<PAGE> 1
Facing Sheet
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES
UNDER THE TRUST INDENTURE ACT OF 1939
STERLING BANCORP
.................................................................
(Name of Applicant)
540 Madison Avenue, New York, N.Y. 10022
.................................................................
(Address of principal executive offices)
SECURITIES TO BE ISSUED UNDER THE INDENTURE
TO BE QUALIFIED
<TABLE>
<CAPTION>
TITLE OF CLASS AMOUNT
<S> <C>
Floating Interest Rate Convertible Subordinated
Debentures, Series V, due July 1, 2001 $11,985,000
Approximate date of proposed public offering July 29, 1994*
Name and address of agent for service: Jerrold Gilbert, 540 Madison
Avenue (Second Floor),
New York, N.Y. 10022
(212) 826-8044
</TABLE>
______________________________________________
* First date exchanges can be completed under exchange offer.
<PAGE> 2
GENERAL
1. GENERAL INFORMATION
(a) A corporation
(b) New York
2. SECURITIES ACT EXEMPTION APPLICABLE
The securities are being offered to holders of the applicant is
outstanding Floating Interest Rate Convertible Subordinated
Debentures, Third Series, due July 1, 1996 and have not been and are
not to be offered otherwise. No consideration has been or is to be
given directly or indirectly to any person for soliciting the exchange
or for any other purpose in connection with the transaction (other
than fees to the indenture trustee, as such and as exchange agent for
the exchange offer, and to counsel). Accordingly, the exemption
provided by Section 3(a)(9) of the Securities Act of 1933 is claimed
by the applicant.
3. AFFILIATIONS
The applicant has the following subsidiaries, all held directly by it:
Sterling National Bank & Trust Company of New York, Standard Factors
Corporation, Security Industrial Loan Association, Universal Finance
Corporation and Sterling Banking Corporation
4. MANAGEMENT AND CONTROL
Set forth below are the names, positions and mailing address of each
person who is or has been chosen to be a director or executive officer
of the applicant:
2
<PAGE> 3
<TABLE>
<CAPTION>
NAME OFFICE ADDRESS
- -------------------- --------------------- ----------------------
<S> <C> <C>
Louis J. Cappelli Chairman of the Board 540 Madison Avenue
and Chief Executive New York, New York 10022
Officer, Director
John C. Millman President, Director 540 Madison Avenue
New York, New York 10022
Jerrold Gilbert Executive Vice 540 Madison Avenue
President, General New York, New York 10022
Counsel & Secretary
John W. Tietjen Senior Vice President, 540 Madison Avenue
Treasurer and Chief New York, New York 10022
Financial Officer
John P. Murphy Senior Vice President 540 Madison Avenue
New York, New York 10022
John A. Aloisio Vice President 540 Madison Avenue
New York, New York 10022
Leonard Rudolph Vice President 540 Madison Avenue
New York, New York 10022
Joseph M. Adamko Vice Chairman and 540 Madison Avenue
Director New York, New York 10022
Charles A. Agemian Director 2311 Ocean Avenue
Spring Lake, New Jersey 07762
Lillian Berkman Director 22 East 64th Street
New York, New York 10021
Walter Feldesman Director Baer Marks & Upham
805 Third Avenue - 19th Floor
New York, New York 10022
Dr. Allan F. Hershfield Director Fashion Institute of Technology
227 West 27th Street
New York, New York 10001
Henry J. Humphreys Director American Assn. of the Sovereign
Military Order of Malta
1011 First Avenue - Room 1500
New York, New York 10022
</TABLE>
3
<PAGE> 4
<TABLE>
<CAPTION>
NAME OFFICE ADDRESS
- -------------------- --------------------- ----------------------
<S> <C> <C>
Maxwell M. Rabb Director Kramer, Levin, Naftalis
Nessen, Kamin & Frankel
919 Third Avenue
New York, New York 10022
Eugene T. Rossides Director Rogers & Wells
607 14th Street, N.W.
Washington, D.C. 20005
Albert Sarnoff Director Time Warner, Inc.
75 Rockefeller Plaza - Suite 1305
New York, New York 10019
William C. Warren Director Roberts & Holland
30 Rockefeller Plaza-20th Floor
New York, New York 10112
</TABLE>
5. PRINCIPAL OWNERS OF VOTING SECURITIES
To the best knowledge of the applicant, no person owned 10% or more of
its voting securities as of May 15, 1994.
6. UNDERWRITERS
No person has acted as underwriter of any securities of the applicant
since prior to July 1, 1991 nor is it proposed that any person act as
underwriter of the securities proposed to be offered.
CAPITAL SECURITIES
7. CAPITALIZATION
(a) As of May 30, 1994
4
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT
TITLE OF CLASS AMOUNT AUTHORIZED OUTSTANDING
- -------------------- ----------------- -----------
<S> <C> <C>
Floating Interest Rate $15,000,000 $11,985,000
Convertible Subordinated
Debentures, Third Series,
due 1996
Floating Interest Rate $15,000,000 $14,778,000
Convertible Subordinated
Debentures, Fourth Series
due 1998
Preferred Shares Series B 1,288 1,288
Preferred Shares Series D 300,000 250,000
Preferred Shares 340,000 -----
Common Shares, $1 Par Value 20,000,000 6,346,212
</TABLE>
(b) Each Common Share is entitled to one vote in all matters
submitted to a vote of stockholders. The Common Shares have
no preemptive or cumulative voting rights. Series B and
Series D Preferred Shares vote as a single class with the
Common Shares. The rights of other Preferred Shares (of which
there are none outstanding) are to be as fixed by the Board of
Directors upon issuance.
5
<PAGE> 6
INDENTURE SECURITIES
8. ANALYSIS OF INDENTURE PROVISIONS
(a) Events of Default
An "Event of Default" is defined to mean: failure to pay
principal when due either at maturity, upon redemption or
otherwise; failure to pay interest when due for 30 days;
failure to perform any other covenant in the Indenture for 60
days after notice; any default in the conversion of the
Debentures and continuance of such default for 60 days after
notice of such default; certain events of bankruptcy,
insolvency or reorganization of the Company; and any default
under any indenture or instrument evidencing indebtedness of
the Company for varied money if such default is not waived or
cured and would permit acceleration of such indebtedness. The
Indenture provides that the Trustee shall, within 90 days
after the occurrence of a default, give to the holders of
Debentures notice of all uncured defaults known to it (the
term "default" to include the events specified above without
grace periods); provided that, except in the case of default
in payment of principal or interest in respect of the
Debentures, the Trustee shall be protected in withholding such
notice if it in good faith determines that the withholding of
such notice is in the interest of the Debentureholders.
(b) Authentication and Delivery of Debentures
Upon the written order of the applicant delivered to the
Trustee and signed by applicant's Chairman of the Board, its
President or a Vice President and by its Treasurer, an
Assistant Treasurer, Secretary or Assistant Treasurer,
Debentures limited to an aggregate principal amount of
$11,985,000 may from time to time be authenticated and
delivered.
(c) Release of Substitution of Property
Not applicable.
6
<PAGE> 7
(d) Satisfaction and Discharge of the Indenture
The Indenture provides that the Indenture shall cease to be of
further effect and be discharged when (A) either (a) the
applicant shall have delivered to the Trustee for cancellation
all Debentures theretofore authenticated or (b) all such
Debentures not theretofore delivered for cancellation shall
have become due and payable and the applicant shall have
deposited with the Trustee an amount sufficient to pay the
principal and interest on the Debentures and (B) the applicant
shall have paid all other sums payable by it under the
Indenture.
(e) Evidence of Compliance with Conditions
The applicant is required to deliver to the Trustee within 120
days after the close of each fiscal year, a statement of
certain officers of the applicant to the effect that a review
of the activities of the applicant during the past fiscal year
with a view to determining whether its obligations under the
Indenture have been fulfilled and as to whether such officers
have obtained knowledge of any default under the Indenture
during such fiscal year.
The Indenture also requires that any application or demand by
the applicant for action by the Trustee shall be accompanied
by an officers' certificate stating that all conditions
precedent, if any, provided for in the Indenture relating to
the proposed action have been complied with and an opinion of
counsel stating that, in such counsel's opinion, all such
conditions precedent have been complied with.
9. OTHER OBLIGORS
None
Contents of Application for Qualification. This application for
qualification comprises:
(a) Pages numbered 1 to 8 consecutively.
7
<PAGE> 8
(b) The statement of eligibility and qualification on Form T-1 of
United States Trust Company of New York, as trustee under the
Indenture to be qualified.
(c) The following Exhibits in addition to those filed as part of
the statement of eligibility and qualification of such
Trustee:
Exhibit T3A (1) Amended and Restated Certificate of Incorporation of
the Applicant, incorporated by reference to Exhibit
3.3 to the Applicant's Form 10-K for the year ended
December 31, 1986
(2) Amendment to Certificate of Incorporation of the
Applicant filed June 13, 1988 incorporated by
reference to Exhibit 3.5 to the Applicant's Form 10-K
for the year ended December 31, 1988.
(3) Amendment to Certificate of Incorporation of the
Applicant filed March 5, 1993 incorporated by
reference to Exhibit 4.1 to the Applicant's Form 8-K,
dated March 5, 1993.
Exhibit T3B By-laws, incorporated by reference to Exhibit 3.3 to
Applicant's Form 10-K for the year ended December 31,
1992.
Exhibit T3C Form of Indenture between Sterling Bancorp and
United States Trust Company of New York.
Exhibit T3D Not applicable.
Exhibit T3E (1) Offering Circular and covering letter.
(2) Letter of Transmittal and instructions relating
thereto.
Exhibit T3F Cross-reference sheet (included as part of Exhibit T3C).
8
<PAGE> 9
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the applicant,
STERLING BANCORP, a corporation organized and existing under the laws of NEW
YORK, has duly caused this application to be signed on its behalf by the
undersigned, thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of NEW YORK, State of NEW YORK on the 8th day of
June, 1994.
(SEAL) STERLING BANCORP
By /s/ John C. Millman
---------------------------------
John C. Millman
President
Attest /s/ Jerrold Gilbert
------------------------
Jerrold Gilbert
Secretary
9
<PAGE> 10
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM T-1
-----------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-----------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2)
--------
-----------
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5459866
(Jurisdiction of incorporation (I.R.S. employer
if not a U.S. national bank) identification No.)
114 West 47th Street 10036-1532
New York, NY (Zip Code)
(Address of principal
executive offices)
STERLING BANCORP
(Exact name of obligor as specified in its charter)
New York 13-2565216
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
540 Madison Avenue 10022
New York, New York (Zip Code)
(Address of principal executive offices)
-----------
Floating Interest Rate Convertible Subordinated Debentures,
Series V due July 1, 2001
(Title of the indenture securities)
================================================================================
<PAGE> 11
GENERAL
1. GENERAL INFORMATION
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Reserve Bank of New York (2nd District), New York, New York
(Board of Governors of the Federal Reserve System)
Federal Deposit Insurance Corporation, Washington, D.C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH THE OBLIGOR
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None
3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15.
Sterling Bancorp currently is not, and has not been in default under any
of its outstanding securities issued under indentures for which United
States Trust Company of New York is Trustee. Accordingly, responses to
Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of Form T-1 are not
required under General Instruction B.
16. LIST OF EXHIBITS
T-1.1 - "Chapter 204, Laws of 1853, An Act to Incorporate the United
States Trust Company of New York, as Amended", is incorporated
by reference to Exhibit T-1.1 to Form T-1 filed on September 20,
1991 with the Securities and Exchange Commission (the
"Commission") pursuant to the Trust Indenture Act of 1939
(Registration No. 2221291).
T-1.2 - The trustee was organized by a special act of the New York
Legislature in 1853 prior to the time that the New York Banking
Law was revised to require a Certificate of authority to
commence business. Accordingly, under New York Banking Law, the
Charter (Exhibit T-1.1) constitutes an equivalent of a
certificate of authority to commence business.
T-1.3 - The authorization of the trustee to exercise corporate trust
powers is contained in the Charter (Exhibit T-1.1).
<PAGE> 12
16. List of Exhibits
(Continued)
T-1.4 - The By-laws of the United States Trust Company of New York, as
amended to date, are incorporated by reference to Exhibit T-1.4
to Form T-1 filed on September 20, 1991 with the Commission
pursuant to the Trust Indenture Act of 1939 (Registration No.
2221291).
T-1.6 - The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939.
T-1.7 - A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
NOTE
As of June 6, 1994, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U.S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United States
Trust Company of New York and its parent company, U.S. Trust Corporation.
-------------------
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
United States Trust Company of New York, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York, and State of New York, on the 6th day
of June, 1994.
UNITED STATES TRUST COMPANY OF
NEW YORK, Trustee
By: /s/ Margaret Ciesmelewski
---------------------------
Margaret Ciesmelewski
Assistant Vice President
<PAGE> 13
Exhibit T-1.6
The consent of the trustee required by Section 321 (b)
of the Act.
United States Trust Company of New York
114 West 47th Street
New York
NY 10036
March 31, 1992
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
Pursuant to the provisions of Section 321 (b) of the Trust Indenture Act of
1939, as amended by the Trust Indenture Reform Act of 1990, and subjet to the
limitations set forth therein, United States Trust Company of New York ("U. S.
Trust") hereby consents that reports of examinations of U. S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
By: /s/ Gerard F. Ganey
-------------------
Gerard F. Ganey
Senior Vice President
<PAGE> 14
Exhibit T-1.7
AMERICAN BANKER, FEBRUARY 9, 1994
-----------------------------------------
CONSOLIDATED REPORT OF CONDITION OF
UNITED STATES TRUST
COMPANY OF NEW YORK
and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System,
at the close of business December 31, 1993, published in accordance with a call
made by the Federal Reserve Bank of this District pursuant to the provisions of
the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from
depository institutions
a. Noninterest-bearing balances and currency and coin . . . . . . . . . . . . $ 176,527
b. Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 833,858
Federal funds sold and securities purchased under agreements to resell
in domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205,000
b. Securities purchased under agreements to resell . . . . . . . . . . . . . 32,000
Loans and lease financing receivables:
a. Loans and leases, net of unearned income . . . . . 1,271,077
b. LESS: Allowance for loan and lease losses . . . . 11,928
c. Loans and leases, net of unearned income, allowance, and reserve . . . . . 1,259,149
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . 98,896
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,543
Investments in unconsolidated subsidiaries and associated companies . . . . . . . 725
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 858
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256,699
-----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,925,254
===========
LIABILITIES
Deposits:
a. In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,345,177
(1) Noninterest-bearing . . . . . . . . . . . . . 1,228,335
(2) Interest-bearing . . . . . . . . . . . . . . . 1,116,842
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs . . . . . . 5,617
(1) Interest-bearing . . . . . . . . . . . . . . . 5,617
Federal funds purchased and securities sold under agreements to repurchase
in domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . 211,921
b. Securities sold under agreements to repurchase . . . . . . . . . . . . . . 15,016
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . 33,824
Other borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Mortgage indebtedness and obligations under capitalized leases . . . . . . . . . 2,429
Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . . . . . . 12,453
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,457
-----------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,744,904
-----------
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,995
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,500
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . 123,855
-----------
TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,350
-----------
TOTAL LIABILITIES AND EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . $ 2,925,254
===========
</TABLE>
I, Richard E. Brinkmann, Senior Vice President & Comptroller of the
above-named bank do hereby declare that this report of condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
RICHARD E. BRINKMANN, SVP, Comptroller
January 31, 1994
We, the undersigned trustees, attest the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
H. MARSHALL SCHWARZ
JEFFREY S. MAURER Trustees
FREDERICK S. WONHAM
<PAGE> 15
EXHIBIT INDEX
-------------
Exhibit T3A (1) Amended and Restated Certificate of Incorporation of
the Applicant, incorporated by reference to Exhibit
3.3 to the Applicant's Form 10-K for the year ended
December 31, 1986
(2) Amendment to Certificate of Incorporation of the
Applicant filed June 13, 1988 incorporated by
reference to Exhibit 3.5 to the Applicant's Form 10-K
for the year ended December 31, 1988.
(3) Amendment to Certificate of Incorporation of the
Applicant filed March 5, 1993 incorporated by
reference to Exhibit 4.1 to the Applicant's Form 8-K,
dated March 5, 1993.
Exhibit T3B By-laws, incorporated by reference to Exhibit 3.3 to
Applicant's Form 10-K for the year ended December 31,
1992.
Exhibit T3C Form of Indenture between Sterling Bancorp and
United States Trust Company of New York.
Exhibit T3D Not applicable.
Exhibit T3E (1) Offering Circular and covering letter.
(2) Letter of Transmittal and instructions relating
thereto.
Exhibit T3F Cross-reference sheet (included as part of Exhibit T3C).
<PAGE> 1
================================================================================
STERLING BANCORP
AND
UNITED STATES TRUST COMPANY OF
NEW YORK
--------------------------
INDENTURE
DATED AS OF AUGUST 1, 1994
--------------------------
FLOATING INTEREST RATE CONVERTIBLE SUBORDINATED DEBENTURES,
SERIES V,
DUE JULY 1, 2001
================================================================================
<PAGE> 2
STERLING BANCORP
Reconciliation and Tie Between Indenture dated as of
August 1, 1994 and the Trust Indenture Act of 1939.
This Reconciliation Table does not constitute
part of the Indenture.
Trust Indenture Section Indenture Section
- ----------------------- -----------------
310 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . 9.09, 9.10(a)
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 9.09
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 9.08, 9.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 9.13(a), 9.13(c)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 9.13(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01, 7.02(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(c)
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04(a)
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7.04(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04(c)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04(d)
314 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7.03(b)
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . 7.03(c)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.04
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.04
315 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . 9.01
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . 9.01, 9.01(a)(2)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.08
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 8.06
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 8.01, 8.06
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . Not included
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.04, 12.02
<PAGE> 3
TABLE OF CONTENTS*
PAGE
----
PARTIES 1
RECITALS: 1
Form of Debenture 1
Form of Trustee's Certificate of Authentication 3
ARTICLE ONE.
DEFINITIONS.
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . 8
Board of Directors . . . . . . . . . . . . . . . . . . . . 9
Business Day . . . . . . . . . . . . . . . . . . . . . . . 9
Certificate of Independent
Public Accountants . . . . . . . . . . . . . . . . . . . 9
Common Shares . . . . . . . . . . . . . . . . . . . . . . 9
Company . . . . . . . . . . . . . . . . . . . . . . . . . 10
Corporate Trust Office . . . . . . . . . . . . . . . . . . 10
Current Market Price . . . . . . . . . . . . . . . . . . . 10
Debenture or Debentures;
Outstanding . . . . . . . . . . . . . . . . . . . . . . 10
Denomination . . . . . . . . . . . . . . . . . . . . . . . 11
Event of Default . . . . . . . . . . . . . . . . . . . . . 11
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Indenture . . . . . . . . . . . . . . . . . . . . . . . . 11
Officers' Certificate . . . . . . . . . . . . . . . . . . 11
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 12
Predecessor Debentures . . . . . . . . . . . . . . . . . . 12
Principal Amount . . . . . . . . . . . . . . . . . . . . . 12
Register . . . . . . . . . . . . . . . . . . . . . . . . . 12
Responsible Officer . . . . . . . . . . . . . . . . . . . 12
Senior Indebtedness . . . . . . . . . . . . . . . . . . . 13
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . 13
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 13
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . 13
- ----------------------------------
* The Table of Contents is not part of the Indenture.
i
<PAGE> 4
PAGE
----
ARTICLE TWO.
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES.
SECTION 2.01 Authentication and delivery of Debentures . . . . . . . . 14
SECTION 2.02 Form of Debentures and Trustee's Certificate
of Authentication . . . . . . . . . . . . . . . . . . . 14
SECTION 2.03 Denominations of Debentures . . . . . . . . . . . . . . . 14
SECTION 2.04 Date of Debentures; record date for payment
of interest . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.05 Execution of Debentures . . . . . . . . . . . . . . . . . 15
SECTION 2.06 Registration, transfer and exchange of
Debentures . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.07 Mutilated, destroyed, lost or stolen Debentures . . . . . 17
SECTION 2.08 Cancellation of surrendered Debentures . . . . . . . . . . 18
SECTION 2.09 Officers' Certificate of Interest Rate
Calculation . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE THREE.
REDEMPTION OF DEBENTURES.
SECTION 3.01 Redemption of the Debentures . . . . . . . . . . . . . . . 19
SECTION 3.02 Notice of redemption; selection of Debentures . . . . . . 19
SECTION 3.03 When Debentures called for redemption
become due and payable . . . . . . . . . . . . . . . . . 21
SECTION 3.04 Deposit of redemption price . . . . . . . . . . . . . . . 21
ARTICLE FOUR.
SUBORDINATION OF DEBENTURES.
SECTION 4.01 Debentures Subordinate to Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.02 Payment over of proceeds of Debentures on
liquidation, etc. . . . . . . . . . . . . . . . . . . . 22
SECTION 4.03 Debentures may be paid prior to dissolution,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.04 Authorization to Trustee to take action to
effectuate subordination . . . . . . . . . . . . . . . . 25
SECTION 4.05 Trustee not charged with knowledge of
prohibition against payments to Trustee;
Notices . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.06 Rights of Trustee in respect of Senior
Indebtedness held by it . . . . . . . . . . . . . . . . 26
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PAGE
----
SECTION 4.07 Trustee not fiduciary in respect of holders of
Senior Indebtedness . . . . . . . . . . . . . . . . . . 26
SECTION 4.08 Applicability of Article Four to paying
agents . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE FIVE.
CONVERSION OF DEBENTURES.
SECTION 5.01 Time of conversion . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.02 Exercise of conversion privilege by holders of
Debentures . . . . . . . . . . . . . . . . . . . . . . . 27
Partial conversion by holders of
Debentures in denominations greater
than $1,000 . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.03 Non-issuance of fractional shares . . . . . . . . . . . . 28
SECTION 5.04 Conversion rate . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.05 Adjustment of conversion rate . . . . . . . . . . . . . . 28
SECTION 5.06 Certificate of Independent Public
Accountants . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.07 Execution of supplemental indenture in cases
of consolidation, merger, etc. . . . . . . . . . . . . . 31
SECTION 5.08 Covenant to reserve Common Shares for
conversion . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.09 Registration of Common Shares issuable
upon conversion . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.10 Charges upon conversion . . . . . . . . . . . . . . . . . 33
SECTION 5.11 Cancellation of converted Debentures . . . . . . . . . . . 33
SECTION 5.12 Trustee under no responsibility for duties of
Company under Article Five . . . . . . . . . . . . . . . 33
SECTION 5.13 Debentureholders to have no rights of
shareholders until conversion . . . . . . . . . . . . . 34
ARTICLE SIX.
PARTICULAR COVENANTS OF THE COMPANY.
SECTION 6.01 Payment of principal of and interest on
Debentures . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.02 Maintenance of offices and agencies for
Debentures . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.03 Paying agents . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.04 Officers' Certificate as to covenants . . . . . . . . . . 35
SECTION 6.05 Company to appoint successor Trustee . . . . . . . . . . . 36
SECTION 6.06 Covenant of further assurance . . . . . . . . . . . . . . 36
iii
<PAGE> 6
PAGE
----
ARTICLE SEVEN.
HOLDERS LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE.
