to the
Exchange Agent of the Corporation's and the Trust's acceptance of such Old
Capital Securities for exchange pursuant to the Exchange Offer. The Exchange
Agent will act as agent for the Corporation and the Trust for the purpose of
receiving tenders of Old Capital Securities, Letters of Transmittal and related
documents, and as agent for tendering holders for the purpose of receiving Old
Capital Securities, Letters of Transmittal and related documents and
transmitting Exchange Capital Securities to validly tendering holders. Such
exchange will be made promptly after the Expiration Date. If, for any reason
whatsoever, acceptance for exchange or the exchange of any Old
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Capital Securities tendered pursuant to the Exchange Offer is delayed (whether
before or after the Corporation's and the Trust's acceptance for exchange of Old
Capital Securities) or the Corporation or the Trust extends the Exchange Offer
or is unable to accept for exchange or exchange Old Capital Securities tendered
pursuant to the Exchange Offer, then, without prejudice to the Corporation or
the Trust's rights set forth herein, the Exchange Agent may, nevertheless, on
behalf of the Corporation and the Trust (and subject to applicable law), retain
tendered Old Capital Securities and such Old Capital Securities may not be
withdrawn except to the extent tendering holders are entitled to withdrawal
rights as described under "--Withdrawal of Tenders."
Pursuant to the Letter of Transmittal, a holder of Old Capital
Securities will warrant and agree in the Letter of Transmittal that it has full
power and authority to tender, exchange, sell, assign and transfer Old Capital
Securities, that the Trust will acquire good, marketable and unencumbered title
to the tendered Old Capital Securities, free and clear of all liens,
restrictions, charges and encumbrances, and that the Old Capital Securities
tendered for exchange are not subject to any adverse claims or proxies. The
holder also will warrant and agree that it will, upon request, execute and
deliver any additional documents deemed by the Corporation, the Trust or the
Exchange Agent to be necessary or desirable to complete the exchange, sale,
assignment and transfer of the Old Capital Securities tendered pursuant to the
Exchange Offer.
Notwithstanding any other provision hereof, the delivery of Exchange
Capital Securities in exchange for Old Capital Securities tendered and accepted
for exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities and a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
together with any required signature guarantees and any other documents required
by the Letter of Transmittal, or of a Book-Entry Confirmation with respect to
such Old Capital Securities. Accordingly, the delivery of Exchange Capital
Securities might not be made to all tendering holders at the same time, and will
depend upon when Old Capital Securities, Book-Entry Confirmations with respect
to Old Capital Securities and other required documents are received by the
Exchange Agent.
BOOK-ENTRY TRANSFER. The Exchange Agent will make a request to
establish an account with respect to the Old Capital Securities at DTC for
purposes of the Exchange Offer within two business days after the date of this
Prospectus. Any financial institution that is a participant in DTC's book-entry
transfer facility system may make a book-entry delivery of the Old Capital
Securities by causing DTC to transfer such Old Capital Securities into the
Exchange Agent's account at DTC in accordance with DTC's procedures for
transfers. However, although delivery of Old Capital Securities may be effected
through book-entry transfer into the Exchange Agent's account at DTC, the Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees and any other required documents, must,
in any case other than as set forth in the following paragraph, be transmitted
to and received by the Exchange Agent at one of its addresses set forth under
"--Exchange Agent" prior to 5:00 p.m., New York City time, on the Expiration
Date, or the guaranteed delivery procedure set forth below must be complied with
in order for such Old Capital Securities to be properly tendered.
DTC's Automated Tender Offer Program ("ATOP") is the only method of
processing exchange offers through DTC. To accept the Exchange Offer through
ATOP, participants in DTC must send electronic instructions to DTC through DTC's
communication system in place for sending signed, hard copy of the Letter of
Transmittal. DTC is obligated to communicate those electronic instructions to
the Exchange Agent. To tender Old Capital Securities through ATOP, the
electronic instructions sent to DTC and transmitted by DTC to the Exchange Agent
must contain the character by which the participant acknowledges its receipt of
and agrees to be bound by the Letter of Transmittal.
GUARANTEED DELIVERY. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for such Old
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent before 5:00 p.m., New York City
time, on the Expiration Date, or the procedures for book-entry transfer cannot
be completed on a timely basis, such Old Capital Securities may nevertheless be
tendered, provided that all of the following guaranteed delivery procedures are
complied with:
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(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of
Transmittal, is received by the Exchange Agent prior to 5:00 p.m., New
York City time, on the Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees and any
other documents required by the Letter of Transmittal, are received by
the Exchange Agent within five New York Stock Exchange trading days
after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail, to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in such notice.
WITHDRAWAL OF TENDERS. Tenders of Old Capital Securities may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
For withdrawal to be effective, a written electronic ATOP transmission
notice of withdrawal (for DTC participants) must be received by the Exchange
Agent at one of its addresses set forth herein prior to 5:00 p.m., New York City
time, on the Expiration Date. Any such notice of withdrawal must (i) specify the
name of the person having tendered the Old Capital Securities to be withdrawn,
(ii) identify the Old Capital Securities to be withdrawn (including the
certificate number or numbers and Liquidation Amount of such Old Capital
Securities) and (iii) where physical certificates for Old Capital Securities
have been transmitted, specify the name in which any such Old Capital Securities
are registered, if different from that of the withdrawing holder. If physical
certificates for Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then, prior to the release of such
certificates, the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed, as necessary. If Old Capital Securities have been
tendered pursuant to the procedure for book-entry transfer described above, any
notice of withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawn Old Capital Securities and otherwise comply with
DTC's procedures. All questions as to validity, form, and eligibility (including
time of receipt) of such notices will be determined by the Corporation or the
Trust, whose determination shall be final and binding on all parties. Any Old
Capital Securities so withdrawn will be deemed not to have been validly tendered
for exchange for purposes of the Exchange Offer. Any Old Capital Securities
which have been tendered for exchange but which are not exchanged for any reason
will be returned to the holder thereof without cost to such holder (or, in the
case of Old Capital Securities tendered by book-entry transfer into the Exchange
Agent's account at DTC pursuant to the book-entry transfer procedures described
above, such Old Capital Securities will be credited to an account maintained
with DTC for the Old Capital Securities) as soon as practicable after
withdrawal, rejection of tender, or termination of the Exchange Offer. Properly
withdrawn Old Capital Securities may be retendered by following one of the
procedures described above at an time prior to 5:00 p.m., New York City time, on
the Expiration Date.
RESALES OF EXCHANGE CAPITAL SECURITIES
Based on existing interpretations by the staff of the Commission and
subject to the two immediately following sentences, the Corporation and the
Trust believe that the Exchange Capital Securities, the Exchange Guarantee and,
after the distribution thereof to the holders of the Capital Securities, the
Exchange Junior Subordinated Debt Securities issued pursuant to this Exchange
Offer may be offered for resale, resold and otherwise transferred by a holder
thereof (other than a holder who is a broker-dealer) without further compliance
with the registration and prospectus delivery requirements of
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the Securities Act; provided, that, such Exchange Capital Securities are
acquired in the ordinary course of such holder's business and such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of the
Exchange Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate" of the Trust or the Corporation or who intends to participate
in the Exchange Offer for the purpose of distributing the Exchange Capital
Securities, or any broker-dealer who purchased the Old Capital Securities from
the Trust to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, (a) will not be able to rely on the interpretations of the
staff of the Commission set forth in the above-mentioned no-action letters, (b)
will not be permitted or entitled to tender such Old Capital Securities in the
Exchange Offer and (c) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other transfer
of such Old Capital Securities unless such sale is made pursuant to an exemption
from such requirements. In addition, as described below, if any broker-dealer
holds Old Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Old Capital
Securities for Exchange Capital Securities, then such broker-dealer must deliver
a prospectus meeting the requirements of the Securities Act in connection with
any resales of such Exchange Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old
Capital Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an "affiliate" of the Trust or the
Corporation, (ii) any Exchange Capital Securities to be received by it are being
acquired in the ordinary course of its business and (iii) it has no arrangement
or understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities. Each
broker-dealer that receives Exchange Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it acquired the Old Capital
Securities for its own account as the result of market-making activities or
other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such Exchange Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Commission in the no-action
letters referred to above, the Corporation and the Trust believe that
broker-dealers who acquired Old Capital Securities for their own accounts as a
result of market-making activities or other trading activities may fulfill their
prospectus delivery requirements with respect to the Exchange Capital Securities
received upon exchange of such Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment from the original sale of the Old
Capital Securities) with the prospectus prepared for the Exchange Offer so long
as it contains a description of the plan of distribution with respect to the
resale of such Exchange Capital Securities. Accordingly, subject to certain
provisions set forth in the Registration Agreement and to the limitations set
out herein, the Corporation and the Trust have agreed that this Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of such Exchange Capital Securities for
a period commencing on the Expiration Date and ending 180 days after the
Expiration Date or, if earlier, when all such Exchange Capital Securities have
been disposed of by such broker-dealer. See "Plan of Distribution." Any
broker-dealer who is an "affiliate" of the Trust or the Corporation may not rely
on such no-action letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction.
In that regard, each broker-dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal, that, upon receipt of notice from the
Corporation or the Trust of the occurrence of any event or the discovery of any
fact which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or which causes this Prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain other
events specified in the Registration Agreement, such broker-dealer will suspend
the sale of Exchange Capital Securities (or the Exchange Junior Subordinated
Debt Securities, as applicable) pursuant to this Prospectus until the
Corporation or the
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Trust has amended or supplemented this Prospectus to correct such misstatement
or mission and has furnished copies of the amended or supplemented Prospectus to
such broker-dealer or the Corporation or the Trust has given notice that the
sale of the Exchange Capital Securities (or the Exchange Junior Subordinated
Debt Securities, as applicable) may be resumed.
Neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Commission would make
a similar determination with respect to the Exchange Offer as it has in such
no-action letters to third parties.
DISTRIBUTIONS ON THE EXCHANGE CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive accumulated Distributions on such Old
Capital Securities for any period from the Distribution Date with respect to
such Old Capital Securities immediately preceding the original issue date of the
Exchange Capital Securities or, if no such Distribution Date has occurred, from
the original issue date of such Old Capital Securities, and such tendering
holders will be deemed to have waived the right to receive any such
Distributions. However, because Distributions on the Exchange Capital Securities
will accumulate from the later of the Distribution Date of the Old Capital
Securities immediately preceding the original issue date of the Exchange Capital
Securities and the original issue date of the Old Capital Securities, the amount
of the Distributions received by holders whose Old Capital Securities are
accepted for exchange will not be affected by the exchange.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Trust will not be required to accept for
exchange, or to exchange, any Old Capital Securities for any Exchange Capital
Securities, and, as described below, may terminate the Exchange Offer (whether
or not any Old Capital Securities have theretofore been accepted for exchange)
or may waive any conditions to or amend the Exchange Offer, if any of the
following conditions have occurred or exists or have not been satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the Exchange Capital Securities issued
pursuant to the Exchange Offer in exchange for Old Capital Securities to be
offered for resale, resold and otherwise transferred by holders thereof (other
than broker-dealers and any such holder which is an "affiliate" of the Trust or
the Corporation within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act; provided that such Exchange Capital Securities are acquired in
the ordinary course of such holder's business and such holders have no
arrangement or understanding with any person to participate in the distribution
of such Exchange Capital Securities; or
(b) any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect to the
Exchange Offer which, in the Corporation's and the Trust's judgment, would
reasonably be expected to impair the ability of the Corporation or the Trust to
proceed with the Exchange Offer; or
(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in the Corporation's and the Trust's judgment, would reasonably
be expected to impair the ability of the Corporation or the Trust to proceed
with the Exchange Offer; or
(d) a banking moratorium shall have been declared by United States
federal or New York State authorities which, in the Corporation's and the
Trust's judgment, would reasonably be expected to impair the ability of the
Corporation or the Trust to proceed with the Exchange Offer; or
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(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Corporation's and
the Trust's judgment, would reasonably be expected to impair the ability of the
Corporation or the Trust to proceed with the Exchange Offer; or
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration Statement
or proceedings shall have been initiated or, to the knowledge of the Corporation
or the Trust, threatened for that purpose; or
(g) any change, or any development involving a prospective change, in
the business or financial affairs of the Corporation or the Trust or any of
their subsidiaries have occurred which, in the judgment of the Corporation and
the Trust, might materially impair the ability of the Corporation or the Trust
to proceed with the Exchange Offer; or
(h) there is a reasonable likelihood in the Corporation's and the
Trust's judgment that, or a material uncertainty exists in the Corporation's and
the Trust's judgment as to whether, consummation of the Exchange Offer would
result in an adverse tax consequence to the Corporation.
If the Corporation and the Trust determine in their sole and absolute
discretion that any of the foregoing events or conditions has occurred or exists
or has not been satisfied, the Corporation and the Trust may, subject to
applicable law, terminate the Exchange Offer (whether or not any Old Capital
Securities have theretofore been accepted for exchange) or may waive any such
condition or otherwise amend the terms of the Exchange Offer in any respect. If
such waiver or amendment constitutes a material change to the Exchange Offer,
the Corporation and the Trust will promptly disclose such waiver or amendment by
means of a prospectus supplement that will be distributed to the registered
holders of the Old Capital Securities, and the Corporation and the Trust will
extend the Exchange Offer to the extent required by applicable law.
EXCHANGE AGENT
Bankers Trust Company has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent as follows:
Inquiries by Telephone: 1-800-735-7777
By Facsimile: 615-835-3701
By mail: By hand:
BT Services Tennessee, Inc. Bankers Trust Company
Reorganization Unit Corporate Trust and Agency Group
P.O. Box 292737 123 Washington Street
Nashville, TN 37229-2737 First Floor Window
New York, NY 10008
By overnight mail:
BT Services Tennessee, Inc.
Corporate Trust and Agency Group
Reorganization Unit
648 Grassmere Park Dr.
Nashville, TN 37211
Delivery to other than the above addresses or facsimile number in the
manner prescribed for each such address will not constitute a valid delivery.
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FEES AND EXPENSES
The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Corporation will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and in
tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however,
Exchange Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Old Capital
Securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of Old Capital Securities in connection with the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
Neither the Corporation nor the Trust will make any payment to brokers,
dealers or others soliciting acceptances of the Exchange Offer.
DESCRIPTION OF THE EXCHANGE SECURITIES
DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Declaration, the Issuer Trustees have
issued the Old Capital Securities and the Common Securities and will issue the
Exchange Capital Securities. The Exchange Capital Securities will represent
beneficial ownership interests in the Trust and the holders thereof will be
entitled to a preference in certain circumstances with respect to Distributions
and amounts payable on redemption of the Trust Securities or liquidation of the
Trust over the Common Securities, as well as other benefits described in the
Declaration. See "--Subordination of Common Securities." The Declaration has
been qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). This summary of certain provisions of the Capital Securities,
the Common Securities and the Declaration does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all the provisions
of the Declaration, including the definitions therein of certain terms. The form
of the Declaration is filed as an exhibit to the Registration Statement of which
this Prospectus is a part.
GENERAL
The Capital Securities (including the Old Capital Securities and the
Exchange Capital Securities) will be limited to $200,000,000 aggregate
Liquidation Amount at any one time outstanding. The Capital Securities will rank
pari passu, and payments will be made thereon pro rata, with the Common
Securities except as described under "--Subordination of Common Securities."
Legal title to the Old Junior Subordinated Debt Securities is, and legal title
to the Exchange Junior Subordinated Debt Securities will be, held by the
Property Trustee in trust for the benefit of the holders of the Capital
Securities and Common Securities. The Guarantee Agreement provides for the
guarantee on a subordinated basis of payments of Distributions and amounts
payable on redemption of the Capital Securities or on liquidation of the Trust
with respect to the Capital Securities but will not guarantee such payments when
the Trust does not have funds on hand available to make such payments. See "--
Description of Guarantee."
DISTRIBUTIONS
The Capital Securities represent beneficial ownership interests in the
Trust, and Distributions on each Capital Security will be payable at the annual
rate of 7.53% of the stated Liquidation Amount of
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$1,000, and will be payable semi-annually in arrears on June 4 and December 4 of
each year to the holders of the Capital Securities at the close of business on
the May 20 and November 20 (each, a "record date"), as the case may be, next
preceding the relevant Distribution Date. Distributions on the Capital
Securities will be cumulative. Distributions on the Old Capital Securities
accumulate from the date of original issuance, and the first Distribution Date
thereon is June 4, 1997. Holders of Old Capital Securities whose Old Capital
Securities are accepted for exchange will not receive accumulated Distributions
on such Old Capital Securities for any period from the Distribution Date with
respect to such Old Capital Securities immediately preceding the original issue
date of the Exchange Capital Securities or, if no such Distribution Date has
occurred, from the original issue date of such Old Capital Securities, and such
tendering holders will be deemed to have waived the right to receive any such
Distributions. However, because Distributions on the Exchange Capital Securities
will accumulate from the later of the Distribution Date of the Old Capital
Securities immediately preceding the original issue date of the Exchange Capital
Securities and the original issue date of the Old Capital Securities, the amount
of the Distributions received by holders whose Old Capital Securities are
accepted for exchange will not be affected by the exchange. The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months. In the event that any date on which Distributions
are payable on the Capital Securities is not a Business Day (as defined below),
payment of the Distributions payable on such date will be made on the next
succeeding day that is a Business Day (and without any additional Distributions
or other payments in respect of any such delay) except that, if such Business
Day is in the next succeeding calendar year, payment of such Distributions shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable
(each date on which Distributions are payable in accordance with the foregoing,
a "Distribution Date"). A "Business Day" shall mean any day other than a
Saturday or a Sunday, or a day on which banking institutions in The City of New
York are authorized or required by law or executive order to remain closed, or a
day on which the corporate trust office of the Property Trustee or the Debenture
Trustee is closed for business.
So long as no Debenture Event of Default has occurred and is
continuing, the Corporation has the right under the Indenture to defer the
payment of interest on the Junior Subordinated Debt Securities at any time or
from time to time for a period not exceeding 10 consecutive semi-annual periods
with respect to each Extension Period; provided that no Extension Period may
extend beyond the Stated Maturity of the Junior Subordinated Debt Securities. As
a consequence of any such election, semi-annual Distributions on the Capital
Securities by the Trust will be deferred during any such Extension Period.
Distributions to which holders of the Capital Securities are entitled will
accumulate additional Distributions thereon at the rate per annum of 7.53%
thereof, compounded semi-annually from the relevant payment date for such
Distributions. The term "Distributions" as used herein shall include any such
additional Distributions. During any Extension Period, the Corporation may not
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Corporation's
capital stock (which includes common and preferred stock), (ii) make any payment
of principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Corporation (including Other Debentures) that rank pari
passu in all respects with or junior in interest to the Junior Subordinated Debt
Securities or (iii) make any guarantee payments with respect to any guarantee by
the Corporation of the debt securities of any subsidiary of the Corporation
(including Other Guarantees) if such guarantee ranks pari passu in all respects
with or junior in interest to the Junior Subordinated Debt Securities (other
than (a) dividends or distributions in common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) purchases or acquisitions of shares of the
Corporation's common stock in connection with the satisfaction by the
Corporation of its obligations under any employee benefit plan or any other
contractual obligation of the Corporation (other than a contractual obligation
ranking pari passu in all respects with or junior to the Junior Subordinated
Debt Securities), (e) as a result of a reclassification of the Corporation's
capital stock or the exchange or conversion of one class or series of the
Corporation's capital stock for another class or series of the Corporation's
capital stock or (f) the purchase of fractional interests in shares of the
Corporation's stock
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pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged). Prior to the termination of any such
Extension Period, the Corporation may further extend such Extension Period,
provided that such extension does not cause such Extension Period to exceed 10
consecutive semi-annual periods, to end on a date other than an Interest Payment
Date or to extend beyond the Stated Maturity of the Junior Subordinated Debt
Securities. Upon the termination of any such Extension Period and the payment of
all amounts then due, and subject to the foregoing limitations, the Corporation
may elect to begin a new Extension Period. The Corporation must give the
Property Trustee, the Administrative Trustees and the Debenture Trustee notice
of its election of any such Extension Period at least five Business Days prior
to the earlier of (i) the date the Distributions on the Capital Securities would
have been payable except for the election to begin such Extension Period or (ii)
the date the Administrative Trustees are required to give notice to any
automated quotation system or to holders of such Capital Securities of the
record date or the date such Distributions are payable but in any event not less
than five Business Days prior to such record date. There is no limitation on the
number of times that the Corporation may elect to begin an Extension Period. See
"Description of the Exchange Securities--Description of Junior Subordinated Debt
Securities--Option to Extend Interest Payment Period" and "Certain United States
Federal Income Tax Consequences--Interest Income and Original Issue Discount."
The Corporation has no current intention of exercising its right to
defer payments of interest on the Junior Subordinated Debt Securities.
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the Junior Subordinated
Debt Securities. See "Description of the Exchange Securities--Description of
Junior Subordinated Debt Securities--General." If the Corporation does not make
interest payments on the Junior Subordinated Debt Securities, the Property
Trustee will not have funds available to pay Distributions on the Capital
Securities. The payment of Distributions (if and to the extent the Trust has
funds legally available for the payment of such Distributions and cash
sufficient to make such payments) is guaranteed by the Corporation on a limited
basis as set forth herein under "Description of the Exchange
Securities--Description of Guarantee."
REDEMPTION
Upon the repayment in full at the Stated Maturity of the Junior
Subordinated Debt Securities or redemption in whole or in part of the Junior
Subordinated Debt Securities (other than following the distribution of the
Junior Subordinated Debt Securities to the holders of the Trust Securities), the
proceeds from such repayment or redemption shall be applied by the Property
Trustee to redeem a Like Amount of Trust Securities, upon not less than 30 nor
more than 60 days' notice of a date of redemption (the "Redemption Date"), at
the applicable Redemption Price, which shall be equal to (i) in the case of the
repayment of the Junior Subordinated Debt Securities at the Stated Maturity, the
Maturity Redemption Price (equal to the principal of, and accrued but unpaid
interest on, the Junior Subordinated Debt Securities) or (ii) in the case of the
optional redemption of the Junior Subordinated Debt Securities, the Optional
Redemption Price (equal to the Optional Prepayment Price (as defined under
"Description of the Exchange Securities--Description of Junior Subordinated Debt
Securities--Optional Redemption") in respect of the Junior Subordinated Debt
Securities). See "Description of the Exchange Securities--Description of Junior
Subordinated Debt Securities--Optional Redemption." If less than all of the
Junior Subordinated Debt Securities are to be redeemed on a Redemption Date,
then the proceeds from such redemption shall be allocated to the redemption pro
rata of the Capital Securities and the Common Securities. The amount of premium,
if any, paid by the Corporation upon the redemption of the Junior Subordinated
Debt Securities to be redeemed on a Redemption Date shall be allocated to the
redemption pro rata of the Capital Securities and the Common Securities.
The Corporation has the right to redeem the Junior Subordinated Debt
Securities in whole or in part at any time on or after December 4, 2006 at the
applicable Optional Prepayment Price, subject to receipt of prior approval by
the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve.