SECTION 7.01 Company to furnish Trustee information as to
names and addresses of holders . . . . . . . . . . . . . 36
SECTION 7.02 (a) Trustee to preserve information as to
names and addresses of holders; Trustee
may destroy list of holders on certain
conditions . . . . . . . . . . . . . . . . . . . . . 36
(b) Trustee to make information as to names
and addresses of holders available to
"applicants" or mail communication to
Debentureholders in certain circumstances . . . . . . 37
(c) Company, Trustee and paying agents not accountable . . 38
SECTION 7.03 (a) Annual and other reports to be filed by
Company with Trustee and Securities and
Exchange Commission . . . . . . . . . . . . . . . . . 38
(b) Additional information and reports to be
filed with Trustee and Securities and
Exchange Commission . . . . . . . . . . . . . . . . . 38
(c) Summaries of information and reports to be
transmitted by Company to holders . . . . . . . . . . 39
SECTION 7.04 (a) Trustee to transmit annual report to
holders . . . . . . . . . . . . . . . . . . . . . . . 39
(b) Trustee to transmit certain further reports
to holders . . . . . . . . . . . . . . . . . . . . . 40
(c) To what holders reports are to be mailed . . . . . . 40
(d) Copies of reports to be filed with stock
exchanges and Securities and Exchange
Commission . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE EIGHT.
REMEDIES ON DEFAULT.
SECTION 8.01 Events of Default; declaration of principal due;
waivers . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.02 Payment of Debentures on default; remedies
of Trustee . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.03 Application of moneys collected by Trustee . . . . . . . . 46
SECTION 8.04 Proceedings by holders . . . . . . . . . . . . . . . . . . 47
SECTION 8.05 Remedies cumulative and continuing . . . . . . . . . . . . 48
iv
<PAGE> 7
PAGE
----
SECTION 8.06 Rights of holders of majority in amount of
Debentures to direct Trustee . . . . . . . . . . . . . . 48
SECTION 8.07 Undertaking to pay costs. . . . . . . . . . . . . . . . . 49
SECTION 8.08 Notice of defaults to holders . . . . . . . . . . . . . . 49
ARTICLE NINE.
CONCERNING THE TRUSTEE.
SECTION 9.01 Duties and liabilities of Trustee . . . . . . . . . . . . 50
SECTION 9.02 Reliance on documents, opinions, etc. . . . . . . . . . . . 51
SECTION 9.03 No responsibility for recitals, etc. . . . . . . . . . . . 52
SECTION 9.04 Trustee or paying agent may become owner or
pledgee of Debentures . . . . . . . . . . . . . . . . . 52
SECTION 9.05 Moneys to be held in trust . . . . . . . . . . . . . . . . 52
SECTION 9.06 Compensation and reimbursement of
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 9.07 Officers' Certificate as evidence . . . . . . . . . . . . 54
SECTION 9.08 Resignation of Trustee with conflicting
interest . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.09 Eligibility of Trustee . . . . . . . . . . . . . . . . . . 60
SECTION 9.10 Resignation or removal of Trustee . . . . . . . . . . . . 60
SECTION 9.11 Acceptance by successor to Trustee . . . . . . . . . . . . 62
SECTION 9.12 Successor by merger, etc. . . . . . . . . . . . . . . . . . 62
SECTION 9.13 Limitations on rights of Trustee
as a creditor . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE TEN.
CONCERNING THE HOLDERS.
SECTION 10.01 Evidence of action by holders . . . . . . . . . . . . . . 67
SECTION 10.02 Proof of execution of Instruments and of
holding of Debentures . . . . . . . . . . . . . . . . . 67
SECTION 10.03 Who may be deemed owners of Debentures . . . . . . . . . . 68
SECTION 10.04 Debentures owned by Company disregarded . . . . . . . . . 68
SECTION 10.05 Revocation of consents . . . . . . . . . . . . . . . . . . 69
ARTICLE ELEVEN.
HOLDERS' MEETINGS.
SECTION 11.01 Purposes of meetings . . . . . . . . . . . . . . . . . . . 69
SECTION 11.02 Call of meetings by Trustee . . . . . . . . . . . . . . . 69
SECTION 11.03 Call of meetings by Company or holders . . . . . . . . . . 70
SECTION 11.04 Qualifications for voting . . . . . . . . . . . . . . . . 70
SECTION 11.05 Regulations . . . . . . . . . . . . . . . . . . . . . . . 70
v
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PAGE
----
SECTION 11.06 Voting . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE TWELVE.
SUPPLEMENTAL INDENTURES.
SECTION 12.01 Supplemental indentures without consent of
holders . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 12.02 Supplemental indentures with consent of
holders . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 12.03 Effect of supplemental indentures . . . . . . . . . . . . 74
SECTION 12.04 Notation on Debentures . . . . . . . . . . . . . . . . . . 74
SECTION 12.05 Waiver of compliance by holders . . . . . . . . . . . . . 74
ARTICLE THIRTEEN.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
SECTION 13.01 Consolidation, merger or sale of assets by
the Company . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 13.02 Successor corporation to the Company . . . . . . . . . . . 75
SECTION 13.03 Evidence furnished to Trustee . . . . . . . . . . . . . . 76
SECTION 13.04 Lease of substantially all assets of the
Company . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE FOURTEEN.
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
SECTION 14.01 Satisfaction and discharge of Indenture . . . . . . . . . 77
SECTION 14.02 Application of deposited funds . . . . . . . . . . . . . . 77
SECTION 14.03 Repayment of moneys held by paying agent . . . . . . . . . 77
SECTION 14.04 Return of moneys held unclaimed for two
years . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE FIFTEEN.
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS.
SECTION 15.01 Incorporators, shareholders, officers and
directors of the Company immune from
liability . . . . . . . . . . . . . . . . . . . . . . . 78
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PAGE
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ARTICLE SIXTEEN.
MISCELLANEOUS PROVISIONS.
SECTION 16.01 Provisions of Indenture and Debentures for
the sole benefit of parties and holders of
Debentures . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 16.02 Successors and assigns of parties . . . . . . . . . . . . 78
SECTION 16.03 Notices or demands . . . . . . . . . . . . . . . . . . . . 79
SECTION 16.04 Officers' Certificate and Opinion of Counsel
to be furnished by Company . . . . . . . . . . . . . . . 79
SECTION 16.05 Holidays and days when banking
institutions closed . . . . . . . . . . . . . . . . . . 79
SECTION 16.06 Computation of Interest . . . . . . . . . . . . . . . . . 80
SECTION 16.07 Provisions required by Trust Indenture Act of
1939 to control . . . . . . . . . . . . . . . . . . . . 80
SECTION 16.08 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 16.09 Governing law . . . . . . . . . . . . . . . . . . . . . . 80
Acceptance Of Trust By Trustee . . . . . . . . . . . . . . . . . . . . . . 80
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Signatures And Seals . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
vii
<PAGE> 10
THIS INDENTURE, dated as of the 1st day of August, 1994, between STERLING
BANCORP, a corporation duly organized and existing under the laws of the State
of New York (hereinafter sometimes called the "Company"), and United States
Trust Company of New York, a corporation duly organized and existing under the
laws of the State of New York, as Trustee (hereinafter sometimes called the
"Trustee").
WITNESSETH:
WHEREAS, the Company has duly authorized the issue of its Floating Interest
Rate Convertible Subordinated Debentures, Series V, due July 1, 2001
(hereinafter called the "Debentures"), in the aggregate principal amount of $ ,
and to provide the terms and conditions upon which the Debentures are to be
authenticated, issued and delivered, has duly authorized the execution and
delivery of this Indenture;
WHEREAS, the text of the Debentures and the Trustee's certificate of
authentication to be borne thereby are to be substantially in the following
forms, respectively:
[FORM OF FACE OF DEBENTURE]
No.____________ $____________
Face
Amount
STERLING BANCORP
FLOATING INTEREST RATE CONVERTIBLE
SUBORDINATED DEBENTURE, SERIES V, DUE 2001
STERLING BANCORP, a corporation duly organized and existing under the laws
of the State of New York (hereinafter called the "Company"), for value
received, hereby promises to pay to or registered assigns, the
principal sum of Dollars, on July 1, 2001, and to pay interest on the
unpaid balance thereof from the date of original authentication hereof
(hereinafter called "original authentication date") or of any predecessor
debenture (as defined in the Indenture referred to herein) or from the most
recent interest payment date to which interest has been paid or duly provided
for, semiannually on January 1 and July 1 of each year commencing January 1,
1995 until payment of said principal sum has been made or duly provided for at
a rate per annum as provided below.
Interest on the Debentures is payable, to the extent permitted by law, at a
rate equal to one-half of percentage point (1/2%) above the prime rate per
annum of Chemical Bank from time to time in effect at the end of each day
during the period
<PAGE> 11
commencing thirty (30) days prior to the interest payment period (which term
"interest payment period" means the period from the original authentication
date through December 31, 1994 for the January 1, 1995 interest payment date
and the six month period commencing the prior January 1 or July 1 for
subsequent interest payments) and ending thirty (30) days prior to the interest
payment date to which it relates. The interest so payable on any January 1 or
July 1 will, subject to certain exceptions provided in the Indenture referred
to on the reverse hereof, be paid to the person in whose name this Debenture
(or the Debenture in exchange or substitution for which this Debenture was
issued) was registered at the close of business on the fifteenth day of the
calendar month preceding such January 1 or July 1. Payment of the principal of
and interest on this Debenture will be made at the office or agency of the
Company in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
The provisions of this Debenture are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under said Indenture.
IN WITNESS WHEREOF, STERLING BANCORP has caused this Instrument to be
signed by its Chairman of the Board, President or one of its Vice Presidents
manually or in facsimile and a facsimile of its corporate seal to be imprinted
hereon and attested by the manual or facsimile signature of its Secretary or
one of its Assistant Secretaries.
Dated:
STERLING BANCORP
By
-----------------------
ATTEST: President
- --------------------------
Secretary
2
<PAGE> 12
[Form of Trustee's Certificate of Authentication]
This Debenture is one of the Debentures described in the within-mentioned
Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee
By
--------------------------------
Authorized Officer
[Text of Reverse of Debenture]
STERLING BANCORP
Floating Interest Rate Convertible Subordinated
Debentures, Series V, Due 2001
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its Floating Interest Rate Convertible Subordinated
Debenture, Series V, due 2001 (herein called the "Debentures"), limited (except
as provided in the Indenture referred to below) to the aggregate principal
amount of $11,985,000, all issued or to be issued under and pursuant to an
indenture dated as of August 1, 1994 (herein called the "Indenture") duly
executed and delivered by the Company to United States Trust Company of New
York, as Trustee (herein called the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Debentures.
The indebtedness evidenced by the Debentures is, to the extent and in the
manner set forth in the Indenture, expressly subordinated and subject in right
of payment to the prior payment in full of all Senior Indebtedness, as defined
in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred. In the event of any proceedings for insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution or other
winding up of the Company, all Senior Indebtedness shall be entitled to receive
payment in full of all principal thereof, premium, if any, and interest thereon
before the holders of the Debentures are entitled to receive any payment of
3
<PAGE> 13
principal of or interest upon the Debentures, and the holders of the Senior
Indebtedness shall be entitled to receive any payment or distribution which may
be payable or deliverable in any such proceedings in respect of the Debentures.
In the event that the Debentures are declared due and payable before their
expressed maturity because of the occurrence of an Event of Default, as defined
in the Indenture, which shall not have been rescinded or annulled, the holders
of Senior Indebtedness then outstanding shall be entitled to receive payment in
full of all principal thereof, premium, if any, and interest thereon before the
holders of the Debentures are entitled to receive any payment of principal of
or interest upon the Debentures. If an event of default, known to the
principal executive officer or the principal financial officer of the Company,
shall occur and be continuing under any instrument evidencing any Senior
Indebtedness or under which Senior Indebtedness was issued, the holders of the
Debentures shall not be entitled to receive any payment of principal thereof or
interest thereon unless and until such event of default shall have been waived
or cured or payment in full of all principal of, premium, if any, and interest
on all Senior Indebtedness shall have been made. In any case where payments or
distributions are made to holders of the Debentures in contravention of such
subordination provisions contained in the Indenture, such payments or
distributions shall be held for the benefit of, and shall be paid over to, the
holders of Senior Indebtedness or their representatives. This Debenture is
issued subject to the provisions of the Indenture, and each holder of this
Debenture by accepting the same, agrees to and shall be bound by such
provisions and authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination as provided in the Indenture and appoints the Trustee his
attorney in fact for any and all such purposes. Each holder of this Debenture
by accepting the same, also agrees that each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred, shall be deemed to have
purchased Senior Indebtedness in reliance upon the covenants and provisions
contained in the Indenture and this Debenture.
Subject to the provisions of the Indenture, the holder hereof has the
right, at his option, at any time on or prior to the close of business on July
1, 2001 (except that, in case this Debenture or a portion hereof shall be
called for redemption prior to such date, such right shall terminate as to the
principal amount being redeemed at the close of business on the date fixed for
redemption unless the Company shall default in payment due upon redemption
hereof) to convert the unpaid principal amount
4
<PAGE> 14
hereof, or such portion of the unpaid principal amount hereof represented by a
portion of the face amount hereof which is $1,000 or an integral multiple
thereof, into fully paid and nonassessable Common Shares (calculated as to each
conversion to the nearest 1/100th of a share) of the Company at the conversion
rate of $8.75 per share, or such conversion rate as adjusted from time to time
as provided in the Indenture, upon surrender of this Debenture in accordance
with the terms and provisions of the Indenture to the Company at its office or
agency for such purpose in the Borough of Manhattan, The City and State of New
York, accompanied (if so required by the Company) by instruments of transfer,
in form satisfactory to the Company, duly executed by the holder or by his duly
authorized attorney. No adjustment is to be made on conversion for interest
accrued hereon or for dividends on Common Shares issued on conversion. No
fractional Common Share shall be issued upon any conversion, but the Company
will pay a cash adjustment in lieu thereof as provided in the Indenture.
The Company has caused CUSIP numbers to be printed on the Debentures. No
representation is made as to the accuracy of such numbers as printed on the
Debentures.
In case an Event of Default shall have occurred and be continuing, the
principal of all the Debentures may be declared due and payable immediately by
the Trustee or by the holders of not less than 25% in aggregate principal
amount of the Debentures then outstanding, and upon such declaration shall
become immediately due and payable, but such declaration may in certain events
be rescinded by the holders of a majority in aggregate principal amount of the
Debentures at the time outstanding, in the manner, with the effect and subject
to the conditions provided in the Indenture. The Indenture also provides that
the holders of a majority in aggregate principal amount of the Debentures at
the time outstanding may waive (with certain exceptions) any past default under
the Indenture and its consequences.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66 2/3% in aggregate principal
amount of the Debentures at the time outstanding, evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights and
obligations of the holders of the Debentures and of the Company; provided,
however, that no such supplemental indenture shall (i) extend the fixed
maturity of any Debentures, or reduce the rate or extend the
5
<PAGE> 15
time of payment of interest thereon, or reduce the principal amount thereof, or
modify the provisions of the Indenture with respect to the subordination of the
Debentures, or alter or impair the right to convert the same into Common Shares
at the prices and upon the terms provided in the Indenture, without the consent
of the holders of each Debenture so affected, or (ii) reduce the aforesaid
percentage of principal amount of Debentures, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of all Debentures then outstanding.
Any such consent or any waiver or other action by the holder of this
Debenture shall be conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and of any Debenture issued in exchange
herefor or in place hereof, irrespective of whether any notation of such
consent or waiver or other action is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Debenture at the times and place and at the rate and in the coin or currency
herein prescribed.
As provided in the Indenture, the Debentures may be redeemed, at the option
of the Company, as a whole or from time to time in part, on August 1, 1997 and
any date thereafter prior to final maturity, upon the notice referred to below,
at 100% of the unpaid principal amount thereof, together, in each case, with
interest accrued thereon to the date fixed for redemption. In addition, the
Debentures will be redeemable, in whole or in part, prior to August 1, 1997 at
the option of the Company, at a redemption price equal to 100% of the principal
amount thereof, together with accrued interest to the redemption date, if for a
period of 30 consecutive trading days ("Consecutive Period") the closing price
of the Common Shares on the New York Stock Exchange has been at least 140% of
the conversion price then in effect. Notice to the holders of Debentures to be
redeemed shall be given by mailing to such holders a notice of such redemption,
not later than the thirtieth day, and not earlier than the sixtieth day, before
the date fixed for redemption, at their last addresses as they shall appear on
the Register, all as provided in the Indenture. In the case of redemption
prior to August 1, 1997, notice of redemption shall be given within 30 days of
the last day of the Consecutive Period.
If this Debenture (or, if this Debenture is of a larger denomination than
$1,000, any portion of the unpaid principal amount hereof
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represented by a portion of the face amount hereof which is $1,000 or an
integral multiple of $1,000) is duly called for redemption and payment thereof
duly provided, this Debenture (or such portion of the principal amount hereof
as aforesaid) shall cease to bear interest from and after the date fixed for
such redemption.
Upon due presentment for registration of transfer of this Debenture at the
office or agency to be maintained by the Company in the Borough of Manhattan,
The City and State of New York, a new Debenture of the same denomination or, if
this Debenture is of a larger denomination than $1,000, new Debentures of the
denominations of $1,000 or integral multiples of $1,000, for the same aggregate
denomination, will be issued to the transferee in exchange herefor, but only in
the manner and subject to the limitations provided in the Indenture.
The Debentures are issuable only as fully registered Debentures without
coupons in denominations of $1,000 and any integral multiple thereof and in
such other denominations less than $1,000 as the Company may authorize. As
provided in and subject to the limitations in the Indenture, Debentures of any
denomination are exchangeable for other Debentures of the denominations of
$1,000 or authorized multiples of $1,000 of an equal aggregate denomination, as
requested by the holder surrendering the same, at the office or agency to be
maintained by the Company in the Borough of Manhattan, The City and State of
New York.
No service charge shall be made for any exchange or registration of
transfer, but the Company may make a charge sufficient to reimburse it for any
tax or governmental charge in connection therewith.
The term "denomination", as used herein with respect to any Debenture or
Debentures, shall mean the face amount thereof.
All interest calculations will be rounded to the nearest 0.05 of a
percentage point. If Chemical Bank shall cease to establish a prime rate
comparable to that established on the date of original authentication hereof,
there shall be substituted thereafter for Chemical Bank's prime rate a rate or
formula specified by the Company which in its judgment provides a reasonable
equivalence to such prime rate and which, if feasible, shall be based on a rate
established by Chemical Bank or another New York Clearing House member bank.
The Company, the Trustee, any paying agent, any conversion agent and any
Registrar may deem and treat the holder hereof as the absolute owner of this
Debenture (whether or not this Debenture shall be overdue
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and notwithstanding any notice of ownership or writing hereon made by anyone
other than the Registrar) for the purposes of receiving payment of or on
account of the principal and interest hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any conversion
agent nor any Registrar shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture, or in this Debenture, or because of any indebtedness
evidenced hereby, shall be had against any incorporator, or against any past,
present or future shareholder, officer or director, as such, of the Company or
of any successor corporation, either directly or through the Company or any
successor corporation, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance hereof by the holder hereof and as part of the consideration
for the issue hereof.
AND WHEREAS, the Company represents that all acts and things necessary to
make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee as in this Indenture provided, the valid, binding and
legal obligations of the Company and to constitute these presents a valid
indenture and agreement according to its terms, have been done and performed,
and the execution by the Company of this Indenture and the issue hereunder of
the Debentures have in all respects been duly authorized; and the Company, in
the exercise of legal right and power in it vested, is executing this Indenture
and proposes to make, execute, issue and deliver the Debentures;
NOW, THEREFORE:
In order to declare the terms and conditions upon which the Debentures are,
and are to be, authenticated, issued and delivered, and in consideration of the
premises, of the purchase and acceptance of the Debentures by the holders
thereof and of the sum of one dollar duly paid to it by the Trustee at the
execution of these presents, the receipt whereof is hereby acknowledged, the
Company covenants and agrees with the Trustee, for the equal and proportionate
benefit of the respective holders from time to time of the Debentures, as
follows:
ARTICLE ONE.
DEFINITIONS.
SECTION 1.01. The terms defined in this Section (except as herein
otherwise expressly provided or unless the context otherwise requires)
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for all purposes of this Indenture shall have the respective meanings specified
in this Section. All other terms used in this Indenture which are defined in
the Trust Indenture Act of 1939 or which are by reference therein defined in
the Securities Act of 1933, as amended (except as herein otherwise expressly
provided or unless the context otherwise requires), shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act
as in force at the date of the execution of this Indenture.
Board of Directors:
The term "Board of Directors" shall mean the Board of Directors of the
Company or the Executive Committee thereof.
Business Day:
The term "Business Day" shall mean any and all days on which banking
institutions in the Borough of Manhattan, The City and State of New York, are
not authorized by law to close.
Certificate of Independent Public Accountants:
The term "Certificate of Independent Public Accountants" shall mean a
certificate or opinion signed by an individual, partnership or corporation
engaged in accounting work who is in fact independent who may be the regular
independent accountants retained by the Company to audit its books or who may
be another independent public accountant acceptable to the Trustee. The term
"independent public accountants" when used herein shall mean such individual,
partnership or corporation.
Common Shares:
The term "Common Shares" shall mean (i) the class of stock designated as
the common stock of the Company at the date of this Indenture, or (ii) any
other class of stock resulting from successive changes or reclassifications of
such common stock. In the event that at any time as a result of an adjustment
made pursuant to Subdivision (a) of Section 5.05, the holder of any Debenture
thereafter surrendered for conversion shall become entitled to receive any
shares of the Company other than shares of its common stock as described in
Clause (i) above, thereafter the number of such other shares so receivable upon
conversion of any Debenture shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Shares contained in Section 5.05, and the provisions
of Sections 5.02, 5.03 and 5.05 to 5.12 inclusive, with
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respect to the Common Shares shall apply on like terms to any such other
shares. The term "Common Shares" shall include the term "Common Stock"
wherever used in this Indenture.
Company:
The term "Company" shall mean Sterling Bancorp, a New York corporation,
and, subject to the provisions hereof, shall also include its successors and
assigns.
Corporate Trust Office:
The term "corporate trust office" shall mean the principal office of the
Trustee (or the office of any successor in trust) in the Borough of Manhattan,
The City and State of New York, at which at any particular time its corporate
trust business shall be administered, which office is, at the date of execution
of this Indenture, located at 45 Wall Street, New York, N.Y. 10005.
Current Market Price:
The term "current market price," when used with reference to the Common
Shares of the Company, shall mean the closing price of such Common Shares on
the day in question. The closing price for each day shall be the last reported
sale price regular way or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices regular way, in
either case on the New York Stock Exchange, or, if the Common Shares are not
listed or admitted to trading on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934 on
which the Common Shares are listed or admitted to trading, or if not listed or
admitted to trading on any such securities exchange, the average of the high
bid and low asked prices in the over-the-counter market as reported by National
Quotation Bureau Incorporated or similar organization selected by the Company
for the purpose.
Debenture or Debentures; Outstanding:
The term "Debenture" or "Debentures" shall mean any Debenture or Debentures
authenticated and delivered under this Indenture.
The term "outstanding," when used with reference to Debentures, shall,
subject to the provisions of Sections 3.02 and 10.04, mean, as of any
particular time, all Debentures authenticated and delivered by the Trustee
under this Indenture, except
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(a) Debentures theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation,
(b) Subject to Sections 2.04 and 5.01, Debentures or portions thereof
for the payment or redemption of which moneys in the necessary amounts
shall have been deposited in trust with the Trustee or with any paying
agent (other than the Company), provided that if such Debentures or
portions thereof are to be redeemed prior to the maturity thereof, notice
of such redemption shall have been given as in Article Three provided, or
provision satisfactory to the Trustee shall have been made for giving such
notice; and
(c) Debentures in lieu of or in substitution for which other
Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.07, unless proof satisfactory to the Trustee is
presented that any such Debentures are held by bona fide purchasers.