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REDEMPTION PROCEDURES
Trust Securities shall be redeemed, subject to receipt of prior
approval by the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, at the applicable Redemption
Price with the proceeds from the contemporaneous repayment or redemption of the
Junior Subordinated Debt Securities. Redemptions of the Trust Securities shall
be made and the applicable Redemption Price shall be payable on each Redemption
Date only to the extent that the Trust has funds on hand available for the
payment of such Redemption Price. See also "--Subordination of Common
Securities."
If the Trust gives a notice of redemption in respect of the Trust
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, with respect to the Capital Securities held in
global form, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the applicable Redemption Price to the holders
of the Capital Securities. See "--Form, Denomination, Book-Entry Procedures and
Transfer." With respect to the Capital Securities held in certificated form, the
Property Trustee, to the extent funds are available, will irrevocably deposit
with the paying agent for the Capital Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the applicable Redemption Price to the holders
thereof upon surrender of their certificates evidencing the Capital Securities.
See "--Payment and Paying Agency." Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date shall be payable to the holders of
the Capital Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of the holders of the
Capital Securities will cease, except the right of the holders of the Capital
Securities to receive the applicable Redemption Price, but without interest on
such Redemption Price, and the Capital Securities will cease to be outstanding.
In the event that any date fixed for redemption of Capital Securities is not a
Business Day, then payment of the applicable 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
applicable Redemption Price is improperly withheld or refused and not paid
either by the Trust or by the Corporation pursuant to the Guarantee,
Distributions on Capital Securities will continue to accrue at the then
applicable rate, from the Redemption Date originally established by the Trust to
the date such applicable Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the applicable Redemption Price.
Subject to applicable law (including, without limitation, United States
Federal securities law), the Corporation or its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.
Payment of the applicable Redemption Price on, and any distribution of
Junior Subordinated Debt Securities to holders of, the Trust Securities shall be
made to the applicable recordholders thereof as they appear on the register
therefor on the relevant record date, provided that a Redemption Date falls on a
Distribution Date.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each holder of Trust Securities at
its registered address. Unless the Corporation defaults in payment of the
applicable Prepayment Price on, or in the repayment of, the Junior Subordinated
Debt Securities, on and after the Redemption Date Distributions will cease to
accrue on the Trust Securities called for redemption.
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LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The Corporation will have the right at any time (including upon the
occurrence of a Tax Event) to terminate the Trust and cause a Like Amount of the
Junior Subordinated Debt Securities to be distributed to the holders of the
Trust Securities in liquidation of the Trust; provided, however, that following
such distribution of the Junior Subordinated Debt Securities, the Corporation
agrees to use its best efforts to maintain any ratings of such Junior
Subordinated Debt Securities by any nationally recognized rating agency for so
long as any such Junior Subordinated Debt Securities are outstanding. Such right
is subject to prior approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve. If the Junior
Subordinated Debt Securities are distributed to the holders of the Trust
Securities as the result of the occurrence of a Tax Event and such Tax Event
continues notwithstanding such distribution, the Corporation has the right to
prepay the Junior Subordinated Debt Securities in whole, but not in part, at the
Tax Event Prepayment Price. See "Description of the Exchange
Securities--Description of Junior Subordinated Debt Securities--Tax Event
Prepayment."
Upon liquidation of the Trust and certain other events, the Junior
Subordinated Debt Securities may be distributed to holders of the Capital
Securities. Under current United States Federal income tax law and
interpretations thereof and assuming, as expected, that the Trust is treated as
a grantor trust for United States Federal income tax purposes, a distribution by
the Trust of the Junior Subordinated Debt Securities pursuant to a liquidation
of the Trust will not be a taxable event to the Trust or to holders of the
Capital Securities and will result in a holder of the Capital Securities
receiving directly such holder's pro rata share of the Junior Subordinated Debt
Securities (previously held indirectly through the Trust). If, however, the
liquidation of the Trust were to occur because the Trust is subject to United
States Federal income tax with respect to income accrued or received on the
Junior Subordinated Debt Securities as a result of the occurrence of a Tax Event
or otherwise, the distribution of Junior Subordinated Debt Securities to holders
of the Capital Securities by the Trust could be a taxable event to the Trust and
each holder, and holders of the Capital Securities may be required to recognize
gain or loss as if they had exchanged their Capital Securities for the Junior
Subordinated Debt Securities they received upon the liquidation of the Trust.
See "Certain United States Federal Income Tax Consequences--Distribution of
Junior Subordinated Debt Securities to Holders of Capital Securities."
The Trust shall automatically terminate upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Junior Subordinated Debt
Securities to the holders of the Trust Securities if the Corporation, as
Depositor, has given written direction to the Property Trustee to terminate the
Trust (which direction is optional and, except as described above, wholly within
the discretion of the Corporation, as Depositor); (iii) redemption of all of the
Trust Securities as described under " -- Redemption" above; (iv) expiration of
the term of the Trust; and (v) the entry of an order for the dissolution of the
Trust by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii), (iv)
or (v) above, the Trust shall be liquidated by the Issuer Trustees as
expeditiously as the Issuer Trustees determine to be possible by distributing,
after satisfaction of liabilities to creditors of the Trust as provided by
applicable law, to the holders of the Trust Securities a Like Amount of the
Junior Subordinated Debt Securities, unless such distribution is determined by
the Property Trustee not to be practical, in which event such holders will be
entitled to receive out of the assets of the Trust available for distribution to
holders an amount equal to, in the case of holders of Capital Securities, the
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the
Capital Securities shall be paid on a pro rata basis. The holder(s) of the
Common Securities will be entitled to receive distributions upon any such
liquidation pro rata with the holders of the Capital Securities, except that if
a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities. See
"--Subordination of Common Securities."
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If an early termination occurs as described in clause (iii) above, the Junior
Subordinated Debt Securities will be subject to optional redemption in whole
(but not in part).
"Like Amount" means (i) with respect to a redemption of Capital
Securities, Capital Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debt Securities to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and the proceeds of which will be used to
pay the Redemption Price of the Capital Securities and (ii) with respect to a
distribution of Junior Subordinated Debt Securities to holders of Capital
Securities in connection with a dissolution or liquidation of the Trust, Junior
Subordinated Debt Securities having a principal amount equal to the Liquidation
Amount of the Capital Securities of the holder to whom such Junior Subordinated
Debt Securities are distributed.
If the Corporation elects not to redeem the Junior Subordinated Debt
Securities prior to maturity and the Trust is not liquidated and the Junior
Subordinated Debt Securities are not distributed to holders of the Trust
Securities, the Capital Securities will remain outstanding until the repayment
of the Junior Subordinated Debt Securities at the Stated Maturity.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debt Securities to holders of the Trust Securities, (i) the Capital
Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee,
as the record holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Junior Subordinated Debt Securities
to be delivered upon such distribution with respect to Capital Securities held
by DTC or its nominee and (iii) any certificates representing Capital Securities
not held by DTC or its nominee will be deemed to represent Junior Subordinated
Debt Securities having a principal amount equal to the Liquidation Amount of
such Capital Securities and bearing accrued and unpaid interest in an amount
equal to the accumulated and unpaid Distributions on such Capital Securities
until such certificates are presented to the Administrative Trustees or their
agent for cancellation, whereupon the Corporation will issue to such holder, and
the Debenture Trustee will authenticate, a certificate representing such Junior
Subordinated Debt Securities.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debt Securities that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the Capital Securities that an investor may hold, or
the Junior Subordinated Debt Securities that the investor may receive on
dissolution and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the Capital Securities.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities shall be made pro rata to the holders of
Capital Securities and Common Securities based on the Liquidation Amount of the
Trust Securities; provided, however, that if on any Distribution Date or
Redemption Date any Event of Default resulting from a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution on, or
applicable Redemption Price of, any of the Common Securities, and no other
payment on account of the redemption, liquidation or other acquisition of such
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the outstanding Capital
Securities for all Distribution periods terminating on or prior thereto or, in
the case of payment of the applicable Redemption Price, the full amount of such
Redemption Price on all of the outstanding Capital Securities shall have been
made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions on, or the
Redemption Price of, the Capital Securities then due and payable.
In the case of any Event of Default under the Declaration resulting
from a Debenture Event of Default, the Corporation as holder of the Common
Securities will be deemed to have waived any right to act with respect to any
such Event of Default until the effect of all such Events of Default have been
cured,
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waived or otherwise eliminated. Until all such Events of Default have been so
cured, waived or otherwise eliminated, the Property Trustee shall act solely on
behalf of the holders of such Capital Securities and not on behalf of the
Corporation as holder of the Common Securities, and only the holders of the
Capital Securities will have the right to direct the Property Trustee to act on
their behalf.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
the Declaration (an "Event of Default") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see
"Description of the Exchange Securities--Description of Junior Subordinated Debt
Securities--Debenture Events of Default"); or
(ii) default by the Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a period
of 30 days; or
(iii) default by the Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in the Declaration
(other than a covenant or warranty, a default in the performance of which or the
breach of which is addressed in clause (ii) or (iii) above), and continuation of
such default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Issuer Trustee or Issuer
Trustees by the holders of at least 25% in aggregate Liquidation Amount of the
outstanding Capital Securities, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" under the Declaration; or
(v) the occurrence of certain events of bankruptcy or
insolvency with respect to the Property Trustee and the failure by the
Corporation to appoint a successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Depositor, unless such Event of
Default shall have been cured or waived. The Corporation, as Depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Declaration.
If a Debenture Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities upon
termination of the Trust as described above. See "--Liquidation of the Trust and
Distribution of Junior Subordinated Debt Securities" and "--Subordination of
Common Securities."
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by the holder of the
Common Securities. If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time by the holders of a majority in Liquidation Amount of the outstanding
Capital Securities. In no event will the holders of the Capital Securities have
the right to vote to appoint, remove or replace the Administrative Trustees,
which voting rights are vested exclusively in the Corporation as the holder of
the Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a
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successor trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Declaration.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust's
property may at the time be located, the Corporation, as the holder of the
Common Securities, and the Administrative Trustees shall have power to appoint
one or more persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of such Trust's property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the Declaration. In case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any Person (as defined in the Declaration) into which the Property
Trustee, the Delaware Trustee or any Administrative Trustee that is not a
natural person may be merged or converted or with which it may be consolidated
or any Person resulting from any merger, conversion or consolidation to which
such Issuer Trustee shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of such Issuer Trustee, shall be
the successor of such Issuer Trustee under the Declaration, provided such Person
shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below or as otherwise set forth in the Declaration. The Trust may, at
the request of the Corporation, as Depositor, with the consent of the
Administrative Trustees but without the consent of the holders of the Capital
Securities, the Property Trustee or the Delaware Trustee, merge with or into,
consolidate, amalgamate or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to, a trust organized as such
under the laws of any State; provided, however, that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
the Capital Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Capital Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Corporation expressly
appoints a trustee of such successor entity possessing the same powers and
duties as the Property Trustee as the holder of the Junior Subordinated Debt
Securities, (iii) the Successor Securities are listed or traded, or any
Successor Securities will be listed or traded upon notification of issuance, on
any national securities exchange or other organization on which the Capital
Securities are then listed or traded, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect,
(vi) such successor entity has a purpose identical to that of the Trust, (vii)
prior to such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, the Corporation has received an opinion from independent
counsel to the Trust experienced in such matters to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Capital Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer
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or lease, neither the Trust nor such successor entity will be required to
register as an investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and (viii) the Corporation or any
permitted successor or assign owns all of the common securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to, any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Trust or the successor entity to be classified
as other than a grantor trust for United States Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
Except as provided below and under "Description of the Exchange
Securities--Description of Guarantee--Amendments and Assignment" and as
otherwise required by law and the Declaration, the holders of the Capital
Securities will have no voting rights.
The Declaration may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities, (i) to cure any ambiguity, correct or
supplement any provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to matters or
questions arising under the Declaration which shall not be inconsistent with the
other provisions of the Declaration, or (ii) to modify, eliminate or add to any
provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States Federal income tax purposes
as a grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act; provided, however, that in the case
of clause (i), such action shall not adversely affect in any material respect
the interests of any holder of Trust Securities, and any amendments of the
Declaration shall become effective when notice thereof is given to the holders
of the Trust Securities. The Declaration may be amended by the Issuer Trustees
and the Corporation with (i) the consent of holders representing not less than a
majority (based upon Liquidation Amounts) of the outstanding Trust Securities,
and (ii) receipt by the Issuer Trustees of an opinion of counsel to the effect
that such amendment or the exercise of any power granted to the Issuer Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States Federal income tax purposes or the Trust's
exemption from status as an "investment company" under the Investment Company
Act. In addition, without the consent of each holder of Trust Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Junior Subordinated Debt Securities are held by the
Trust, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
the Junior Subordinated Debt Securities, (ii) waive any past default that is
waivable under Section 5.13 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior Subordinated
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated Debt
Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Capital Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Junior Subordinated Debt Securities affected thereby, no such consent
shall be given by the Property Trustee without the prior consent of each holder
of the Capital Securities. The Issuer Trustees shall not revoke any action
previously authorized or approved by a vote of the holders of the Capital
Securities except by subsequent vote of such holders.
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The Property Trustee shall notify each holder of Capital Securities of any
notice of default with respect to the Junior Subordinated Debt Securities. In
addition to obtaining the foregoing approvals of such holders of the Capital
Securities, prior to taking any of the foregoing actions, the Issuer Trustees
shall obtain an opinion of counsel experienced in such matters to the effect
that the Trust will not be classified as an association or a publicly traded
partnership taxable as a corporation for United States Federal income tax
purposes on account of such action.
Any required approval of holders of Capital Securities may be given at
a meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the
Declaration.
No vote or consent of the holders of Capital Securities will be
required for the Trust to redeem and cancel the Capital Securities in accordance
with the Declaration.
Notwithstanding that holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
EXPENSES AND TAXES
In the Indenture, the Corporation, as borrower, has agreed to pay all
debts and other obligations (other than with respect to the Capital Securities)
and all costs and expenses of the Trust (including the fees and expenses of the
Issuer Trustees and the costs and expenses relating to the operation of the
Trust and the Exchange Offer)and to pay any and all taxes and all costs and
expenses with respect to the foregoing (other than United States withholding
taxes) to which the Trust might become subject. The foregoing obligations of the
Corporation under the Indenture are for the benefit of, and shall be enforceable
by, any person to whom any such debts, obligations, costs, expenses and taxes
are owed (a "Creditor"), whether or not such Creditor has received notice
thereof. Any such Creditor may enforce such obligations of the Corporation
directly against the Corporation, and the Corporation has irrevocably waived any
right or remedy to require that any such Creditor take any action against the
Trust or any other person before proceeding against the Corporation. The
Corporation has also agreed in the Indenture to execute such additional
agreement(s) as may be necessary or desirable to give full effect to the
foregoing.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
In the event that Exchange Capital Securities are issued in
certificated form, such Exchange Capital Securities will be in blocks having a
Liquidation Amount of not less than $100,000 (100 Exchange Capital Securities)
and may be transferred or exchanged in such blocks in the manner and at the
offices described below.
The Exchange Capital Securities initially will be represented by one or
more Exchange Capital Securities in registered, global form (collectively, the
"Global Exchange Capital Securities"). The Global Exchange Capital Securities
will be deposited upon issuance with the Property Trustee as custodian for DTC,
in New York, New York, and will be registered in the name of DTC or its nominee,
in each case for credit to an account of a direct or indirect participant in DTC
as described below.
Except as set forth below, the Global Exchange Capital Securities may
be transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee and only in amounts that would not cause a
holder to own less than 100 Exchange Capital Securities. Beneficial interests in
the Global Exchange Capital Securities may not be exchanged for Exchange Capital
Securities
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in certificated form except in the limited circumstances described below. See
"--Exchange of Book-Entry Exchange Capital Securities for Certificated Exchange
Capital Securities." Transfer of beneficial interests in the Global Exchange
Capital Securities will be subject to the applicable rules and procedures of DTC
and its direct or indirect participants which may change from time to time.
DEPOSITARY PROCEDURES
DTC has advised the Trust and the Corporation as follows: DTC is a
limited purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
to accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
Indirect access to DTC's system is also available to other entities such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
(collectively, the "Indirect Participants"). Persons who are not Participants
may beneficially own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership interest and transfer
of ownership interest of each actual purchaser of each security held by or on
behalf of DTC are recorded on the records of the Participants and Indirect
Participants.
DTC has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Exchange Capital
Securities, DTC will credit the accounts of Participants designated by the
Exchange Agent with portions of the principal amount of the Global Exchange
Capital Securities and (ii) ownership of such interests in the Global Exchange
Capital Securities will be shown on, and the transfer of ownership thereof will
be effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with respect
to other owners of beneficial interests in the Global Exchange Capital
Securities).
Investors in the Global Exchange Capital Securities may hold their
interests therein directly through DTC, if they are Participants in DTC, or
indirectly through organizations which are Participants in such system. All
interests in a Global Exchange Capital Security will be subject to the
procedures and requirements of DTC. The laws of some states require that certain
persons take physical delivery in certificated form. Consequently, the ability
to transfer beneficial interests in a Global Exchange Capital Security to such
persons will be limited to that extent. Because DTC can act only on behalf of
Participants, which in turn act on behalf of Indirect Participants and certain
banks, the ability of a person having beneficial interests in a Global Exchange
Capital Security to pledge such interests to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interests, may be affected by the lack of a physical certificate evidencing such
interests. For certain other restrictions on the transferability of the Exchange
Capital Securities, see "--Exchange of Book-Entry Exchange Capital Securities
for Certificated Exchange Capital Securities."
Except as described below, owners of beneficial interests in the Global
Exchange Capital Securities will not be entitled to have Exchange Capital
Securities registered in their names, will not receive or be entitled to receive
physical delivery of Exchange Capital Securities in certificated form and will
not be considered the registered owners or holders thereof under the Declaration
for any purpose.
Payments in respect of the Global Exchange Capital Security registered
in the name of DTC or its nominee will be payable by the Property Trustee to DTC
or its nominee as the registered holder under the Declaration by wire transfer
in immediately available funds on each payment date. Under the terms of the
Declaration, the Property Trustee will treat the persons in whose names the
Exchange Capital Securities, including the Global Exchange Capital Securities,
are registered as the owners thereof for the
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purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, neither the Property Trustee nor any agent thereof has
or will have any responsibility or liability for (i) any aspect of DTC's records
or any Participant's or Indirect Participant's records relating to or payments
made on account of beneficial ownership interests in the Global Exchange Capital
Securities, or for maintaining, supervising or reviewing any of DTC's records or
any Participant's or Indirect Participant's records relating to the beneficial
ownership interests in the Global Exchange Capital Securities or (ii) any other
matter relating to the actions and practices of DTC or any of its Participants
or Indirect Participants. DTC has advised the Trust and the Corporation that its
current practice, upon receipt of any payment in respect of securities such as
the Exchange Capital Securities, is to credit the accounts of the relevant
Participants with the payment on the payment date, in amounts proportionate to
their respective holdings in Liquidation Amount of beneficial interests in the
Global Exchange Capital Security, as shown on the records of DTC. Payments by
the Participants and the Indirect Participants to the beneficial owners of
Exchange Capital Securities represented by Global Exchange Capital Securities
held through such Participants will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee or the Trust. Neither the Trust nor the Property Trustee will be liable
for any delay by DTC or any of its Participants in identifying the beneficial
owners of the Exchange Capital Securities, and the Trust and the Property
Trustee may conclusively rely on and will be fully protected in relying on
instructions from DTC or its nominee for all purposes.
Interests in the Global Exchange Capital Securities will trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity in such
interests will therefore settle in immediately available funds, subject in all
cases to the rules and procedures of DTC and its Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
DTC has advised the Trust and the Corporation that it will take any
action permitted to be taken by a holder of Exchange Capital Securities
(including, without limitation, the presentation of Exchange Capital Securities
for exchange as described below) only at the direction of one or more
Participants to whose account with DTC interests in the Global Exchange Capital
Securities are credited and only in respect of such portion of the aggregate
Liquidation Amount of the Exchange Capital Securities represented by the Global
Exchange Capital Securities as to which such Participant or Participants has or
have given such direction. However, if there is an Event of Default under the
Declaration, DTC reserves the right to exchange the Global Exchange Capital
Securities for legended Exchange Capital Securities in certificated form and to
distribute such Exchange Capital Securities to its Participants.
So long as DTC or its nominee is the registered owner of the Global
Exchange Capital Securities, DTC or such nominee, as the case may be, will be
considered the sole owner or holder of the Exchange Capital Securities
represented by the Global Exchange Capital Security for all purposes under the
Declaration.
The information in this section concerning DTC and its book-entry
system has been obtained from sources that the Trust and the Corporation believe
to be reliable, but neither the Trust nor the Corporation takes responsibility
for the accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate
transfers of interest in the Global Exchange Capital Securities among
Participants in DTC, it is under no obligation to perform or to continue to
perform such procedures, and such procedures may be discontinued at any time.
Neither the Trust nor the Property Trustee will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations.
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EXCHANGE OF BOOK-ENTRY EXCHANGE CAPITAL SECURITIES FOR CERTIFICATED EXCHANGE
CAPITAL SECURITIES
A Global Exchange Capital Security is exchangeable for Exchange Capital
Securities in registered certificated form if (i) DTC (x) notifies the Trust
that it is no longer willing or able to properly discharge its responsibilities
with respect to the Exchange Capital Securities and the Corporation is unable to
locate a qualified successor or (y) has ceased to be a clearing agency
registered under the Exchange Act; (ii) the Corporation at its option elects to
terminate the book-entry system through DTC; or (iii) there shall have occurred
and be continuing a Debenture Event of Default. In addition, beneficial
interests in a Global Exchange Capital Security may be exchanged by or on behalf
of DTC for certificated Exchange Capital Securities upon request by DTC but only
upon at least 20 days prior written notice given to the Property Trustee in
accordance with DTC's customary procedures. In all cases, certificated Exchange
Capital Securities delivered in exchange for any Global Exchange Capital
Security or beneficial interests therein will be registered in the names, and
issued in any approved denominations, requested by or on behalf of DTC (in
accordance with its customary procedures).
PAYMENT AND PAYING AGENCY
Payments in respect of the Exchange Capital Securities held in global
form shall be made to DTC, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates, and payments in respect of the
Exchange Capital Securities that are not held by the Depositary shall be made by
check mailed to the address of the holder entitled thereto as such address shall
appear on the register. The paying agent (the "Paying Agent") shall initially be
the Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the Corporation. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee, the Administrative Trustees and the Corporation. In the event
that the Property Trustee shall no longer be the Paying Agent, the
Administrative Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Administrative Trustees and the Corporation) to
act as Paying Agent.
RESTRICTIONS ON TRANSFER
The Exchange Capital Securities will be issued, and may be transferred
only, in blocks having a Liquidation Amount of not less than $100,000 (100
Exchange Capital Securities). Any attempted transfer, sale or other disposition
of Exchange Capital Securities in a block having a Liquidation Amount of less
than $100,000 shall be deemed to be void and of no legal effect whatsoever. Any
such transferee shall be deemed not to be the holder of such Exchange Capital
Securities for any purpose, including but not limited to the receipt of
Distributions on such Exchange Capital Securities, and such transferee shall be
deemed to have no interest whatsoever in such Exchange Capital Securities.
Bankers Trust Company has informed the Trust that so long as it serves
as paying agent for the Capital Securities, it anticipates that information
regarding Distributions on the Capital Securities, including payment date,
record date and redemption information, will be made available through Bankers
Trust Company at 1-800-735-7777.
RATING
The Exchange Capital Securities are expected to retain the "A+" rating
issued by Standard & Poor's Rating Services and the "a1" rating issued by
Moody's Investor Services, Inc. in respect of the Old Capital Securities.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Exchange Capital Securities.
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Registration of transfers of the Exchange Capital Securities will be
effected without charge by or on behalf of the Trust, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to be
registered the transfer of the Exchange Capital Securities after they have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance
of an Event of Default, undertakes to perform only such duties as are
specifically set forth in the Declaration and, during the existence of an Event
of Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Trust
Securities unless it is offered indemnity satisfactory to it against the costs,
expenses and liabilities that might be incurred thereby. If no Event of Default
has occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the Declaration,
and the matter is not one on which holders of the Capital Securities or the
Common Securities are entitled under the Declaration to vote, then the Property
Trustee shall take such action as is directed by the Corporation and, if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association or a publicly traded
partnership taxable as a corporation for United States Federal income tax
purposes and so that the Junior Subordinated Debt Securities will be treated as
indebtedness of the Corporation for United States Federal income tax purposes.
In this connection, the Corporation and the Administrative Trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Trust or the Declaration, that the Corporation and
the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Trust Securities.
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The Old Junior Subordinated Debt Securities were issued and the
Exchange Junior Subordinated Debt Securities will be issued as a single series
under the Indenture. The Indenture has been qualified under the Trust Indenture
Act. This summary of certain terms and provisions of the Junior Subordinated
Debt Securities and the Indenture does not purport to be complete, and where
reference is made to particular provisions of the Indenture, such provisions,
including the definitions of certain terms, some of which are not otherwise
defined herein, are qualified in their entirety by reference to all of the
provisions of the Indenture and those terms made a part of the Indenture by the
Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Old Capital Securities, the Trust
invested the proceeds thereof, together with the consideration paid by the
Corporation for the Common Securities, in the Old Junior Subordinated Debt
Securities issued by the Corporation. Pursuant to the Exchange Offer, the
Corporation will exchange the Old Junior Subordinated Debt Securities for the
Exchange Junior Subordinated Debt Securities as soon as practicable after the
date hereof. No Old Junior Subordinated Debt Securities will remain outstanding
after such exchange. The following is a description of the
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Exchange Junior Subordinated Debt Securities (referred to in this section as the
"Junior Subordinated Debt Securities").
The Junior Subordinated Debt Securities will bear interest at the
annual rate of 7.53% of the principal amount thereof, payable semi-annually in
arrears on June 4 and December 4 of each year (each, an "Interest Payment
Date"), commencing June 4, 1997, to the person in whose name each Junior
Subordinated Debt Security is registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment Date.
It is anticipated that, until the liquidation of the Trust, each Junior
Subordinated Debt Security will be in the name of the Trust and will be held by
the Property Trustee in trust for the benefit of the holders of the Trust
Securities. Notwithstanding the registration of the Junior Subordinated Debt
Securities under the Securities Act, the Junior Subordinated Debt Securities may
not be offered for resale, resold or otherwise transferred by the Trust without
further compliance with the registration and prospectus delivery requirements of
the Securities Act. If the Junior Subordinated Debt Securities are distributed
to the holders of the Capital Securities, however, the Trust and the Corporation
believe (based on existing interpretations by the staff of the Commission) such
holders would be permitted, subject to certain limitations, to offer for resale,
resell or transfer the Junior Subordinated Debt Securities without further
compliance with the registration and prospectus delivery requirements of the
Securities Act. See "The Exchange Offer--Resales of Exchange Capital
Securities." The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any date
on which interest is payable on the Junior Subordinated Debt Securities is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), 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 the date such payment was originally payable. Accrued interest
that is not paid on the applicable Interest Payment Date will bear additional
interest on the amount thereof (to the extent permitted by law) at the rate per
annum of 7.53% thereof, compounded semi-annually from the relevant Interest
Payment Date. The term "interest" as used herein shall include semi-annual
interest payments and interest on semi-annual interest payments not paid on the
applicable Interest Payment Date.
The Junior Subordinated Debt Securities will mature on December 4,
2026.
The Junior Subordinated Debt Securities will be unsecured and will rank
junior and be subordinate in right of payment to all Senior Debt of the
Corporation. Because the Corporation is a bank holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary,
including the Bank, upon such subsidiary's liquidation or reorganization or
otherwise (and thus the ability of holders of the Junior Subordinated Debt
Securities to benefit from such distribution), is subject to the prior claims of
creditors of such subsidiary, except to the extent that the Corporation may
itself be recognized as a creditor of such subsidiary. Accordingly, the Junior
Subordinated Debt Securities will be subordinated to all Senior Debt and
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and holders of Junior Subordinated Debt Securities
should look only to the assets of the Corporation for payments on the Junior
Subordinated Debt Securities. The Indenture does not limit the incurrence or
issuance of other secured or unsecured debt of the Corporation, including Senior
Debt, whether under the Indenture or any existing or other indenture that the
Corporation may enter into in the future or otherwise. See "--Subordination."
The Junior Subordinated Debt Securities will rank pari passu with all
Other Debentures issued under the Indenture and will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Debt of the Corporation. See
"--Subordination." The Corporation is a non-operating holding company and almost
all of the operating assets of the Corporation and its consolidated subsidiaries
are owned by such subsidiaries. The Corporation relies primarily on dividends
from such subsidiaries to meet its obligations. The Corporation is a legal
entity separate and distinct from its banking and non-banking affiliates. The
Bank is the Corporation's principal asset and source of revenue and net income.
The Bank is subject to certain restrictions imposed by federal
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law on any extensions of credit to, and certain other transactions with, the
Corporation and certain other affiliates, and on investments in stock or other
securities thereof. Such restrictions prevent the Corporation and such other
affiliates from borrowing from the Bank unless the loans are secured by various
types of collateral. Further, such secured loans, other transactions and
investments by the Bank are generally limited in amount as to the Corporation
and as to each of such other affiliates to 10% of the Bank's capital and surplus
and as to the Corporation and all of such other affiliates to an aggregate of
20% of the Bank's capital and surplus. In addition, payment of dividends to the
Corporation by the Bank is subject to ongoing review by banking regulators and
is subject to various statutory limitations and in certain circumstances
requires approval by banking regulatory authorities. The Other Debentures are
issuable in one or more series pursuant to an indenture supplemental to the
Indenture or a resolution of the Corporation's Board of Directors or a committee
thereof.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Junior Subordinated Debt Securities will be represented by one or
more global certificates registered in the name of Cede & Co. as the nominee of
DTC if, and only if, distributed to the holders of the Trust Securities. Until
such time, the Junior Subordinated Debt Securities will be registered in the
name of the Trust and held by the Property Trustee. Should the Junior
Subordinated Debt Securities be distributed to holders of the Trust Securities,
beneficial interests in the Junior Subordinated Debt Securities will be shown
on, and transfers thereof will be effected only through, records maintained by
Participants in DTC. Except as described below, Junior Subordinated Debt
Securities in certificated form will not be issued in exchange for the global
certificates.
A global security shall be exchangeable for Junior Subordinated Debt
Securities registered in the names of persons other than Cede & Co. only if (i)
DTC notifies the Corporation that it is unwilling or unable to continue as a
depositary for such global security and no successor depositary shall have been
appointed, or if at any time DTC ceases to be a "clearing agency" registered
under the Exchange Act, at a time when DTC is required to be so registered to
act as such depositary, (ii) the Corporation in its sole discretion determines
that such global security shall be so exchangeable, or (iii) there shall have
occurred and be continuing a Debenture Event of Default. Any global security
that is exchangeable pursuant to the preceding sentence shall be exchangeable
for certificates registered in such names as DTC shall direct. It is expected
that such instructions will be based upon directions received by DTC from its
Participants with respect to ownership of beneficial interests in such global
security. In the event that Junior Subordinated Debt Securities are issued in
certificated form, such Junior Subordinated Debt Securities will be in minimum
denominations of $1,000 and integral multiples of $1,000 in excess thereof and
may be transferred or exchanged only in such minimum denominations and in the
manner and at the offices described below.
Payments on Junior Subordinated Debt Securities represented by a global
security will be made to DTC, as the depositary for the Junior Subordinated Debt
Securities. In the event Junior Subordinated Debt Securities are issued in
certificated form, principal and interest will be payable, the transfer of the
Junior Subordinated Debt Securities will be registrable, and Junior Subordinated
Debt Securities will be exchangeable for Junior Subordinated Debt Securities of
other denominations of a like aggregate principal amount, at the corporate
office of the Debenture Trustee in New York, New York, or at the offices of any
paying agent or transfer agent appointed by the Corporation, provided that
payment of interest may be made at the option of the Corporation by check mailed
to the address of the persons entitled thereto or by wire transfer. In addition,
if the Junior Subordinated Debt Securities are issued in certificated form, the
record dates for payment of interest will be the May 20 or November 20, as the
case may be, next preceding the relevant Interest Payment Date.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Description of the Exchange Securities--Description of
Capital Securities--Form, Denomination, Book-Entry Procedures and Transfer." If
the Junior Subordinated Debt Securities are distributed to the holders of the
Trust Securities
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upon the termination of the Trust, the form, denomination, book-entry and
transfer procedures with respect to the Exchange Capital Securities, as
described under "Description of the Exchange Securities--Description of Capital
Securities--Form, Denomination, Book-Entry Procedures and Transfer," shall apply
to the Junior Subordinated Debt Securities mutatis mutandis.
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any) and any interest on
Junior Subordinated Debt Securities will be made at the office of the Debenture
Trustee in the City of New York or at the office of such Paying Agent or Paying
Agents as the Corporation may designate from time to time, except that at the
option of the Corporation payment of any interest may be made (except in the
case of Junior Subordinated Debt Securities in global form), (i) by check mailed
to the address of the Person entitled thereto as such address shall appear in
the register for Junior Subordinated Debt Securities or (ii) by transfer to an
account maintained by the person entitled thereto as specified in such register,
provided that proper transfer instructions have been received by the relevant
Record Date. Payment of any interest on any Junior Subordinated Debt Security
will be made to the person in whose name such Junior Subordinated Debt Security
is registered at the close of business on the Record Date for such interest,
except in the case of defaulted interest. The Corporation may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent; however the Corporation will at all times be required to maintain a
Paying Agent in each Place of Payment (as defined in the Indenture) for the
Junior Subordinated Debt Securities.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debt Security and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall, at the request of the Corporation, be
repaid to the Corporation and the holder of such Junior Subordinated Debt
Security shall thereafter look, as a general unsecured creditor, only to the
Corporation for payment thereof.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default has occurred and is
continuing, the Corporation has the right under the Indenture to defer the
payment of interest at any time or from time to time for a period not exceeding
10 consecutive semi-annual periods with respect to each Extension Period;
provided, however, that no Extension Period may end on a date other than an
Interest Payment Date or extend beyond the Stated Maturity of the Junior
Subordinated Debt Securities. At the end of an Extension Period, the Corporation
must pay all interest then accrued and unpaid on the Junior Subordinated Debt
Securities (together with interest thereon at the annual rate of 7.53%,
compounded semi-annually from the relevant Interest Payment Date, to the extent
permitted by applicable law). During an Extension Period, interest will continue
to accrue and holders of Junior Subordinated Debt Securities (and holders of the
Capital Securities while Capital Securities are outstanding) will be required to
accrue interest income for United States Federal income tax purposes. See
"Certain United States Federal Income Tax Consequences--Interest Income and
Original Issue Discount."
During any Extension Period, the Corporation may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation (including any Other Debentures) that rank pari
passu in all respects with or junior in interest to the Junior Subordinated Debt
Securities or (iii) make any guarantee payments with respect to any guarantee by
the Corporation of the debt securities of any subsidiary of the Corporation
(including any Other Guarantees) if such guarantee ranks pari passu in all
respects with or junior in interest to the Junior Subordinated Debt Securities
(other than (a) dividends or distributions in common stock of the Corporation,
(b) any declaration of a dividend in connection with the implementation of a
stockholders'
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rights plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (c) payments under
the Guarantee, (d) purchases or acquisitions of shares of the Corporation's
common stock in connection with the satisfaction by the Corporation of its
obligations under any employee benefit plan or any other contractual obligation
of the Corporation (other than a contractual obligation ranking pari passu in
all respects with or junior to the Junior Subordinated Debt Securities), (e) as
a result of a reclassification of the Corporation's capital stock or the
exchange or conversion of one class or series of the Corporation's capital stock
for another class or series of the Corporation's capital stock or (f) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged). Prior to the termination of any
Extension Period, the Corporation may further extend such Extension Period;
provided, however, that such extension does not cause such Extension Period to
exceed 10 consecutive semi-annual periods, to end on a date other than an
Interest Payment Date or to extend beyond the Stated Maturity. Upon the
termination of any Extension Period and the payment of all interest then accrued
and unpaid on the Junior Subordinated Debt Securities (together with interest
thereon at the annual rate of 7.53%, compounded semi-annually, to the extent
permitted by applicable law), the Corporation may elect to begin a new Extension
Period, subject to the above requirements. No interest shall be due and payable
during an Extension Period, except at the end thereof. The Corporation must give
the Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of its election of any Extension Period (or an extension thereof) at
least five Business Days prior to the earlier of (i) the date the Distributions
on the Trust Securities would have been payable except for the election to begin
or extend such Extension Period or (ii) the date the Administrative Trustees are
required to give notice to any automated quotation system or to holders of
Capital Securities of the record date or the date such Distributions are
payable, but in any event not less than five Business Days prior to such record
date. The Debenture Trustee shall give notice of the Corporation's election to
begin or extend a new Extension Period to the holders of the Capital Securities.
There is no limitation on the number of times that the Corporation may elect to
begin an Extension Period.
OPTIONAL REDEMPTION
The Junior Subordinated Debt Securities will be redeemable, in whole or
in part, at the option of the Corporation at any time on or after December 4,
2006, subject to the Corporation having received prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve, at a redemption price (the "Optional Prepayment Price") equal
to the following prices, expressed in percentages of the principal amount of the
Junior Subordinated Debt Securities together with accrued but unpaid interest to
but excluding the date fixed for redemption. If redeemed during the 12-month
period beginning December 4:
<TABLE>
<CAPTION>
Redemption
Year Price
---- -----
<S> <C>
2006 103.765%
2007 103.389
2008 103.01
2009 102.6355
2010 102.259
2011 101.8825
2012 101.506
2013 101.1295
2014 100.753
2015 100.3765
</TABLE>
and at 100% on or after December 4, 2016.
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<PAGE> 56
TAX EVENT PREPAYMENT
If a Tax Event shall occur and be continuing, the Corporation may, at
its option and subject to receipt of prior approval of the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve, terminate the Trust and distribute the Junior Subordinated Debt
Securities to the holders of the Trust Securities at any time within 90 days of
the occurrence of such Tax Event and, if such Tax Event continues
notwithstanding the taking of such actions, to prepay the Junior Subordinated
Debt Securities in whole (but not in part) at a prepayment price (the "Tax Event
Prepayment Price") equal to 100% of the principal amount of such Junior
Subordinated Debt Securities plus accrued interest thereon to the date of
prepayment. See "Description of the Exchange Securities--Description of Capital
Securities--Liquidation of the Trust and Distribution of Junior Subordinated
Debt Securities."
"Tax Event" means the receipt by the Corporation of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced proposed change) in, the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or decision is announced on or after the
date the Old Junior Subordinated Debt Securities were issued, there is more than
an insubstantial risk that (i) the Trust is, or will be within 90 days of the
date of such opinion, subject to United States Federal income tax with respect
to income received or accrued on the Junior Subordinated Debt Securities, (ii)
interest payable by the Corporation on the Junior Subordinated Debt Securities
is not, or within 90 days of the date of such opinion, will not be, deductible
by the Corporation, in whole or in part, for United States Federal income tax
purposes or (iii) the Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Junior Subordinated
Debt Securities at its registered address. Unless the Corporation defaults in
payment of the Tax Event Prepayment Price, on and after the prepayment date
interest shall cease to accrue on the Junior Subordinated Debt Securities.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation also covenanted that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock),(ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Corporation (including Other Debentures) that rank pari passu
in all respects with or junior in interest to the Junior Subordinated Debt
Securities or (iii) make any guarantee payments with respect to any guarantee by
the Corporation of the debt securities of any subsidiary of the Corporation
(including under Other Guarantees) if such guarantee ranks pari passu in all
respects with or junior in interest to the Junior Subordinated Debt Securities
(other than (a) dividends or distributions in common stock of the Corporation,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) purchases or acquisitions of shares of the
Corporation's common stock in connection with the satisfaction by the
Corporation of its obligations under any employee benefit plan or any other
contractual obligation of the Corporation (other than a contractual obligation
ranking pari passu in all respects with or junior to the Junior Subordinated
Debt Securities), (e) as a result of a reclassification of the Corporation's
capital stock or the exchange or conversion of one class or series of the
Corporation's capital stock for another class or series of the Corporation's
capital stock or (f) the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged) if at such time
(i) there shall have occurred a Debenture Event of Default, (ii) the Corporation
shall be in default with respect to its payment of any obligations under the
Guarantee or
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<PAGE> 57
(iii) the Corporation shall have given notice of its election of an Extension
Period as provided in the Indenture and shall not have rescinded such notice, or
such Extension Period, or any extension thereof, shall be continuing.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may,
without the consent of the holders of Junior Subordinated Debt Securities,
amend, waive or supplement the Indenture for specified purposes, including,
among other things, curing ambiguities, defects or inconsistencies (provided
that any such action does not materially adversely affect the interest of the
holders of Junior Subordinated Debt Securities or the holders of the Capital
Securities so long as they remain outstanding) and qualifying, or maintaining
the qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of not less than a majority in principal amount of
Junior Subordinated Debt Securities, to modify the Indenture in a manner
affecting the rights of the holders of Junior Subordinated Debt Securities;
provided, however, that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debt Security so affected, (i)
change the Stated Maturity, or reduce the principal amount of the Junior
Subordinated Debt Securities, or reduce the rate or extend the time of payment
of interest thereon or (ii) reduce the percentage of principal amount of Junior
Subordinated Debt Securities, the holders of which are required to consent to
any such modification of the Indenture.
In addition, the Corporation and the Debenture Trustee may execute,
without the consent of any holder of Junior Subordinated Debt Securities, any
supplemental Indenture for the purpose of creating any Other Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debt Securities that has occurred
and is continuing constitutes a "Debenture Event of Default":
(i) failure for 30 days to pay any interest on the Junior Subordinated
Debt Securities when due (subject to the deferral of any due date in the case of
an Extension Period); or
(ii) failure to pay any principal or premium, if any, on the Junior
Subordinated Debt Securities when due, whether at maturity, upon redemption, by
declaration of acceleration or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice to
the Corporation from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the Junior Subordinated Debt
Securities; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation; or
(v) the voluntary or involuntary dissolution, winding-up or termination
of the Trust, except in connection with the distribution of the Junior
Subordinated Debt Securities to the holders of Trust Securities in liquidation
of the Trust, the redemption of all of the Trust Securities of the Trust, or
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debt Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Junior Subordinated Debt
Securities may declare the principal due and payable immediately upon a
Debenture Event of Default and, should the Debenture
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Trustee or such holders of Junior Subordinated Debt Securities fail to make such
declaration, the holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities shall have such right. The holders of a majority in aggregate
outstanding principal amount of the Junior Subordinated Debt Securities may
annul such declaration and waive the default if the default (other than the
non-payment of the principal of the Junior Subordinated Debt Securities which
has become due solely by such acceleration) has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee. Should the holders
of Junior Subordinated Debt Securities fail to annul such declaration and waive
such default, the holders of a majority in aggregate Liquidation Amount of the
Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debt Securities affected thereby may, on behalf of the
holders of all the Junior Subordinated Debt Securities, waive any past default,
except a default in the payment of principal or interest (unless such default
has been cured and a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration has been deposited with the
Debenture Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding Junior Subordinated Debt Security. Should the holders
of such Junior Subordinated Debt Securities fail to annul such declaration and
waive such default, the holders of a majority in aggregate Liquidation Amount of
the Capital Securities shall have such right. The Corporation is required to
file annually with the Debenture Trustee a certificate as to whether or not the
Corporation is in compliance with all the conditions and covenants applicable to
it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on the Junior Subordinated Debt Securities, and any other amounts
payable under the Indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the Junior Subordinated Debt
Securities.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay interest or
principal on the Junior Subordinated Debt Securities on the date such interest
or principal is otherwise payable, a holder of Capital Securities may institute
a Direct Action. The Corporation may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Capital Securities. If the right to bring a Direct
Action is removed following the Exchange Offer, the Trust may become subject to
the reporting obligations under the Securities Exchange Act of 1934, as amended.
Notwithstanding any payments made to a holder of Capital Securities by the
Corporation in connection with a Direct Action, the Corporation shall remain
obligated to pay the principal of or interest on the Junior Subordinated Debt
Securities, and the Corporation shall be subrogated to the rights of the holder
of such Capital Securities with respect to payments on the Capital Securities to
the extent of any payments made by the Corporation to such holder in any Direct
Action.
The holders of the Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Junior Subordinated Debt Securities unless there
shall have been an Event of Default under the Declaration. See "Description of
the Exchange Securities--Description of Capital Securities--Events of Default;
Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with
or merge with or into any other Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, and no Person
shall consolidate with or merge with or into the Corporation or convey, transfer
or lease its properties
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<PAGE> 59
and assets substantially as an entirety to the Corporation, unless (i) in case
the Corporation consolidates with or merges with or into another Person or
conveys or transfers its properties and assets substantially as an entirety to
any Person, the successor Person is organized under the laws of the United
States or any state or the District of Columbia, and such successor Person
expressly assumes the Corporation's obligations on the Junior Subordinated Debt
Securities;(ii) immediately after giving effect thereto, no Debenture Event of
Default, and no event which, after notice or lapse of time or both, would become
a Debenture Event of Default, shall have occurred and be continuing; (iii) such
transaction is permitted under the Declaration and the Guarantee and does not
give rise to any breach or violation of the Declaration or the Guarantee; and
(iv) certain other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debt Securities protection in the event of a highly
leveraged or other transaction involving the Corporation that may adversely
affect holders of the Junior Subordinated Debt Securities.
SUBORDINATION
In the Indenture, the Corporation has covenanted and agreed that any
Junior Subordinated Debt Securities issued thereunder shall be subordinate and
junior in right of payment to all Senior Debt to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, the holders of Senior Debt will first
be entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of Junior Subordinated
Debt Securities will be entitled to receive or retain any payment or
distribution in respect thereof; provided, however, that holders of Senior Debt
shall not be entitled to receive payment of any such amounts to the extent that
such holders would be required by the subordination provisions of such Senior
Debt to pay such amounts over to the obligees on trade accounts payable or other
liabilities arising in the ordinary course of business.