Denomination:
The term "denomination," when used with respect to any Debenture or
Debentures, shall mean the face amount thereof.
Event of Default:
The term "Event of Default" shall mean any event specified as such in
Section 8.01.
Holder:
The term "holder" shall mean any person who shall at the time be the
registered holder of any Debenture or Debentures on the Register of the
Company.
Indenture:
The term "Indenture" shall mean this Indenture and all indentures
supplemental hereto which have been entered into in accordance with the terms
hereof.
Officers' Certificate:
The term "Officers' Certificate" shall mean a certificate signed by the
Chairman of the Board or the President or any Vice President and by the
Secretary or any Assistant Secretary of the Company. Each such
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certificate shall include the statements provided for in Section 16.04, if and
to the extent required by the provisions thereof.
Opinion of Counsel:
The term "Opinion of Counsel" shall mean an opinion in writing signed by
legal counsel, who may be an employee of or of counsel to the Company or other
counsel satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 16.04, if and to the extent required by the
provisions thereof.
Predecessor Debentures:
The term "predecessor debentures" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.07 in
lieu of a lost, destroyed or stolen Debenture shall be deemed to evidence the
same debt as the lost, destroyed or stolen Debenture.
Principal Amount:
The term "principal amount" shall mean at any time the aggregate unpaid
principal amount of such Debenture or Debentures.
Register:
The term "Register" shall mean the register or registers kept by the
Company as provided in Section 2.06.
Responsible Officer:
The term "Responsible Officer" when used with respect to the Trustee shall
mean the chairman of the board of directors or trustees, any vice-chairman of
the board of directors or trustees, the chairman of the executive committee,
the vice-chairman of the executive committee, the president, any vice
president, the secretary, the treasurer, any assistant vice president, any
assistant secretary, any assistant treasurer, or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of his knowledge or
any familiarity with the particular subject.
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Senior Indebtedness:
The term "Senior Indebtedness" shall mean (a) all indebtedness, evidenced
by a note or similar instrument, whether outstanding on the date of execution
of this Indenture or thereafter created, incurred, assumed, issued or
guaranteed by the Company, which is for money borrowed, and (b) any deferrals,
renewals, extensions or refundings of any such indebtedness; provided, however,
that the term shall not include (i) any such indebtedness if in the instrument
creating or evidencing the same or pursuant to which the same is outstanding,
it is specifically stated, at or prior to the time the Company becomes liable
in respect thereof, that such indebtedness or such renewal, extension or
refunding thereof is not Senior Indebtedness, (ii) any indebtedness of the
Company under the Debentures and (iii) its Floating Interest Rate Convertible
Subordinated Debentures, Third Series, due 1996, or its Floating Interest Rate
Convertible Subordinated Debentures, Fourth Series, due 1998, all of which
shall rank equally with the Debentures. The Debentures shall not constitute
"Senior Indebtedness" as defined in either the Indenture relating to the
Company's Floating Interest Rate Convertible Subordinated Debentures, Third
Series due 1996 or the Indenture relating to the Company's Floating Interest
Rate Convertible Subordinated Debentures, Fourth Series, due 1998.
Subsidiary:
The term "Subsidiary" shall mean a corporation, a majority of the voting
stock of which is at any time owned by the Company, either directly or through
Subsidiaries.
Trustee:
The term "Trustee" shall mean the trustee under this Indenture for the time
being, whether original or successor.
Trust Indenture Act of 1939:
The term "Trust Indenture Act of 1939" shall mean the Trust Indenture Act
of 1939 as in force at the date of execution of this Indenture, except as
provided in Sections 5.07 and 12.03.
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ARTICLE TWO.
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES.
SECTION 2.01. The Debentures shall be designated as Floating Interest Rate
Convertible Subordinated Debentures, Series V, due 2001. Debentures for the
aggregate principal amount of $11,985,000, except as provided in Section 2.07
upon the execution of this Indenture, or from time to time thereafter, may be
executed by the Company and delivered to the Trustee for authentication, and
the Trustee shall thereupon authenticate and deliver said Debentures to or upon
the written order of the Company, signed by its Chairman of the Board,
President or one of its Vice Presidents and by its Secretary or one of its
Assistant Secretaries, without any further action by the Company.
SECTION 2.02. The Debentures and the Trustee's certificate of
authentication to be bome by the Debentures shall be fully engraved or
lithographed or printed on steel engraved borders and shall be substantially of
the tenor and purport as in this Indenture above recited and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any securities exchange on which the Debentures
may be listed, or to conform to usage. The Company in issuing Debentures may
use CUSIP numbers (if then generally in use).
SECTION 2.03. The Debentures shall be issuable only as fully registered
Debentures without coupons in the denominations of $1,000 and any integral
multiple thereof and in such other denominations less than $1,000 as the
Company may authorize.
SECTION 2.04. Each Debenture shall be dated the date of its authentication.
Interest shall be payable on the unpaid principal represented thereby from the
date of original authentication thereof or of any precedessor debenture or from
the most recent interest payment date to which interest has been paid or duly
provided for, semiannually on January 1 and July 1 of each year commencing
January 1, 1986, until payment thereof has been made or duly provided for.
The persons in whose names Debentures are registered at the close of
business on any record date (as hereinafter defined) with respect to any
interest payment date (excluding any Debenture, or portion thereof, called for
redemption on any date subsequent to such record date and on
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or prior to such interest payment date) shall be entitled to receive the
interest payable on such interest payment date notwithstanding the cancellation
of any Debenture upon any registration of transfer, exchange or conversion
thereof subsequent to the record date, except if and to the extent the Company
shall default in the payment of the interest due on such interest payment date,
in which case such defaulted interest shall be paid to the persons in whose
names outstanding Debentures are registered at the close of business on the
business day preceding the date of payment or, at the option of the Company, on
a subsequent record date (which shall not be less than five business days
preceding the date of payment of such defaulted interest) established for such
purpose by notice given by mail by or on behalf of the Company to the holders
of the Debentures not less than fifteen days preceding such subsequent record
date. The term "record date" as used in this Section with respect to any
interest payment date shall mean the close of business on the fifteenth day of
the month next preceding such interest payment date or in the case of defaulted
interest, the close of business on any subsequent record date established as
hereinabove provided.
SECTION 2.05. The Debentures shall be signed in the corporate name of the
Company by its Chairman of the Board, its President or one of its Vice
Presidents and shall have imprinted thereon a facsimile of its corporate seal
attested by the signature of its Secretary or one of its Assistant Secretaries.
Any such signatures may be the manual or facsimile signatures of the present or
any future such authorized officers, and may be imprinted or otherwise
reproduced.
Only such Debentures as shall bear thereon a certificate of authentication
substantially in the form hereinbefore recited, executed by the Trustee by
manual signature of one of its authorized officers, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee upon any Debenture executed by the Company shall be
conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee or disposed of by the
Company, such Debenture nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debenture had not ceased to be
such officer; and any Debenture may be signed on behalf of the Company by such
persons as, at the actual date of
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the execution of such Debenture, shall be the proper officers of the Company,
although at the date of the execution of this Indenture any such person was not
such an officer.
SECTION 2.06. The Company shall keep at the office or agency to be
maintained by the Company in accordance with the provisions of Section 6.02 a
Register in which, subject to such reasonable regulations as it may prescribe,
the Company shall register Debentures and shall register the transfer of
Debentures as in this Article provided. At all reasonable times such Register
shall be open for inspection by the Trustee. Upon surrender for registration
of transfer of any Debenture at such office or agency, the Company shall
execute and the Trustee shall authenticate and deliver in the name of the
transferee, a new Debenture or Debentures (a) in the same denominations as the
Debentures surrendered for transfer or (b) in denominations of $1,000 or any
integral multiple of $1,000 except that in the latter case, if the unpaid
aggregate principal amount of the Debenture or Debentures surrendered for
registration of transfer shall not be evenly divisible by $1,000, a Debenture
or Debentures in such denomination or denominations less than $1,000 as may be
necessary to effectuate such registration of transfer.
Unless and until otherwise determined by resolution of the Board of
Directors, the Register of the Company in the Borough of Manhattan, The City
and State of New York, for the purpose of exchange or registration of transfer
of the Debentures shall be kept at the corporate trust office of the Trustee
and, for this purpose, the Trustee shall be designated "Registrar."
Any Debenture or Debentures held by a holder and aggregating more than
$1,000 in principal amount may, upon surrender thereof at the office or agency
to be maintained by the Company for such purpose in accordance with the
provisions of Section 6.02, be exchanged for the same aggregate principal
amount of Debentures in denominations of $1,000 and any integral multiple of
$1,000, and the Company shall execute and the Trustee shall authenticate and
deliver, in exchange therefor, the Debenture or Debentures which the holder
making such exchange shall be entitled to receive. If the principal amount of
Debentures surrendered for exchange on any particular date by any holder shall
not be evenly divisible by $1,000 (provided the aggregate principal amount of
such Debentures so surrendered exceeds $1,000), then such holder shall also be
entitled to receive upon such exchange, and the Company shall execute and the
Trustee shall authenticate and
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deliver, a Debenture in such a denomination of less than $1,000 as may be
necessary to effectuate such exchange.
All Debentures presented for exchange or registration of transfer shall be
accompanied (if so required by the Company or the Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Company and
the Registrar, duly executed by the holder or by his attorney duly authorized
in writing.
No service charge shall be made to the holder for any exchange or
registration of transfer of Debentures, or for the issue of new Debentures in
case of partial redemption or conversion, but the Company may make a charge
sufficient to reimburse it for any tax or governmental charge required to be
paid in connection therewith.
The Company shall not be required to register transfers or make exchanges
of Debentures for a period of fifteen days next preceding any mailing of notice
of redemption. The Company shall not be required to register transfers or make
exchanges of Debentures theretofore selected for redemption in whole or in
part, except, in the case of any Debenture to be redeemed in part, the portion
thereof not so to be redeemed.
SECTION 2.07. In case any Debenture shall become mutilated or be destroyed,
lost or stolen, the Company shall execute, and upon its request the Trustee
shall authenticate and deliver, a new Debenture bearing a number not
contemporaneously outstanding, in substitution for the Debenture so mutilated,
destroyed, lost or stolen. In every case the applicant for a substituted
Debenture shall furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them harmless. Also, in
every case of destruction, loss or theft, the applicant shall furnish to the
Company and to the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Debenture and of the ownership thereof, and in every case
of mutilation, the applicant shall surrender to the Trustee the Debenture so
mutilated. The Trustee may authenticate any such substituted Debenture and
deliver the same upon the written request or authorization of any officer of
the Company. Upon the issuance of any substituted Debenture, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith and in addition a further sum not exceeding ten dollars for each
Debenture so issued in substitution. In case any Debenture which has finally
matured or is about to finally mature or which has been previously selected for
redemption and which is about to be redeemed shall become mutilated or be
destroyed, lost or stolen, with the consent
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of the holder, the Company may, instead of the issuance of a substitute
Debenture as permitted by this Section, pay or authorize the payment or
conversion of the same.
Every substituted Debenture issued pursuant to the provisions of this
Section by virtue of the fact that any Debenture is destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Debenture shall at any time be enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Debentures duly issued hereunder.
All Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement, payment or
conversion of mutilated, destroyed, lost or stolen Debentures and shall
preclude any and all other rights or remedies, notwithstanding any law or
statute now existing or hereafter enacted to the contrary with respect to the
replacement, payment or conversion of negotiable instruments or other
securities without their surrender.
SECTION 2.08. All Debentures surrendered for payment, conversion,
redemption, exchange, registration of transfer or substitution shall be
cancelled by the Trustee, and no Debentures shall be issued in lieu thereof
except as expressly required or permitted by any of the provisions of this
Indenture. The Trustee may deliver to the Company cancelled Debentures held by
the Trustee or may destroy cancelled Debentures held by the Trustee and deliver
to the Company a certificate with respect to such destruction. If the Company
shall acquire any of the Debentures, however, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such
Debentures unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.09. The interest rate applicable to each semiannual period will
be calculated as promptly as practicable by the Company according to the method
described in the Debenture. The Company will furnish the Trustee with an
Officers' Certificate setting forth the calculation of the interest rate
applicable to each semiannual period promptly after it has made such
calculation, but not later than ten (10) days prior to each interest payment
date. Subject to Section 9.01 of this Indenture, the Trustee shall be fully
protected in relying upon such Officers' Certificate.
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ARTICLE THREE.
REDEMPTION OF DEBENTURES.
SECTION 3.01. The Company may, at its option, at any time on or after
August 1, 1997 and prior to final maturity redeem the Debentures, either as a
whole or from time to time in part, at 100% of the unpaid principal amount
thereof, in each case together with accrued interest to the date fixed for
redemption. In addition, the Debentures will be redeemable, in whole or in
part, prior to August 1, 1997 at the option of the Company, at a redemption
price equal to 100% of the principal amount thereof, together with accrued
interest to the redemption date, if for a period of 30 consecutive trading days
("Consecutive Period") the closing price of the Company's Common Shares on the
New York Stock Exchange (or if the Company's Common Shares are no longer listed
on the New York Stock Exchange, the principal national securities exchange on
which the Common Shares are listed, or if not listed on a national securities
exchange, as reported by the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or the NASDAQ National Market, as the
case may be) has been at least 140% of the conversion price then in effect. In
the case of redemption prior to August 1, 1997, (i) notice of redemption shall
be given within 30 days of the last day of the Consecutive Period, (ii) the
election of the Company to exercise such option shall be evidenced by an
Officers' Certificate delivered to the Trustee prior to the mailing of any
notice of such redemption and (iii) such Officers' Certificate shall state that
such redemption will comply with the provisions of this Section 3.01.
SECTION 3.02. Notice of redemption to the holders of Debentures to be
redeemed pursuant to Section 3.01 shall be given by mailing to such holders a
notice of such redemption first class postage prepaid, not later than the
thirtieth day, and not earlier than the sixtieth day, before the date fixed for
redemption, at their last addresses as they shall appear upon the Register.
Any notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice; and failure duly to give such notice by mail, or any defect in such
notice, to the holder of any Debenture designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Debenture. Notice of redemption shall be given by the Company or, at
the Company's request, by the Trustee in the name of and at the expense of the
Company.
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Each such notice of redemption shall specify the date fixed for redemption,
the redemption price, the CUSIP number, the aggregate principal amount of
Debentures being redeemed, the place of payment, that payment will be made upon
presentation and surrender of the Debentures to be redeemed, that interest
accrued to the date fixed for redemption will be paid as specified if said
notice, that on and after said date interest thereon will cease to accrue, the
current conversion price and the date on which the right to convert such
Debentures will expire. If less than all the outstanding Debentures are to be
redeemed, the notice of redemption shall specify which of such Debentures or
portions thereof are to be redeemed. In case any Debenture is to be redeemed
in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed (which shall be a portion of the unpaid principal
amount thereof represented by a face amount of $1,000 or an integral multiple
of $1,000) and shall state that upon surrender of such Debenture, a new
Debenture or Debentures of an aggregate denomination equal to the portion of
the denomination of such Debenture representing the unredeemed portion of the
principal amount thereof, will be issued. The Trustee may use CUSIP numbers in
notices of redemption as a convenience to holders of Debentures, and notices of
redemption required to be given by this Section 3.02 shall state that no
representation is made as to the correctness or accuracy of the CUSIP number
listed in such notice or printed on the Debentures.
If less than all Debentures are so to be redeemed, the Company shall give
the Trustee notice not less than forty-five days prior to the redemption date
(or such lesser notice as the Trustee may accept) as to the aggregate principal
amount of Debentures to be redeemed, and the Trustee shall as soon as
practicable thereafter select, in such manner in its discretion as it shall
deem appropriate and fair (having regard, among other things, to the respective
denominations of the outstanding Debentures), the numbers of the Debentures to
be redeemed and the portions of any thereof to be redeemed in part and shall
thereafter promptly notify the Company in writing thereof; provided, however,
that the Trustee shall select Debentures of denominations of $1,000 and less
for redemption in whole only.
For the purpose of determining the Debentures to be redeemed in case of
redemption of less than all the Debentures, the Trustee may treat as
outstanding Debentures surrendered for conversion after the fifteenth day
before its determination is made.
Upon surrender of any Debenture which is to be redeemed in part only, the
Company shall execute and the Trustee shall authenticate and
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deliver to the holder thereof, at the expense of the Company, a new Debenture
or Debentures of the denominations of $1,000 or integral multiples of $1,000 in
aggregate denomination equal to the portion of the denomination of such
Debenture representing the unredeemed portion of the principal amount thereof.
If the unredeemed principal amount of such Debenture shall not be evenly
divisible by $1,000 (provided the aggregate principal amount of such Debenture
exceeds the redeemed portion by $1,000) then such holder shall also be entitled
to receive, and the Company shall execute and the Trustee shall authenticate
and deliver, a Debenture in such denomination of less than $1,000 as may be
necessary to effectuate such delivery.
SECTION 3.03. If the giving of notice of redemption shall have been
completed as provided in Section 3.02, the Debentures or portions thereof
specified on such notice shall, unless converted into Common Shares pursuant to
the terms hereof, become due and payable on the date and at the place stated in
such notice at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption, and on and after such date fixed for
redemption (unless the Company shall default in the payment of such Debentures
at the redemption price, together with interest accrued thereon to the date
fixed for redemption) interest on the Debentures or portions thereof so called
for redemption shall cease to accrue. On surrender of Debentures on or after
said date at said place of payment in said notice specified, the said
Debentures or portions thereof shall be paid and redeemed by the Company at the
applicable redemption price, together with interest accrued thereon to the date
fixed for redemption.
SECTION 3.04. Prior to any date fixed for redemption, the Company shall
deposit with the Trustee or with a paying agent (or, if the Company is acting
as its own paying agent, segregate and hold in trust as provided in Section
6.03) an amount of money sufficient to pay the principal amount, and accrued
interest, if any, on all the Debentures which are to be redeemed on that date.
ARTICLE FOUR.
SUBORDINATION OF DEBENTURES.
SECTION 4.01. The Company, for itself, its successors and assigns,
covenants and agrees, and each holder of Debentures, by his acceptance thereof,
likewise covenants and agrees, that the payment of the principal of and
interest on each and all of the Debentures is hereby expressly subordinated, to
the extent and in the manner hereinafter set forth, in
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right of payment to the prior payment in full of all Senior Indebtedness of the
Company.
SECTION 4.02. (a) In the event of any insolvency or bankruptcy proceedings,
and any receivership, liquidation, reorganization or other similar proceedings
in connection therewith, relative to the Company or to its creditors, as such,
or to its property, and in the event of any proceedings for voluntary
liquidation, dissolution or other winding up of the Company, whether or not
involving insolvency or bankruptcy, then:
(i) the holders of all Senior Indebtedness shall be entitled to
receive payment in full of all principal of, premium, if any, and interest
on all Senior Indebtedness before the holders of the Debentures are
entitled to receive any payment on account of principal of, or interest
upon the Debentures; and
(ii) to that end (but subject to the power of a court of competent
jurisdiction to make other equitable provision reflecting the rights
conferred by the provisions of this Indenture upon the Senior Indebtedness
and the holders thereof with respect to the Debentures and the holders
thereof by a lawful plan of reorganization under applicable bankruptcy law)
the holders of Senior Indebtedness shall be entitled to receive for
application in payment thereof any payment or distribution of any kind or
character, whether in cash or property or securities, which may be payable
or deliverable in any such proceedings in respect of the Debentures, except
securities which are subordinate and junior in right of payment to the
payment of all Senior Indebtedness then outstanding.
(b) In the event that the Debentures are declared due and payable
before their expressed maturity because of the occurrence of any Event of
Default specified in Section 8.01 (under circumstances when the provisions of
the foregoing clause (a) shall not be applicable), and such declaration shall
not have been rescinded or annulled, the holders of Senior Indebtedness
becoming due and payable because of the occurrence of such Event of Default
shall be entitled to receive payment in full of all principal of, premium, if
any, and interest on such Senior Indebtedness before the holders of the
Debentures are entitled to receive any payment on account of the principal of
or interest upon the Debentures.
(c) If an Event of Default, to the knowledge of the principal
executive officer or of the principal financial officer of the Company, shall
occur and be continuing under any instrument evidencing Senior
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Indebtedness or under which Senior Indebtedness was issued (under circumstances
when the provisions of the foregoing clauses (a) and (b) shall not be
applicable), the holders of the Debentures shall not be entitled to receive any
payment on account of principal of or interest upon the Debentures unless and
until such Event of Default shall have been waived or cured or payment in full
of all principal of, premium, if any, and interest on all Senior Indebtedness
due and payable shall have been made.
(d) No holder of Senior Indebtedness shall be prejudiced in his right
to enforce subordination of the Debentures by any act or failure to act on the
part of the Company.
(e) Subject to the payment in full of all Senior Indebtedness, the
holders of the Debentures (equally and ratably with the holders of all other
subordinated indebtedness which by its terms ranks on a parity with the
Debentures and is entitled to like rights or subrogation) shall be subrogated
to the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until the principal of and interest on the Debentures shall be paid in full and
no payments or distributions to the Senior Indebtedness pursuant to the
provisions of this Article shall, as between the Company, its creditors other
than the holders of Senior Indebtedness, and the holders of the Debentures, be
deemed to be a payment by the Company to or on account of Senior Indebtedness,
it being understood that the provisions of this Article are and are intended
solely for the purpose of defining the relative rights of the holders of the
Debentures, on the one hand, and the holders of the Senior Indebtedness, on the
other hand, and nothing contained in this Article or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
holders of the Debentures, the obligation of the Company, which is
unconditional and absolute, to pay to the holders of the Debentures the
principal of and interest on the Debentures as and when the same shall become
due and payable in accordance with their terms, or to affect relative rights of
the holders of the Debentures and creditors of the Company other than the
holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article, of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
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(f) The Company shall give prompt written notice to the Trustee of any
proceeding of the nature referred to in paragraph (a) of this Section. Upon
any distribution of assets or securities of the Company in any proceedings of
the nature referred to in paragraph (a) of this Section, the Trustee and the
holders of the Debentures shall be entitled to rely upon any order or decree of
a court of competent jurisdiction in which such proceedings are pending, and
the Trustee, subject to the provisions of Section 9.01 hereof, and the holders
of the Debentures shall be entitled to rely upon a certificate of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the holders of the Debentures for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article. In the event that the
Trustee determines, in good faith, that further evidence is required with
respect to the right of any person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Section, the
Trustee may request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by
such person, as to the extent to which such person is entitled to participate
in such payment or distribution and as to other facts pertinent to the rights
of such person under this Article and if such evidence is not furnished, the
Trustee may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment.
(g) In the event that any direct or indirect payment or distribution
shall be received by the Trustee or by any holder of the Debentures in
contravention of the provisions of this Section, then such payments or
distributions shall be held for the benefit of, and shall be paid over to, the
holders of the Senior Indebtedness at the time outstanding or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, as their respective interests may appear,
for application to the pro rata payment of all such Senior Indebtedness until
all such Senior Indebtedness shall have been paid in full, after giving effect
to any concurrent payment or distribution to the holders of such Senior
Indebtedness.
SECTION 4.03. Nothing contained in this Article or elsewhere in this
Indenture, or in the Debentures, shall prevent (a) the Company, at any time
except under the conditions described in Section 4.02 or during the pendency of
any proceedings of the nature referred to in paragraph
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(a) therein, from making payments at any time of principal of or interest on
the Debentures, or (b) the application by the Trustee or any paying agent of
any moneys deposited with it hereunder to the payment of or on account of the
principal of or interest on the Debentures.