In the event of the acceleration of the maturity of the Junior
Subordinated Debt Securities, the holders of all Senior Debt outstanding at the
time of such acceleration will first be entitled to receive payment in full of
all amounts due thereon (including any amounts due upon acceleration) before the
holders of the Junior Subordinated Debt Securities will be entitled to receive
or retain any payment in respect of the principal of (or premium, if any) or
interest, if any, on the Junior Subordinated Debt Securities; provided, however,
that holders of Senior Debt shall not be entitled to receive payment of any such
amounts to the extent that such holders would be required by the subordination
provisions of such Senior Debt to pay such amounts over to the obligees on trade
accounts payable or other liabilities arising in the ordinary course of
business.
In the event that the Corporation shall default in the payment of any
principal, premium, if any, or interest, if any, on any Senior Debt when the
same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration of acceleration or otherwise, then, unless and
until such default shall have been cured or waived or shall have ceased to exist
or all Senior Debt shall have been paid, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) shall be made or agreed to be
made for principal, premium, if any, or interest, if any, on the Junior
Subordinated Debt Securities, or in respect of any redemption, repayment,
retirement, purchase or other acquisition of any of the Junior Subordinated Debt
Securities.
"Debt" means (i) the principal of and premium, if any, and unpaid
interest on indebtedness for money borrowed, (ii) purchase money and similar
obligations, (iii) obligations under capital leases, (iv) guarantees,
assumptions or purchase commitments relating to, or other transactions as a
result of which the Corporation is responsible for the payment of such
indebtedness of others, (v) renewals, extensions and refunding of any such
indebtedness, (vi) interest or obligations in respect of any such indebtedness
accruing after the commencement of any insolvency or bankruptcy proceedings and
(vii) obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity contracts and
similar arrangements.
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"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Corporation whether
or not such claim for post-petition interest is allowed in such proceeding), on
Debt of the Corporation, whether incurred on or prior to the date of the
Indenture or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are not superior in right of payment to the Junior
Subordinated Debt Securities or the Other Debentures; provided, however, that
Senior Debt shall not be deemed to include (i) any Debt of the Corporation which
when incurred and without respect to any election under Section 1111(b) of the
United States Bankruptcy Code of 1978, as amended, was without recourse to the
Corporation, (ii) any Debt of the Corporation to any of its subsidiaries, (iii)
Debt to any employee of the Corporation, (iv) Debt which by its terms is
subordinated to trade accounts payable or accrued liabilities arising in the
ordinary course of business to the extent that payments made to the holders of
such Debt by the holders of the Junior Subordinated Debt Securities as a result
of the subordination provisions of the Indenture would be greater than such
payments otherwise would have been as a result of any obligation of such holders
of such Debt to pay amounts over to the obligees on such trade accounts payable
or accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject; and (v) any other debt
securities issued pursuant to the Indenture.
The Indenture places no limitation on the amount of Senior Debt that
may be incurred by the Corporation. The Corporation expects from time to time to
incur additional indebtedness constituting Senior Debt.
RESTRICTIONS ON TRANSFER
The Junior Subordinated Debt Securities will be issued, and may be
transferred only, in minimum denominations of not less than $1,000 and multiples
of $1,000 in excess thereof. Any transfer, sale or other disposition of Junior
Subordinated Debt Securities in a denomination of less than $1,000 shall be
deemed to be void and of no legal effect whatsoever. Any such transferee shall
be deemed not to be the holder of such Junior Subordinated Debt Securities for
any purpose, including but not limited to the receipt of payments on such Junior
Subordinated Debt Securities, and such transferee shall be deemed to have no
interest whatsoever in such Junior Subordinated Debt Securities.
GOVERNING LAW
The Indenture and the Junior Subordinated Debt Securities will be
governed by and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee is subject to all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act.
Subject to such provisions, the Debenture Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the request of any
holder of Junior Subordinated Debt Securities, unless offered indemnity
satisfactory to it by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
DESCRIPTION OF GUARANTEE
The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of the Old Capital Securities and
the Common Securities. As soon as practicable after the date hereof, the Old
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Guarantee will be exchanged by the Corporation for the Exchange Guarantee. The
Old Guarantee shall be of no force and effect after such exchange. This summary
of certain provisions of the Exchange Guarantee does not purport to be complete
and is subject to, and qualified in its entirety by reference to, all of the
provisions of the Exchange Guarantee, including the definitions therein of
certain terms, and the Trust Indenture Act. The Guarantee Trustee will hold the
Exchange Guarantee for the benefit of the holders of the Exchange Capital
Securities, the Old Capital Securities and the Common Securities. References in
this section to the "Guarantee" shall be deemed to refer to the Exchange
Guarantee.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
herein) to the holders of the Trust Securities, as and when due, regardless of
any defense, right of set-off or counterclaim that the Trust may have or assert
other than the defense of payment. The following payments with respect to the
Trust Securities, to the extent not paid by or on behalf of the Trust (the
"Guarantee Payments"), will be subject to the Guarantee: (i) any accrued and
unpaid Distributions required to be paid on the Trust Securities, to the extent
that the Trust has funds on hand available therefor at such time, (ii) the
applicable Redemption Price with respect to Trust Securities called for
redemption, to the extent that the Trust has funds on hand available therefor at
such time, or (iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of the Trust (other than in connection with the distribution of
Junior Subordinated Debt Securities to the holders of the Trust Securities or
the redemption of all of the Trust Securities) the lesser of (a) the Liquidation
Distribution, to the extent the Trust has funds available therefor, and (b) the
amount of assets of the Trust remaining available for distribution to holders of
the Trust Securities upon liquidation of the Trust after satisfaction of
liabilities to creditors of the Trust as required by applicable law. The
Corporation's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Corporation to the holders of the Trust
Securities or by causing the Trust to pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis
of the Trust's obligations under the Capital Securities, although it will apply
only to the extent that the Trust has funds sufficient to make such payments,
and is not a guarantee of collection. If the Corporation does not make interest
payments on the Junior Subordinated Debt Securities held by the Trust, the Trust
will not be able to pay Distributions on the Capital Securities and will not
have funds legally available therefor.
The Guarantee will rank subordinate and junior in right of payment to
all Senior Debt. See "--Status of the Guarantee." Because the Corporation is a
holding company, the right of the Corporation to participate in any distribution
of assets of any subsidiary, upon such subsidiary's liquidation or
reorganization or otherwise, is subject to the prior claims of creditors of such
subsidiary, except to the extent the Corporation may itself be recognized as a
creditor of that subsidiary. Accordingly, the Corporation's obligations under
the Guarantee will be effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, and claimants should look only to
the assets of the Corporation for payments thereunder. See "Republic New York
Corporation." The Guarantee will not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Debt, whether
under the Indenture, any other indenture that the Corporation may enter into in
the future or otherwise.
The Corporation has, through the Guarantee, the Declaration, the Junior
Subordinated Debt Securities and the Indenture, taken together, fully,
irrevocably and unconditionally guaranteed all of the Trust's obligations under
the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Junior Subordinated Debt Securities and the Guarantee."
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STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the
Corporation and will rank subordinate and junior in right of payment to all
Senior Debt in the same manner as Junior Subordinated Debt Securities.
The Guarantee will rank pari passu with all Other Guarantees issued by
the Corporation. The Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The
Guarantee will be held for the benefit of the holders of the Capital Securities
and the Common Securities. The Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Trust or
upon distribution of the Junior Subordinated Debt Securities to the holders of
the Trust Securities. The Guarantee will not place a limitation on the amount of
additional Senior Debt that may be incurred by the Corporation. The Corporation
expects from time to time to incur additional indebtedness constituting Senior
Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of the Capital Securities (in which case no vote
will be required), the Guarantee may not be amended without the prior approval
of the holders of not less than a majority of the aggregate Liquidation Amount
of such outstanding Capital Securities. The manner of obtaining any such
approval will be as set forth under "Description of the Exchange
Securities--Description of Capital Securities--Voting Rights; Amendment of the
Declaration." All guarantees and agreements contained in the Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Corporation and shall inure to the benefit of the holders of the Capital
Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of
the Corporation to perform any of its payment or other obligations thereunder;
provided, however, that except with respect to a default in payment of any
Guarantee Payment, the Corporation shall have received notice of default and
shall not have cured such default within 60 days after receipt of such notice.
The holders of not less than a majority in aggregate Liquidation Amount of the
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Trust or any other
person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Guarantee will provide that the Corporation shall not consolidate
with or merge with or into any other Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, and no Person
shall consolidate with or merge with or into the Corporation or convey, transfer
or lease its properties and assets substantially as an entirety to the
Corporation, unless (i) in case the Corporation consolidates with or merges with
or into another Person or conveys or transfers its properties
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and assets substantially as an entirety to any Person, the successor Person is
organized under the laws of the United States or any state or the District of
Columbia and such successor Person expressly assumes the Corporation's
obligations on the Guarantee; (ii) immediately after giving effect thereto, no
event of default under the Guarantee, and no event which, after notice or lapse
of time or both, would become an event of default under the Guarantee, shall
have happened and be continuing; (iii) such transaction is permitted under the
Declaration and the Indenture and does not give rise to any breach or violation
of the Declaration or the Indenture; and (iv) certain other conditions as
prescribed in the Guarantee are met.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance
of a default by the Corporation in performance of the Guarantee, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of the Capital Securities unless it is offered indemnity
satisfactory to it against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the applicable Redemption Price of the Trust Securities, upon
full payment of the amounts payable upon liquidation of the Trust or upon
distribution of Junior Subordinated Debt Securities to the holders of the Trust
Securities. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the Trust Securities must
restore payment of any sums paid under the Trust Securities or the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
DESCRIPTION OF THE OLD SECURITIES
The terms of the Old Securities are identical in all material respects
to the Exchange Securities, except that (i) the Old Securities have not been
registered under the Securities Act, are subject to certain restrictions on
transfer and are entitled to certain rights under the Registration Agreement
(which rights will terminate upon consummation of the Exchange Offer, except
under limited circumstances); (ii) the Exchange Capital Securities will not
provide for any increase in the Distribution rate thereon; and (iii) the
Exchange Junior Subordinated Debt Securities will not provide for any increase
in the interest rate thereon. The Old Securities provide under certain
circumstances specified in the Registration Agreement that interest on the
principal amount of the Junior Subordinated Debt Securities and Distributions on
the Liquidation Amount of the Capital Securities will accrue at an increased
rate. The Exchange Securities are not, and upon consummation of the Exchange
Offer the Old Securities will not be, entitled to any such additional
Distributions or interest.
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RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
JUNIOR SUBORDINATED DEBT SECURITIES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital
Securities (to the extent the Trust has funds available for the payment thereof)
are irrevocably guaranteed by the Corporation as and to the extent set forth
under "Description of Guarantee." Taken together, the Corporation's obligations
under the Junior Subordinated Debt Securities, the Indenture, the Declaration
and the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Capital Securities. If and to the extent that the
Corporation does not make payments on the Junior Subordinated Debt Securities,
the Trust will not pay Distributions or other amounts due on the Capital
Securities. The Guarantee does not cover payment of Distributions when the Trust
does not have sufficient funds to pay such Distributions. In such event, the
remedy of a holder of Capital Securities is to institute a Direct Action. The
obligations of the Corporation under the Guarantee are subordinate and junior in
right of payment to all Senior Debt.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other amounts are made when due on
the Junior Subordinated Debt Securities, such payments will be sufficient to
cover Distributions and other payments due on the Capital Securities, primarily
because (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated Debt Securities is equal to the sum of the aggregate Liquidation
Amount or Redemption Price, as applicable, of the Trust Securities; (ii) the
interest rate and interest and other payment dates on the Junior Subordinated
Debt Securities match the Distribution rate and Distribution and other payment
dates for the Trust Securities; (iii) the Corporation shall pay for all costs,
expenses and liabilities of the Trust except the Trust's obligations to holders
of Trust Securities under such Trust Securities; and (iv) the Declaration
provides that the Trust will not engage in any activity that is not consistent
with the limited purposes thereof.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
Trust or any other person or entity.
A default or event of default under any Senior Debt would not
constitute a default or Event of Default under the Declaration. However, in the
event of payment defaults under, or acceleration of, Senior Debt, the
subordination provisions of the Indenture provide that no payments may be made
in respect of the Junior Subordinated Debt Securities until such Senior Debt has
been paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on Junior Subordinated Debt Securities would
constitute an Event of Default under the Declaration.
LIMITED PURPOSE OF THE TRUST
The Capital Securities evidence a beneficial interest in the Trust, and
the Trust exists for the sole purposes of (i) issuing the Trust Securities and
effecting the Exchange Offer for the Exchange Capital Securities, (ii) investing
the proceeds of the Old Capital Securities and the Common Securities in the Old
Junior Subordinated Debt Securities, (iii) exchanging the Junior Subordinated
Debt Securities for the Exchange Subordinated Debt Securities in the Exchange
Offer and (iv) engaging in other activities necessary, advisable or incidental
thereto. A principal difference between the rights of a holder of a
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Capital Security and a holder of a Junior Subordinated Debt Security is that a
holder of a Junior Subordinated Debt Security is entitled to receive from the
Corporation the principal amount of and interest accrued on Junior Subordinated
Debt Securities held, while a holder of Capital Securities is entitled to
receive Distributions from the Trust (or from the Corporation under the
Guarantee) if and to the extent the Trust has funds available for the payment of
such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or
liquidation of the Trust involving the liquidation of the Junior Subordinated
Debt Securities, after satisfaction of the liabilities of creditors of the Trust
as required by applicable law, the holders of the Trust Securities will be
entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of the Exchange Securities--Description
of Capital Securities--Liquidation of the Trust and Distribution of Junior
Subordinated Debt Securities." Upon any voluntary or involuntary liquidation or
bankruptcy of the Corporation, the Property Trustee, as holder of the Junior
Subordinated Debt Securities, would be a subordinated creditor of the
Corporation, subordinated in right of payment to all Senior Debt as set forth in
the Indenture, but entitled to receive payment in full of principal and interest
before any stockholders of the Corporation receive payments or distributions.
Since the Corporation is the guarantor under the Guarantee and has agreed to pay
for all costs, expenses and liabilities of the Trust (other than the Trust's
obligations to the holders of its Trust Securities), the positions of a holder
of Capital Securities and a holder of Junior Subordinated Debt Securities
relative to other creditors and to stockholders of the Corporation in the event
of liquidation or bankruptcy of the Corporation are expected to be substantially
the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Simpson Thacher & Bartlett, special United States
Federal income tax counsel to the Corporation and the Trust ("Tax Counsel"), the
following summary accurately describes the material United States Federal income
tax consequences that may be relevant to the purchase, ownership and disposition
of Capital Securities. Unless otherwise stated, this summary deals only with
Capital Securities held as capital assets by United States Holders (defined
below) who purchased the Old Capital Securities upon original issuance at their
original offering price. As used herein, a "United States Holder" means (i) a
person that is a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, (iii) an estate the income
of which is subject to United States Federal income taxation regardless of its
source, or (iv) any trust if a court within the United States is able to
exercise primary supervision over the administration of such trust and one or
more United States fiduciaries have the authority to control all the substantial
decisions of such trust. The tax treatment of a holder may vary depending on
his, her or its particular situation. This summary does not address all the tax
consequences that may be relevant to a particular holder or to holders who may
be subject to special tax treatment, such as banks, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, or tax-exempt investors. In addition, this summary
does not include any description of any alternative minimum tax consequences or
the tax laws of any state, local or foreign government that may be applicable to
a holder of Capital Securities. This summary is based on the Internal Revenue
Code of 1986, as amended, the Treasury regulations promulgated thereunder and
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change, possibly on a retroactive basis. The authorities
on which this summary is based are subject to various interpretations and the
opinions of Tax Counsel are not binding on the Internal Revenue Service or the
courts, either of which could take a contrary position. Moreover, no rulings
have been or will be sought from the IRS with respect to the transactions
described herein. Accordingly, there can be no assurance that the IRS will not
challenge the opinions expressed herein or that a court would not sustain such a
challenge. Nevertheless, Tax Counsel has advised that it is of the view that, if
challenged, the opinions expressed herein would be sustained by a court with
jurisdiction in a properly presented case.
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HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE CAPITAL
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION OF THE CAPITAL
SECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS SEE "DESCRIPTION OF THE
EXCHANGE SECURITIES--DESCRIPTION OF CAPITAL SECURITIES--LIQUIDATION OF THE TRUST
AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES."
EXCHANGE OF CAPITAL SECURITIES
The Exchange will not be a taxable event for United States Federal
income tax purposes. Consequently, no gain or loss will be recognized by a
holder upon the receipt of Exchange Capital Securities in exchange for their Old
Capital Securities, and such holder will have the same adjusted tax basis and
holding period in the Exchange Capital Securities as the holder had in its Old
Capital Securities immediately before such exchange.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Capital Securities, Tax Counsel
is of the opinion that under current law and assuming full compliance with the
terms of the Declaration and other documents, and based upon certain facts and
assumptions contained in such opinion, the Trust will be classified as a grantor
trust for United States Federal income tax purposes and not as an association
taxable as a corporation. Accordingly, for United States Federal income tax
purposes, each holder of Capital Securities generally will be considered the
owner of an undivided interest in the Junior Subordinated Debt Securities and,
thus, will be required to include in its gross income its allocable share of
income on the Junior Subordinated Debt Securities.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
The Corporation, the Trust and the holders of the Capital Securities
(by acceptance of a beneficial interest in a Capital Security) will agree to
treat the Junior Subordinated Debt Securities as indebtedness for all United
States tax purposes. In connection with the issuance of the Junior Subordinated
Debt Securities, Tax Counsel is of the opinion that, under current law, and
based on certain representations, facts and assumptions set forth in such
opinion, the Junior Subordinated Debt Securities will be classified as
indebtedness for United States Federal income tax purposes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under the applicable Treasury regulations, the Junior Subordinated Debt
Securities will not be treated as issued with OID within the meaning of Section
1273(a) of the Code. Accordingly, except as set forth below, stated interest on
the Junior Subordinated Debt Securities generally will be taxable to a holder as
ordinary income at the time it is paid or accrued in accordance with such
holder's regular method of tax accounting.
If, however, the Corporation exercises its right to defer payments of
interest on the Junior Subordinated Debt Securities, the Junior Subordinated
Debt Securities will become OID instruments at such time and the holders of the
Junior Subordinated Debt Securities and, consequently, holders of the Capital
Securities will be required to accrue their pro rata share of OID on a daily
basis during the Extension Period even though the Corporation will not pay such
interest until the end of the Extension Period, and even though some holders may
use the cash method of tax accounting. Moreover, thereafter the Junior
Subordinated Debt Securities will be taxed as OID instruments for as long as
they remain outstanding. Thus, even after the end of an Extension Period, all
holders would be required to continue to include their pro rata share of OID on
the Junior Subordinated Debt Securities in income on a daily basis, regardless
of their method of tax accounting and in advance of the receipt of the cash
attributable to such interest income. Under the OID economic accrual rules, a
holder would accrue an amount of interest
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income each year that approximates the stated interest payments called for under
the terms of the Junior Subordinated Debt Securities, and actual cash payments
of interest on the Junior Subordinated Debt Securities would not be reported
separately as taxable income. Any amount of OID included in a holder's gross
income (whether or not during an Extension Period) with respect to a Capital
Security will increase such holder's tax basis in such Capital Security, and the
amount of Distributions received by a holder in respect of such accrued OID will
reduce the tax basis of such Capital Security.
The Treasury regulations described above have not yet been addressed in
any rulings or other interpretations by the IRS, and it is possible that the IRS
could take a contrary position. If the IRS were to assert successfully that the
stated interest on the Junior Subordinated Debt Securities was OID regardless of
whether the Corporation exercises its option to defer payments of interest on
such debt securities, all holders of Capital Securities would be required to
include such OID in income on a daily economic accrual basis as described above.
Corporate holders of Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized by such
holders with respect to the Capital Securities.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES TO HOLDERS OF CAPITAL
SECURITIES
As described under the captions "Description of the Exchange
Securities--Description of Junior Subordinated Debt Securities--Tax Event
Prepayment" and "--Description of the Capital Securities--Liquidation of the
Trust and Distribution of Junior Subordinated Debt Securities," Junior
Subordinated Debt Securities may be distributed to holders in exchange for the
Capital Securities and in liquidation of the Trust. Under current law, such a
distribution would be non-taxable and will result in the holder receiving
directly its pro rata share of the Junior Subordinated Debt Securities
previously held indirectly through the Trust, with a holding period and
aggregate tax basis equal to the holding period and aggregate tax basis such
holder had in its Capital Securities before such distribution. If, however, the
liquidation of the Trust were to occur because the Trust is subject to United
States Federal income tax with respect to income accrued or received on the
Junior Subordinated Debt Securities, the distribution of the Junior Subordinated
Debt Securities to holders would be a taxable event to the Trust and to each
holder and a holder would recognize gain or loss as if the holder had exchanged
its Capital Securities for the Junior Subordinated Debt Securities it received
upon liquidation of the Trust.
A holder would accrue interest in respect of the Junior Subordinated
Debt Securities received from the Trust in the manner described above under
"--Interest Income and Original Issue Discount."
Under certain circumstances described herein (see "Description of the
Exchange Securities--Description of Capital Securities--Redemption"), the Junior
Subordinated Debt Securities may be redeemed for cash, with the proceeds of such
redemption distributed to holders in redemption of their Capital Securities.
Under current law, such a redemption would constitute a taxable disposition of
the redeemed Capital Securities for United States Federal income tax purposes,
and a holder would recognize gain or loss as if it sold such redeemed Capital
Securities for cash. See "--Sales or Redemption of Capital Securities."
SALES OR REDEMPTION OF CAPITAL SECURITIES
A holder that sells or redeems Capital Securities will recognize gain
or loss equal to the difference between the amount realized by the holder on the
sale or redemption of the Capital Securities (except to the extent that such
amount realized is characterized as a payment in respect of accrued but unpaid
interest on such holder's allocable share of the Junior Subordinated Debt
Securities that the holder had not included in gross income previously) and the
holder's adjusted tax basis in the Capital Securities sold or redeemed. Such
gain or loss generally will be a capital gain or loss and generally will be a
long-term capital gain or loss if the Capital Securities have been held for more
than one year. Subject to certain
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limited exceptions, capital losses cannot be applied to offset ordinary income
for United States Federal income tax purposes.
PROPOSED TAX LAW CHANGES
On March 19, 1996, during the 104th Congress, the Revenue
Reconciliation Bill of 1996 was introduced. This Bill would have, among other
things, generally denied interest deductions for interest on an instrument
issued by a corporation that has a maximum term of more than 20 years and that
is not shown as indebtedness on the consolidated balance sheet of the issuer or,
when the instrument is issued to a related party (other than a corporation) when
the holder or some other related party issues a related instrument that is not
shown as indebtedness on the issuer's consolidated balance sheet. The
above-described provision of the Bill was proposed to be effective generally for
instruments issued on or after December 7, 1995. If this provision were to apply
to the Junior Subordinated Debt Securities, the Corporation would not be able to
deduct interest on the Junior Subordinated Debt Securities. However, on March
29, 1996, the Chairmen of the Senate Finance and House Ways and Means Committees
issued the Joint Statement to the effect that it was their intention that the
effective date of the Bill, if enacted, would be no earlier than the date of
appropriate Congressional action. In addition, subsequent to the publication of
the Joint Statement, Senator Daniel Patrick Moynihan and Representatives Sam M.