SECTION 4.04. Each holder of a Debenture by his acceptance thereof (i)
hereby irrevocably authorizes and empowers (but without imposing any obligation
on) each holder of any Senior Indebtedness at the time outstanding, and such
holder's representatives, to demand, sue for, collect, receive and receipt for
such holder's ratable share of payments and distributions in respect of the
Debentures which are required to be paid or delivered to the holders of Senior
Indebtedness as provided in Section 4.02, and to file and prove all claims
therefor and take all such other action (including the right to vote such
holder's ratable share of such Debenture) in the name of the holder, or
otherwise, as such holder or such holder's representatives may determine to be
necessary or appropriate for the enforcement of the provisions of Section 4.02;
and (ii) agrees to execute and deliver to each holder of Senior Indebtedness,
and such holder's representatives, all such further instruments confirming the
authorization hereinabove set forth, and all such powers of attorney, proofs of
claim, assignments of claim and other instruments, and to take all such other
action as may be requested by such holder or such holder's representatives in
order to enable such holder to enforce all claims upon or in respect of such
holder's ratable share of the Debentures.
Each holder of a Debenture by his acceptance thereof acknowledges and
agrees that the Debentures are subordinate to Senior Indebtedness in the manner
herein set forth, and that each holder of Senior Indebtedness (whether such
Senior Indebtedness is heretofore or hereafter existing) shall have acquired or
will acquire Senior Indebtedness in reliance upon the covenants and provisions
contained in this Indenture and the Debentures.
Each holder of a Debenture by his acceptance thereof authorizes and directs
the Trustee in his behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Indebtedness and
the holders of Debentures, the subordination as provided in this Article and
appoints the Trustee his attorney in fact for any and all such purposes.
SECTION 4.05. Notwithstanding the provisions of this Article or any other
provision of this Indenture, but subject to the provisions of Section 9.01, the
Trustee and any paying agent shall not be charged with knowledge of the
existence of any Senior Indebtedness, or of any event of
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default under any instrument evidencing any Senior Indebtedness or under which
Senior Indebtedness was issued, or of any facts which would prohibit the making
of any payment of moneys to or by the Trustee or any such paying agent, unless
and until the Trustee or such paying agent shall have received written notice
thereof from the Company or the holders of at least 10% in principal amount of
any kind or category of any Senior Indebtedness or the representative or
representatives of such holders; and the Company shall give prompt written
notice to the Trustee and any paying agent of any such default or facts.
Notwithstanding the provisions of this Article or any other provision of
this Indenture, but subject to the provisions of Section 9.01, the Trustee and
any paying agent shall not be charged with knowledge of the curing of any such
default or of the elimination of the act or condition preventing any such
payment unless and until the Trustee or such paying agent shall have received
an Officers' Certificate to such effect; and the Company shall deliver such an
Officers' Certificate promptly after the curing of any such default or the
elimination of such act or condition.
SECTION 4.06. The Trustee shall be entitled to all the rights set forth in
this Article with respect to any Senior Indebtedness which may at any time be
held by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Section 9.13, or elsewhere in this Indenture, shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
9.06.
SECTION 4.07. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness and shall not be liable to any such holders
if it shall mistakenly pay over or distribute to holders of Debentures or the
Company or any other person moneys or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 4.08. The term "Trustee" as used in this Article shall (unless the
context shall otherwise require) be construed as extending to and including any
paying agent, appointed by the Company and acting hereunder, within its meaning
as fully for all intents and purposes as if such paying agent were named in
this Article in place of the Trustee, provided, however, that Sections 4.05,
4.06 and 4.07 shall not apply to the Company if it acts as paying agent.
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ARTICLE FIVE.
CONVERSION OF DEBENTURES.
SECTION 5.01. Subject to and upon compliance with the provisions of this
Article Five, at the option of the holder, the principal amount of any
Debenture or of any portion of any Debenture which is a multiple of $1,000,
may, at any time before the close of business on July 1, 2001 (or, in case such
Debenture or portion thereof shall be called for redemption prior to such date
and the Company does not default in timely payment of the redemption price,
then until the close of business on the date fixed for redemption), be
converted at 100% of the principal amount of such Debenture or such portion
thereof (as the case may be) into Common Shares of the Company at the
conversion rate in effect at the time of conversion, determined as hereinafter
provided.
SECTION 5.02. Debentures to be converted shall be surrendered on any
Business Day at the office or agency of the Company to be maintained in
accordance with Section 6.02, together with the conversion notice (in the form
provided on the Debentures) duly executed. Debentures shall (if required by
the Company or the Trustee) be accompanied by proper assignments thereof to the
Company or in blank for transfer together with any requisite federal and state
transfer tax stamps.
As promptly as practicable after the due surrender of Debentures for
conversion in the manner hereinbefore provided, the Company shall issue and
deliver at said office or agency to such holder, or on his written order, a
certificate or certificates for the number of full shares issuable upon such
conversion, and shall pay cash as provided in Section 5.03 hereof in respect of
any fraction of a Common Share otherwise issuable upon such conversion.
Subject to the provisions of Section 5.05 hereof, such conversion shall be
deemed to have been effected immediately prior to the close of business on the
Business Day on which such Debenture, together with the conversion notice
thereon duly executed, shall have been surrendered as aforesaid, and at the
conversion rate in effect at the close of business on such Business Day, and
the person or persons in whose name or names any certificate or certificates
for Common Shares shall be issuable upon such conversion shall be deemed to
have become at the close of business on said date the holder or holders of
record of the shares represented thereby, except that if the stock transfer
books shall be closed on the day of such surrender then such persons shall be
deemed to have become the holder or holders of record of such shares
immediately prior to the close of business on the day when such transfer books
shall be reopened, and such conversion shall be at the conversion
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rate in effect at such time. No adjustment shall be made for interest accrued
since the last preceding interest payment date on any Debenture or portion
thereof that shall be converted, or for dividends on any Common Shares that
shall be issued upon the conversion of such Debenture; provided, however, that,
subject to the provisions of Article Four, nothing contained herein shall alter
or impair the obligation of the Company to pay interest on Debentures on any
interest payment date notwithstanding the conversion of such Debentures between
the close of business on the record date (as such term is defined in Section
2.04) next preceding such interest payment date and such interest payment date.
The holder of any Debenture shall be entitled at his option to exercise the
foregoing conversion privilege in respect of any part of the principal amount
thereof, and to receive a new Debenture or Debentures in a denomination or
denominations equal to the unconverted and unredeemed portion of the principal
amount of the Debenture so converted. Holders of Debentures of a denomination
of $1,000 may convert said Debentures in whole only. In such case the Trustee
shall cancel the surrendered Debenture and it shall authenticate and deliver
such new Debenture or Debentures to such Debentureholder.
SECTION 5.03. The Company shall not be required to issue fractions of
Common Shares upon conversions of Debentures. If any fractional Common Share
would otherwise be deliverable upon the conversion of any Debenture or
Debentures, the Company shall pay an amount in cash equal to the current market
price of such fractional share, calculated to the nearest cent. If more than
one Debenture shall be surrendered for conversion at one time by the same
holder, the number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal amount of the
Debentures so surrendered.
SECTION 5.04. The initial conversion rate at which Common Shares shall be
issuable upon conversion of Debentures shall be one Common Share for each $8.75
principal amount of Debentures. The actual conversion rate at any time, or
from time to time, shall be the initial conversion rate adjusted as provided in
Section 5.05.
SECTION 5.05. The initial conversion rate shall be adjusted from time to
time as follows:
(a) In case the Company shall, at any time or from time to time while
any of the Debentures are outstanding, (i) pay a dividend in Common Shares,
(ii) subdivide its outstanding Common Shares, (iii) combine its outstanding
Common Shares into a smaller number of
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shares, or (iv) issue by reclassification of its Common Shares any shares
of stock of the Company, the conversion rate in effect immediately prior
thereto shall be adjusted as provided below so that the holder of any
Debenture thereafter surrendered for conversion shall be entitled to
receive the number of Common Shares or other securities of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described above, had such Debenture been
converted immediately prior to the happening of such event. An adjustment
made pursuant to this subdivision (a) shall become effective in the case of
a dividend, immediately after the opening of business on the day following
the record date for the determination of shareholders entitled to receive
such dividend, and shall become effective in the case of a subdivision,
combination or reclassification immediately after the opening of business
on the day following the day when such subdivision, combination or
reclassification, as the case may be, becomes effective.
(b) In case the Company shall, at any time or from time to time while
any of the Debentures are outstanding, issue rights or warrants to all
holders of Common Shares entitling them (for a period expiring within 45
days after the record date mentioned below) to subscribe for or purchase
Common Shares at a price per share less than the current market price per
share of a Common Share (determined as provided in subdivision (d) below)
at the record date mentioned below, the conversion rate in effect
immediately prior to the record date mentioned below shall be adjusted by
multiplying the number of Common Shares into which such principal amount of
Debentures was theretofore convertible by a fraction, of which the
numerator shall be the number of Common Shares outstanding on the date of
issuance of such rights or warrants plus the number of additional Common
Shares offered for subscription or purchase, and of which the denominator
shall be the number of Common Shares outstanding on the date of issuance of
such rights or warrants plus the number of shares which the aggregate
offering price of the total number of shares so offered would purchase at
such current market price. Such adjustment shall become effective
immediately after the opening of business on the day following the record
date for the determination of shareholders entitled to receive such rights
or warrants.
(c) In case the Company shall, at any time or from time to time while
any of the Debentures are outstanding, distribute to all holders of Common
Shares evidences of its indebtedness or
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securities or assets (excluding cash dividends or cash distributions
payable out of consolidated earnings or earned surplus, or dividends
payable in Common Shares) or rights to subscribe (excluding those referred
to in subdivision (b) above and excluding rights to subscribe to the
Debentures), the conversion rate in effect immediately prior to the record
date mentioned below shall be adjusted by multiplying the number of Common
Shares into which such principal amount of Debentures was theretofore
convertible by a fraction, of which the numerator shall be the current
market price per Common Share (determined as provided in subdivision (d)
below) on the record date for such distribution, and of which the
denominator shall be such current market price per Common Share, less the
then fair market value (as determined by the Board of Directors, whose
determination shall be conclusive) of the portion of the assets or
securities or evidences of indebtedness so distributed or of such
subscription rights applicable to one Common Share. Such adjustment shall
become effective immediately after the opening of business on the day
following the record date for the determination of shareholders entitled to
receive such distribution. For the purposes of this subdivision (c)
consolidated earnings or earned surplus shall be computed by adding thereto
all charges against earned surplus on account of dividends paid in Common
Shares in respect of which the conversion rate has been adjusted, all as
determined by the independent public accountants then regularly auditing
the accounts of the Company, whose determination shall be conclusive.
(d) For the purpose of any computation under subdivisions (b) and (c)
above, the current market price per Common Share at any date shall be
deemed to be the average of the current market prices for the ten
consecutive Business Days commencing fifteen calendar days before the day
in question.
(e) No adjustment in the conversion rate shall be made by reason of
the issuance in exchange for cash, property or services of Common Shares,
or any securities convertible into or exchangeable for Common Shares, or
carrying the right to purchase any of the foregoing.
(f) No adjustment in the conversion rate shall be required unless such
adjustment would require an increase or decrease of at least 50 cents in
such rate; provided, however, that any adjustments which by reason of this
subdivision (f) are not required to be made shall be carried forward and
taken into account in any subsequent
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adjustment. All calculations under this Article Five shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case may
be.
SECTION 5.06. Whenever a conversion rate shall be required to be adjusted
by the provisions of Section 5.05 hereof, the Company shall forthwith file with
the Trustee, with the agency maintained by the Company for the conversion of
Debentures pursuant to Section 6.02, and with each transfer agent for the
Common Shares, a Certificate of Independent Public Accountants showing the
adjusted conversion rate determined as provided in said Section 5.05, stating
that such adjusted conversion rate conforms to the requirements of said Section
5.05 and setting forth a brief statement of the facts requiring the adjustment
of such conversion rate. Such Certificate shall be conclusive evidence of the
correctness of such adjustment and the Trustee shall be fully protected in
relying on such Certificate, subject to the provisions of Section 9.01.
Promptly after delivery of such Certificate, the Company shall prepare a notice
of such adjustment of the conversion rate setting forth the adjusted conversion
rate and the date on which such adjustment becomes effective, and shall mail a
copy of such notice to the holder of each Debenture at his last address
appearing on the Register of the Company.
SECTION 5.07. In case of any consolidation of the Company with, or merger
of the Company into, another corporation (except for a merger or a
consolidation in which the Company is the continuing corporation), or in case
of any sale, conveyance or lease to another corporation of the property of the
Company as an entirety or substantially as an entirety in connection with which
the Company is dissolved, the Company, or such successor, purchasing or lessee
corporation, as the case may be, shall execute with the Trustee a supplemental
indenture satisfactory in form to the Trustee (which shall conform to the Trust
Indenture Act of 1939 as in force on the date of the execution thereof)
providing that the holder of each Debenture then outstanding shall have the
right thereafter to convert such Debenture into the kind and amount of shares
of stock and other securities and property which he or she would have owned or
have been entitled to receive immediately after such consolidation, merger,
sale, conveyance or lease had such Debenture been converted immediately prior
to the effective date of such consolidations, merger, sale, conveyance or
lease. Such supplemental indenture shall become effective immediately after
such effective date of any such consolidation, merger, sale, conveyance or
lease and shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article Five. The
provisions of this
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Section 5.07 shall similarly apply to successive consolidation, mergers, sales,
conveyances or leases.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any such supplemental indenture
relating either to the kind or amount of shares of stock or securities or
property receivable by Debentureholders upon the conversion of their Debentures
after any such consolidations, merger, sale, conveyance or lease, or to any
adjustment to be made with respect thereto. Upon the happening of any such
event, the Company shall deliver or cause to be delivered to the Trustee a
Certificate of Independent Public Accountants with respect thereto, and such
Certificate shall be conclusive evidence of the correctness of any of the
above-mentioned provisions contained in any such supplemental indenture and the
Trustee shall be protected in relying thereupon, subject to the provisions of
Section 9.01.
SECTION 5.08. The Company covenants that it will at all times reserve and
keep available out of its authorized Common Shares, solely for the purpose of
issuance upon conversion of the Debentures as herein provided, such number of
Common Shares as shall be issuable upon the conversion of all outstanding
Debentures; and if at any time the number of authorized Common Shares shall not
be sufficient to effect the conversion of all outstanding Debentures at the
conversion rate then in effect, the Company will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued Common Shares to such number of shares as shall be sufficient for such
purpose.
The Company covenants that, upon conversion of the Debentures as herein
provided, there will be credited to the Common Share account from the
consideration for which the Common Shares issuable upon such conversion are
issued an amount per Common Share so issued as determined by the Board of
Directors, which amount shall not be less than the amount required by law and
by the Company's Certificate of Incorporation, as amended, as in effect on the
date of such conversion. For the purposes of this covenant the principal
amount of the Debentures converted, less the amount of cash paid in lieu of
issuing fractional shares on such conversion, shall be deemed to be the amount
of consideration for which the Common Shares issuable upon such conversion are
issued.
Before taking any action which would cause an adjustment reducing the
conversion price below the then par value (if any) of the Common Shares
issuable upon conversion of the Debentures, the Company will
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take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable Common Shares at such adjusted conversion price.
The Company covenants that all Common Shares which may be issued upon
conversion of the Debentures will, when issued, be fully paid and
nonassessable.
SECTION 5.09. The Company covenants that if any Common Shares reserved or
to be reserved for the purpose of conversion of the Debentures hereunder
require registration with or approval of any governmental authority or the
taking of any other action under any Federal or State law, or listing upon any
national securities exchange, before such shares may be legally issued upon
conversion, the Company will in good faith and at its own expense as
expeditiously as possible endeavor to secure such registration, approval or
listing or take such other action, as the case may be.
SECTION 5.10. The issuance of certificates for Common Shares upon the
conversion of Debentures shall be made without charge to the converting
Debentureholder for any tax in respect of the issue thereof (except taxes in
the nature of exchange or currency control measures or which, for any other
reason, are payable by reason of the citizenship or residency status of any
person surrendering Debentures for conversion or receiving Common Shares,
securities or other property upon conversion). The Company shall not, however,
be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of certificates in any name other than
that of the holder of any Debenture converted, and the Company shall not be
required to issue or deliver such certificates unless and until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
SECTION 5.11. All Debentures surrendered for conversion shall be delivered
to the Trustee for cancellation and disposed of as provided for in Section 2.08
hereof
SECTION 5.12. The Trustee shall not at any time be under any duty or
responsibility to any holder of a Debenture to make or cause to be made any
adjustment of the conversion rate provided for in this Article, or to determine
whether any facts exist which may require any such adjustment, or with respect
to the nature or extent of any such adjustment, when made, or with respect to
the method employed or to be
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employed in making the same. The Trustee shall not be accountable with respect
to the validity or value (or the kind or amount) of any Common Shares or of any
securities or property which may at any time be issued or delivered upon the
conversion of any Debenture, and it makes no representation with respect
thereto. The Trustee shall not be responsible for any failure of the Company
to make any cash payment or issue, transfer or deliver any shares of stock or
stock certificates or other securities or property upon the surrender of any
Debenture for the purpose of conversion, and, subject to Section 9.01, it
assumes no duty or obligation with respect thereto.
If any question shall at any time arise with respect to the conversion rate
of the Common Shares such question shall be conclusively determined by a
Certificate of Independent Public Accountants, and such determination shall be
binding upon the Company and upon the holders of the Debentures.
SECTION 5.13. Until the conversion of Debentures shall have become
effective as provided in Section 5.02 hereof, the holders of such Debentures
shall not be entitled to any rights of shareholders of the Company with respect
to such Debentures.
ARTICLE SIX.
PARTICULAR COVENANTS OF THE COMPANY.
SECTION 6.01. The Company will duly and punctually pay or cause to be paid
the principal of and interest on each of the Debentures at the time and place
and in the manner provided in the Debentures to or upon the written order of
the holders thereof.
SECTION 6.02. So long as any of the Debentures remain outstanding, the
Company will maintain in the Borough of Manhattan, The City and State of New
York, an office or agency where the Debentures may be presented for payment, an
office or agency where the Debentures may be presented for registration of
transfer or exchange as in this Indenture provided, an office or agency where
the Debentures may be presented for conversion and an office or agency where
notices and demands to or upon the Company in respect of the Debentures or of
this Indenture may be served. The Company will give to the Trustee notices of
the location of each such office or agency and of any change of location
thereof. The Company hereby initially appoints the corporate trust office of
United States Trust Company of New York in the Borough of Manhattan, The City
of New York as its office or agency for such purposes. In case the Company
shall fail to maintain an office or agency
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for any such purpose or shall fail to give such notice of the location or of
any change in the location thereof, such office or agency for such purpose
shall be the corporate trust office of the Trustee.
SECTION 6.03. (a) If the Company shall appoint a paying agent other than
the Trustee, such paying agent shall be a bank or trust company of the
character and qualifications set forth in clauses (b) and (c) of Section 9.09
and the Company will cause such paying agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section,
(1) that it will hold all sums held by it as such agent for the
payment of the principal of or interest on the Debentures (whether such
sums have been paid to it by the Company or by any other obligor on the
Debentures) in trust for the benefit of the holders of the Debentures, and
will notify the Trustee of the receipt of sums to be so held, and
(2) that it will give the Trustee notice of any failure by the Company
(or by any other obligor on the Debentures) to make any payment of the
principal of or interest on the Debentures when the same shall be due and
payable.
(b) If the Company shall act as its own paying agent, it will, on or before
each due date of the principal of or interest on the Debentures, set aside,
segregate and hold in trust for the benefit of the holders of the Debentures, a
sum sufficient to pay such principal or interest so becoming due. The Company
will promptly notify the Trustee of any failure to take such action.
(c) Anything in this Section to the contrary notwithstanding, the Company
may, at any time, for the purpose of obtaining a satisfaction and discharge of
this Indenture, or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust by it or the paying agent as required by this Section,
such sums to be held by the Trustee upon the trusts herein contained.
(d) Anything in this Section to the contrary notwithstanding, the agreement
to hold sums in trust as provided in this Section is subject to the provisions
of Sections 14.03 and 14.04.
SECTION 6.04. The Company will deliver to the Trustee, on or before a date
not more than four months after the end of each fiscal year of the Company
ending after the date hereof, an Officers' Certificate, which shall conform to
the provisions of Section 16.04, stating that a review of the activities of the
Company and of its Subsidiaries during the
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preceding fiscal year has been made under the supervision of the signing
officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every such covenant in this Indenture contained and is not in default in the
performance and observance of any of the terms, provisions and conditions
hereof, or, if the Company shall be in default, specifying all such defaults
and the nature thereof of which he may have knowledge.
SECTION 6.05. The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, in the manner provided in Section 9.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 6.06. The Company will, upon request of the Trustee, execute and
deliver such further instruments and do such further acts as may reasonably be
necessary or proper to carry out more effectually the purposes of this
Indenture.
ARTICLE SEVEN.
HOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE.
SECTION 7.01. The Company covenants and agrees that it and every obligor
upon the Debentures will furnish or cause to be furnished to the Trustee within
30 days after each interest payment date, and at such other times as the
Trustee may request in writing, within 30 days after receipt by the Company of
any such request, a list in such form as the Trustee may reasonably require
containing all information in the possession or control of the Company, and of
any paying agents of the Company other than the Trustee, as to the names and
addresses of the holders of Debentures obtained (in the case of each list other
than the first list) since the date as of which the next previous list was
furnished, but so long as the Trustee is the Registrar no such list need be
furnished. Any such list may be dated as of the date not more than 15 days
prior to the time such information is furnished or caused to be furnished, and
need not include information received after such date.
SECTION 7.02. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debentures (i) contained in the most recent
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list furnished to it as provided in Section 7.01 and (ii) received by it in the
capacity of paying agent or Registrar (if so acting) hereunder.
The Trustee may destroy any list furnished to it as provided in Section
7.01 upon receipt of a new list so furnished.
(b) In case three or more holders of Debentures (hereinafter referred to as
"applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debenture for a period of
at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Debentures with respect to their rights under this Indenture or under the
Debentures and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five business days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of
this Section, or
(ii) inform such applicants as to the approximate number of holders of
Debentures whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a)
of this Section, and as to the approximate cost of mailing to such holders
of the Debentures the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each holder of the Debentures whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section, a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender the Trustee shall mail to such
applicants and file with the Securities and Exchange Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the
best interests of the holders of the Debentures or would be in violation of
applicable law. Such written statement shall specify the basis of such
opinion. If said Commission, after opportunity for a hearing upon the
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objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, said Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies
of such material to all such holders of the Debentures with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Each and every holder of the Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any paying agent shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the holders
of Debentures in accordance with the provisions of subsection (b) of this
Section, regardless of the source from which such information was derived, and
that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under said subsection (b).
SECTION 7.03. (a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is required to file the same with the
Securities and Exchange Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as said Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with said Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
or, if the Company is not required to file information, documents or reports
pursuant to either of such Sections, then to file with the Trustee and said
Commission, in accordance with the rules and regulations prescribed from time
to time by said Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934 in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in
such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Securities and Exchange Commission, in accordance with the rules and
regulations prescribed from time to time by said Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations.
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(c) The Company covenants and agrees to transmit by mail to all holders of
Debentures, as the names and addresses of such holders appear upon the
Register, within 30 days after the filing thereof with the Trustee, any
information, documents and reports, or in the sole discretion of the Company
summaries thereof, required to be filed by the Company pursuant to subsections
(a) and (b) of this Section as may be required by the rules and regulations
prescribed from time to time by the Securities and Exchange Commission.
SECTION 7.04. (a) On or before July 15, 1995, and on or before July 15, in
every year thereafter, so long as any Debentures are outstanding hereunder, the
Trustee shall transmit to the holders of the Debentures as hereinafter in this
Section provided, a brief report dated as of May 15 of the year in which such
report is made with respect to:
(i) its eligibility under Section 9.09, and its qualification under
Section 9.08, or in lieu thereof, if to the best of its knowledge it has
continued to be eligible and qualified under such Sections, a written
statement to such effect;
(ii) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Debentures, on any property or funds held or collected
by it as Trustee, except that the Trustee shall not be required (but may
elect) to state such advances if such advances so remaining unpaid
aggregate not more than one-half of one per cent of the principal amount of
the Debentures outstanding on the date of such report;
(iii) the amount, interest rate, and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Debentures) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in paragraph (2), (3), (4) or
(6) of subsection (b) of Section 9.13;
(iv) the property and funds, if any, physically in the possession of
the Trustee, as such, on the date of such report;
(v) any additional issue of Debentures which the Trustee has not
previously reported; and
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(vi) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Debentures, except action in respect of a
default, notice of which has been or is to be withheld by it in accordance
with the provisions of Section 8.08.
(b) The Trustee shall transmit to the holders of the Debentures, as
hereinafter provided, a brief report with respect to the character and amount
of any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such) since the date of
the last report transmitted pursuant to the provisions of subsection (a) of
this Section or (if no such report has yet been so transmitted, since the date
of execution of this Indenture) for the reimbursement of which it claims or may
claim a lien or charge prior to that of the Debentures on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this subsection, except that the Trustee shall not be required (but
may elect) to report such advances if such advances remaining unpaid at any
time aggregate ten percent or less of the principal amount of Debentures
outstanding at such time, such report to be transmitted within 90 days after
such time.
(c) Reports pursuant to this Section shall be transmitted by mail to all
holders of Debentures, as the names and addresses of such holders appear upon
the Register.
(d) A copy of each such report shall, at the time of such transmission to
holders of Debentures, be filed by the Trustee with each stock exchange upon
which the Debentures are listed and also with the Securities and Exchange
Commission.
ARTICLE EIGHT.
REMEDIES ON DEFAULT.
SECTION 8.01. In case one or more of the following Events of Default shall
have occurred and be continuing, that is to say:
(a) default in the payment of the principal of any of the Debentures
as and when the same shall become due and payable, whether at maturity or
upon redemption or upon declaration or otherwise, and whether or not such
payment is prohibited by the provisions of Section 4.02; or
(b) default in the payment of any installment of interest upon any of
the Debentures as and when the same shall become due and
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payable, and continuance of such default for a period of 30 days (it being
understood that if the entire amount of such payment of interest is
deposited by the Company with the Trustee, or with another paying agent
duly appointed hereunder, before the expiration of such period of thirty
days, such default shall no longer be considered to be continuing under
this Indenture), whether or not such payment is prohibited by the
provisions of Section 4.02; or
(c) default in the conversion of any of the Debentures as and when
election for such conversion shall have been made pursuant to Section 5.02,
and continuance of such default for a period of 60 days after the date on
which written notice of such default, requiring the Company to remedy the
same, shall have been given to the Company by the Trustee by registered
mail, or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Debentures at the time outstanding; or
(d) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture contained for a period of 60 days after the
date on which written notice of such failure, requiring the Company to
remedy the same, shall have been given to the Company by the Trustee, or to
the Company and the Trustee by the holders of at least 25% in aggregate
principal amount of the Debentures at the time outstanding; or
(e) a default under any indenture or instrument evidencing or under
which the Company has at the date of this Indenture or shall hereafter have
any indebtedness for borrowed money shall happen and be continuing and such
indebtedness shall have been accelerated so that the same shall be or
become due and payable prior to the date on which the same would otherwise
have become due and payable, and such acceleration shall not be rescinded
or annulled within ten days after notice thereof shall have been given to
the Company by the Trustee by registered mail or to the Company and the
Trustee by the holders of at least 25% in aggregate principal amount of the
Debentures at the time outstanding; provided, however, that if such default
under such indenture or instrument shall be remedied or cured by the
Company, or waived by the holders of such indebtedness, then the Event of
Default hereunder by reason thereof shall be deemed likewise to have been
thereupon remedied, cured or waived without further action upon the part of
either the Trustee or any of the holders of the Debentures, notwithstanding
that the acceleration of
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the Debentures as hereinafter provided may have occurred and an action or
proceeding commenced as a result thereof; and provided further, that the
Trustee, subject to Section 9.01, shall not be charged with knowledge of
any such default unless written notice of such default shall have been
given to the Trustee by the Company, by the trustee then acting under any
indenture or other instrument under which such default shall have occurred
or by the holders of at least five percent in aggregate principal amount of
the Debentures at the time outstanding; or
(f) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of the
Company under the Federal bankruptcy laws, as now or hereafter constituted,
or any other similar applicable Federal or State law, and such decree or
order shall have continued undischarged and unstayed for a period of 60
days; or a decree or order of a court having jurisdiction in the premises
for the appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of the Company or of all or substantially all of
its property, or for the winding up or liquidation of its affairs, shall
have been entered, and such decree or order shall have continued
undischarged and unstayed for a period of 60 days; or
(g) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking reorganization under the Federal bankruptcy laws, as now or
hereafter constituted, or any other similar applicable Federal or State
law, or shall consent to the filing of any such petition, or shall consent
to the appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due;
then, and in each and every such case, unless the principal of all the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debentures
then outstanding, by notice in writing to the Company (and to the Trustee if
given by holders), may declare the principal of all the Debentures to be due
and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, anything in this Indenture or in the
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Debentures contained to the contrary notwithstanding. This provision, however,
is subject to the condition that if, at any time after the principal of the
Debentures shall have been so declared due and payable, and before any judgment
or decree for the payment of the moneys due shall have been obtained or entered
as hereinafter provided, the Company shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest upon all
the Debentures and the principal of any and all Debentures which shall have
become due otherwise than by acceleration (with interest upon such principal
and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest, at the same rate as the
rate of interest specified in the Debentures, to the date of such payment or
deposit) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee, its agents, attorneys and counsel, and all other
expenses and liabilities incurred and all advances made by the Trustee except
as a result of its negligence or bad faith, and any and all defaults under the
Indenture, other than the nonpayment of the principal of Debentures which shall
have become due by acceleration, shall have been remedied--then and in every
such case the holders of a majority in aggregate principal amount of the
Debentures then outstanding, by written notice to the Company and the Trustee,
may waive all past defaults and rescind and annul such declaration and its
consequences; but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the Trustee and the holders of the Debentures shall, subject to any
determination in such proceeding, be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company, the Trustee and the holders of the Debentures shall continue as though
no such proceedings had been taken.
SECTION 8.02. The Company covenants that (i) in case default shall be made
in the payment of any installment of interest on any of the Debentures, as and
when the same shall become due and payable, and such default shall have
continued for a period of 30 days, or (ii) in case default shall be made in the
payment of the principal of any of the Debentures, as and when the same shall
have become due and payable, whether upon maturity or upon redemption or upon
declaration or
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otherwise--then upon demand of the Trustee, the Company will pay to the Trustee,
for the benefit of the holders of the Debentures, the whole amount that then
shall have become due and payable on all such Debentures for principal or
interest, or both, as the case may be, with interest upon the overdue principal
and (to the extent that payment of such interest is enforceable under
applicable law) upon overdue installments of interest at the same rate as the
rate of interest specified in the Debentures; and, in addition thereto, such
further amount as shall be sufficient to cover reasonable compensation to the
Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result
of its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Company or any other obligor upon the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor upon the Debentures wherever situated the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor upon the Debentures under
the Federal bankruptcy laws, as now or hereafter constituted, or any other
similar applicable Federal or State law, or in case a receiver or trustee shall
have been appointed for the property of the Company or such other obligor, or
in case of any other judicial proceedings relative to the Company or such other
obligor upon the Debentures, or to creditors or property of the Company or such
other obligor, the Trustee, irrespective of whether the principal of the
Debentures shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or
claims for the whole amount of principal and interest owing and unpaid in
respect of the Debentures, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including
any claim for reasonable compensation to the Trustee, its agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred, and
all advances made, by the Trustee except as a result of its negligence
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or bad faith) and of the holders of the Debentures allowed in any such judicial
proceedings relative to the Company or any other obligor upon the Debentures,
or to the creditors or property of the Company or such other obligor, and to
collect and receive any moneys or other property payable or deliverable on any
such claims, and to distribute all amounts received with respect to the claims
of the holders of the Debentures and of the Trustee on their behalf. Any
receiver, assignee or trustee in bankruptcy or reorganization or similar
official is hereby authorized by each of the holders of the Debentures to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of payments directly to the holders of the Debentures, to pay to the
Trustee such amount as shall be sufficient to cover reasonable compensation to
the Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result
of its negligence or bad faith. Each holder of a Debenture by his acceptance
thereof agrees that to the extent that an allowance out of the estate in any
such proceedings with respect to such reasonable compensation and reimbursement
may be denied to the Trustee or to its counsel and accountants or other agents
for any reason, the court may nevertheless allow such claim in any such
proceedings, and for the purposes of any plan of reorganization, may classify
the Trustee as a secured creditor having priority over the class in which the
holders are placed, and each holder further agrees that the Trustee, for the
purpose of such claim, shall, in priority to the holders (a) be entitled to
receive and collect such claim out of all distributions of securities or
dividends or other disbursements which would otherwise be made to the holders
in any such proceedings, and (b) have a lien upon all securities and other
considerations to which the holders may become entitled pursuant to any plan of
reorganization in any such proceedings; and the court may determine the method
and conditions under which any such distributions may be made and lien
enforced.
In any such proceeding, for the purpose of determining the number of claims
being voted by creditors, including, but not limited to, voting for the
election of a trustee in bankruptcy or a creditors' committee, each holder of
Debentures shall be treated as a separate creditor; and for such purpose, each
and every holder of a Debenture, by the acceptance thereof, shall be deemed to
have appointed the Trustee (and the Trustee is hereby so appointed) the true
and lawful attorney-in-fact of each respective holder of Debentures; provided,
however, that nothing herein contained shall be deemed to authorize or empower
the Trustee to consent to or accept or adopt, on behalf of any holder of
Debentures, any plan of reorganization or readjustment of the Company or
arrangement
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affecting the Debentures or the rights of any holder thereof and that the
appointment of the Trustee as attorney-in-fact, as stated above, shall not be
deemed to require it to vote.
All rights of action and of asserting claims under this Indenture, or under
any of the Debentures, may be enforced by the Trustee without the possession of
any of the Debentures, or the production thereof on any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Trustee shall be brought in its own name and as trustee of an express
trust, and any recovery shall be for the ratable benefit of the holders of the
Debentures, subject to the provisions of Article Four.
In case of an Event of Default hereunder the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture, or in aid of the exercise of any
power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
SECTION 8.03. Subject to the provisions of Article Four, any moneys
collected by the Trustee pursuant to Section 8.02 shall be applied in the order
following, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal or interest, upon
presentation of the several Debentures, and stamping thereon the payment, if
only partially paid, and upon surrender thereof, if fully paid:
FIRST: To the payment of costs and expenses of collection,
reasonable compensation to the Trustee, its agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee except as a result of its negligence or
bad faith;
SECOND: In case the principal of the Debentures shall not have
become due, to the payment of interest on the Debentures, in the order
of the maturity of the installment of such interest, with interest (to
the extent that such interest has been collected by the Trustee) upon
the overdue installments of interest at the same rate as the rate of
interest specified in the Debentures, such payments to be made ratably
to the persons entitled thereto, without discrimination or preference;
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THIRD: In case the principal of any Debentures shall have become
due, by declaration, or otherwise, to the payment of the whole amount
then owing and unpaid upon the Debentures for principal and interest,
with interest upon the overdue principal and (to the extent that such
interest has been collected by the Trustee) upon overdue installments
of interest at the same rate as the rate of interest specified in the
Debentures; and in case such moneys shall be insufficient to pay in
full the whole amount so due and unpaid upon the Debentures, then to
the payment of such principal and interest, without preference or
priority of principal over interest, or of interest over principal, or
of any installment of interest over any other installment of interest,
or of any Debenture over any other Debenture, ratably to the aggregate
of such principal and accrued and unpaid interest;
FOURTH: To the payment of the remainder, if any, to the Company,
its successors or assigns, or to whosoever may be lawfully entitled to
receive the same, or as a court of competent jurisdiction may
determine.
SECTION 8.04. No holder of any Debenture shall have any right by virtue or
by availing of any provisions of this Indenture to institute any action or
proceedings at law or in equity or in bankruptcy or otherwise, upon or under or
with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless such holder previously shall
have given to the Trustee written notice of an Event of Default and of the
continuance thereof, and unless also the holders of not less than 25% in
aggregate principal amount of the Debentures then outstanding shall have made
written request upon the Trustee to institute such action or proceedings in its
own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 8.06; it being understood and intended, and being expressly
covenanted by the taker and holder of every Debenture with every other taker
and holder and the Trustee, that no one or more holders of Debentures shall
have any right in any manner whatever by virtue or by availing himself of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Debentures, or to obtain or seek to obtain priority over or
preference to any other such holder or to
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enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all holders of Debentures. For
the protection and enforcement of the provisions of this Section, each and
every holder of the Debentures and the Trustee shall be entitled to such relief
as can be given either at law or in equity.
Notwithstanding any other provisions in this Indenture, but subject to the
provisions of Article Four, the right of any holder of any Debenture to receive
payment of the principal of and interest on such Debenture, on or after the
respective due dates expressed in such Debenture, or to institute suit for the
enforcement of (i) any such payment on or after such respective dates and (ii)
any right of conversion hereunder, shall not be impaired or affected without
the consent of such holder.
SECTION 8.05. All powers and remedies given by this Article to the Trustee
or to the holders of the Debentures shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default occurring and continuing as aforesaid shall
impair any such right or power or shall be construed to be a waiver of any such
default or an acquiescence therein; and, subject to the provisions of Section
8.04, every power and remedy given by this Article or by law to the Trustee or
to the holders of the Debentures may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the holders of the
Debentures.
SECTION 8.06. The holders of a majority in aggregate principal amount of
the Debentures at the time outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that such direction shall not be otherwise than in accordance with law
and the provisions of this Indenture, and, subject to the provisions of Section
9.01, the Trustee shall have the right to decline to follow any such direction
if the Trustee in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceeding so directed would involve it in a
personal liability; and provided further, that nothing in this Indenture
contained shall impair the right of the Trustee in its discretion to take any
action deemed proper by the Trustee and which is not inconsistent with such
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direction by the holders of the Debentures. Except as provided in this Section
and subject to the provisions of the last paragraph of Section 8.04, no holder
of any Debenture shall have the right to direct the time, method or place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee. Prior to any
declaration accelerating the maturity of the Debentures under Section 8.01, the
holders of a majority in aggregate principal amount of the Debentures at the
time outstanding may on behalf of the holders of all the Debentures waive any
past default or Event of Default hereunder and its consequences except a
default in the payment of the principal or interest on any of the Debentures.
SECTION 8.07. All parties to the Indenture agree, and each holder of any
Debenture by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any holder of any
Debenture, or group of holders, holding in the aggregate more than 10% in
principal amount of the Debentures outstanding, or to any suit instituted by
any holder for the enforcement of the payment of the principal of or interest
on any Debenture on or after the due date expressed in such Debenture.
SECTION 8.08. The Trustee shall, within 90 days after the occurrence of any
default, mail to all holders of Debentures, as the names and addresses of such
holders appear upon the Register, notice of all defaults known to the Trustee,
unless all such defaults shall have been cured before the giving of such notice
(the term "default" or "defaults" for purposes of this Section being defined to
be any event or events, as the case may be, specified in Section 8.01,
excluding any periods of grace provided for therein and irrespective of any
requirement for written notice provided for therein), provided, that, except in
the case of a default in the payment of principal of or interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee of directors or
Responsible Officers, or both, of the Trustee in good faith determines that the
withholding of such notice is in the interest of the holders of the Debentures.
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ARTICLE NINE.
CONCERNING THE TRUSTEE.
SECTION 9.01. The Trustee, prior to the occurrence of an Event of Default
and after the curing or waiving of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default has
occurred (which has not been cured or waived) the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon any certificates, opinions or Opinions of Counsel furnished
to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates, opinions or
Opinions of Counsel which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
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(c) the Trustee shall not be liable with respect to any action taken
or suffered 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 aggregate
principal amount of the Debentures at the time outstanding relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture.
None of the provisions of this Indenture shall be construed as requiring
the Trustee to expend or risk its own funds or otherwise to incur any personal
financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if there are reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
SECTION 9.02. Except as otherwise provided in Section 9.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the holders of the Debentures, pursuant to the
provisions of this Indenture, unless such holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred, therein or thereby;
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(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(f) The Trustee shall not be liable for any action taken by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture;
(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys; and
(h) The Trustee shall not be required to see that insurance on the
property of the Company is effected or maintained.
SECTION 9.03. The recitals contained herein and in the Debentures shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or the
Debentures, provided that the Trustee shall not be relieved of its duty to
authenticate Debentures only as authorized by this Indenture. The Trustee shall
not be accountable for the use or application by the Company of any of the
Debentures or of the proceeds thereof.
SECTION 9.04. The Trustee, any paying agent or any conversion agent or
Debenture Registrar, in its individual or any other capacity, may become the
owner or pledgee of Debentures with the same rights it would have if it were
not Trustee, or paying agent or conversion agent or Debenture Registrar.
SECTION 9.05. Subject to the provisions of Article Four and Section 14.04,
all moneys received by the Trustee or any paying agent shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by law. Neither the Trustee nor any paying agent shall be under any
liability for interest on any moneys received by it hereunder except such as it
may agree with the Company to pay thereon. So long as no Event of Default shall
have occurred and be continuing, all interest allowed on any such moneys
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shall be paid from time to time upon the written order of the Company, signed
by its Chairman, President or one of its Vice Presidents.
SECTION 9.06. The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable compensation,
and, except as otherwise expressly provided, the Company will pay or reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith. The Company also covenants to indemnify the
Trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on the part of the Trustee, arising
out of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim of
liability in the premises (except any liability incurred with negligence or bad
faith on the part of the Trustee). The obligations of the Company under this
Section to compensate the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture.
Such additional indebtedness shall have a prior claim to that of the Debentures
upon all property and funds held or collected by the Trustee as such or by any
receiver, assignee or trustee in bankruptcy or reorganization or similar
official pursuant to Section 8.02, except funds held in trust for the benefit
of the holders of particular Debentures.
Anything herein to the contrary notwithstanding, all costs and expenses,
including but not limited to attorneys' fees, incurred by the Trustee
subsequent to the filing of a petition for reorganization or any other
proceeding with respect to the Company under the Federal bankruptcy laws and
which are the result of actions required of the Trustee by the Trust Indenture
Act of 1939, shall constitute expenses of administration and shall be paid by
the Company as additional administration expenses of the reorganization or any
other such proceeding; provided, however, that nothing herein shall be deemed
to require the Trustee to continue to perform for or on behalf of the Company
or its successor any services other than those expressly required by the Trust
Indenture Act of 1939, unless and until the debtor in possession, trustee,
receiver or such other entity as shall succeed the Company in any
reorganization or any other such proceeding shall request in writing that the
Trustee continue, resume or assume the
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performance of such services as the Company's successor may request and the
Trustee shall have agreed in writing to continue, resume or assume the
performance of such services. All costs and expenses, including but not limited
to attorneys' fees, incurred by the Trustee as a result of its continuing,
resuming or assuming to perform services for the Company's successor shall
constitute expenses of administration and shall be paid by the Company's
successor as additional administration expenses of the reorganization or any
other such proceedings.
SECTION 9.07. Except as otherwise provided in Section 9.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering any action to be taken hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to
the Trustee, and such Certificate, in the absence of negligence or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted by it under the provisions of this Indenture upon
the face thereof and the Trustee shall be fully protected in relying on such
Certificate.
SECTION 9.08. (a) If the Trustee has or shall acquire any conflicting
interest, as defined in this Section, it shall, within 90 days after
ascertaining that it has such conflicting interest, either eliminate such
conflicting interest or resign in the manner and with the effect specified in
Section 9.10.
(b) In the event that the Trustee shall fail to comply with the provisions
of subsection (a) of this Section, the Trustee shall, within ten days after the
expiration of such 90-day period, transmit notice of such failure by mail to
all holders of Debentures, as the names and addresses of such holders appear
upon the Register of the Company.
(c) For the purposes of this Section the Trustee shall be deemed to have a
conflicting interest if
(1) the Trustee is trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the Company, are outstanding, unless such other indenture is
a collateral trust indenture under which the only collateral consists of
Debentures issued under this Indenture; provided that there shall be
excluded from the operation of this paragraph any other indenture or
indentures under which other
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securities, or certificates of interest or participation in other
securities, of the Company, are outstanding if (i) this Indenture and such
other indenture or indentures are wholly unsecured and such other indenture
or indentures are hereafter qualified under the Trust Indenture Act of
1939, unless the Securities and Exchange Commission shall have found and
declared by order pursuant to subsection (b) of Section 305 or subsection
(c) of Section 307 of the Trust Indenture Act of 1939 that differences
exist between the provisions of this Indenture and the provisions of such
other indenture or indentures which are so likely to involve a material
conflict of interest as to make it necessary in the public interest or for
the protection of investors to disqualify the Trustee from acting as such
under this Indenture and such other indenture or indentures, or (ii) the
Company shall have sustained the burden of proving, on application to the
Securities and Exchange Commission and after opportunity for hearing
thereon, that the trusteeship under this Indenture or such indenture or
indentures is not so likely to involve a material conflict of interest as
to make it necessary in the public interest or for the protection of
investors to disqualify the Trustee from acting as such under one of such
indentures;
(2) the Trustee or any of its directors or executive officers is an
obligator upon the Debentures issued under this Indenture or an underwriter
for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers, a
director, officer, partner, employee, appointee, or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (A) one individual may be a director and/or an executive officer of
the Trustee and a director and/or an executive officer of the Company, but
may not be at the same time an executive officer of both the Trustee and
the Company; (B) if and so long as the number of directors of the Trustee
in office is more than nine, one additional individual may be a director
and/or an executive officer of the Trustee and a director of the Company;
and (C) the Trustee may be designated by the Company or by an underwriter
for the Company to act in the capacity of transfer agent, registrar,
custodian, paying agent, escrow agent, or depositary, or in any other
similar capacity, or, subject to the
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provisions of paragraph (1) of this subsection (c), to act as trustee
whether under an indenture or otherwise;
(5) ten percent or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner, or
executive officer thereof, or twenty percent or more of such voting
securities is beneficially owned, collectively, by any two or more such
persons; or ten percent or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the Company or by any
director, partner, or executive officer thereof, or is beneficially owned,
collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, (A) five percent or more of
the voting securities, or ten percent or more of any other class of
security, of the Company, not including the Debentures issued under this
Indenture and securities issued under any other indenture under which the
Trustee is also trustee, or (B) ten percent or more of any class of
security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, five percent or more of the
voting securities of any person who, to the knowledge of the Trustee, owns
ten percent or more of the voting securities of, or controls directly or
indirectly or is under direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, ten percent or more of any
class of security of any person who, to the knowledge of the Trustee owns
fifty percent or more of the voting securities of the Company; or
(9) the Trustee owns on May 15 in any calendar year, in the capacity
of executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an aggregate of
twenty-five percent or more of the voting securities, or of any class of
security, of any person, the beneficial ownership of a specified percentage
of which would have constituted a conflicting interest under paragraph (6),
(7) or (8) of this subsection (c). As to any such securities of which the
Trustee acquired ownership through becoming executor, administrator or
testamentary trustee of an estate which included them, the provisions of
the preceding sentence shall not apply, for a period of
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two years from the date of such acquisition, to the extent that such
securities included in such estate do not exceed twenty-five percent of
such voting securities or twenty-five percent of any such class of
security. Promptly after May 15, in each calendar year, the Trustee shall
make a check of its holdings of such securities in any of the
above-mentioned capacities as of such May 15. If the Company fails to make
payment in full of principal of or interest on any of the Debentures when
and as the same become due and payable, and such failure continues for
thirty days thereafter, the Trustee shall make a prompt check of its
holdings of such securities in any of the above-mentioned capacities as of
the date of the expiration of such thirty-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph (9), all such
securities so held by the Trustee, with sole or joint control over such
securities vested in it, shall, but only so long as such failure shall
continue, be considered as though beneficially owned by the Trustee for the
purposes of paragraphs (6), (7) and (8) of this subsection (c).