Gibbons and Charles B. Rangel wrote the Letters to Treasury Department officials
concurring with the views expressed in the Joint Statement. If the principles
contained in the Joint Statement and the Letters were followed, any proposed
legislation in this area that is subsequently enacted would not adversely affect
the ability of the Corporation to deduct interest on the Junior Subordinated
Debt Securities. The 104th Congress adjourned without enacting the Bill.
Legislation was subsequently proposed, however, by the United States Department
of the Treasury on February 6, 1997, as part of President Clinton's Fiscal 1998
Budget Proposal (the "Proposed Legislation"). The Proposed Legislation contained
a provision (similar to the provision of the Bill described above) which
generally would deny the interest deduction for interest paid or accrued on an
instrument issued by a corporation that (i) has a maximum term of more than 15
years and (ii) is not shown as indebtedness on the separate balance sheet of the
issuer or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a related
instrument that is not shown as indebtedness on the issuer's consolidated
balance sheet. This provision is proposed to be effective generally for
instruments issued on or after the date of the first Congressional committee
action on the Proposed Legislation. If this provision were to apply to the
Junior Subordinated Debt Securities, the Corporation would not be able to deduct
the interest on the Junior Subordinated Debt Securities. As of April 28, 1997,
no Congressional committee action has been taken on the Proposed Legislation.
There can be no assurance that Proposed Legislation or future legislative or
administrative proposals or final legislation will not adversely affect the
ability of the Corporation to deduct interest on the Junior Subordinated Debt
Securities or otherwise affect the tax treatment of the transactions described
herein. Such a change therefore, could give rise to a Tax Event, which would
permit the Corporation to terminate the Trust and distribute the Junior
Subordinated Debt Securities to the holders of the Trust Securities in
liquidation of the Trust (and, if a Tax Event continued to exist notwithstanding
the taking of such actions, to prepay the Junior Subordinated Debt Securities),
as described more fully under "Description of the Exchange
Securities--Description of Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debt Securities" and "Description of Junior
Subordinated Debt Securities--Tax Event Prepayment."
NON-UNITED STATES HOLDERS
As used herein, the term "Non-United States Holder" means any holder
that is not a United States Holder. As discussed above, the Capital Securities
will be treated as evidence of an indirect beneficial ownership interest in the
Junior Subordinated Debt Securities. See "--Classification of the Trust." Thus
under present United States Federal income tax law, and subject to the
discussion below concerning backup withholding:
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(a) no withholding of United States Federal income tax will be
required with respect to the payment by the Corporation or any paying agent of
principal or interest (which for purposes of this discussion includes any OID)
with respect to the Capital Securities or the Junior Subordinated Debt
Securities to a Non-United States Holder, provided (i) that the beneficial owner
of the Capital Securities ("Beneficial Owner") does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of the Corporation entitled to vote within the meaning of section
871(h)(3) of the Code and the regulations thereunder, (ii) the Beneficial Owner
is not a controlled foreign corporation that is related to the Corporation
through stock ownership, (iii) the Beneficial Owner is not a bank whose receipt
of interest with respect to the Capital Securities (or the Junior Subordinated
Debt Securities) is described in section 881(c)(3)(A) of the Code and (iv) the
Beneficial Owner satisfies the statement requirement (described generally below)
set forth in section 871(h) and section 881(c) of the Code and the regulations
thereunder; and
(b) no withholding of United States Federal income tax will be
required with respect to any gain realized by a Non-United States Holder upon
the sale or other disposition of the Capital Securities (or the Junior
Subordinated Debt Securities).
To satisfy the requirement referred to in (a)(iv) above, the Beneficial
Owner, or a financial institution holding the Capital Securities on behalf of
such owner, must provide, in accordance with specified procedures, to the Trust
or its paying agent, a statement to the effect that the Beneficial Owner is not
a United States Holder. Pursuant to current temporary Treasury regulations,
these requirements will be met if (1) the Beneficial Owner provides his name and
address, and certifies, under penalties of perjury, that it is not a United
States person (which certification may be made on an IRS Form W-8 (or successor
form)) or (2) a financial institution holding the Capital Securities on behalf
of the Beneficial Owner certifies, under penalties of perjury, that such
statement has been received by it and furnishes a paying agent with a copy
thereof.
If a Non-United States Holder cannot satisfy the requirements of the
"portfolio interest" exception described in (a) above, payments of interest made
to such Non-United States Holder will be subject to a 30% withholding tax unless
the Beneficial Owner provides the Corporation or its paying agent, as the case
may be, with a properly executed (1) IRS Form 1001 (or successor form) claiming
an exemption from, or a reduction of, such withholding tax under the benefit of
a tax treaty or (2) IRS Form 4224 (or successor form) stating that interest paid
on the Junior Subordinated Debt Securities is not subject to withholding tax
because it is effectively connected with the Beneficial Owner's conduct of a
trade or business in the United States.
If a Non-United States Holder is engaged in a trade or business in the
United States and interest on the Junior Subordinated Debt Securities is
effectively connected with the conduct of such trade or business, the Non-United
States Holder, although exempt from the withholding tax discussed above, will be
subject to United States Federal income tax on such interest on a net income
basis in the same manner as if it were a United States Holder. In addition, if
such Non-United States Holder is a foreign corporation, it may be subject to a
branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to adjustments. For this purpose, such
interest income would be included in such foreign corporation's earnings and
profits.
Any gain realized upon the sale or other disposition of the Capital
Securities (or the Junior Subordinated Debt Securities) generally will not be
subject to United States Federal income tax unless (i) such gain is effectively
connected with a trade or business in the United States of the Non-United States
Holder, (ii) in the case of a Non-United States Holder who is an individual,
such individual is present in the United States for 183 days or more in the
taxable year of such sale, exchange or retirement, and certain other conditions
are met, or (iii) in the case of any gain representing accrued interest on the
Junior Subordinated Debt Securities, the requirements described above are not
satisfied.
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As discussed above, legislation was introduced in the 104th Congress
that would have denied an interest deduction to the Corporation for the interest
payable on the Junior Subordinated Debt Securities. Such legislation also may
have caused the Junior Subordinated Debt Securities to have been classified as
equity (rather than indebtedness) of the Corporation for United States Federal
income tax purposes and, thus, caused the income derived from the Junior
Subordinated Debt Securities to be characterized as dividend, rather than
interest, income for such purposes. Dividend income is not eligible for the
"portfolio interest" exception described in (a) above. Therefore, if such
legislation had been enacted, income derived by a Non-United States Holder on
the Capital Securities may have been subject to the 30% United States Federal
withholding tax described above unless a reduction or elimination of such tax
was available under an applicable tax treaty or such dividend income was
effectively connected with a trade or business carried on in the United States
by such Non-United States Holder. The 104th Congress adjourned without enacting
such legislation. However, it is possible that legislation could be enacted in
the future that could affect the characterization of income paid on the Capital
Securities (or the Junior Subordinated Debt Securities) or otherwise adversely
affect a Non-United States Holder. See "--Proposed Tax Law Changes".
INFORMATION REPORTING AND BACKUP WITHHOLDING
Income on the Capital Securities held of record by holders (other than
United States corporations and other exempt holders) will be reported annually
to such holders and to the IRS. The Administrative Trustees currently intend to
deliver such reports to holders of record prior to January 31 following each
calendar year. It is anticipated that persons who hold Capital Securities as
nominees for beneficial holders will report the required tax information to
beneficial holders on Form 1099.
"Backup withholding" at a rate of 31% will apply to payments of
interest to non-exempt United States Holders unless the holder furnishes its
taxpayer identification number in the manner prescribed in applicable Treasury
regulations, certifies that such number is correct, certifies as to no loss of
exemption from backup withholding and meets certain other conditions.
No Form 1099 information reporting or backup withholding will be
required with respect to payments made by the Trust or any Paying Agent to
Non-United States Holders if a statement described in (a)(iv) under "Non-United
States Holders" has been received and the payor does not have actual knowledge
that the beneficial owner is a United States person. However, payments of
interest or OID made by the Trust or any Paying Agent to Non-United States
holders are required to be reported to those Holders and the IRS on Form 1042-S.
In addition, backup withholding and information reporting will not
apply if payments of the principal, interest, OID or premium on the Junior
Subordinated Debt Securities are paid or collected by a foreign office of a
custodian, nominee or other foreign agent on behalf of the Beneficial Owner, or
if a foreign office of a broker (as defined in applicable Treasury regulations)
pays the proceeds of the sale of the Capital Securities to the owner thereof.
If, however, such nominee, custodian, agent or broker is, for United States
Federal income tax purposes, a United States person, a controlled foreign
corporation or a foreign person that derives 50% or more of its gross income for
certain periods from the conduct of a trade or business in the United States,
such payments will not be subject to backup withholding but will be subject to
information reporting, unless (1) such custodian, nominee, agent or broker has
documentary evidence in its records that the Beneficial Owner is not a United
States person and certain other conditions are met or (2) the Beneficial Owner
otherwise establishes an exemption.
Payment of the proceeds from disposition of Capital Securities to or
through a United States office of a broker is subject to information reporting
and backup withholding unless the holder or Beneficial Owner establishes an
exemption from information reporting and backup withholding.
68
<PAGE> 71
Any amounts withheld from a holder of the Capital Securities under the
backup withholding rules will be allowed as a refund or a credit against such
holder's United States Federal income tax liability, provided the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Old Capital Securities where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. The Trust and the Corporation have agreed that, starting on
the Expiration Date and ending on the close of business on the 180th day
following the Expiration Date, they will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, until ______________, 1997, all dealers effecting
transactions in the Exchange Securities may be required to deliver a prospectus.
The Corporation and the Trust will not receive any proceeds from any
sale of Exchange Securities by broker-dealers. Exchange Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such Exchange Securities may be deemed to be an "underwriter" within the meaning
of the Securities Act and any profit of any such resale of Exchange Securities
and any commissions or concessions received by any such persons may be deemed to
be underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
VALIDITY OF THE EXCHANGE SECURITIES
Certain matters of Delaware law relating to the validity of the
Exchange Capital Securities and the formation of the Trust will be passed upon
by Potter Anderson & Corroon, special Delaware Counsel to the Trust. The
validity of the Exchange Guarantee and the Exchange Junior Subordinated Debt
Securities will be passed upon for the Corporation by William F. Rosenblum, Jr.,
Esq., Senior Vice President, Deputy General Counsel and Secretary of the
Corporation. Mr. Rosenblum owns or has the right to acquire a number of shares
of common stock of the Corporation equal to less than 1% of the outstanding
common stock of the Corporation. Mr. Rosenblum will rely on the opinion of
Potter Anderson & Corroon as to matters of Delaware law and on the opinion of
Piper & Marbury L.L.P. as to matters of Maryland law. Certain matters relating
to United States Federal income tax considerations will be passed upon for the
Corporation by Simpson Thacher & Bartlett.
EXPERTS
The consolidated statements of condition of the Corporation as of
December 31, 1995 and 1994 and the related consolidated statements of income,
changes in stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1995 and the consolidated statements of
69
<PAGE> 72
condition of the Bank as of December 31, 1995 and 1994 included in the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1995
have been incorporated herein by reference in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated herein
by reference, and upon the authority of said firm as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP covering the December 31, 1995
financial statements refers to the fact that in 1995 the Corporation adopted
Statement of Financial Accounting Standards ("SFAS") No. 114, "Accounting by
Creditors for Impairment of a Loan," SFAS No. 118, "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures," and SFAS No. 122,
"Accounting for Mortgage Servicing Rights an Amendment of SFAS No. 65," and in
1993 the Corporation adopted SFAS No. 115, "Accounting for Certain Investments
in Debt and Equity Securities."
70
<PAGE> 73
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Article Ninth of the Corporation's Articles of
Incorporation and the provisions of Section 2-418 of the General Corporation Law
of Maryland, as amended, the Corporation may indemnify a director or officer for
service in such capacity unless it is proved that: (a) the act or omission of
such person was material to the cause of action adjudicated in the proceeding
and either was committed in bad faith or was the result of active and deliberate
dishonesty; (b) such person actually received an improper personal benefit in
money, property or services; or (c) in the case of any criminal proceeding, such
person had reasonable cause to believe that the act or omission was unlawful.
Indemnification may be against judgments, penalties, fines, settlements, and
reasonable expenses actually incurred by the director or officer in connection
with the proceeding; however, if the proceeding was one by or in the right of
the Corporation, indemnification may not be made if such person has been
adjudged liable to the Corporation. The termination of any proceeding by
judgment, order or settlement does not create a presumption that the director or
officer did not meet the requisite standard of conduct for indemnification, but
the termination of any proceeding by conviction or upon a plea of nolo
contendere or its equivalent, or an entry of an order of probation prior to
judgment, does create a rebuttable presumption that such person may not be
indemnified. In addition, the Corporation may pay or reimburse, prior to final
disposition, the expenses, including attorneys' fees, incurred by a director or
officer in defending a proceeding provided that such person has given (a) a
written affirmation that, in good faith, he believes that he has met the
standard of conduct necessary for indemnification by the Corporation and (b) a
written undertaking to the Corporation to repay such advances if it is
ultimately determined that he is not entitled to indemnification. This
undertaking, however, need not be secured and may be accepted without reference
to such person's financial ability to make the repayment. Article Ninth of the
Corporation's Articles of Incorporation also provides that the Corporation may
indemnify any person who is or was an employee or agent of the Corporation or is
or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise to the extent and under the circumstances provided for
indemnification of directors and officers of the Corporation. Any
indemnification shall be made by the Corporation only as authorized in the
specific case upon a determination by the Corporation's Board of Directors, by
independent legal counsel in a written opinion or by the stockholders of the
Corporation that indemnification of the director, officer, employee or agent is
proper in the circumstances because such person has met the applicable standard
of conduct. Such indemnification is not exclusive of any other rights and
remedies to which a director, officer, employee or agent of the Corporation may
be entitled by law or other agreement or otherwise.
The Corporation carries a policy of insurance providing for indemnification
of directors, officers and employees of the Corporation and its subsidiaries as
permitted by Article Ninth of the Corporation's Articles of Incorporation and
Section 2-418 of the General Corporation Law of Maryland, as amended.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT
- --------
<S> <C>
4.1 Junior Subordinated Indenture between the Corporation and
Bankers Trust Company, as Debenture Trustee, dated December 4,
1996.*
4.2 Certificate of Trust of Republic New York Capital II.*
4.3 Declaration of Trust among the Corporation, Bankers Trust
Company as Property Trustee and Delaware Trustee, and the
Administrative Trustees named therein, dated November 26,
1996.*
4.4 Amended and Restated Declaration of Trust among the
Corporation, Bankers Trust Company, as Property Trustee and
Delaware Trustee, and the Administrative Trustees named
therein, dated December 4, 1996.*
</TABLE>
71
<PAGE> 74
<TABLE>
<S> <C>
4.5 Form of Capital Security Certificate originally issued by
Republic New York Capital I on December 4, 1996 (included as
Exhibit B of Exhibit 4.4).*
4.6 Form of Capital Security Certificate to be issued by Republic
New York Capital II and registered under the Securities Act of
1933, as amended.*
4.7 Form of Security for 7.53% Junior Subordinated Debt Security
due December 4, 2026 originally issued by the Corporation on
December 4, 1996 (included in Article 2 of Exhibit 4.1).*
4.8 Form of Security for 7.53% Junior Subordinated Debt Security
due December 4, 2026 to be issued by the Corporation and
registered under the Securities Act of 1933, as amended.*
4.9 Guarantee Agreement originally executed by the Corporation and
Bankers Trust Company, as Guarantee Trustee, on December 4,
1996.*
4.10 Form of Guarantee Agreement to be entered into by the
Corporation and Bankers Trust Company, as Guarantee Trustee,
and registered under the Securities Act of 1933, as amended.**
4.11 Registration Agreement, dated December 4, 1996 between the
Corporation, Republic New York Capital I and Deutsche Morgan
Grenfell Inc.*
5.1 Opinion and consent of William F. Rosenblum, Jr. Esq., Senior
Vice President, Deputy General Counsel and Secretary of the
Corporation as to legality of the Junior Subordinated Debt
Securities and the Guarantee to be issued by the
Corporation.**
5.2 Opinion of special Delaware counsel as to legality of the
Capital Securities to be issued by Republic New York Capital
II.**
8 Opinion of special tax counsel as to certain federal income
tax matters.**
12 Computation of ratio of earnings to fixed charges.**
23.1 Consent of KPMG Peat Marwick LLP.*
23.2 Consent of William F. Rosenblum, Jr.(included in Exhibit
5.1).**
23.3 Consent of special Delaware counsel (included in Exhibit
5.2).**
24.1 Form of Power of Attorney of Republic New York Corporation.*
24.2 Form of Power of Attorney of Republic New York Capital II.*
25.1 Form T-1 Statement of Eligibility of Bankers Trust Company to
act as trustee under the Junior Subordinated Indenture.*
25.2 Form T-1 Statement of Eligibility of Bankers Trust Company to
act as trustee under the Amended and Restated Declaration of
Trust.*
25.3 Form T-1 Statement of Eligibility of Bankers Trust Company
under the Guarantee for the benefit of the holders of Capital
Securities.*
99.1 Form of Letter of Transmittal.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement.**
</TABLE>
- ---------
* Filed previously.
** Filed herewith.
ITEM 22. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, as
amended, (the "Securities Act") each filing of a Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934, as amended (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934), that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the Exchange Securities
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
72
<PAGE> 75
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of each
Registrant pursuant to the provisions of the Articles of Incorporation of the
Corporation, or otherwise, each Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Corporation of expenses incurred or paid by a director, officer
or controlling person of each 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, the Corporation will,
unless in the opinion of its counsel the matter has been settled by the
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus, pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the Registration Statement through the date
of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired or involved therein, that was not the subject of and
included in the registration statement when it became effective.
73
<PAGE> 76
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, REPUBLIC NEW YORK
CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING THIS FORM S-4 AND HAS DULY CAUSED THIS
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 APRIL 28, 1997.
REPUBLIC NEW YORK CORPORATION
By: WALTER H. WEINER
---------------------------------------------
Walter H. Weiner
(Chairman of the Board)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED
BELOW ON APRIL 28, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C>
Director and Chairman of the Board
WALTER H. WEINER (Principal Executive Officer)
- ------------------------------
(Walter H. Weiner)
KENNETH F. COOPER Executive Vice President
- ------------------------------ and Chief Financial Officer -
(Kenneth F. Cooper) Financial Reporting and Control
(Principal Financial and
Accounting Officer)
KURT ANDERSEN Director
- ------------------------------
(Kurt Andersen)
Director
- ------------------------------
(Robert A. Cohen)
Director
- ------------------------------
(Cyril S. Dwek)
ERNEST GINSBERG Director
- ------------------------------
(Ernest Ginsberg)
NATHAN HASSON Director
- ------------------------------
(Nathan Hasson)
Director
- ------------------------------
(Jeffrey C. Keil)
PETER KIMMELMAN Director
- ------------------------------
(Peter Kimmelman)
</TABLE>
74
<PAGE> 77
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C>
RICHARD A. KRAEMER Director
- ------------------------------
(Richard A. Kraemer)
LEONARD LIEBERMAN Director
- ------------------------------
(Leonard Lieberman)
WILLIAM C. MACMILLEN, JR . Director
- ------------------------------
(William C. MacMillen, Jr.)
PETER J. MANSBACH Director
- ------------------------------
(Peter J. Mansbach)
MARTIN F. MERTZ Director
- ------------------------------
(Martin F. Mertz)
JAMES L. MORICE Director
- ------------------------------
(James L. Morice)
Director
- ------------------------------
(E. Daniel Morris)
JANET L. NORWOOD Director
- ------------------------------
(Janet L. Norwood)
JOHN A. PANCETTI Director
- ------------------------------
(John A. Pancetti)
VITO S. PORTERA Director
- ------------------------------
(Vito S. Portera)
WILLIAM P. ROGERS Director
- ------------------------------
(William P. Rogers)
ELIAS SAAL Director
- ------------------------------
(Elias Saal)
DOV C. SCHLEIN Director
- ------------------------------
(Dov C. Schlein)
PETER WHITE Director
- ------------------------------
(Peter White)
</TABLE>
75
<PAGE> 78
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, REPUBLIC NEW YORK
CAPITAL II CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
THE REQUIREMENTS FOR FILING THIS FORM S-4 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF NEW YORK, AND STATE OF NEW YORK ON APRIL 28, 1997.
REPUBLIC NEW YORK CAPITAL II
By: THOMAS F. ROBARDS
----------------------------------------
(Thomas F. Robards)
Administrative Trustee
By: STEPHEN J. SAALI
----------------------------------------
(Stephen J. Saali)
Administrative Trustee
76
<PAGE> 79
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
4.1 Junior Subordinated Indenture between the Corporation and
Bankers Trust Company, as Debenture Trustee, dated December 4,
1996.*
4.2 Certificate of Trust of Republic New York Capital II.*
4.3 Declaration of Trust among the Corporation, Bankers Trust
Company as Property Trustee and Delaware Trustee, and the
Administrative Trustees named therein, dated November 26,
1996.*
4.4 Amended and Restated Declaration of Trust among the
Corporation, Bankers Trust Company, as Property Trustee and
Delaware Trustee, and the Administrative Trustees named
therein, dated December 4, 1996.*
4.5 Form of Capital Security Certificate originally issued by
Republic New York Capital I on December 4, 1996 (included as
Exhibit B of Exhibit 4.4).*
4.6 Form of Capital Security Certificate to be issued by Republic
New York Capital II and registered under the Securities Act of
1933, as amended.*
4.7 Form of Security for 7.53% Junior Subordinated Debt Security
due December 4, 2026 originally issued by the Corporation on
December 4, 1996 (included in Article 2 of Exhibit 4.1).*
4.8 Form of Security for 7.53% Junior Subordinated Debt Security
due December 4, 2026 to be issued by the Corporation and
registered under the Securities Act of 1933, as amended.*
4.9 Guarantee Agreement originally executed by the Corporation and
Bankers Trust Company, as Guarantee Trustee, on December 4,
1996.*
4.10 Form of Guarantee Agreement to be entered into by the
Corporation and Bankers Trust Company, as Guarantee Trustee,
and registered under the Securities Act of 1933, as amended.**
4.11 Registration Agreement, dated December 4, 1996 between the
Corporation, Republic New York Capital I and Deutsche Morgan
Grenfell Inc.*
5.1 Opinion and consent of William F. Rosenblum, Jr., Esq., Senior
Vice President, Deputy General Counsel and Secretary of the
Corporation, as to legality of the Junior Subordinated Debt
Securities and the Guarantee to be issued by the
Corporation.**
5.2 Opinion of special Delaware counsel as to legality of the
Capital Securities to be issued by Republic New York Capital
II.**
8 Opinion of special tax counsel as to certain federal income
tax matters.**
12 Computation of ratio of earnings to fixed charges.**
23.1 Consent of KPMG Peat Marwick LLP.*
23.2 Consent of William F. Rosenblum, Jr.(included in Exhibit
5.1).**
23.3 Consent of special Delaware counsel (included in Exhibit
5.2).**
24.1 Form of Power of Attorney of Republic New York Corporation.*
24.2 Power of Attorney of Republic New York Capital II.*
25.1 Form T-1 Statement of Eligibility of Bankers Trust Company to
act as trustee under the Junior Subordinated Indenture.*
25.2 Form T-1 Statement of Eligibility of Bankers Trust Company to
act as trustee under the Amended and Restated Declaration of
Trust.*
25.3 Form T-1 Statement of Eligibility of Bankers Trust Company
under the Guarantee for the benefit of the holders of Capital
Securities.*
99.1 Form of Letter of Transmittal.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement.**
</TABLE>
- ---------------
* Filed previously.