The specifications of percentages in paragraphs (5) to (9), inclusive, of
this subsection (c) shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this subsection (c)
only, (A) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (B) an obligation shall be deemed to
be in default when a default in payment of principal shall have continued for
thirty days or more and shall not have been cured; and (C) the Trustee shall
not be deemed to be the owner or holder of (i) any security which it holds as
collateral security (as a trustee or otherwise) for an obligation which is not
in default as defined in clause (B) above, or (ii) any security which it holds
as collateral security under this Indenture irrespective of any default
hereunder, or (iii) any security which it holds as agent for collection, or as
custodian, escrow agent, or depositary, or in any similar representative
capacity.
Except as provided in the next preceding paragraph hereof, the word
"security" or "securities" as used in this Indenture shall mean any note,
stock, treasury stock, bond, debenture, evidence of indebtedness,
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certificate of interest or participation in any profit-sharing agreement,
collateral-trust certificate, pre-organization certificate or subscription,
transferable share, investment contract, voting-trust certificate, certificate
of deposit for a security, fractional undivided interest in oil, gas or other
mineral rights, or, in general, any interest or instrument commonly known as a
"security" or any certificate of interest or participation in temporary or
interim certificate for, receipt for, guarantee of, or warrant or right to
subscribe to or purchase, any of the foregoing.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to the Company
shall mean every person who, within three years prior to the time as of
which the determination is made, has purchased from the Company with a view
to, or has offered or sold for the Company in connection with, the
distribution of any security of the Company outstanding at such time, or
has participated or has had a direct or indirect participation in any such
undertaking, or has participated or has had a participation in the direct
or indirect underwriting of any such undertaking, but such term shall not
include a person whose interest was limited to a commission from an
underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" shall mean any director of a corporation or
any individual performing similar functions with respect to any
organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" shall mean any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of the affairs of
a person.
(5) The term "Company" shall mean an obligor upon the Debentures.
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(6) The term "executive officer" shall mean the president, every vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
(A) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section (each of whom
is referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
(B) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(C) The term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares, and the number of units if relating
to any other kind of security.
(D) The term "outstanding" means issued and not held by or for account
of the issuer. The following securities shall not be deemed outstanding
with the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating
to another class of securities of the issuer, if the obligation
evidenced by such other class of securities is not in default as
to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as security for
an obligation of the issuer not in default as to principal or
interest or otherwise;
(iv) securities held in escrow if placed in escrow by the
issuer thereof;
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provided, however, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(E) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges, provided, however, that, in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes, and provided further, that, in
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
SECTION 9.09. The Trustee hereunder shall at all times be a corporation
organized and doing business under the laws of the United States or of the
State of New York, which (a) is authorized under such laws to exercise
corporate trust powers, and (b) is subject to supervision or examination by
Federal or State authority and (c) shall have at all times a combined capital
and surplus of not less than ten million dollars. If such corporation
publishes reports of condition at least annually, pursuant to law, or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
at any time shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 9.10.
SECTION 9.10. (a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice of resignation to
the Company and by mailing notice thereof at the expense of the Company to the
holders of the Debentures at their addresses as they shall appear upon the
Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee.
If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation, the
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resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any holder of the Debentures who has
been a bona fide holder of a Debenture or Debentures for at least six months
may, subject to the provisions of Section 8.07, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper, appoint a successor trustee.
(b) In case at any time any of the following shall occur
(i) the Trustee shall fail to comply with the provisions of subsection
(a) of Section 9.08 after written request therefor by the Company or by any
holder of the Debentures who has been a bona fide holder of a Debenture or
Debentures for at least six months, or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 9.09 and shall fail to resign after written request
therefor by the Company or by any such holder of the Debentures, or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 8.07, any holder of the Debentures who has been a bona
fide holder of a Debenture or Debentures for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may at any time remove the Trustee and
appoint a successor trustee by written notice of such action to the Company,
the Trustee and the successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
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become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.11.
SECTION 9.11. Any successor trustee appointed as provided in Section 9.10
shall execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Company or of the
successor trustee, the trustee ceasing to act shall, upon payment of any
amounts then due it pursuant to the provisions of Section 9.06, execute and
deliver an instrument transferring to such successor trustee all the rights and
powers of the trustee so ceasing to act. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing in order
more fully and certainly to vest in and confirm to such successor trustee all
such rights and powers. Any trustee ceasing to act shall, nevertheless, have a
prior claim to that of the Debentures upon all property or funds held or
collected by such trustee to the extent of any amounts then due it pursuant to
the provisions of Section 9.06.
No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be qualified
under the provisions of Section 9.08 and eligible under the provisions of
Section 9.09.
Upon acceptance of appointment by a successor trustee as provided in this
Section, the Company shall mail notice of the succession of such trustee
hereunder to the holders of the Debentures at their addresses as they shall
appear upon the Register. If the Company fails to mail such notice within ten
days after the acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
SECTION 9.12. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article, to
the extent operative, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
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SECTION 9.13. (a) Subject to the provisions of subsection (b) of this
Section, if the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company or of any other obligor on the
Debentures within four months prior to a default, as defined in subsection (c)
of this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the holders of the
Debentures, and the holders of other indenture securities (as defined in
subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such four months' period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this subsection, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four months'
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (i) payments made on account of any
such claim by any person (other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third person, and (iii) distributions made in cash, securities
or other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal bankruptcy laws, as now or hereafter constituted, or applicable
Federal or State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four months' period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such four
months' period and such property was
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received as security therefor simultaneously with the creation thereof, and
if the Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to believe
that a default, as defined in subsection (c) of this Section, would occur
within four months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property held as security for such
claims as provided in such paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C), and (D) property substituted after
the beginning of such four months' period for property held as security at the
time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned between the
Trustee, the holders of the Debentures and the holders of other indenture
securities in such manner that the Trustee, the holders of the Debentures and
the holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal bankruptcy laws, as now or hereafter constituted, or
applicable Federal or State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on
account of the receipt by it from the Company of the funds and property in such
special account and before crediting to the respective claims of the Trustee,
the holders of the Debentures and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Federal bankruptcy laws, as
now or hereafter constituted, or applicable Federal or State law, but after
crediting thereon receipts on account of the indebtedness represented by their
respective claims from all sources other than from such dividends and from the
funds and property so held in such special account. As used in this paragraph,
with respect to any claim, the term "dividends" shall include any distribution
with respect to such claim, in bankruptcy or receivership or in
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proceedings for reorganization pursuant to the Federal bankruptcy laws, as now
or hereafter constituted, or applicable Federal or State law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership, or proceeding
for reorganization is pending shall have jurisdiction (i) to apportion between
the Trustee, the holders of the Debentures and the holders of other indenture
securities, in accordance with the provisions of this paragraph, the funds and
property held in such special account and the proceeds thereof, or (ii) in lieu
of such apportionment in whole or in part, to give to the provisions of this
paragraph due consideration in determining the fairness of the distributions to
be made to the Trustee, the holders of the Debentures and the holders of other
indenture securities with respect to their respective claims, in which event it
shall not be necessary to liquidate or to appraise the value of any securities
or other property held in such special account or as security for any such
claim, or to make a specific allocation of such distributions as between the
secured and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of such
four months' period shall be subject to the provisions of this subsection (a)
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four months' period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which would have
given rise to the obligation to account, if such Trustee had continued as
trustee, occurred after the beginning of such four months' period; and
(ii) such receipt of property or reduction of claim occurred within
four months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of this
Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the
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lien of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the circumstances
surrounding the making thereof is given to the holders of the Debentures at
the time and in the manner provided in Section 7.04 with respect to reports
pursuant to subsections (a) and (b) thereof, respectively;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) of
this Section.
(c) As used in this Section:
(1) The term "default" shall mean any failure to make payment in full
of the principal of or interest upon any of the Debentures or upon the
other indenture securities when and as such principal or interest becomes
due and payable;
(2) The term "other indenture securities" shall mean securities upon
which the Company is an obligor (as defined in the Trust Indenture Act of
1939) outstanding under any other indenture (A) under which the Trustee is
also trustee, (B) which contains provisions substantially similar to the
provisions of subsection (a) of this Section, and (C) under which a default
exists at the time of the approtionment of the funds and property held in
said special account;
(3) The term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks
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or other orders drawn upon banks or bankers and payable upon demand;
(4) The term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation; and
(5) The term "Company" shall mean any obligor upon the Debentures.
ARTICLE TEN.
CONCERNING THE HOLDERS.
SECTION 10.01. Whenever in this Indenture it is provided that the holders
of a specified percentage in aggregate principal amount of the Debentures may
take any action (including the making of any demand or request, the giving of
any notice, consent or waiver or the taking of any other action), the fact that
at the time of taking any such action the holders of such specified percentage
have joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by holders of the Debentures in person or
by agent or proxy appointed in writing, or (b) by the record of the holders of
the Debentures voting in favor thereof at any meeting of holders of the
Debentures duly called and held in accordance with the provisions of Article
Eleven, or (c) by a combination of such instrument or instruments and any such
record of such a meeting of holders of the Debentures.
SECTION 10.02. Subject to the provisions of Section 9.01, 9.02 and 11.05,
proof of the execution of any instrument by a holder of the Debentures or his
agent or proxy and proof of the holding by any person of any of the Debentures
shall be sufficient if made in the following manner:
The fact of the holding of a Debenture or Debentures may be proved by the
Register or by a certificate of the Registrar.
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The fact and date of the execution of any such instrument and the amount
and numbers of Debentures held by the person so executing such instrument may
also be proved in any other manner which the Trustee may deem sufficient.
The Trustee may require such additional proof of any matter referred to in
this Section as it shall deem necessary.
The record of any meeting of holders of the Debentures shall be proved in
the manner provided in Section 11.06.
SECTION 10.03. The Company, the Trustee, any paying agent, any conversion
agent and any Registrar may deem and treat the person in whose name any
Debenture shall be registered in the Register as the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notation of ownership or other writing thereon made by anyone other than
the Registrar) for the purpose of receiving payment thereof or on account
thereof and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any conversion agent nor any Registrar shall be affected
by any notice to the contrary. Payment of or on account of the principal of or
interest on such Debenture shall be made only to or upon the order in writing
of the holder thereof. All such payments and all conversions shall be valid
and, to the extent of the sum or sums paid, effectual to satisfy and discharge
the liability for the moneys payable upon any such Debenture.
SECTION 10.04. In determining whether the holders of the required aggregate
principal amount of Debentures have concurred in any direction, consent, or
waiver under this Indenture, Debentures which are owned by the Company or any
other obligor on the Debentures, or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any other obligor on the Debentures, shall be disregarded and
deemed not to be outstanding for the purpose of any such determination, except
that for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver only Debentures which the
Trustee knows are so owned shall be so disregarded. Debentures so owned which
have been pledged in good faith may be regarded as outstanding if the pledge
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debentures and that the pledgee is not the Company or any
other obligor on the Debentures or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any other obligor on the Debentures.
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SECTION 10.05. At any time prior to the taking of any action by the holders
of the percentage in aggregate principal amount of the Debentures specified in
this Indenture in connection with such action, any holder of a Debenture which
is included in the Debentures the holders of which have consented to such
action may, by filing written notice with the Trustee at its corporate trust
office and upon proof of holding as provided in Section 10.02, revoke such
action so far as concerns such Debenture. Except as aforesaid, any such action
taken by the holder of any Debenture shall be conclusive and binding upon such
holder and upon all future holders and owners of such Debenture and of any
Debenture issued in substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon such Debenture. Any action taken by
the holders of the percentage in aggregate principal amount of the Debentures
specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the holders of all the
Debentures.
ARTICLE ELEVEN.
HOLDERS' MEETINGS.
SECTION 11.01. A meeting of holders of the Debentures may be called at any
time and from time to time pursuant to the provisions of this Article Eleven
for any of the following purposes:
(a) to give any notice to the Company or to the Trustee or to give any
authorized directions to the Trustee, or to waive any default hereunder and
its consequences, or to take any other action authorized to be taken by
holders of the Debentures pursuant to any of the provisions of Article
Eight;
(b) to remove the Trustee and appoint a successor trustee pursuant to
the provisions of Article Nine;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 12.02; or
(d) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of the Debentures
under any other provision of this Indenture or under applicable law.
SECTION 11.02. The Trustee may at any time call a meeting of holders of the
Debentures to take any action specified in Section 11.01, to be held at such
time and at such place in the Borough of Manhattan, The City and State of New
York, as the Trustee shall determine. Notice
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of every meeting of the holders of the Debentures, setting forth the time and
place of such meeting and in general terms the action proposed to be taken at
such meeting, shall be mailed to the holders of the Debentures at their
addresses as they shall appear upon the Register. Such notice shall be mailed
not less than 20 nor more than 180 days prior to the date fixed for the
meeting.
SECTION 11.03. In case at any time the Company, pursuant to a resolution of
its Board of Directors, or the holders of at least 15 percent in aggregate
principal amount of the Debentures then outstanding to be affected by the
business to be submitted to the meeting, shall have requested the Trustee to
call a meeting of holders of the Debentures to take any action authorized in
Section 11.01 by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within 30 days after receipt of such request, then the
Company or the holders of the Debentures in the amount above specified may
determine the time and the place in said Borough of Manhattan for such meeting
and may call such meeting by mailing notice thereof as provided in Section
11.02.
SECTION 11.04. To be entitled to vote at any meeting of holders of the
Debentures a person shall (a) be a holder of one or more Debentures; or (b) be
a person appointed by an instrument in writing as proxy by the holder of one or
more Debentures. The only persons who shall be entitled to be present or to
speak at any meeting of the holders of the Debentures shall be the persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel, and any representatives of the Company and its
counsel.
SECTION 11.05. Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of holders of the Debentures, in regard to proof of the holding of
Debentures and of the appointment of proxies, and in regard to the appointment
and duties of inspectors of votes, the submission and examination of proxies,
certificates, and such other matters concerning the conduct of the meeting as
it shall think fit. Except as otherwise permitted or required by any such
regulations, the holding of Debentures shall be proved in the manner specified
in Section 10.02. Pursuant to the foregoing authority the Trustee may fix in
advance a date as the record date for determining the Debentureholders entitled
to notice of or to vote at any meeting, such date to be not less than 15 nor
more than 150 days prior to the date fixed for such meeting.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by
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the Company or by holders of the Debentures as provided in Section 11.03, in
which case the Company or the holders of the Debentures calling the meeting, as
the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the holders of a majority in principal amount of the Debentures
represented at the meeting.
Subject to the provisions of Sections 10.04 and 11.04, at any meeting each
holder of Debentures or proxy shall be entitled to one vote for each portion of
the principal amount of Debentures held or represented by him represented by
$1.00 principal amount of such Debentures, provided, however, that no vote
shall be cast or counted at any meeting in respect of any Debenture challenged
as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote except as
a holder of Debentures or proxy. Any meeting of holders of the Debentures duly
called pursuant to the provisions of Section 11.02 or 11.03 may be adjourned
from time to time, and the meeting may be held as so adjourned without further
notice.
SECTION 11.06. The vote upon any resolution submitted to any meeting of
holders of the Debentures shall be by written ballot on which shall be
subscribed the signatures of the holders or proxies and on which shall be
inscribed the identifying number or numbers or to which shall be attached a
list of identifying numbers of the Debentures held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate
of the proceedings of each meeting of holders of the Debentures shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was mailed as provided in Section 11.02. The record shall be signed and
verified by the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
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ARTICLE TWELVE.
SUPPLEMENTAL INDENTURES.
SECTION 12.01. The Company and the Trustee may from time to time enter into
an indenture or indenture supplemental hereto for one or more of the following
purposes:
(a) to make provision with respect to the conversion rights of holders
of Debentures pursuant to the requirements of Section 5.07;
(b) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article Thirteen;
(c) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as the Board of Directors and the
Trustee shall consider to be for the protection of the holders of
Debentures, and to make the occurrence, or the occurrence and continuance,
of a default in any of such additional covenants, restrictions, conditions
or provisions a default or an Event of Default permitting the enforcement
of all or any of the several remedies provided in this Indenture as herein
set forth, with such period of grace, if any, and subject to such
conditions as such supplemental indenture may provide;
(d) to provide that the Debentures shall also be issuable in coupon
form (including Debentures registrable as to principal only) and that at
the option of any holder, registered Debentures without coupons may be
exchanged for coupon Debentures and at the option of a holder of coupon
Debentures, coupon Debentures may be exchanged for registered Debentures
without coupons or for other coupon Debentures, of authorized
denominations; and, in such case, to make such other additions to, or
modifications of, this Indenture as are appropriate to an issue of coupon
Debentures and registered Debentures without coupons;
(e) to cure any ambiguity or to correct or supplement any provision
contained in this Indenture which may be defective or inconsistent with any
other provisions contained in this Indenture; to make such other provisions
in regard to matters or questions arising under this Indenture as shall not
adversely affect the interests of the holders of the Debentures.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture and to make any further
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appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which adversely affects the Trustee's own rights, duties, or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section may
be executed by the Company and the Trustee without the consent of the holders
of any of the Debentures at the time outstanding, notwithstanding any of the
provisions of Section 13.02.
SECTION 12.02. With the consent (evidenced as provided in Section 10.01) of
the holders of not less than 66 2/3% in aggregate principal amount of the
Debentures at the time outstanding, the Company and the Trustee may from time
to time and at any time enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights and obligations of the holders of the Debentures and of the
Company; provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Debentures, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
or make the principal thereof or interest thereon payable in any coin or
currency other than that hereinbefore provided, or modify the provisions of
this Indenture with respect to the subordination of the Debentures, or impair
the right to convert the Debentures into Common Stock at the prices and upon
the terms set forth in Article Five, without the consent in each case of the
holder of each Debenture so affected, or (ii) reduce the aforesaid percentage
of principal amounts of Debentures, the consent of the holders of which is
required for any such supplemental indenture, without the consent of the
holders of all Debentures then outstanding.
Upon the request of the Company, accompanied by a copy of the resolution of
its Board of Directors authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
holders of the Debentures as aforesaid, the Trustee shall join with the Company
in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the holders of the Debentures
under this Section to approve the particular form of any
73
<PAGE> 83
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall mail to the holders of the Debentures, as their names and addresses
appear in the Register, a notice setting forth in general terms the substance
of such supplemental indenture. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 12.03. Any supplemental indenture executed pursuant to the
provisions of this Article shall comply with the Trust Indenture Act of 1939 as
then in effect. Upon the execution of any supplemental indenture pursuant to
the provisions of this Article, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Debentures shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
The Trustee, subject to the provisions of Sections 9.01 and 9.02, may
receive an Opinion of Counsel as conclusive evidence that any such supplemental
indenture complies with the provisions of this Article.
SECTION 12.04. Debentures authenticated and delivered after the execution
of any supplemental indenture pursuant to the provisions of this Article may
bear a notation in form approved by the Trustee as to any matter provided for
in such supplemental indenture. New Debentures so modified as to conform, in
the opinion of the Trustee and the Company, to any modification of this
Indenture contained in any such supplemental indenture may be prepared and
executed by the Company, authenticated by the Trustee and delivered in exchange
for the Debentures then outstanding.
SECTION 12.05. Anything in this Indenture to the contrary notwithstanding,
any of the acts which the Company is required to do or is prohibited from doing
by any of the provisions of this Indenture may, to the extent that such
provisions might be changed or eliminated by a supplemental indenture pursuant
to Section 12.02 hereof upon consent of holders of not less than 66 2/3% in
aggregate principal amount of the
74
<PAGE> 84
Debentures at the time outstanding, be omitted or done by the Company, if there
is obtained the prior written consent thereto of the holders of at least
66 2/3% of the aggregate principal amount of the Debentures at the time
outstanding or the prior written waiver of compliance with any such provision
or provisions signed by such holders. The Company agrees promptly to file with
the Trustee a duplicate original of each such consent or waiver.
ARTICLE THIRTEEN.
CONSOLIDATION, MERGER,
SALE OR CONVEYANCE.
SECTION 13.01. The Company covenants that it will not consolidate or merge
with any other corporation or sell or convey ALL or substantially all of its
assets as an entirety to any person, firm or corporation or in a series of
transactions pursuant to a plan which provides for the distribution of the
proceeds of such sale or conveyance and the remaining assets of the Company to
the holders of the Company's capital stock, unless (i) either the Company shall
be the continuing corporation, or the successor corporation (if other than the
Company) shall be a corporation organized under the laws of the United States
of America or any State thereof and shall expressly assume the due and punctual
payment of the principal of and interest on all the Debentures, according to
their tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company by
supplemental indenture (which Indenture shall satisfy the requirements of
Section 5.07) satisfactory to the Trustee, executed and delivered to the
Trustee by such corporation, (ii) in the event of a sale or conveyance of all
or substantially all of the assets of the Company in a series of transactions
pursuant to such a plan, the corporation which assumes the payment of the
principal of and interest on all the Debentures and performance of the
covenants of this Indenture as provided in paragraph (i) of this Section shall,
immediately after the acquisition of such portion of the assets of the Company,
have assets not less than the assets of the Company immediately prior to the
first sale or conveyance in such series of transactions, and (iii) the Company
or such successor corporation, as the case may be, shall not, immediately after
such merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenants or conditions.
SECTION 13.02. In case of any such consolidation, merger, sale or
conveyance and upon any such assumption by the successor corporation,
75
<PAGE> 85
such successor corporation shall succeed to and be substituted for the Company,
with the same effect as if it had been named herein as the obligor under this
Indenture. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of Sterling Bancorp, any or all
of the Debentures issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Debentures which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debentures which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All
the Debentures so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Debentures theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Debentures
had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance, the Company
shall thereupon be relieved of any further obligation or liability hereunder or
upon the Debentures, and the Company as the predecessor corporation may
thereupon or at any time thereafter be dissolved, wound up or liquidated, and
such changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
SECTION 13.03. The Trustee, subject to the provisions of Sections 9.01 and
9.02, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale or conveyance,
and any such assumption, complies with the provisions of this Article.
SECTION 13.04. The Company shall not lease its properties and assets
substantially as an entirety to any person, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof
76
<PAGE> 86
ARTICLE FOURTEEN.