** Filed herewith.
77
<PAGE> 1
Exhibit 4.10
----------------------------------------------------------
GUARANTEE AGREEMENT
Between
REPUBLIC NEW YORK CORPORATION
(as Guarantor)
and
BANKERS TRUST COMPANY
(as Trustee)
dated as of
________________, 1997
----------------------------------------------------------
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
- ------------------- -------------------
<S> <C>
310(a). ......................................................... 4.1(a)
310(b). ......................................................... 4.1(c),2.8
310(c). ......................................................... Inapplicable
311(a). ......................................................... 2.2(b)
311(b). ......................................................... 2.2(b)
311(c). ......................................................... Inapplicable
312(a). ......................................................... 2.2(a)
312(b). ......................................................... 2.2(b)
313. ......................................................... 2.3
314(a). ......................................................... 2.4
314(b). ......................................................... Inapplicable
314(c). ......................................................... 2.5
314(d). ......................................................... Inapplicable
314(e). ......................................................... 1.1,2.5, 3.2
314(f). ......................................................... 2.1, 3.2
315(a). ......................................................... 3.1(d)
315(b). ......................................................... 2.7
315(c). ......................................................... 3.1
315(d) ......................................................... 3.1(d)
316(a). ......................................................... 1.1, 2.6, 5.4
316(b). ......................................................... 5.3
316(c). ......................................................... 8.2
317(a). ......................................................... Inapplicable
317(b). ......................................................... Inapplicable
318(a). ......................................................... 2.1(b)
318(b). ......................................................... 2.1
318(c). ......................................................... 2.1(c)
</TABLE>
* This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.
i
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINITIONS ............................................................... 2
Section 1.1. Definitions ....................................................... 2
ARTICLE II. TRUST INDENTURE ACT ...................................................... 5
Section 2.1. Trust Indenture Act; Application .................................. 5
Section 2.2. List of Holders ................................................... 5
Section 2.3. Reports by the Guarantee Trustee .................................. 6
Section 2.4. Periodic Reports to Guarantee Trustee ............................. 6
Section 2.5. Evidence of Compliance with Conditions Precedent .................. 6
Section 2.6. Events of Default; Waiver ......................................... 6
Section 2.7. Event of Default; Notice .......................................... 6
Section 2.8. Conflicting Interests ............................................. 6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE ...................... 6
Section 3.1. Powers and Duties of the Guarantee Trustee ........................ 6
Section 3.2. Certain Rights of Guarantee Trustee ............................... 8
Section 3.3. Indemnity ......................................................... 9
Section 3.4. Expenses .......................................................... 9
ARTICLE IV. GUARANTEE TRUSTEE ........................................................ 10
Section 4.1. Guarantee Trustee; Eligibility .................................... 10
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee...... 10
ARTICLE V. GUARANTEE ................................................................. 11
Section 5.1. Guarantee ......................................................... 11
Section 5.2. Waiver of Notice and Demand ....................................... 11
Section 5.3. Obligations Not Affected .......................................... 11
Section 5.4. Rights of Holders ................................................. 12
Section 5.5. Guarantee of Payment .............................................. 12
Section 5.6. Subrogation ....................................................... 12
Section 5.7. Independent Obligations ........................................... 12
ARTICLE VI. COVENANTS AND SUBORDINATION .............................................. 13
Section 6.1. Subordination ..................................................... 13
Section 6.2. Pari Passu Guarantees ............................................. 13
ARTICLE VII. TERMINATION ............................................................. 13
Section 7.1. Termination ....................................................... 13
ARTICLE VIII. MISCELLANEOUS .......................................................... 13
Section 8.1. Successors and Assigns ............................................ 13
Section 8.2. Amendments ........................................................ 13
Section 8.3. Notices ........................................................... 14
Section 8.4. Benefit ........................................................... 15
Section 8.5. Interpretation .................................................... 15
Section 8.6. Governing Law ..................................................... 15
</TABLE>
ii
<PAGE> 4
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of _______________, 1997, is executed
and delivered by REPUBLIC NEW YORK CORPORATION, a bank holding company (the
"Guarantor") having its principal office at 452 Fifth Avenue, New York, New York
10018 and BANKERS TRUST COMPANY, a New York banking corporation, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Trust Securities (as defined herein) of Republic New York
Capital II, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration of Trust"), dated as of December 4, 1996, among the Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial ownership interests in the assets of the Issuer, the Issuer
issued $200,000,000 aggregate Liquidation Amount of its 7.53% Capital
Securities, Liquidation Amount $1,000 per security (the "Old Capital
Securities") and $6,186,000 of aggregate liquidation preference of Common
Securities, liquidation preference $1,000 per security (the "Common Securities"
and collectively with the Capital Securities (as defined herein), the "Trust
Securities") representing undivided beneficial ownership interests in the assets
of the Issuer and having the terms set forth in the Declaration of Trust;
WHEREAS, the Trust Securities were issued by the Issuer and the proceeds
thereof were used to purchase the Junior Subordinated Debt Securities due
December 4, 2026 (as defined in the Declaration of Trust) (the "Junior
Subordinated Debt Securities") of the Guarantor which were deposited with
Bankers Trust Company, as Property Trustee under the Declaration of Trust, as
trust assets; and
WHEREAS, as an incentive for Persons to purchase Old Capital Securities,
the Guarantor irrevocably and unconditionally agreed, to the extent set forth in
that certain Guarantee Agreement dated as of December 4, 1996 among the
Guarantor and the Guarantee Trustee, for the benefit of the holders of the Old
Capital Securities and the Common Securities (the "Old Guarantee"), to make
certain payments to such holders on the terms and conditions set forth herein;
and
WHEREAS, pursuant to that certain Registration Agreement, dated as of
December 4, 1996, among the Guarantor, the Trust and the Purchaser named therein
(the "Registration Agreement"), the Guarantor and the Issuer agreed that if the
Guarantor and the Issuer filed a registration statement (the "Registration
Statement") to exchange the Old Capital Securities for a like amount of new
capital securities (the "Exchange Capital Securities" and together with the Old
Capital Securities, the "Capital Securities"), then the Guarantor and the Issuer
would simultaneously include in the Registration Statement an offer to exchange
the Old Guarantee for this Guarantee Agreement for the benefit of the Holders of
the Trust Securities; and
WHEREAS, the Registration Agreement provides, under certain circumstances
(including the failure of the Issuer and the Guarantor to file the Registration
Statement within a prescribed period of time following the issuance of the Trust
Securities and the failure of the exchange offer contemplated by the
Registration Statement to be consummated within a prescribed period of time
following the issuance of the Trust Securities), for the interest payable on the
Junior Subordinated Debt Securities to be increased and for a corresponding
increase in the rate at which Distributions (as defined in the Declaration of
Trust) accrue on the Old Capital Securities and the Common Securities; and
1
<PAGE> 5
WHEREAS, the Guarantor would be adversely affected by such an increase in
the interest rate on the Junior Subordinated Debt Securities and the
Distributions on the Old Capital Securities and the Common Securities; and
WHEREAS, on January 31, 1997, the Guarantor and the Issuer filed the
Registration Statement; and
WHEREAS, pursuant to the Registration Agreement, the Guarantor and the
Issuer wish to exchange the Old Guarantee for this Guarantee Agreement; and
WHEREAS, this Guarantee Agreement is substantially identical to the Old
Guarantee except that this Guarantee Agreement will be registered pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act"); and
WHEREAS, in satisfaction of its obligations under the Registration
Agreement, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Trust Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein;
NOW, THEREFORE, in satisfaction of its obligations under the Registration
Agreement, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Trust Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Declaration of Trust as in effect on the
date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Capital Securities" shall have the meaning specified in the fourth
recital of this Guarantee Agreement, and shall include the Exchange Capital
Securities.
"Common Securities" shall have the meaning specified in the first recital
of this Guarantee Agreement.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) the
principal of and premium, if any, and unpaid interest
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on indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases, (iv) guarantees, assumptions or purchase
commitments relating to, or other transactions as a result of which the
Guarantor is responsible for the payment of, such indebtedness of others, (v)
renewals, extensions and refunding of any such indebtedness, (vi) interest or
obligations in respect of any such indebtedness accruing after the commencement
of any insolvency or bankruptcy proceedings and (vii) obligations associated
with derivative products such as interest rate and currency exchange contracts,
foreign exchange contracts, commodity contracts and similar arrangements.
"Declaration of Trust" means the Amended and Restated Declaration of
Trust, dated December 4, 1996, executed by the Guarantor, as Depositor, Bankers
Trust (Delaware), as Delaware Trustee, Bankers Trust Company, as Property
Trustee, and the Administrative Trustees named therein.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payment, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration of Trust) required to be paid on
the Trust Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Trust Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination, winding-up or
liquidation of the Issuer, unless Junior Subordinated Debt Securities are
distributed to the Holders, the lesser of (a) the aggregate of the liquidation
preference of $1,000 per Trust Security plus accrued and unpaid Distributions on
the Trust Securities to the date of payment to the extent the Issuer shall have
funds on hand available to make such payment at such time and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means Bankers Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the first recital of this
Guarantee Agreement.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any Trust Securities; provided, however, that in determining whether
the holders of the requisite percentage of Trust Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of November
27, 1996, between the Guarantor and Bankers Trust Company, as trustee as
supplemented and amended.
"Issuer" shall have the meaning specified in the first recital of this
Guarantee Agreement.
"List of Holders" has the meaning specified in Section 2.2(a).
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"Majority in Liquidation Amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the aggregate Liquidation Amount of all then
outstanding Trust Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman and Chief Executive Officer, President or a Vice
President, and by the Treasurer, an Associate Treasurer, an Assistant Treasurer,
the Controller, the Secretary or an Assistant Secretary of such Person, and
delivered to the Guarantee Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" when used with respect to the Guarantee Trustee
means any officer assigned to the Corporate Trust Office, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and having direct responsibility for the administration of this
Guarantee Agreement, and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Senior Debt" means the principal of (and premium, if any) and interest,
if any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Guaranty Agreement or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Trust Securities or to
other Debt which is pari passu with, or subordinated to, the Trust Securities;
provided, however, that Senior Debt shall not be deemed to include (a) any Debt
of the Guarantor which, when incurred and without respect to any election under
Section 1111(b) of the United States Bankruptcy Code of 1978, as amended, was
without recourse to the Guarantor, (b) any Debt of the Guarantor to any of its
Subsidiaries, (c) any Debt to any employee of the Guarantor, (d) any Debt which
by its terms is subordinated to trade accounts payable or accrued liabilities
arising in the ordinary course of business to the extent that payments made to
the holders of such Debt by the holders of the Securities as a result of the
subordination provisions of this Indenture would be greater than such payments
otherwise would have been as a result of any obligation
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of such holders of such Debt to pay amounts over to the obligees on such trade
accounts payable or accrued liabilities arising in the ordinary course of
business as a result of the subordination provisions to which such Debt is
subject, (e) any other debt securities issued pursuant to this Indenture and (f)
this Guarantee Agreement.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb), as amended.
"Trust Securities" shall have the meaning specified in the first recital
of this Guarantee Agreement.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of the Guarantee Agreement and shall,
to the extent applicable, be governed by such provisions.
(b) If and to the extent that, any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (i) semiannually, on or before December 4 and June 4 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of a date not more than 15
days prior to the delivery thereof, and (ii) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such request, a List of Holders as of a date not more than
15 days prior to the time such list is furnished, in each case to the extent
such information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than July 15 of each year, commencing July 15, 1997, the
Guarantee Trustee shall provide to the Holders such reports, if any, as are
required by Section 313 of the Trust Indenture Act in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
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SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Trust Securities
may, by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notice of all Events of Default known to the Guarantee Trustee, unless such
Events of Default have been cured before the giving of such notice; provided,
that, except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer charged with the administration of
the Declaration of Trust shall have received written notice of such Event of
Default.
SECTION 2.8. Conflicting Interests.
The Declaration of Trust shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a
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Holder exercising his or her rights pursuant to Section 5.4(iv) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of
its appointment to act as Successor Guarantee Trustee. The right, title and
interest of the Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee upon acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof or of the Trust Indenture Act
are specifically required to be furnished to the Guarantee Trustee,
the Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation
Amount of the Trust Securities relating to the time, method and
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place of conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not assured to it under the terms of this Guarantee Agreement
or indemnity satisfactory to it against such risk or liability is not
reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
advice or written opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or opinion. Such legal
counsel may be legal counsel to the Guarantor or any of its Affiliates and
may be one of its employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity reasonably
satisfactory to it against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as may
be requested by the Guarantee Trustee; provided, that nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee Agreement.
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(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received and (C) shall be
fully protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee and its directors,
officers, agents and employees for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of the
Guarantee Trustee, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Guarantee Trustee
will not claim or exact any lien or charge on any Guarantee Payments as a result
of any amount due to it under this Guarantee Agreement. This indemnity shall
survive the termination of this Guarantee Agreement or the resignation or
removal of the Guarantee Trustee.
SECTION 3.4. Expenses.
The Guarantor shall from time to time reimburse the Guarantee Trustee for
its expenses and costs incurred in connection with the performance of its duties
hereunder.
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ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of
Section 310(c) of the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority, then, for the
purposes of this Section and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and the Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), in the absence of the existence of an Event
of Default, the Guarantee Trustee may be appointed or removed without cause at
any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by a written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
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ARTICLE V. GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of 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 amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders. The Guarantor shall give prompt
written notice to the Guarantee Trustee in the event it makes any direct payment
hereunder.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
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:
(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 Trust Securities 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 Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Junior Subordinated Debt Securities as so provided in the Indenture),
Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Trust Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the Trust
Securities;
(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 Trust Securities, 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, the Trust Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
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(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Trust Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement and
(iv) any Holder may institute a legal proceeding directly against the Guarantor
to enforce its rights under this Guarantee Agreement, without first instituting
a legal proceeding against the Issuer or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Junior Subordinated Debt Securities to
Holders as provided in the Declaration of Trust.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights 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 by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or 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 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 Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Trust Securities and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
12
<PAGE> 16
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all Senior
Debt of the Guarantor.
SECTION 6.2. Pari Passu Guarantees.
This Guarantee Agreement shall rank pari passu with any similar Guarantee
Agreements issued by the Guarantor on behalf of the holders of trust securities
issued by Republic New York Capital I.
ARTICLE VII. TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Trust Securities,
(ii) the distribution of Junior Subordinated Debt Securities to the Holders in
exchange for all of the Trust Securities or (iii) full payment of the amounts
payable in accordance with the Declaration of Trust upon liquidation of the
Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must repay any sums paid with respect to Trust Securities or this
Guarantee Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
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 of the Trust Securities
then outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article VIII of the Indenture
and pursuant to which the assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.
SECTION 8.2. Amendments.
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of all the outstanding Trust Securities. The provisions of Article VI of the
Declaration of Trust concerning meetings of the Holders shall apply to the
giving of such approval.
13
<PAGE> 17
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied (confirmed by delivery of the original) or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
REPUBLIC NEW YORK CORPORATION
452 Fifth Avenue
New York, NY 10018
Facsimile No.: (212) 525-6875
Attention: Treasurer
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
Republic New York Capital II
c/o Republic New York Corporation
452 Fifth Avenue
New York, NY 10018
Facsimile No.: (212) 525-6875
Attention: Treasurer
with a copy to: Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
Attention: Corporate Trust and Agency Group
Corporate Market Services
(c) if given to the Guarantee Trustee:
Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
Attention: Corporate Trust and Agency Group
Corporate Market Services
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
14
<PAGE> 18
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Trust Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
15
<PAGE> 19
THIS GUARANTEE AGREEMENT is executed as of the day and year first above written.
REPUBLIC NEW YORK CORPORATION
By: _______________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Guarantee Trustee
By: _______________________________
Name:
Title:
16
<PAGE> 1
EXHIBIT 5.1
[Letterhead of William F. Rosenblum, Jr.]
April 28, 1997
The Board of Directors
Republic New York Corporation
452 Fifth Avenue
New York, New York 10018
Re: Republic New York Corporation
Registration Statement on Form S-4
File No. 333-20873
Ladies and Gentlemen:
This opinion is furnished to you in connection with a Registration Statement on
Form S-4 (the "Registration Statement") of Republic New York Corporation, a
Maryland Corporation (the "Company") and Republic New York Capital II, a
Delaware statutory business trust (the "Trust"), relating to (i) the issuance by
the Trust of $200,000,000 aggregate Liquidation Amount of the Trust's 7.53%
Capital Securities (the "Exchange Capital Securities") registered pursuant to
the Securities Act of 1933, as amended (the "Securities Act"), in exchange for
up to $200,000,000 aggregate Liquidation Amount of the Trust's outstanding 7.53%
Capital Securities (the "Old Capital Securities");(ii) the issuance by the
Company to the Trust of $206,186,000 aggregate principal amount of the Company's
7.53% Junior Subordinated Debt Securities (the "Exchange Junior Subordinated
Debt Securities") registered pursuant to the Securities Act, in exchange for up
to $206,186,000 aggregate principal amount of the Company's outstanding 7.53%
Junior Subordinated Debt Securities (the "Old Junior Subordinated Debt
Securities"); and (iii) the Company's guarantee (the "Exchange Guarantee"),
which guarantees the payment of Distributions and payments on liquidation or
redemption of the Exchange Capital Securities, registered pursuant to the
Securities Act, in exchange for the guarantee (the "Old Guarantee") which
guarantees the payment of Distributions and payments on liquidation or
redemption of the Old Capital Securities. The Exchange Capital Securities are to
be issued pursuant to an Amended and Restated Declaration of Trust dated as of
December 4, 1996 (the "Declaration") between the Company, as Depositor, Bankers
Trust (Delaware), as Delaware Trustee, Bankers Trust Company as Property
Trustee, and the Administrative Trustees named therein; the Exchange Junior
Subordinated Debt Securities are to be issued pursuant to an Indenture dated as
of November 27, 1996 (the "Indenture") between the Company and Bankers Trust
Company, as Trustee; and the New Guarantee is to be issued pursuant to the
Guarantee Agreement dated as of December 4, 1996 (the "Guarantee Agreement")
between the Company and Bankers Trust Company, as Guarantee Trustee. The
Exchange Capital Securities, the Exchange Junior Subordinated Debt Securities
and the Exchange Guarantee are collectively referred to herein as the "Exchange
Securities".
I am Senior Vice President and Deputy General Counsel of the Company as well as
Senior Vice President and Senior Deputy General Counsel of the Company's
principal subsidiary, Republic National Bank of New York (the "Bank").
In my capacity as Deputy General Counsel, I have been involved in the
preparation of the Registration Statement relating to the offering of the
Exchange Securities, the Declaration, the Indenture, the Guarantee Agreement and
all other matters relating to the foregoing documents and the transactions
contemplated thereby. For the purposes of this opinion, I have examined the
charter and By-Laws of the Company and the Bank, the Indenture, the Declaration
and the Guarantee Agreement. In addition, I have examined all such corporate
records and other documents relating to each of the foregoing entities and such
certificates of public officials, officers of the Company and other persons and
have satisfied myself as to such other matters as I have deemed necessary and
relevant in order to render this opinion. In addition, I have had
<PAGE> 2
Board of Directors
Republic New York Corporation
April 28, 1997
Page 2
oral conferences with such officers of the Company and the Bank as I have deemed
necessary and relevant with respect to material factual matters which have not
been independently established by me.
Based upon the foregoing and having regard for such legal considerations as I
deem relevant, I am of the opinion that:
1. The Company is a duly organized and validly existing Company in good
standing pursuant to the laws of the State of Maryland and is duly registered as
a bank holding company in accordance with the Bank Holding Company Act of 1956,
as amended, and has the corporate power and authority to own its properties and
conduct its business as described in the Registration Statement; the Bank is a
duly organized and validly existing national banking association pursuant to the
laws of the United States of America, continues to hold a valid certificate to
do business as such and has full power and authority to conduct its business as
such; and each of the Company and the Bank, except as set forth in the
Registration Statement, is in all material respects in compliance with all laws,
rules, regulations, directives and published interpretations issued or
administered by, all conditions imposed in writing by and all agreements entered
into with, any bank regulatory agency, authority or body having jurisdiction
over the Company and the Bank or any of their respective assets, operations or
businesses; each of the Company and the Bank holds all material licenses,
certificates and permits from governmental authorities necessary for the conduct
of its business as described in the Registration Statement; and, other than the
Bank, there is no significant subsidiary of the Company, as that term is defined
in Rule 1-02(v) of Regulation S-X, and there are no other subsidiaries of the
Company which individually, or in the aggregate, own or lease property or
conduct business which is material to the properties or business of the Company
and its subsidiaries taken as a whole;
2. The Bank is duly authorized, and the Company is duly qualified as a
foreign corporation, to do business and is in good standing in all jurisdictions
in which such authorization or qualification is required and in which the
failure to be so authorized or to qualify, as the case may be, could, in the
aggregate, have any material adverse effect upon the business, condition or
properties of each of the Company or the Bank and their respective subsidiaries
taken as a whole;
3. All of the outstanding capital stock of the Bank is duly authorized,
validly issued, fully paid and (except as provided in 12 U.S.C. Section 55, as
amended) nonassessable and owned by the Company free and clear of all liens,
encumbrances and security interests;
4. The Indenture has been duly authorized, executed and delivered, has
been duly qualified under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, fraudulent transfer, moratorium or other laws relating to or
affecting the enforcement of creditor's rights generally from time to time in
effect or by general equitable principles, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing, regardless
of whether such enforceability is considered in a proceeding in equity or at
law; the Exchange Junior Subordinated Debt Securities have been duly and validly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered against surrender and cancellation of
a like amount of Old Junior Subordinated Debt Securities in the manner described
in the Registration Statement, the Exchange Junior Subordinated Debt Securities
will constitute legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture and enforceable in accordance with their terms
except as enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or other laws
relating to or affecting the enforcement of creditor's rights generally from
time to time in effect of by general equitable principles, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether such enforceability is considered in a proceeding
in equity or at law;
<PAGE> 3
Board of Directors
Republic New York Corporation
April 28, 1997
Page 3
5. The Exchange Guarantee has been duly authorized by all requisite
corporate action and, when executed as specified in the Guarantee Agreement and
delivered against surrender and cancellation of the Old Guarantee in the manner
described in the Registration Statement, the Exchange Guarantee will constitute
the valid and binding obligation of the Company, enforceable in accordance with
its terms except as enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or other laws
relating to or affecting the enforcement of creditor's rights generally from
time to time in effect of by general equitable principles, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether such enforceability is considered in a proceeding
in equity or at law;
I am an attorney admitted to practice in the State of New York and the opinions
stated herein are limited to the laws of the United States and the State of New
York. I have not made any independent investigation of the laws of the State of
Maryland. Therefore, insofar as my opinion pertains to matters of Maryland law,
I have relied upon the opinion of Piper & Marbury L.L.P. dated April 28, 1997, a
copy of which has been furnished to you the date hereof. The opinion of Piper &
Marbury L.L.P. is satisfactory in form and substance to me, and such firm is
counsel of good standing whom I believe to be reliable.
I hereby consent to your filing of this opinion as an exhibit to the
Registration Statement, and to the reference to me under the caption "Validity
of the New Securities" contained in the Prospectus included therein.
Very truly yours,
William F. Rosenblum, Jr.
<PAGE> 1
Exhibit 5.2
[Letterhead of Potter Anderson & Carroon]
April 28, 1997
To Each of the Persons Listed
on Schedule I Attached Hereto
Re: Republic New York Capital II 7.53% Capital Securities
Ladies and Gentlemen:
We have acted as special Delaware counsel for Republic New York Capital
II, a Delaware business trust (the "Trust") in connection with the issuance of
its 7.53% Capital Securities (the "Capital Securities") and common securities
(the "Common Securities") in connection with the Amended and Restated
Declaration of Trust (the "Trust Agreement") dated as of December 4, 1996 by and
among Republic New York Corporation, as Depositor, Bankers Trust (Delaware), as
Delaware Trustee, Bankers Trust Company, as Property Trustee, and the
Administrative Trustees named therein. Initially capitalized terms used herein
and not otherwise defined are used herein as defined in the Trust Agreement.
For purposes of giving the opinions hereinafter set forth, we have
examined only the following documents and have conducted no independent factual
investigation of our own:
1. The Certificate of Trust for the Trust, dated as of November 26,
1996 (the "Certificate"), as filed in the Office of the Secretary
of State of the State of Delaware (the "Secretary of State") on
November 26, 1996;
<PAGE> 2
To each of the persons on
Schedule I attached hereto
April 28, 1997
Page 3
2. The original trust agreement of trust of the Trust, dated as of
November 26, 1996, by and among Republic New York Corporation, as Depositor,
Bankers Trust (Delaware), as Delaware Trustee and the Administrative Trustees
named therein (the "Original Trust Agreement");
3. The Trust Agreement;
4. A Certificate of Good Standing for the Trust, dated April 28,
1997 obtained from the Secretary of State;
5. The Registration Statement on Form S-4, as amended, (the
"Registration Statement"), including a prospectus with respect to the Trust (the
"Prospectus"), relating to, among other things, an Exchange Offer (the "Exchange
Offer") involving the 7.53% Capital Securities of the Trust representing
preferred, undivided beneficial interests in the assets of the Trust (each, an
"Exchange Security" and collectively, the "Exchange Securities" to be offered in
exchange for the presently outstanding 7.53% Capital Securities of the Trust
(the "Old Capital Securities"), filed by the Depositor and the Trust with the
Securities and Exchange Commission.
As to certain facts material to the opinions expressed herein, we
have relied upon the representations and warranties contained in the documents
examined by us all of which we have assumed to be true, complete and accurate in
all material respects. The documents referred to in paragraphs 1, 2, 3 and 5
above are collectively referred to as the "Agreements."
Based upon the foregoing, and upon examination of such questions of
law of the State of Delaware as we have considered necessary or appropriate, and
subject to the assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
2. The Exchange Securities, upon issuance pursuant to the Exchange
Offer, will represent valid, and, subject to the qualifications set forth in
number 3 below, fully paid and non-assessable undivided beneficial interests in
the assets of the Trust.
<PAGE> 3
To each of the persons on
Schedule I attached hereto
April 28, 1997
Page 4
3. The Holders of Exchange Securities, as beneficial owners of
Exchange Securities of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware, except
that the Holders of the Exchange Securities may be obligated to (a) provide
indemnity and/or security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of certificates representing Trust
Securities and the issuance of replacement certificates representing Trust
Securities, and (b) provide security or indemnity in connection with requests of
or directions to the Property Trustee to exercise its rights and powers under
the Trust Agreement.
All of the foregoing opinions contained herein are subject to the
following assumptions, qualifications, limitations and exceptions:
a. The foregoing opinions are limited to the laws of the State
of Delaware presently in effect, excluding the securities laws thereof. We have
not considered and express no opinion on the laws of any other jurisdiction,
including, without limitation, federal laws and rules and regulations relating
thereto.
b. We have assumed the due execution and delivery by each
party listed as a party to each document examined by us. We have assumed further
the due authorization by each party thereto (exclusive of the Trust) of each
document examined by us, and that each of such parties (exclusive of the Trust)
has the full corporate, or trust or banking, power, authority, and legal right
to execute, deliver and perform each such document. We have also assumed that
each of the parties to each of the Agreements (exclusive of the Trust and the
Administrative Trustees) is a corporation, bank, national banking association or
trust company, validly existing and in good standing under the laws of their
respective jurisdictions or organization and that the Agreements to which they
are a party do not result in the breach of the terms of, and do not contravene
their respective constituent documents, and contractual restriction binding on
them or any law, rule or regulation applicable to them. In addition, we have
assumed the legal capacity of any natural persons who are parties to any of the
documents examined by us.
<PAGE> 4
To each of the persons on
Schedule I attached hereto
April 28, 1997
Page 5
c. We have assumed that all signatures on documents examined
by us are genuine, that all documents submitted to us as originals are authentic
and that all documents submitted to us as copies conform with the originals.
d. We have assumed that the Original Trust Agreement and the
Trust Agreement collectively, constitute the entire agreement among each of the
respective parties thereto with respect to the subject matter thereof, including
with respect to the creation, operation, dissolution and winding up of the Trust
and that the Trust Agreement and the Certificate are in full force and effect.
e. We have assumed that no event set forth in Article 9 of the
Trust Agreement has occurred.
f. We have assumed that the Exchange Securities will be issued
and exchanged in accordance with the Trust Agreement and the Prospectus. We have
further assumed the receipt of each Person to whom an Exchange Security is to be
issued by the Trust of a Certificate for such Exchange Security and the exchange
by it of an equivalent liquidation amount of Old Securities in accordance with
the Trust Agreement and the Prospectus.
g. We note that we have not participated in the preparation,
and do not assume responsibility for the contents, of the Registration Statement
and the Prospectus.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of Exchange
Securities" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Potter Anderson & Corroon
<PAGE> 5
SCHEDULE I
REPUBLIC NEW YORK CORPORATION
REPUBLIC NEW YORK CAPITAL II
<PAGE> 1
Exhibit 8
April 28, 1997
Re: Offer to Exchange 7.53% Capital
Securities for Outstanding
7.53% Capital Securities
Republic New York Corporation
452 Fifth Avenue
New York, New York 10018
Republic New York Capital II
c/o Republic New York Corporation
452 Fifth Avenue
New York, New York 10018
Ladies and Gentlemen:
We have acted as special tax counsel ("Tax Counsel") to Republic New
York Corporation, a Maryland corporation (the "Company"), and Republic New York
Capital II, a statutory business trust organized under the Business Trust Act of
the State of Delaware (the "Trust"), in connection with the preparation and
filing by the Company and the Trust with the Securities and Exchange Commission
(the "Commission") of a Registration Statement on Form S-4(as amended, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), registering the exchange (referred to collectively herein as
the "Exchange"), of: (i) up to $200,000,000 aggregate liquidation amount of
7.53% Capital Securities (the "Exchange Capital Securities"), which
<PAGE> 2
-2- April 28, 1997
will have been registered under the Securities Act pursuant to the Registration
Statement, for a like amount of the Trust's outstanding 7.53% Capital Securities
(the "Old Capital Securities"); (ii) the Company's guarantee (which is set forth
in the Guarantee Agreement, dated December 4, 1996, between the Company and
Bankers Trust Company, as trustee (the "Old Guarantee Trustee")) of the payment
of distributions and payments upon liquidation or redemption of the Trust
Securities (the "Old Guarantee") for a like guarantee (which will be set forth
in a new Guarantee Agreement between the Company and Bankers Trust Company, as
trustee (the "Exchange Guarantee Trustee")) of the Trust Securities (the
"Exchange Guarantee"), which will have been registered under the Securities Act
pursuant to the Registration Statement; and (iii) all of the Company's
outstanding 7.53% Junior Subordinated Debt Securities (the "Old Junior
Subordinated Debt Securities") for a like aggregate principal amount of 7.53%
Junior Subordinated Debt Securities (the "Exchange Junior Subordinated Debt
Securities"), which will have been registered under the Securities Act pursuant
to the Registration Statement.
All capitalized terms used in this opinion letter and not otherwise
defined herein shall have the meaning ascribed to such terms in the Registration
Statement.
In delivering this opinion letter, we have reviewed and relied upon:
(i) the Registration Statement; (ii) the Indenture, dated as of November 27,
1996 (the "Indenture"), between the Company and Bankers Trust Company, as
trustee (the "Indenture Trustee"); (iii) the Officer's Certificate, dated
December 4, 1996, made pursuant to Section 3.1 of the Indenture; (iv) forms of
the Old Junior Subordinated Debt Securities and the Exchange Junior Subordinated
Debt Securities; (v) the Amended and
<PAGE> 3
-3- April 28, 1997
Restated Declaration of Trust, dated as of December 4, 1996 (the "Declaration"),
among the Company, as Depositor, Bankers Trust Company, as the initial Property
Trustee, Bankers Trust (Delaware), as the initial Delaware Trustee and the
initial Administrative Trustees named therein; (vi) the Old Guarantee and a form
of the Exchange Guarantee; and (vii) forms of the Trust Securities. Further, we
have relied upon certain other statements and representations contained in the
Company's letter of representations dated December 4, 1996. We have also
examined and relied upon the originals or copies, certified or otherwise
identified to our satisfaction, of such records of the Company and the Trust and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination of such material, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals
and the conformity to original documents of all copies of documents submitted to
us. In addition, we also have assumed that (i) the transactions related to the
original issuance of the Old Junior Subordinated Debt Securities, the Old
Capital Securities and the Common Securities were consummated in accordance with
the terms of the documents and forms of documents described herein and (ii) the
Exchange will be consummated in accordance with the terms of such documents and
forms of documents.
On the basis of the foregoing and assuming that the Trust was formed
and will be maintained in compliance with the terms of the Declaration, we
hereby confirm (i) our opinions set forth in the Registration Statement under
the caption "Certain Federal Income Tax Consequences" and (ii) that, subject to
the qualifications set forth therein, the
<PAGE> 4
-4- April 28, 1997
discussion set forth in the Registration Statement under such caption is an
accurate summary of the United States federal income tax matters described
therein.
We express no opinion with respect to the transactions referred to
herein or in the Registration Statement other than as expressly set forth
herein. Moreover, we note that there is no authority directly on point dealing
with securities such as the Trust Securities or transactions of the type
described herein and that our opinion is not binding on the Internal Revenue
Service or the courts, either of which could take a contrary position.
Nevertheless, we believe that if challenged, the opinions we express herein
would be sustained by a court with jurisdiction in a properly presented case.
Our opinion is based upon the Code, the Treasury regulations
promulgated thereunder and other relevant authorities of law, all as in effect
on the date hereof. Consequently, future changes in the law may cause the tax
treatment of the transactions referred to herein to be materially different from
that described above.
We are admitted to practice law only in the State of New York and the
opinions we express herein are limited solely to matters governed by the federal
law of the United States.
<PAGE> 5
-5- April 28, 1997
We hereby consent to the use of this opinion for filing as Exhibit 8 to
the Registration Statement and the use of our name in the Registration Statement
under the captions "Certain Federal Income Tax Consequences" and "Validity of
the Exchange Securities".
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
<PAGE> 1
EXHIBIT 12
CALCULATION OF RATIOS OF EARNINGS TO
FIXED CHARGES-CONSOLIDATED
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
($ IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
EXCLUDING INTEREST ON DEPOSITS
Fixed Charges:
Interest on long-term debt and short-term
borrowings $ 588,693 $ 489,697 $ 499,065 $ 467,841 $ 513,322
One-third of rent expense 14,495 13,651 14,412 10,859 10,252
---------- ---------- ---------- ---------- ----------
Total fixed charges $ 603,188 $ 503,348 $ 513,477 $ 478,700 $ 523,574
========== ========== ========== ========== ==========
Earnings:
Income before income taxes $ 590,546 $ 398,115 $ 492,366 $ 451,358 $ 347,269
Fixed charges 603,188 503,348 513,477 478,700 523,574
---------- ---------- ---------- ---------- ----------
Total earnings $1,193,734 $ 901,463 $1,005,843 $ 930,058 $ 870,843
========== ========== ========== ========== ==========
Ratio of earnings to fixed charges excluding
interest on deposits 1.98x 1.79x 1.96x 1.94x 1.66x
INCLUDING INTEREST ON DEPOSITS
Fixed Charges:
Interest on long-term debt, short-term
borrowings and deposits $1,870,898 $1,627,772 $1,326,855 $1,157,075 $1,318,228
One-third of rent expense 14,495 13,651 14,412 10,859 10,252
---------- ---------- ---------- ---------- ----------
Total fixed charges $1,885,393 $1,641,423 $1,341,267 $1,167,934 $1,328,480
========== ========== ========== ========== ==========
Earnings:
Income before income taxes $ 590,546 $ 398,115 $ 492,366 $ 451,358 $ 347,269
Fixed charges 1,885,393 1,641,423 1,341,267 1,167,934 1,328,480
---------- ---------- ---------- ---------- ----------
Total earnings $2,475,939 $2,039,538 $1,833,633 $1,619,292 $1,675,749
========== ========== ========== ========== ==========
Ratio of earnings to fixed charges including
interest on deposits 1.31x 1.24x 1.37x 1.39x 1.26x
</TABLE>
For the purpose of computing the consolidated ratio of earnings to fixed
charges, earnings represent consolidated income before income taxes plus fixed
charges. Fixed charges excluding interest on deposits consist of interest on
long-term debt and short-term borrowings and one-third of rental expense (which
is deemed representative of the interest factor). Fixed charges including
interest on deposits consist of the foregoing items plus interest on deposits.
<PAGE> 1
Exhibit 99.1
LETTER OF TRANSMITTAL
REPUBLIC NEW YORK CAPITAL II
OFFER TO EXCHANGE ITS
7.53% CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
7.53%% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
PURSUANT TO THE PROSPECTUS
DATED __________________, 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON _________________, 1997, UNLESS THE OFFER IS EXTENDED.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
BANKERS TRUST COMPANY
<TABLE>
<CAPTION>
By mail: By hand: By overnight mail:
-------- -------- ------------------
<S> <C> <C>
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Reorganization Unit Corporate Trust and Reorganization Unit
P.O. Box 292737 Agency Unit Grassmere Park Dr.
Nashville, TN 37229-2737 123 Washington Street Nashville, TN 37211
First Floor Window
New York, NY 10008
</TABLE>
For information call:
(800) 735-7777
Confirm: (615)835-3572
Facsimile: (615) 835-3701
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
The undersigned acknowledges that he or she has received the Prospectus,
dated _____________, 1997 (the "Prospectus"), of Republic New York Capital II
(the "Trust") and Republic New York Corporation ("Republic" or the
"Corporation"), and this Letter of Transmittal (the "Letter of Transmittal"),
which together constitute the Trust's and the Corporation's offer (the "Exchange
Offer") to exchange up to $200,000,000 aggregate Liquidation Amount of the
Trust's 7.53% Capital Securities (the "Exchange Capital Securities") for a like
Liquidation Amount of its outstanding 7.53% Capital Trust Securities (the "Old
Capital Securities" and, together with the Exchange Capital Securities, the
"Capital Securities"). The terms of the Exchange Capital Securities are
identical in all material respects to the Old Capital Securities, except the
Exchange Capital Securities have been registered pursuant to the Securities Act
of 1933, as amended (the "Securities Act"), and, therefore, will not bear
legends restricting their transfer and will not contain certain provisions
providing for an increase in the Distribution rate thereon. The term "Expiration
Date" shall mean 5:00 p.m., New York City time, on _________, 1997, unless the
Exchange Offer is extended as provided in the Prospectus, in which case the term
"Expiration Date" shall mean the latest date and time to which the Exchange
Offer is extended. Capitalized terms used but not defined herein shall have the
same meaning given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Capital
Securities (as defined below) either (i) if Old Capital Securities are forwarded
herewith or (ii) if tender of Old Capital Securities is to be made by book-entry
transfer to an account maintained by Bankers Trust Company (the "Exchange
Agent") at The Depository Trust Company ("DTC") pursuant to the procedures set
forth in "The Exchange Offer--Procedures for Tendering Old Capital Securities"
in the Prospectus.
Holders of Old Capital Securities whose certificates (the "Certificates")
for such Old Capital Securities are not immediately available or who cannot
deliver their Certificates and all other required documents to the Exchange
Agent prior to 5:00 p.m., New York City time, on the Expiration Date or who
cannot complete the procedures for book-entry transfer on a timely basis must
tender their Old Capital Securities according to the guaranteed delivery
procedures set forth in "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus. See Instruction 1.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Old Capital Securities are registered on the books of the Trust or
any other person who has obtained a properly completed bond power from the
registered holder. The undersigned has completed, executed and delivered this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer. Holders who wish to tender their Old Capital
Securities must complete this Letter of Transmittal in its entirety.
<PAGE> 2
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY
BEFORE COMPLETING THIS LETTER OF TRANSMITTAL
ALL TENDERING HOLDERS COMPLETE THIS BOX
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
- ---------------------------------------------------------------------------------------------------------------
OLD CAPITAL LIQUIDATION NUMBER OF
SECURITIES AMOUNT OF BENEFICIAL HOLDERS
NAME AND ADDRESS OF TENDERED (ATTACH OLD CAPITAL FOR WHOM OLD
REGISTERED HOLDER CERTIFICATE ADDITIONAL LIST IF SECURITIES TENDERED CAPITAL SECURITIES
(PLEASE FILL IN IF BLANK) NUMBERS* NECESSARY) (IF LESS THAN ALL)** ARE HELD
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
TOTAL AMOUNT TENDERED:
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by book-entry holders.
** Old Capital Securities may be tendered in whole or in part in
denominations of $100,000 Liquidation Amount and integral multiples of $1,000
in excess thereof; provided that if any Old Capital Securities are tendered
for exchange in part, the untendered Liquidation Amount thereof must be
$100,000 or any integral multiple of $1,000 in excess thereof. All Old
Capital Securities held shall be deemed tendered unless a lesser number is
specified in this column.
- --------------------------------------------------------------------------------
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[_] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH DTC AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN DTC MAY DELIVER
CAPITAL SECURITIES BY BOOK-ENTRY TRANSFER (SEE INSTRUCTION 1)):
Name of Tendering Institution:----------------------------------------
DTC Account Number:---------------------------------------------------
Transaction Code Number:----------------------------------------------
[_] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING (SEE INSTRUCTION 5):
Name of Registered Holders(s):----------------------------------------
Window Ticket Number (if any):----------------------------------------
Date of Execution of Notice of Guaranteed Delivery:-------------------
Name of Institution which Guaranteed Delivery:------------------------
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution:----------------------------------------
DTC Account Number:---------------------------------------------------
Transaction Code Number:----------------------------------------------
[_] CHECK HERE IF OLD CAPITAL SECURITIES TENDERED BY BOOK-ENTRY TRANSFER BUT
NOT EXCHANGED ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET
FORTH ABOVE.
[_] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE
10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
<PAGE> 3
Name:
-----------------------------------------------------------------
Address:
--------------------------------------------------------------
Area Code and Telephone Number:
---------------------------------------
Contact Person:
-------------------------------------------------------
<PAGE> 4
Ladies and Gentlemen:
The undersigned hereby tenders to the Trust and the Corporation the above
described aggregate Liquidation Amount of Old Capital Securities in exchange for
a like aggregate Liquidation Amount of Exchange Capital Securities.
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of the
Corporation and the Trust in connection with the Exchange Offer) with respect to
the tendered Old Capital Securities, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
subject only to the right of withdrawal described in the Prospectus, to (i)
deliver Certificates for Old Capital Securities together with all accompanying
evidences of transfer and authenticity to, or upon the order of, the Trust, upon
receipt by the Exchange Agent, as the undersigned's agent, of the Exchange
Capital Securities to be issued in exchange for such Old Capital Securities,
(ii) present Certificates for such Old Capital Securities for transfer, and to
transfer the Old Capital Securities on the books of the Trust, and (iii) receive
for the account of the Trust all benefits and otherwise exercise all rights of
beneficial ownership of such Old Capital Securities, all in accordance with the
terms and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE CORPORATION, THE TRUST OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT
AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY. THE UNDERSIGNED HAS
READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old Capital
Securities tendered hereby should be printed above, if they are not already set
forth above, as they appear on the Certificates representing such Old Capital
Securities. The Certificate number(s) and the Old Capital Securities that the
undersigned wishes to tender should be indicated in the appropriate boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to the
Exchange Offer for any reason, or if Certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, Certificates for
such nonexchanged or nontendered Old Capital Securities will be returned (or, in
the case of Old Capital Securities tendered by book-entry transfer, such Old
Capital Securities will be credited to an account maintained at DTC), without
expense to the tendering holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tender of Old Capital Securities pursuant
to any one of the procedures described in "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus and in this Letter of
Transmittal, and the Corporation's and the Trust's acceptance for exchange of
such tendered Old Capital Securities, will constitute a binding agreement
between the undersigned, the Corporation and the Trust upon the terms and
subject to the conditions of the Exchange Offer. The undersigned recognizes
that, under certain circumstances set forth in the Prospectus, the Corporation
and the Trust may not be required to accept for exchange any of the Old Capital
Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Capital
Securities be issued in the name(s) of the undersigned or, in the case of
book-entry transfer of Old Capital Securities, that such Exchange Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute Certificates representing Old Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or, in
the case of a book-entry transfer of
<PAGE> 1
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
7.53% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
REPUBLIC NEW YORK CAPITAL II
FULLY AND UNCONDITIONALLY GUARANTEED
BY REPUBLIC NEW YORK CORPORATION
This Notice of Guaranteed Delivery, or one substantially equivalent to
this form, must be used for a holder of the Issuer's (as defined below) 7.53%
Capital Securities (the "Old Capital Securities") to accept the Exchange Offer
(as defined below) if (i) certificates for such holder's Old Capital Securities
are not immediately available, (ii) such holder cannot deliver its certificates
for Old Capital Securities, the Letter of Transmittal and all other required
documents to Bankers Trust Company (the "Exchange Agent") prior to 5:00 p.m.,
New York City time, on the Expiration Date (as defined in the Prospectus
referred to below) or (iii) the procedures for delivery by book-entry transfer
cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand, overnight courier or mail, or transmitted by facsimile
transmission, to the Exchange Agent. See "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
BANKERS TRUST COMPANY
<TABLE>
<CAPTION>
By mail: By hand: By overnight mail:
-------- -------- ------------------
<S> <C> <C>
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Reorganization Unit Corporate Trust and Reorganization Unit
P.O. Box 292737 Agency Unit 648 Grassmere Park Dr.
Nashville, TN 37229-2737 123 Washington Street Nashville, TN 37211
First Floor Window
New York, NY 10008
</TABLE>
For information call:
(800) 735-7777
Confirm: (615)835-3572
Facsimile: (615) 835-3701
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Republic New York Capital II, a Delaware
business trust (the "Issuer"), upon the terms and subject to the conditions set
forth in the Prospectus dated ________________, 1997 (as the same may be amended
or supplemented from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate Liquidation Amount of Old Capital
Securities set forth below pursuant to the guaranteed delivery procedures set
forth in the Prospectus under the caption "The Exchange Offer--Procedures for
Tendering Old Capital Securities." All capitalized terms used herein but not
defined shall have the meanings ascribed to them in the Prospectus.
The undersigned understands and acknowledges that the Exchange Offer will
expire at 5:00 p.m., New York City time, on ______________, 1997, unless
extended by the Issuer. The term "Expiration Date" shall mean 5:00 p.m., New
York City time, on ________________, 1997, unless the Exchange Offer is extended
as provided in the Prospectus, in which case the term "Expiration Date" shall
mean the latest date and time to which the Exchange Offer is extended.
SIGNATURE
x_______________________ Date:__________
x_______________________ Date:
Signature(s) of Registered Holder(s)
or Authorized Signatory
Area Code and Telephone Number: ___________________________
Name(s):___________________________________________________
(Please Print)
Capacity (full title, if singing in a fiduciary or representative capacity):
____________________________________________________________________________
Address: ___________________________________________________________________
(Including Zip Code)
Taxpayer Identification Number or
Social Security No.:
____________________________________________________________________________
Aggregate Liquidation Amount of
Old Capital Securities Tendered
(must be integral
multiples of $1,000): ___________________________________
Certificate Number(s) of Old Capital Securities (if
available): _____________________________________________
<PAGE> 3
Aggregate Liquidation Amount
Represented by Certificate(s): $_________________________
IF TENDERED OLD CAPITAL SECURITIES WILL BE
DELIVERED BY BOOK-ENTRY TRANSFER, PRO-
VIDE THE DEPOSITORY TRUST COMPANY
("DTC") ACCOUNT NO. AND TRANSACTION CODE
NUMBER (if available):
Account No. ___________________________________________
Transaction No. _______________________________________
GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified as an "eligible
guarantor institution" within the meaning of Rule 17Ad-15 promulgated under the
Securities Exchange Act of 1934, as amended, guarantees deposit with the
Exchange Agent of a properly completed and executed Letter of Transmittal (or
facsimile thereof), or an Agent's Message, as well as the certificate(s)
representing all tendered Old Capital Securities in proper form for transfer, or
confirmation of the book-entry transfer of such Old Capital Securities into the
Exchange Agent's account at DTC as described in the Prospectus under the caption
"The Exchange Offer - Procedures for Tendering Old Capital Securities -
Book-Entry Transfer" and other documents required by the Letter of Transmittal,
all by 5:00 p.m., New York City time, on the third New York Stock Exchange
trading day following the Expiration Date.
Name of Eligible Institution: _______________________________________________
Authorized Signature
Address: ____________________________ Name: _______________________________
_____________________________________ Title: ______________________________
Area Code and Telephone No.: ________ Date: _______________________________
NOTE: DO NOT SEND OLD CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED
DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE PURSUANT
TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
<PAGE> 1
Exhibit 99.3
FORM OF EXCHANGE AGENCY AGREEMENT
________________, 1997
Bankers Trust Company
Corporate Trust and Agency Group
Four Albany Street
New York, NY 10006
Attention:
Ladies and Gentlemen:
Republic New York Corporation, a Maryland corporation, as Depositor (the
"Corporation"), and Republic New York Capital II, a Delaware business trust (the
"Trust"), hereby appoint Bankers Trust Company ("Bankers Trust") to act as
exchange agent (the "Exchange Agent") in connection with an exchange offer by
the Corporation and the Trust to exchange up to $200,000,000 aggregate
Liquidation Amount of the Trust's 7.53% Capital Securities (the "Exchange
Capital Securities"), which have been registered under the Securities Act of
1933, as amended (the "Securities Act"), for a like aggregate Liquidation Amount
of the Trust's 7.53% Capital Securities (the "Old Capital Securities" and
together with the Exchange Capital Securities, the "Capital Securities"). The
terms and conditions of the exchange offer are set forth in a Prospectus dated
___________, 1997 (as the same may be amended or supplemented from time to time,
the "Prospectus") and in the related Letter of Transmittal, which together
constitute the "Exchange Offer." The registered holders of the Old Capital
Securities or the Exchange Capital Securities, as applicable, are hereinafter
referred to as "Holders." Capitalized terms used herein and not defined shall
have the respective meanings described thereto in the Prospectus.
On the basis of the representations, warranties and agreements of the
Corporation, the Trust and Bankers Trust contained herein and subject to the
terms and conditions hereof, the following sets forth the agreement among the
Corporation, the Trust and Bankers Trust as Exchange Agent with respect to the
Exchange Offer:
1. APPOINTMENT AND DUTIES AS EXCHANGE AGENT.
a. The Corporation and the Trust hereby appoint Bankers Trust to act as
Exchange Agent in connection with the Exchange Offer and Bankers Trust agrees to
act as Exchange Agent in connection with the Exchange Offer. As Exchange Agent,
Bankers Trust will perform those services as are outlined herein, including, but
not limited to, accepting tenders of Old Capital Securities and communicating
generally regarding the Exchange Offer with brokers, dealers, commercial banks,
trust companies and other persons, including Holders of the Old Capital
Securities.
1
<PAGE> 2
b. The Corporation and the Trust acknowledge and agree that Bankers Trust
has been retained pursuant to this Agreement to act solely as Exchange Agent in
connection with the Exchange Offer, and in such capacity, Bankers Trust shall
perform such duties in good faith as are outlined herein.
c. Bankers Trust will examine each of the Letters of Transmittal and
certificates for Old Capital Securities and any other documents delivered or
mailed to Bankers Trust by or for Holders of the Old Capital Securities, and any
Book-Entry Confirmations (as defined in the Prospectus) received by Bankers
Trust with respect to the Old Capital Securities, to ascertain whether: (i) the
Letters of Transmittal and such other documents are duly executed and properly
completed in accordance with the instructions set forth therein and that such
Book-Entry Confirmations are in due and proper form and contain the information
required to be set forth therein, (ii) the Old Capital Securities have otherwise
been properly tendered, (iii) Old Capital Securities tendered in part are
tendered in Liquidation Amounts of $100,000 (100 Capital Securities) and
integral multiples of $1,000 in excess thereof and that if any Old Capital
Securities are tendered for exchange in part, the untendered Liquidation Amount
thereof is $100,000 (100 Capital Securities) or any integral multiple of $1,000
in excess thereof, and (iv) Holders have provided their correct Tax
Identification Number and required certification. Determination of all questions
as to validity, form, eligibility and acceptance for exchange of any Old Capital
Securities shall be made by the Corporation or the Trust, whose determination
shall be final and binding. In each case where the Letter of Transmittal or any
other document has been improperly completed or executed or where a Book-Entry
Confirmation is not in due and proper form or omits certain information, or any
certificate for Old Capital Securities is not in proper form for transfer or
some other irregularity or deficiency in connection with the tender or
acceptance of the Old Capital Securities exists, Bankers Trust will endeavor
upon request of the Corporation or the Trust to advise the tendering Holder of
Old Capital Securities of the irregularity or the deficiency in the tender and
to take any other action as the Corporation or the Trust may request to cause
such irregularity or deficiency to be corrected. Notwithstanding the above,
Bankers Trust shall not be under any duty to give any notification of any
irregularities or deficiency in tenders or incur any liability for failure to
give any such notification.
d. With the approval of the President, any Executive Vice President, any
Senior Vice President, any Vice President or the Treasurer or any Assistant
Treasurer of the Corporation (such approval, if given orally, to be confirmed in
writing), Bankers Trust is authorized to waive any irregularities or other
deficiency in connection with any tender of Old Capital Securities pursuant to
the Exchange Offer.
e. Tenders of Old Capital Securities may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer" and Old Capital Securities shall be considered properly tendered
only when tendered in accordance with the procedures set forth therein.
f. Bankers Trust shall advise the Corporation and the Trust of the
aggregate Liquidation Amount of Old Capital Securities received by it as soon
2
<PAGE> 3
as possible after 5:00 p.m., New York City time, on the Expiration Date and
accept the Corporation's or the Trust's instructions with respect to the
disposition of such Old Capital Securities.
g. Bankers Trust shall deliver certificates for Old Capital Securities
tendered in part to the transfer agent for split-up and shall return any
untendered Old Capital Securities and all Old Capital Securities which have not
been accepted by the Corporation and the Trust to the Holders thereof promptly
after the expiration or termination of the Exchange Offer.
h. Upon acceptance by the Corporation and the Trust of any Old Capital
Securities duly tendered pursuant to the Exchange Offer (such acceptance, if
given orally, to be confirmed in writing), the Corporation and the Trust will
cause Exchange Capital Securities in exchange therefor to be issued as promptly
as possible and Bankers Trust will deliver such Exchange Capital Securities on
behalf of the Corporation and the Trust at the rate of $100,000 (100 Capital
Securities) Liquidation Amount of Exchange Capital Securities for each $100,000
Liquidation Amount of Old Capital Securities tendered as promptly as possible
after acceptance by the Corporation and the Trust of the Old Capital Securities
for exchange and notice (such notice, if given orally, to be confirmed in
writing) of such acceptance by the Corporation and the Trust. Unless otherwise
instructed by the Corporation or the Trust, Bankers Trust shall issue Exchange
Capital Securities only in denominations of $100,000 (100 Capital Securities)
Liquidation Amount or any integral multiple of $1,000 in excess thereof.
i. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Capital Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time prior to 5:00 p.m., New York City time, on
the Expiration Date in accordance with the terms of the Exchange Offer.
j. Notice of any decision by the Corporation and the Trust not to exchange
any Old Capital Securities tendered shall be given by the Corporation or the
Trust to Bankers Trust either orally (if given orally, to be confirmed in
writing) or in a written notice.
k. If the Corporation and the Trust do not accept for exchange all or part
of the Old Capital Securities tendered because of an invalid tender, the
occurrence of certain other events set forth in the Prospectus under the caption
"The Exchange Offer-- Conditions to the Exchange Offer" or otherwise, Bankers
Trust shall, upon notice from the Corporation and the Trust (such notice, if
given orally, to be confirmed in writing), promptly after the expiration or
termination of the Exchange Offer return the certificates for unaccepted Old
Capital Securities (or effect appropriate book- entry transfer), together with
any related required documents and the Letters of Transmittal relating thereto
that are in Bankers Trust's possession, to the persons who deposited such
certificates.
l. Certificates, if issued in definitive form, for reissued Old Capital
Securities, unaccepted Old Capital Securities or Exchange Capital Securities
shall be forwarded (a) by first-class certified mail, return receipt requested,
under a blanket surety bond obtained by Bankers Trust
3
<PAGE> 4
protecting Bankers Trust, the Corporation and the Trust from loss or liability
arising out of the non-receipt or non-delivery of such certificates or (b) by
registered mail insured by Bankers Trust separately for the replacement value of
each such certificate.
m. Bankers Trust is not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, commercial bank, trust
company or other nominee or to engage or use any person to solicit tenders.
n. As Exchange Agent, Bankers Trust:
(i) shall have no duties or obligations other than those
specifically set forth herein or as may be subsequently agreed to in
writing;
(ii) will make no representations and will have no responsibilities
as to the validity, value or genuineness of any of the certificates for
the Old Capital Securities deposited pursuant to the Exchange Offer, and
will not be required to and will make no representation as to the
validity, value or genuineness of the Exchange Offer;
(iii) shall not be obligated to take any legal action hereunder
which might in Bankers Trust's reasonable judgment involve any expense or
liability, unless Bankers Trust shall have been furnished with indemnity
satisfactory to it for the taking of such action;
(iv) may conclusively rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to Bankers Trust and
reasonably believed by Bankers Trust to be genuine and to have been signed
by the proper party or parties;
(v) may conclusively act upon any tender, statement, request,
comment, agreement or other instrument whatsoever (not only as to the due
execution and validity and effectiveness of its provisions, but also as to
the truth and accuracy of any information contained therein) which Bankers
Trust believes in good faith to be genuine and to have been signed or made
by a proper person or persons;
(vi) may conclusively rely on and shall be fully protected in acting
upon written or oral instructions from the President, any Executive Vice
President, any Senior Vice President, any Vice President, the Treasurer or
any Assistant Treasurer of the Corporation(such instruction, if given
orally, to be confirmed in writing);
(vii) may consult with its own counsel with respect to any questions
relating to Bankers Trust's duties and responsibilities and the advice of
such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by Bankers
Trust hereunder in good faith and in accordance with the advice of such
counsel;
4
<PAGE> 5
(viii) shall not advise any person tendering Old Capital Securities
pursuant to the Exchange Offer as to whether to tender or refrain from
tendering all or any portion of its Old Capital Securities or as to the
market value, decline or appreciation in market value of any Old Capital
Securities that may or may not occur as a result of the Exchange Offer or
as to the market value of the Exchange Capital Securities; and
(ix) shall take such action as may from time to time be requested by
the Corporation or the Trust to furnish copies of the Prospectus, the
Letter of Transmittal, the Notice of Guaranteed Delivery or such other
forms as may be approved from time to time by the Corporation and the
Trust to all persons requesting such documents and to accept and comply
with telephone requests for information relating to the Exchange Offer.
The Corporation and the Trust will furnish Bankers Trust with copies of
such documents at its request. Notwithstanding the foregoing, it is
understood that the Corporation and the Trust will be primarily
responsible for supplying copies of the Prospectus, the Letter of
Transmittal and the Notice of Guaranteed Delivery and responding to
requests for confirmation.
o. Bankers Trust shall advise orally and promptly thereafter confirm in
writing to the Corporation and the Trust and such other person or persons as the
Corporation and the Trust may request, daily (and more frequently during the
week immediately preceding the Expiration Date and if otherwise reasonably
requested) up to and including the Expiration Date, the aggregate Liquidation
Amount of Old Capital Securities which have been tendered pursuant to the terms
of the Exchange Offer and the items received by Bankers Trust pursuant to the
Exchange Offer and this Agreement. In addition, Bankers Trust will also provide,
and cooperate in making available to the Corporation and the Trust or any such
other person or persons as the Corporation and the Trust may request from time
to time, such other information in its possession as the Corporation, the Trust
or any such other person or persons as the Corporation and the Trust may
designate may reasonably request (such request if made orally, to be confirmed
in writing). Such cooperation shall include, without limitation, the granting by
Bankers Trust to the Corporation and the Trust, and such person or persons as
the Corporation and the Trust may request, access to those persons on Bankers
Trust's staff who are responsible for receiving tenders, in order to ensure that
immediately prior to the Expiration Date the Corporation and the Trust shall
have received adequate information in sufficient detail to enable the
Corporation and the Trust to decide whether to extend the Exchange Offer.
Bankers Trust shall prepare a final list of all persons whose tenders were
accepted, the aggregate Liquidation Amount of Old Capital Securities tendered
and the aggregate Liquidation Amount of Old Capital Securities accepted and
deliver said list to the Corporation and the Trust.
p. Letters of Transmittal, Book-Entry Confirmations and Notices of
Guaranteed Delivery shall be stamped by Bankers Trust as to the date and the
time of receipt thereof and shall be preserved by Bankers Trust for a period of
time at least equal to the period of time Bankers Trust preserves other records
pertaining to the transfer of securities, or one year, whichever is longer, and
thereafter shall be delivered by Bankers Trust to the Corporation
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and the Trust. Bankers Trust shall dispose of unused Letters of Transmittal and
other surplus materials by returning them to the Corporation or the Trust.
q. Bankers Trust hereby expressly waives any lien, encumbrance or right of
set-off whatsoever that Bankers Trust may have with respect to funds deposited
with it for the payment of transfer taxes by reasons of amounts, if any,
borrowed by the Corporation or the Trust, or any of its or their subsidiaries or
affiliates, pursuant to any loan or credit agreement with Bankers Trust or for
compensation owed to Bankers Trust hereunder or for any other matter.
2. COMPENSATION.
$3,500 will be payable to Bankers Trust in its capacity as Exchange Agent;
provided, that Bankers Trust reserves the right to receive reimbursement from
the Corporation for any reasonable out-of-pocket expenses incurred as Exchange
Agent in performing the services described herein. The obligations of the
Corporation hereunder shall survive the termination of this Agreement.
3. INDEMNIFICATION.
a. The Corporation and the Trust hereby agree to protect, defend,
indemnify and hold harmless Bankers Trust and its officers, directors, employees
and agents from and against any and all costs, losses, liabilities, expenses
(including reasonable counsel fees and disbursements) and claims imposed upon or
asserted against Bankers Trust on account of any action taken or omitted to be
taken by Bankers Trust in connection with its acceptance of or performance of
its duties under this Agreement and to reimburse Bankers Trust upon demand for
the reasonable costs and expenses of defending itself against any claim or
liability arising out of or relating to this Agreement. This indemnification
shall survive the release, discharge, termination and/or satisfaction of this
Agreement. Anything in this Agreement to the contrary notwithstanding, neither
the Corporation nor the Trust shall be liable for indemnification or otherwise
for any loss, liability, cost or expense to the extent arising out of Bankers
Trust's bad faith, gross negligence or willful misconduct. In no case shall the
Corporation or the Trust be liable under this indemnification agreement with
respect to any claim against Bankers Trust until the Corporation and the Trust
shall be notified by Bankers Trust, by letter, of the written assertion of a
claim against Bankers Trust or of any other action commenced against Bankers
Trust. Such notice shall be delivered promptly after Bankers Trust shall have
received any such written assertion or shall have been served with a summons in
connection therewith, provided, that, Bankers Trust's failure to give such
notice shall not excuse the Corporation or the Trust from its obligations
hereunder (except to the extent the Corporation or the Trust is prejudiced by
such delay). The Corporation and the Trust shall be entitled to participate at
their own expense in the defense of any such claim or other action, and, if the
Corporation and the Trust so elect, the Corporation and the Trust may assume the
defense of any pending or threatened action against Bankers Trust in respect of
which indemnification may be sought hereunder with counsel reasonably acceptable
to Bankers Trust, in which case the Corporation and the Trust shall not
thereafter be responsible for the fees and disbursements of legal counsel for
Bankers Trust under this paragraph; provided that the Corporation and the Trust
shall not be
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entitled to assume the defense of any such action if the named parties to such
action include the Corporation or the Trust and Bankers Trust and representation
of the parties by the same legal counsel would, in the written opinion of
counsel for Bankers Trust, be inappropriate due to actual or potential
conflicting interests between them. It is understood that the Corporation and
the Trust shall not be liable under this paragraph for the fees and
disbursements of more than one legal counsel for Bankers Trust. In the event
that the Corporation and the Trust shall assume the defense of any such suit
with counsel reasonably acceptable to Bankers Trust, neither the Corporation nor
the Trust shall thereafter be liable for the fees and expenses of any counsel
retained by Bankers Trust.
b. Bankers Trust agrees that, without the prior written consent of the
Corporation and the Trust (which consent shall not be unreasonably withheld), it
will not settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding in respect of which
indemnification could be sought in accordance with the indemnification
provisions of this Agreement (whether or not Bankers Trust, the Corporation, the
Trust or any of their respective directors, officers and controlling persons is
an actual or potential party to such claim, action or proceeding).
c. The Corporation agrees to indemnify and hold harmless the Trust from
and against any and all losses, claims, damages and liabilities whatsoever,
which are due from the Trust under this Section .
4. TAX INFORMATION.
The Corporation and the Trust shall arrange to comply with all
requirements under the tax laws of the United States, including those relating
to missing Tax Identification Numbers, and shall file any appropriate reports
with the Internal Revenue Service. The Corporation and the Trust understand that
they are required, in certain instances, to deduct 31% with respect to interest
paid on the Exchange Capital Securities and proceeds from the sale, exchange,
redemption or retirement of the Exchange Capital Securities from Holders of
Exchange Capital Securities who have not supplied their Taxpayer Identification
Number or required certification. Such funds will be turned over to the Internal
Revenue Service. Bankers Trust shall notify the Corporation and the Trust of any
Holder of Exchange Capital Securities who has failed to supply such Taxpayer
Identification Number or certification.
5. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts
executed in and to be performed in that State.
6. NOTICES. Except as otherwise provided herein, any communication or notice
provided for hereunder shall be in writing and shall be given (and shall be
deemed to have been given upon receipt) by delivery in person, facsimile or
overnight delivery or by registered or certified mail (postage prepaid, return
receipt requested) to the applicable party at the addresses indicated below:
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If to the Corporation:
Republic New York Corporation
Office of the Corporate Secretary
452 Fifth Avenue
New York, NY 10018
Fax No.: (212) 525-6509
If to the Trust:
c/o Republic New York Corporation
Office of the Corporate Secretary
452 Fifth Avenue
New York, NY 10018
Fax No.: (212) 525-6509
If to Bankers Trust Company:
Bankers Trust Company
Corporate Trust and Agency Group/ Capital Market Services
Four Albany Street, 4th Floor
New York, NY 10006
Attn: Jason W. Krasilovsky
Fax No.: (212) 250-6961
or, as to each party, at such other address as shall be designated by such party
in a written notice complying as to delivery with the terms of this Section .
7. PARTIES IN INTEREST. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement. Without
limitation of the foregoing, the parties hereto expressly agree that no Holder
of Old Capital Securities or Exchange Capital Securities shall have any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
8. COUNTERPARTS; SEVERABILITY. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which when so executed shall be deemed an original, and all of such counterparts
shall together constitute one and the same agreement. If any term or other
provision of this Agreement or the application thereof is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
provisions of this Agreement shall nevertheless remain in full force and effect.
9. CAPTIONS. The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
10. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter
hereof.
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This Agreement may not be amended or modified nor may any provision hereof be
waived except in writing signed by each party to be bound thereby.
11. TERMINATION. This Agreement shall terminate upon the earliest of (a) the
90th day following the expiration, withdrawal or termination of the Exchange
Offer, (b) the close of business on the date of actual receipt of written notice
by Bankers Trust from the Corporation and the Trust stating that this Agreement
is terminated, (c) one year following the date of this Agreement, and (d) the
time and date on which this Agreement shall be terminated by mutual consent of
the parties hereto.
12. MISCELLANEOUS.
Bankers Trust hereby acknowledges receipt of the Prospectus and the forms of
the Letter of Transmittal and the Notice of Guaranteed Delivery and further
acknowledges that it has examined each of them. Any inconsistency between this
Agreement, on the one hand, and the Prospectus and the forms of the Letter of
Transmittal and the Notice of Guaranteed Delivery (as they may be amended or
supplemented from time to time), on the other hand, shall be resolved in favor
of the latter three documents, except with respect to the duties, liabilities,
rights, powers and indemnification of Bankers Trust as Exchange Agent, which
shall be controlled by this Agreement.
Kindly indicate your willingness to act as Exchange Agent and your
acceptance of the foregoing provisions by signing in the space provided below
for that purpose and returning to the Corporation a copy of this Agreement so
signed, whereupon this Agreement and Bankers Trust's acceptance shall constitute
a binding agreement among Bankers Trust, the Corporation and the Trust.
Very truly yours,
REPUBLIC NEW YORK CORPORATION
By: __________________________________
Name:
Title:
REPUBLIC NEW YORK CAPITAL II
By:_______________________________
Name:
Title: Administrative Trustee
Accepted and agreed to as of
the date first written above:
BANKERS TRUST COMPANY, as Exchange Agent
By: _____________________________________
Name:
Title:
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