SATISFACTION AND DISCHARGE OF
INDENTURE; UNCLAIMED MONEYS.
SECTION 14.01. If at any time (a) there shall have been delivered to the
Trustee for cancellation all Debentures theretofore authenticated (other than
any Debentures which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.07), or (b) all such
Debentures not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year, or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit or cause to be deposited with the Trustee as trust funds
the entire amount sufficient to pay at maturity or upon redemption all such
Debentures not theretofore delivered to the Trustee for cancellation, including
principal and interest due or to become due to such date of maturity or date
fixed for redemption, as the case may be, and if in either case the Company
shall also pay or cause to be paid all other sums payable hereunder by the
Company, then (except as to any remaining rights of conversion provided for in
Article Five) this Indenture shall cease to be of further effect, and the
Trustee, on demand of and at the cost and expense of the Company and upon
delivery to the Trustee of an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent to the satisfaction and discharge of this
Indenture have been complied with, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture. The Company
agrees to reimburse the Trustee for any costs or expenses thereafter reasonably
and properly incurred by the Trustee in connection with this Indenture or the
Debentures.
SECTION 14.02. All moneys deposited with the Trustee pursuant to Section
14.01 shall be held in trust and applied by it to the payment, as provided in
this Indenture, to the holders of the particular Debentures for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal of and interest on the
Debentures.
SECTION 14.03. In connection with the satisfaction and discharge of this
Indenture, all moneys then held by any paying agent (other than the Trustee)
under the provisions of this Indenture shall upon demand of the Company be paid
to the Trustee and thereupon such paying agent shall be released from all
further liability with respect to such moneys.
77
<PAGE> 87
SECTION 14.04. Any moneys deposited with or paid to the Trustee or any
paying agent for the payment of the principal of or interest on any Debentures
(including moneys held in trust by the Company if it shall act as its own
paying agent) and not applied but remaining unclaimed for two years after the
date upon which such principal or interest shall have become due and payable
shall be repaid by the Trustee or such paying agent on demand to the Company,
or if held in trust by the Company may at the Company's option be released from
such trust; and the holder of such Debenture shall thereafter look only to the
Company for any payment which such holder may be entitled to collect and all
liability of the Trustee or any such paying agent with respect to such moneys
shall thereupon cease.
ARTICLE FIFTEEN.
IMMUNITY OF INCORPORATORS,
SHAREHOLDERS, OFFICERS AND DIRECTORS.
SECTION 15.01. No recourse under or upon any obligation, covenant or
agreement contained in this Indenture, or in any Debenture, or because of any
indebtedness evidenced thereby, shall be had against any incorporator, or
against any past, present or future shareholder, officer or director, as such,
of the Company or of any successor corporation, either directly or through the
Company or any successor corporation, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Debentures by the holders thereof
and as part of the consideration for the issue of the Debentures.
ARTICLE SIXTEEN.
MISCELLANEOUS PROVISIONS.
SECTION 16.01. Nothing in this Indenture or in the Debentures, expressed or
implied, shall give or be construed to give to any person, firm or corporation
other than the parties hereto, the holders of the Debentures and, to the extent
provided in Article Four, the holders of Senior Indebtedness, any legal or
equitable right, remedy or claim under this Indenture, or under any covenant or
provision therein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and the holders of the Debentures.
SECTION 16.02. Subject to the provisions of Articles Nine and Thirteen,
whenever in this Indenture any of the parties hereto is named
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<PAGE> 88
or referred to, the successors and assigns of such party shall be deemed to be
included, and all the covenants, stipulations, promises and agreements in this
Indenture contained by or in behalf of the Company or the Trustee shall bind
and inure to the benefit of their respective successors and assigns, whether so
expressed or not.
SECTION 16.03. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the holders of Debentures to or on the Company may be given or served by being
mailed, first class postage prepaid, addressed (unless another address is filed
by the Company with the Trustee) as follows--Sterling Bancorp, 540 Madison
Avenue, New York, New York 10022, Attention: Secretary. Any notice, direction,
request or demand by the Company or by any holder of the Debentures to or upon
the Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made at the corporate trust office of the Trustee.
SECTION 16.04. Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions under this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been
complied with.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition; (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him 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 or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 16.05. In any case where the date for the payment of the principal
of or interest on the Debentures or the date fixed for redemption of any
Debentures or the last day on which a holder of the Debentures has the right to
convert his Debentures pursuant to the provisions of Article Five shall not be
a Business Day, then such payment or redemption or conversion need not be made
on such date but may be made on the next succeeding Business Day with the same
force
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<PAGE> 89
and effect as if made on such prior date, and no interest shall accrue for the
period after such prior date.
SECTION 16.06. Interest on the Debentures shall be computed on the basis of
a 365 or 366 day year as the case may be. All interest calculations shall be
rounded to the nearest five hundredths of a percentage point.
SECTION 16.07. If and to the extent that any provision of the Indenture
limits, qualifies or conflicts with a provision which is required to be
included in this Indenture by any of Sections 310 to 317, inclusive, of the
Trust Indenture Act of 1939, such required provisions shall control.
SECTION 16.08. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
SECTION 16.09. This Indenture and each of the Debentures issued hereunder
shall be deemed to be contracts made under the laws of the State of New York
and shall for all purposes be governed by the laws of said State.
United States Trust Company of New York hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
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<PAGE> 90
IN WITNESS WHEREOF, STERLING BANCORP has caused this Indenture to be signed
and acknowledged by its President, or one of its Vice Presidents, and its
corporate seal to be affixed hereunto, and the same to be attested by its
Secretary or one of its Assistant Secretaries; and UNITED STATES TRUST COMPANY
OF NEW YORK has caused this Indenture to be signed and acknowledged by one of
its Assistant Vice Presidents and its corporate seal to be affixed hereunto,
and the same to be attested by one of its Assistant Secretaries, all as of the
day and year first above written.
STERLING BANCORP
By
---------------------------
President
ATTEST:
- ----------------------------
Secretary
UNITED STATES TRUST
COMPANY OF NEW YORK
By
---------------------------
Assistant Vice President
United Stated
Trust Company of New York
ATTEST:
- ----------------------------
Assistant Secretary
81
<PAGE> 91
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the day of , 1994, before me personally came , to
me known, who, being by me duly sworn, did depose and say that he resides
at ; that he is President of STERLING BANCORP, one of the parties
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed pursuant to authority of the board
of directors of said corporation, and that he signed his name thereto pursuant
to like authority.
Notary Public, State of New York
No.
Qualified in County
Commission Expires
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the day of , 1994, before me personally came , to
me known, who, being by me duly sworn, did depose and say that he resides at
; that he is an Assistant Vice President of UNITED STATES TRUST
COMPANY of New York, one of the parties described in and which executed the
above instrument; that he knows the corporate seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of its By-Laws, and that he signed his name thereto by
like authority.
Notary Public, State of New York
No.
Qualified in County
Commission Expires
82
<PAGE> 1
[STERLING BANCORP LETTERHEAD OF LOUIS J. CAPPELLI]
June 9, 1994
To: Holders of our Floating Interest Rate Convertible Subordinated
Debentures, Third Series, due 1996 ("Third Series Debentures")
The Company is offering you the opportunity to exchange your Third Series
Debentures, which will come due on July 1, 1996 for a new series of debentures:
the New Debentures are titled Floating Interest Rate Convertible Subordinated
Debentures, Series V, due July 1, 2001 and are similar to your Third Series
Debentures in interest rate and most other provisions, except that they permit
you by exchanging to extend the maturity of your debentures and to obtain an
improved conversion privilege: the New Debentures have a conversion price of
$8.75 as compared to the $12.00 conversion price of the Third Series Debentures.
If you elect to exchange, you will not lose any interest payment; the July
1, 1994 interest payment will be made on all Third Series Debentures and
exchanging holders will also be paid interest to August 1, 1994, the date from
which interest will accrue on the New Debentures.
The Company's purpose in making the Exchange Offer is to refund the Third
Series Debentures which will come due July 1, 1996. After the Exchange Offer is
completed, the Company will consider whether to retire remaining Third Series
Debentures at or before maturity.
You are urged to read the enclosed Offering Circular carefully. The
enclosed Letter of Transmittal is for your use in submitting your debenture
certificates, to the Exchange Agent, United States Trust Company of New York.
Cordially,
s/ Louis Cappelli
<PAGE> 2
OFFERING CIRCULAR
STERLING BANCORP
OFFER TO EXCHANGE ITS
FLOATING INTEREST RATE CONVERTIBLE SUBORDINATED
DEBENTURES, SERIES V, DUE 2001
FOR ANY AND ALL OF ITS
FLOATING INTEREST RATE CONVERTIBLE SUBORDINATED
DEBENTURES, THIRD SERIES, DUE 1996
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.
NEW YORK CITY TIME, ON JULY 29, 1994
Sterling Bancorp (the "Company") hereby offers, upon the terms and subject
to the conditions set forth in this Offering Circular and in the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange $1,000 principal amount of its Floating Interest Rate Convertible
Subordinated Debentures, Series V, due July 1, 2001 (the "New Debentures") for
each $1,000 principal amount of its Floating Interest Rate Convertible
Subordinated Debentures, Third Series, due July 1, 1996 (the "Third Series
Debentures"), of which $11,985,000 in principal amount was outstanding as of May
31, 1994.
The New Debentures will be convertible into the Company's Common Shares at
$8.75 per share, will mature on July 1, 2001 and may not be redeemed prior to
August 1, 1997, unless for a period of 30 consecutive business days the closing
price of the Common Shares has been at least 140% of the conversion price and
the Company gives at least 30 days' notice of its intention to redeem. In other
respects the terms of the New Debentures are like those of the Third Series
Debentures (which are convertible into the Company's Common Shares at $12.00 per
share and mature on July 1, 1996). See "Summary Comparison of Principal Terms of
Third Series Debentures and New Debentures."
Upon the terms and subject to the conditions of the Exchange Offer, the
Company will accept for exchange any and all Third Series Debentures properly
tendered prior to 5:00 p.m., New York City time on July 29, 1994, unless
extended at the option of the Company (the "Expiration Date"). Tenders of Third
Series Debentures may be withdrawn at any time prior to the Expiration Date. See
"The Exchange Offer-- Withdrawal Rights." The Company will deliver New
Debentures as soon as practicable following the Expiration Date.
The Common Shares and Third Series Debentures are traded on the New York
Stock Exchange ("NYSE") and application will be made to list the New Debentures
and the Common Shares issuable upon conversion of the New Debentures on the
NYSE. On June 7, 1994, the closing price of the Common Shares on the NYSE was
$7.00 per share.
Interest on the New Debentures will accrue from August 1, 1994. Accrued
interest from July 1, 1994, the day to which interest will be paid on all Third
Series Debentures, to August 1, 1994 will be paid on all Third Series Debentures
exchanged.
The Exchange Offer is not conditioned upon any minimum principal amount of
Third Series Debentures being tendered for exchange and is subject only to
certain customary conditions described under "The Exchange Offer--Conditions of
the Exchange Offer," certain of which may be waived by the Company.
THE DATE OF THIS OFFERING CIRCULAR IS JUNE 9, 1994.
<PAGE> 3
The Exchange Offer is being made by the Company in reliance upon the
exemption from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), afforded by Section 3(a)(9) thereof. The
Company, therefore, will not pay any commission or other remuneration to any
broker, dealer, salesman, or other person for soliciting tenders of the Third
Series Debentures. Regular employees of the Company and its subsidiaries, who
will not receive additional compensation therefor, may solicit exchanges from
holders of the Third Series Debentures.
No person has been authorized to give any information or to make any
representations in connection with the Exchange Offer other than those contained
in this Offering Circular. If given or made, the information or representations
should not be relied upon as having been authorized by the Company. The delivery
of this Offering Circular shall not, under any circumstances, imply that the
information herein is correct as of any time subsequent to its date.
This Offering Circular does not constitute an offer to any person in any
jurisdiction in which any such offer would be unlawful, and the Company will not
accept tenders from holders of Third Series Debentures in any jurisdiction in
which such acceptance would not be in compliance with applicable securities or
blue sky laws of such jurisdiction.
ADDITIONAL INFORMATION
United States Trust Company of New York has agreed to provide certain
services as Exchange Agent in connection with the Exchange Offer. Holders of
Third Series Debentures who require assistance should contact the Company,
attention Jerrold Gilbert, Secretary, at 540 Madison Avenue, New York, New York
10022, (212) 826-8044 (call collect) or the Exchange Agent at 114 West 47th
Street, New York, New York 10036-1532 (attention: Corporate Trust Department),
(800) 548-6565.
2
<PAGE> 4
OFFERING SUMMARY
The following is a summary of certain features of the Exchange Offer and
other matters, and all statements contained herein are qualified in their
entirety by reference to the more detailed information included elsewhere in
this Offering Circular.
THE COMPANY
Sterling Bancorp (the "Company") is a bank holding company, incorporated in
New York, which directly or through subsidiaries engages in commercial banking
and other financial services. The Company owns virtually 100% of Sterling
National Bank & Trust Company of New York (the "bank").
The Company's principal executive offices are located at 540 Madison
Avenue, New York, New York 10022. Its telephone number is (212) 826-8000.
PURPOSE OF THE EXCHANGE OFFER
The Third Series Debentures are due July 1, 1996. The purpose of the
exchange offer is to refund them in whole or part through the issuance of New
Debentures in exchange therefor. Depending on the amount of Third Series
Debentures remaining outstanding after the exchange offer is concluded, the
Company will consider whether to retire the remainder at or before maturity and
what, if any, other refunding steps should be taken.
THE EXCHANGE OFFER
<TABLE>
<S> <C>
THE OFFERING.................. The Company is offering to exchange $1,000 principal amount
of its New Debentures for each $1,000 principal amount of
Third Series Debentures properly tendered and accepted for
exchange in the Exchange Offer. See "The Exchange
Offer--Terms of the Exchange Offer."
EXPIRATION DATE............... 5:00 p.m., New York City time, on July 29, 1994, unless
extended by the Company. See "The Exchange Offer--Expiration
Date; Extensions; Termination; Amendments."
WITHDRAWAL OF TENDERS......... Tenders of Third Series Debentures may be withdrawn at any
time prior to the Expiration Date. See "The Exchange
Offer--Withdrawal Rights."
ACCRUAL OF INTEREST ON THE NEW
DEBENTURES.................. Interest on the New Debentures will accrue commencing August
1, 1994. Interest from July 1, 1994, the day to which
interest will be paid on the Third Series Debentures to
August 1, 1994 will be paid with regard to all Third Series
Debentures exchanged.
ACCEPTANCE OF THIRD SERIES AND
DELIVERY OF NEW
DEBENTURES.................. The Company will accept for exchange any and all Third Series
Debentures which are properly tendered in the Exchange Offer
prior to 5:00 p.m., New York City time, on the Expiration
Date. The New Debentures to be issued pursuant to the
Exchange Offer will be delivered promptly following the
Expiration Date. See "The Exchange Offer-- Acceptance of
Third Series Debentures for Exchange; Delivery of New
Debentures."
CONDITIONS OF THE EXCHANGE
OFFER....................... The Company's obligation to consummate the Exchange Offer is
not conditioned upon any minimum principal amount of Third
Series De-
</TABLE>
3
<PAGE> 5
<TABLE>
<S> <C>
bentures being tendered for exchange. The Exchange Offer is,
however, subject to certain customary conditions, certain of
which may be waived by the Company. See "The Exchange
Offer--Conditions of the Exchange."
PROCEDURES FOR TENDERING THIRD
SERIES DEBENTURES........... Each holder of Third Series Debentures wishing to accept the
Exchange Offer must complete and sign the Letter of
Transmittal, in accordance with the instructions contained
herein and therein, and forward or hand deliver such Letter
of Transmittal to the Exchange Agent at one of the addresses
set forth herein and therein. Any holder of Third Series
Debentures whose Third Series Debentures are registered in
the name of a broker, dealer, commercial bank, trust company
or nominee is urged to contact such registered holder
promptly if such holder wishes to accept the Exchange Offer.
Holders whose certificates representing their Third Series
Debentures are not immediately available or who cannot
deliver their certificates or any other required documents to
the Exchange Agent prior to 5:00 p.m., New York City time, on
the Expiration Date may tender their Third Series Debentures
pursuant to the guaranteed delivery procedure set forth
herein. See "The Exchange Offer--Procedures for Tendering"
and "--Guaranteed Delivery Procedure."
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES................ For a discussion of certain Federal income tax consequences
to exchanging holders of Third Series Debentures and to the
Company, see "Certain Federal Income Tax Consequences."
TRADING....................... The Company's Common Shares and the Third Series Debentures
are traded on the New York Stock Exchange ("NYSE") and
application will be made to list the New Debentures on the
NYSE.
EXCHANGE AGENT................ United States Trust Company of New York. See "The Exchange
Offer --Exchange Agent."
FURTHER INFORMATION........... For further information, please contact the Company,
attention Jerrold Gilbert, Secretary, at (212) 826-8044 (call
collect), or the Exchange Agent at (800) 548-6565.
</TABLE>
4
<PAGE> 6
SUMMARY COMPARISON OF PRINCIPAL TERMS OF THIRD SERIES
DEBENTURES AND NEW DEBENTURES
<TABLE>
<CAPTION>
THE THIRD SERIES DEBENTURES THE NEW DEBENTURES
------------------------------- -------------------------------
<S> <C> <C>
INTEREST................... Floating rate equal to one half Same.
of one percent ( 1/2%) above
the daily prime rate of
Chemical Bank (successor to
Manufacturers Hanover Trust
Company which was named as the
reference bank in the indenture
relating to the Third Series
Debentures) from time to time
in effect on a trailing 30-day
basis.
MATURITY................... July 1, 1996 July 1, 2001.
CONVERSION................. Convertible into Common Shares Convertible into Common Shares
at $12 per share. The at $8.75 per share. The
conversion price is subject to conversion price is subject to
adjustment to prevent dilution adjustment to prevent dilution
in certain events. in the same events as the Third
Series.
RANKING.................... Unsecured general obligations Same. New Debentures will rank
of the Company subordinate to on a par (pari passu) with
all existing and future Senior Third Series Debentures that
Indebtedness of the Company (as remain outstanding after the
defined), which totalled Exchange Offer and with the
approximately $16.5 million at Company's Floating Interest
April 30, 1994. Rate Convertible Subordinated
Debentures, Fourth Series, due
1998, approximately $14.8
million principal amount of
which was outstanding at March
31, 1994.
REDEMPTION AT OPTION OF THE
COMPANY.................. Redeemable at any time in whole No redemption may be made prior
or in part at the option of the to August 1, 1997 unless the
Company at the principal closing price of the Common
amount, together with accrued Shares for a period of 30
interest. consecutive trading days has
been at least 140% of the
conversion price and the
Company gives at least 30 days
notice of its intention to
redeem. Otherwise, redeemable
at any time in whole or in part
at the option of the Company at
the principal amount, together
with accrued interest.
</TABLE>
5
<PAGE> 7
SELECTED FINANCIAL DATA
STERLING BANCORP AND SUBSIDIARIES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, QUARTERS ENDED MARCH 31,
--------------------------- ---------------------------
1993 1992 1994 1993
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Total interest income................. $ 32,540,225 $ 30,571,788 $ 9,158,416 $ 7,916,257
Total interest expense................ 10,167,937 11,510,043 2,885,971 2,496,207
Net interest income................... 22,372,288 19,061,745 6,272,445 5,420,050
Provision for possible loan losses.... 690,000 1,290,000 190,000 160,000
Noninterest income.................... 3,871,276 5,249,962 997,386 876,966
Noninterest expenses.................. 19,770,442 18,659,177 5,328,703 4,755,475
Income before taxes................... 5,783,122 4,362,530 1,751,128 1,381,541
Provision for income taxes............ 2,627,725 1,785,316 840,661 639,777
Net income............................ 3,155,397 2,577,214 910,467 741,764
Average number of common shares
outstanding
Primary............................. 6,351,040 6,342,327 6,359,132 6,345,940
Fully diluted....................... 8,734,423 --* 8,781,961 8,666,192
Net income per average common share
Primary............................. 0.50 0.41 0.14 0.12
Fully diluted....................... 0.47 --* 0.13 0.11
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
--------------------------- ---------------------------
1993 1992 1994 1993
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment securities................. $286,815,791 $219,570,835 $345,372,885 $249,715,612
Loans, net of unearned discounts...... 298,750,821 288,790,639 227,202,500 226,411,576
Excess cost over equity in net assets
of the banking subsidiary........... 21,158,440 21,158,440 21,158,440 21,158,440
Total assets.......................... 653,039,241 578,248,287 642,040,359 551,789,960
Noninterest-bearing deposits.......... 174,088,971 159,234,582 135,807,652 120,563,295
Interest-bearing deposits............. 298,896,955 296,924,857 277,893,051 275,104,430
Total debt............................ 117,551,364 61,650,175 164,281,417 95,541,770
Total liabilities..................... 600,159,589 528,098,282 589,232,665 501,208,686
Shareholders' equity.................. 52,856,675 50,150,005 52,777,058 50,581,274
Book value per common share........... 8.31 7.90 8.30 7.97
Tangible book value per common
share............................... 4.98 4.56 4.97 4.63
</TABLE>
*Net income per average common share assuming full dilution has not been
presented because the effects would be antidilutive.
6
<PAGE> 8
THE COMPANY
Sterling Bancorp (the "Company") is a bank holding company, incorporated in
New York, which directly or through subsidiaries, engages in commercial banking
and other financial services. The Company owns virtually 100% of Sterling
National Bank & Trust Company of New York (the "bank"). The Company is a legal
entity separate and distinct from the bank and the Company's non-bank
subsidiaries.
While the Company generates income from its own operations, it also relies
for its cash requirements on funds maintained or generated by its subsidiaries,
principally the bank. Such sources have been adequate to meet the Company's cash
requirements throughout its history. At April 30, 1994, the Company had
approximately $11,450,000 in cash and interest bearing deposits with banks.
Various legal restrictions limit the extent to which the bank can supply
funds to the Company and its non-bank subsidiaries. All national banks are
limited in the payment of dividends without the approval of the Comptroller of
the Currency (the Comptroller) to an amount not to exceed the net profits (as
defined) for that year to date combined with its retained net profits for the
preceding two calendar years. The bank with the Comptroller's approval paid
dividends aggregating $37,330,000 in 1992 (significantly exceeding net profits)
and in 1993 paid dividends substantially equal to the bank's net profits for the
year ended December 31, 1993.
In addition, from time to time dividends are paid to the Company by other
subsidiaries from their retained earnings without regulatory restrictions.
At April 30, 1994, the Company's outstanding long-term debt, consisting
principally of Convertible Subordinated Debentures (originally issued pursuant
to rights offerings to shareholders of the Company), aggregated $29,263,000. To
the extent Debentures are converted to common stock of the Company (as has been
the case with $11,000,000 principal amount since 1982), the subordinated debt
related thereto is retired and becomes part of shareholders' equity. The
Company's long-term indebtedness is also met through funds generated from
profits and new financing. Since becoming a public company in 1946, the Company
and its predecessors have been able to obtain the financing required and have
paid at maturity all outstanding long-term indebtedness. The Company expects to
continue to meet its obligations in accordance with their terms.
At April 30, 1994, the Company's short-term debt, consisting of commercial
paper, was approximately $13,800,000. The Company had cash, interest-bearing
deposits with banks and other current assets aggregating approximately
$28,300,000 and back-up credit lines with banks of $15,000,000. The Company and
its predecessor have issued and repaid at maturity commercial paper aggregating
billions of dollars since 1955. Since 1979, the Company has had no need to use
available back-up lines of credit.
RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
QUARTER ENDED YEARS ENDED
MARCH 31, DECEMBER 31,
---------------- ----------------
1994 1993 1993 1992
------ ------ ------ ------
<S> <C> <C> <C> <C>
Excluding Interest on Deposits.................... 2.19x 2.59x 2.42x 2.10x
Including Interest on Deposits.................... 1.59x 1.53x 1.55x 1.37x
</TABLE>
The ratios include the earnings and fixed charges of the Company and its
subsidiaries. Earnings represent net income plus provision for income taxes and
fixed charges. Fixed charges, excluding interest on deposits, represent all
interest expense (except interest on deposits) including amortization of
discounts and issuance costs plus one-third of net rental expense. Fixed
charges, including interest on deposits, represent all interest expense
including amortization of discounts and issuance costs plus one-third of net
rental expense.
RECENT TRANSACTIONS IN SECURITIES OF THE COMPANY
There have been no transactions in the Third Series Debentures by the
Company or any of its executive officers, directors or any associate or
subsidiary thereof since April 1, 1994. Transactions by such persons since such
date in the Company's Common Shares were as follows: Louis J. Cappelli,
Chairman, Chief Executive Officer and a Director of the Company, John C.
Millman, President and a Director of the Company, and Jerrold Gilbert, Executive
Vice President, General Counsel and Secretary of the Company, participate
through voluntary payroll deductions in the Sterling Bancorp/Sterling National
Bank 401(k) Sterling
7
<PAGE> 9
Bancorp Stock Fund which made purchases as follows (the shares allocable for
Messrs. Cappelli, Millman and Gilbert, respectively, are shown in parentheses):
On April 15, 1994, 400 shares (111; 87; 77) were purchased at a price of $7.125;
on April 20, 1994, 300 shares (83; 65; 57) were purchased at a price of $7.125
and on April 22, 1994 200 shares (55; 43; 38) were purchased at a price of
$7.25. In addition, Mr. Millman purchased 200 shares on April 18, 1994 at a
price of $7.00 per share, and Mr. Gilbert purchased 200 shares on May 3, 1994 at
a price of $7.00 per share.
PRICE RANGE OF COMMON SHARES AND THIRD SERIES DEBENTURES
THE COMMON SHARES
The Common Shares are traded on the NYSE. The following table sets forth
the range of high and low prices on the NYSE for the Common Shares for the
fiscal quarters indicated.
<TABLE>
<CAPTION>
1992 HIGH LOW
----------------------------------------------------------------------- ---- ---
<S> <C> <C>
Second Quarter......................................................... $9 3/8 $7 1/2
Third Quarter.......................................................... 8 3/8 7 1/8
Fourth Quarter......................................................... 9 1/4 7 5/8
</TABLE>
<TABLE>
<CAPTION>
1993
-----------------------------------------------------------------------
<S> <C> <C>
First Quarter.......................................................... 9 1/8 8 1/8
Second Quarter......................................................... 8 1/2 7 1/8
Third Quarter.......................................................... 8 1/4 6 7/8
Fourth Quarter......................................................... 8 5/8 7 5/8
</TABLE>
<TABLE>
<CAPTION>
1994
-----------------------------------------------------------------------
<S> <C> <C>
First Quarter.......................................................... 7 3/4 7
Second Quarter (through June 3, 1994).................................. 7 1/8 6 3/4
</TABLE>
On June 7, 1994 the last sale price of the Common Shares on the NYSE was
$7.
THE THIRD SERIES DEBENTURES
The Third Series Debentures are traded on the NYSE. The following table
sets forth the range of high and low sale prices on the NYSE for each $100
principal amount of Debentures, on the NYSE, for the fiscal quarters indicated.
<TABLE>
<CAPTION>
1992 HIGH LOW
------------------------------------------------------------------- ------ ------
<S> <C> <C>
Second Quarter..................................................... $92.25 $88.50
Third Quarter...................................................... 94.00 92.00
Fourth Quarter..................................................... 88.50 88.00
</TABLE>
<TABLE>
<CAPTION>
1993
-------------------------------------------------------------------
<S> <C> <C>
First Quarter...................................................... 95.25 91.25
Second Quarter..................................................... 94.00 92.50
Third Quarter...................................................... 93.50 92.75
Fourth Quarter..................................................... 95.75 94.25
</TABLE>
<TABLE>
<CAPTION>
1994
-------------------------------------------------------------------
<S> <C> <C>
First Quarter...................................................... 99.75 93.88
Second Quarter (through June 3, 1994).............................. 100.00 97.00
</TABLE>
8
<PAGE> 10
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER
The Company hereby offers, upon the terms and subject to the conditions set
forth herein and in the accompanying Letter of Transmittal (the "Letter of
Transmittal"), to exchange $1,000 principal amount of New Debentures for each
$1,000 principal amount of its outstanding Third Series Debentures. The New
Debentures will be issued to each tendering holder of Third Series Debentures
only in integral multiples of $1,000.
Interest on the New Debentures will accrue from August 1, 1994. Accrued
interest from July 1, 1994, the day to which interest will be paid on all Third
Series Debentures, to August 1, 1994 will be paid on all Third Series Debentures
exchanged.
Although the Company has no present intention to do so, if it should modify
the consideration offered for the Third Series Debentures in the Exchange Offer,
such modified consideration would be paid with regard to all Third Series
Debentures accepted in the Exchange Offer. If the consideration is modified, the
Exchange Offer will remain open at least 10 business days from the date the
Company first gives notice, by public announcement or otherwise, of such
modification, as required by law.
As of May 31, 1994, $11,985,000 aggregate principal amount of the Third
Series Debentures was outstanding. This Offering Circular, together with the
Letter of Transmittal, is being sent to all holders of the Third Series
Debentures.
The Company has in the past purchased Third Series Debentures and it
reserves the right in its sole discretion to purchase or make offers for any
Third Series Debentures that remain outstanding subsequent to the Expiration
Date. The terms of any such purchases or offers could differ from the terms of
the Exchange Offer.
Tendering holders of Third Series Debentures 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 Third Series
Debentures pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than certain applicable taxes, in connection with the Exchange
Offer. See "Payment of Expenses," below.
EXPIRATION DATE; EXTENSIONS; TERMINATION; AMENDMENTS
The Exchange Offer will expire at 5:00 p.m., New York City time, on July
29, 1994, subject to extension by the Company by notice to the Exchange Agent as
herein provided. The Company reserves the right to so extend the Exchange Offer
at its discretion, in which event the term "Expiration Date" shall mean the time
and date on which the Exchange Offer as so extended shall expire. The Company
will notify the Exchange Agent of any extension by oral or written notice and
will make a public announcement thereof, each prior to 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
While it does not foresee doing so, the Company reserves the right (i) to
delay accepting any Third Series Debentures for exchange and to extend or to
terminate the Exchange Offer and not accept for exchange any Third Series
Debentures if any of the events set forth below under the caption "Conditions of
the Exchange Offer" shall have occurred and shall not have been waived by the
Company, by giving oral or written notice of such delay or termination to the
Exchange Agent or (ii) to amend the terms of the Exchange Offer. Any such delay
in acceptance for exchange, extension, termination or amendment will be followed
as promptly as practicable by public announcement thereof. If the Exchange Offer
is amended in a manner determined by the Company to constitute a material
change, the Company will promptly disclose such amendment in a manner reasonably
calculated to inform the holders of such amendment, and the Company will extend
the applicable Exchange Offer for a period of five to 10 business days,
depending upon the significance of the amendment and the manner of disclosure to
holders of the Third Series Debentures, if the Exchange Offer would otherwise
expire during such five to 10 business-day period. The rights reserved by the
Company in this paragraph are in addition to the Company's rights set forth
below under the caption "Conditions of the Exchange Offer."
9
<PAGE> 11
PROCEDURES FOR TENDERING
The acceptance of the Exchange Offer by a holder of the Third Series
Debentures pursuant to one of the procedures set forth below will constitute an
agreement between such holder and the Company in accordance with the terms and
subject to the conditions set forth herein and in the Letter of Transmittal.
To be tendered effectively, the Third Series Debentures, together with the
properly completed Letter of Transmittal (or facsimile thereof), executed by the
registered holder thereof, and any other documents required by the Letter of
Transmittal, must be received by the Exchange Agent at the address set forth
below prior to 5:00 p.m., New York City time, on the Expiration Date, except as
otherwise provided below under the caption "Guaranteed Delivery Procedures."
LETTERS OF TRANSMITTAL AND THIRD SERIES DEBENTURES SHOULD NOT BE SENT TO THE
COMPANY.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Third Series Debentures tendered
pursuant thereto are tendered (i) by a registered holder of the Third Series
Debentures who has not completed the box entitled "Special Issuance and Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. In the event that signatures on a Letter of Transmittal or
a notice of withdrawal, as the case may be, are required to be guaranteed, such
guarantee must be by a firm that is a member of a registered national securities
exchange or a member of the NASD or by a commercial bank or trust company having
an office in the United States (an "Eligible Institution").
The method of delivery of Third Series Debentures and other documents to
the Exchange Agent is at the election and risk of the holder. If such delivery
is by mail it is suggested that the mailing be made sufficiently in advance of
the Expiration Date to permit delivery to the Exchange Agent before the
Expiration Date.
The Exchange Agent will make a request to establish accounts with respect
to the Third Series Debentures at the Depository Trust Company ("DTC"), the
Midwest Securities Transfer Company ("MSTC") and the Philadelphia Depository
Trust Company ("PHILADEP" and, together with DTC and MSTC, collectively referred
to herein as the "Book-Entry Transfer Facilities") for the purpose of the
Exchange Offer promptly after the date of this Offering Circular, and any
financial institution that is a participant in any of the Book-Entry Transfer
Facilities' systems may make book-entry transfer of the Third Series Debentures
by causing DTC, MSTC or PHILADEP to transfer such Third Series Debentures into
the Exchange Agent's account in accordance with such Book-Entry Transfer
Facility's procedure for such transfer. Although delivery of Third Series
Debentures may be effected through book-entry transfer in the Exchange Agent's
account at DTC, MSTC or PHILADEP, the Letter of Transmittal (or facsimile
thereof), with all required signature guarantees and any other required
documents, must, in any case, be transmitted to and received or confirmed by the
Exchange Agent at one of its addresses set forth below prior to 5:00 p.m., New
York City time, on the Expiration Date, except as provided below under the
caption "Guaranteed Delivery Procedure." DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE EXCHANGE AGENT.
If the Letter of Transmittal is signed by a person other than a registered
holder of any certificate(s) listed, such certificate(s) must be endorsed or
accompanied by appropriate bond powers, in either case signed exactly as the
name or names of the registered holder or holders appear on the certificate(s).
If the Letter of Transmittal or Guaranteed Delivery Form or any
certificates or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and, unless waived by the Company, proper evidence satisfactory to the
Company of their authority to so act must be submitted.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Third Series Debentures will be
resolved by the Company, whose determination will be final and binding. The
Company reserves the absolute right to reject any or all tenders that are not in
proper form or the acceptance of which would, in the opinion of counsel for the
Company, be unlawful. The Company also reserves the right to waive any
irregularities or conditions of tender as to particular Third Series Debentures.
10
<PAGE> 12
The Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding. Unless waived, any irregularities in connection with tenders must be
cured within such time as the Company shall determine. Neither the Company nor
the Exchange Agent shall be under any duty to give notification of defects in
such tenders or shall incur liabilities for failure to give such notification.
Tenders of Third Series Debentures will not be deemed to have been made until
such irregularities have been cured or waived. Any Third Series Debentures
received by the Exchange Agent that are not properly tendered and as to which
the irregularities have not been cured or waived will be returned by the
Exchange Agent to the tendering holder, unless otherwise provided in the Letter
of Transmittal, as soon as practicable following the Expiration Date.
GUARANTEED DELIVERY PROCEDURE
If a holder of the Third Series Debentures desires to tender his Third
Series Debentures and the certificate(s) representing such Third Series
Debentures are not immediately available, or time will not permit such holder's
certificate(s) or any other required documents to reach the Exchange Agent
before 5:00 p.m., New York City time, on the Expiration Date, a tender may be
effected if:
(a) The tender is made by or through an Eligible Institution;
(b) Prior to 5:00 p.m., New York City time, on the Expiration Date,
the Exchange Agent receives from such Eligible Institution a properly
completed and duly executed Guaranteed Delivery Form (by facsimile
transmission, mail or hand delivery), setting forth the name and address of
the holder of the Third Series Debentures and the principal amount of the
Third Series Debentures tendered, stating that the tender is being made
thereby and guaranteeing that, within five NYSE trading days after the
Expiration Date, the certificate(s) representing the Third Series
Debentures, accompanied by a properly completed and duly executed Letter of
Transmittal and any other documents required by the Letter of Transmittal,
will be deposited by the Eligible Institution with the Exchange Agent; and
(c) The certificate(s) for all tendered Third Series Debentures, or a
confirmation of a book-entry transfer of such Third Series Debentures into
the Exchange Agent's applicable account at a Book-Entry Transfer Facility
as described above, as well as a properly completed and duly executed
Letter of Transmittal and all other documents required by the Letter of
Transmittal, are received by the Exchange Agent within five NYSE trading
days after the Expiration Date.
CONDITIONS OF THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Company will not
be required to accept for exchange, or to exchange New Debentures for, any Third
Series Debentures not theretofore accepted for exchange or exchanged, and may
terminate or amend the Exchange Offer as provided herein before the acceptance
of such Third Series Debentures, if any of the following conditions exist:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Exchange Offer
which, in the sole judgment of the Company, might materially impair the
ability of the Company to proceed with the Exchange Offer or have a
material adverse effect on the contemplated benefits of the Exchange Offer
to the Company; or
(b) there shall have been proposed, adopted or enacted any law,
statute, rule or regulation which, in the sole judgment of the Company,
might materially impair the ability of the Company to proceed with the
Exchange Offer or have a material adverse effect on the contemplated
benefits of the Exchange Offer to the Company; or
(c) the Indenture governing the New Debentures shall not have been
qualified under the Trust Indenture Act of 1939, as amended.
The foregoing conditions are for the sole benefit of the Company and
may be asserted by the Company regardless of the circumstances giving rise
to such conditions or, except for the condition set forth in clause (c)
above, may be waived by the Company in whole or in part at any time and
from time
11
<PAGE> 13
to time in its sole discretion. If the Company waives or amends the
foregoing conditions, the Company will, if required by applicable law,
extend the Exchange Offer for a minimum of five business days from the
date that the Company first gives notice, by public announcement or
otherwise, of such waiver or amendment, if the Exchange Offer would
otherwise expire within such five business-day period. Any
determination by the Company concerning the events described above will
be final and binding upon all parties.
ACCEPTANCE OF THIRD SERIES DEBENTURES FOR EXCHANGE; DELIVERY OF NEW DEBENTURES
Tenders will be accepted only in principal amounts of $1,000 and integral
multiples thereof.
Upon the terms and subject to the conditions of the Exchange Offer,
promptly after the Expiration Date the Company will accept all Third Series
Debentures validly tendered and not withdrawn. The Company will deliver New
Debentures in exchange for Third Series Debentures promptly following acceptance
of the Third Series Debentures.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Third Series Debentures when, as and if the Company
has given oral or written notice thereof to the Exchange Agent. The Exchange
Agent will act as agent for the tendering holder of Third Series Debentures for
the purposes of receiving New Debentures from the Company. Under no
circumstances will interest be paid by the Company by reason of any delay in
making such payment or delivery.
If any tendered Third Series Debentures 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 Third Series
Debentures will be returned, without expense, to the tendering holder thereof
(or, in the case of Third Series Debentures tendered by book-entry transfer, to
an account maintained at such Book-Entry Transfer Facility), as promptly as
practicable after the expiration or termination of the Exchange Offer.
WITHDRAWAL RIGHTS
Any registered holder of Third Series Debentures who has tendered Third
Series Debentures may withdraw the tender at any time prior to 5:00 p.m., New
York City time, on the Expiration Date, and, unless previously accepted for
exchange by the Company, after 5:00 p.m., New York City time, on August 15,
1994, by delivery of written notice of withdrawal to the Exchange Agent.
To be effective, a written, telegraphic, telex or facsimile transmission
notice of withdrawal must (a) be timely received by the Exchange Agent at the
address set forth herein, (b) specify the name of the person having tendered the
Third Series Debentures to be withdrawn, (c) indicate the Third Series
Debentures to which it relates (or if the tender was by book-entry transfer,
information sufficient to enable the Exchange Agent to identify the Third Series
Debentures so tendered) and the aggregate principal amount of Third Series
Debentures to be withdrawn and (d) be (i) signed by the holder in the same
manner as the original signature on the Letter of Transmittal (including a
guarantee of signature, if required) or (ii) accompanied by evidence
satisfactory to the Company that the holder withdrawing such tender has
succeeded to beneficial ownership of such Third Series Debentures. If
certificates have been delivered or otherwise identified to the Exchange Agent,
the name of the registered holder and the serial numbers of the particular
certificate(s) evidencing the Third Series Debentures withdrawn must also be so
furnished to the Exchange Agent as aforesaid prior to the physical release of
the certificates for the withdrawn Third Series Debentures. If Third Series
Debentures have been tendered pursuant to the procedures for book-entry transfer
as set forth herein, any notice of withdrawal must also specify the name and
number of the account at DTC, MSTC or PHILADEP to be credited with the withdrawn
Third Series Debentures. Withdrawals of tenders of Third Series Debentures may
not be rescinded, and any Third Series Debentures withdrawn will thereafter be
deemed not validly tendered for purposes of the Exchange Offer; provided,
however, that withdrawn Third Series Debentures may be retendered by again
following one of the procedures described herein at any time prior to 5:00 p.m.,
New York City time, on the Expiration Date.
12
<PAGE> 14
All questions as to the validity (including time of receipt) of notices of
withdrawal will be determined by the Company, whose determination will be final
and binding. None of the Company, the Exchange Agent nor any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
EXCHANGE AGENT
United States Trust Company of New York has been appointed as Exchange
Agent for the Exchange Offer. Third Series Debentures, Letters of Transmittal,
and any other required documents, should be sent to the Exchange Agent, at the
addresses set forth on the back cover hereof.
Requests for additional copies of this Offering Circular or the Letter of
Transmittal or for additional information should be directed to Jerrold Gilbert,
Secretary of the Company, at (212) 826-8044 (call collect).
LETTERS OF TRANSMITTAL AND THIRD SERIES DEBENTURES SHOULD NOT BE SENT TO
THE COMPANY.
PAYMENT OF EXPENSES
The Company has not retained any dealer-manager or similar agent in
connection with the Exchange Offer and will not make any payments to brokers,
dealers or others soliciting acceptances of the Exchange Offer. The Company,
however, will pay the Exchange Agent reasonable and customary fees for its
services and will reimburse it for their reasonable out-of-pocket expenses in
connection therewith. The Company will also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Offering Circular and related
documents to the beneficial owners of the Third Series Debentures, and in
handling or forwarding tenders for their customers.
The cash expenses to be incurred in connection with the Exchange Offer,
including the fees and expenses of the Exchange Agent and printing, accounting
and legal fees, will be paid by the Company and, are estimated at $60,000.
The Company will pay all transfer taxes, if any, applicable to the transfer
and sale of Third Series Debentures to it or its order pursuant to the Exchange
Offer. If, however, New Debentures and/or substitute Third Series Debentures for
principal amounts not exchanged are to be delivered or paid to, or are to be
registered or issued in the name of, any person other than the registered holder
of the Third Series Debentures tendered hereby, or if tendered certificates are
registered in the name of any person other than the person signing the Letter of
Transmittal, or if a transfer tax is imposed for any reason other than the
transfer and sale of Third Series Debentures to the Company or its order
pursuant to the Exchange Offer, 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 herewith, the amount of such transfer taxes will be
billed directly to such tendering holder.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of certain of the more significant
United States federal income tax consequences of the Exchange Offer to the
Company and to holders of the Third Series Debentures who exchange their Third
Series Debentures for New Debentures pursuant to the Exchange Offer. The
discussion does not cover all aspects of federal income taxation that may be
relevant to a particular holder in light of its particular investment
circumstances or to certain types of holders of Third Series Debentures subject
to special treatment under the federal income tax laws (for example, life
insurance companies, tax-exempt organizations and foreign corporations and
individuals who are not citizens or residents of the United States) and does not
discuss any aspects of state, local or foreign taxation. The discussion with
respect to exchanging holders is limited to those who have held Third Series
Debentures as "capital assets" and who will hold the New Debentures as "capital
assets" (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986, as amended (the "Code"). This
discussion is based upon laws, regulations, rulings and decisions now in effect
and on proposed and temporary regulations, all of which
13
<PAGE> 15
are subject to change (possibly with retroactive effect) by legislation,
administrative action or judicial decision. No ruling has been or will be
requested from the Internal Revenue Service ("IRS") on any tax matters relating
to the tax consequences of the Exchange Offer and no assurance can be given that
the IRS will not successfully challenge certain of the conclusions set forth
below. ALL HOLDERS OF THIRD SERIES DEBENTURES ARE ADVISED TO CONSULT WITH THEIR
OWN TAX ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES OF THEIR PARTICIPATION IN THE EXCHANGE OFFER.
TREATMENT OF EXCHANGING HOLDERS
Under certain proposed Treasury regulations issued under Section 1001 of
the Code, the significant modification of a debt instrument will be treated as a
taxable exchange of the original instrument for a different debt instrument.
Whether a modification is significant depends on a comparison of the material
terms of the original note and the modified note, such as the interest rate,
maturity, timing of payments and conversion or exchange rights. It is
anticipated that under these proposed Treasury regulations, the issuance of the
New Debentures in exchange for the Third Series Debentures pursuant to the
Exchange Offer likely would be treated as a significant modification of the
Third Series Debentures, and thus as an exchange of the Third Series Debentures
for the New Debentures, with the following federal income tax consequence.
The exchange of Third Series Debentures for New Debentures pursuant to the
Exchange Offer should constitute a tax-free reorganization under Section
368(a)(1)(E) of the Code for federal income tax purposes. Accordingly, subject
to the discussion below with respect to accrued interest (and original issue
discount) and excess principal amount, a holder who exchanges Third Series
Debentures for New Debentures generally (i) should not recognize any gain or
loss on the exchange, (ii) should have an adjusted tax basis in the New
Debentures equal to the holder's adjusted tax basis in the Third Series
Debentures exchanged therefor and (iii) should have a holding period in the New
Debentures that includes the period during which the holder held the Third
Series Debentures exchanged therefor.
Under Section 354(a)(2)(B) of the Code, the nonrecognition of income rules
(and related basis and holding period rules) generally applicable to
reorganizations will not apply to the exchange of Third Series Debentures for
New Debentures to the extent that the principal amount of the New Debentures
received is deemed to exceed the principal amount of the Third Series Debentures
or is "attributable to" interest or original issue discount (discussed below) on
the Third Series Debentures accrued since the beginning of the holder's holding
period. The Company has timely paid or will pay all interest due on the Third
Series Debentures to the holders for all periods through August 1, 1994. Such
amount will be taxable to exchanging holders as interest income to the extent
not previously included in income as interest on the Third Series Debentures. If
the principal amount of the New Debentures is deemed to exceed the principal
amount of the Third Series Debentures exchanged therefor, the exchanging holders
will recognize gain on the exchange to the extent of the excess.
In the event that the exchange of Third Series Debentures for New
Debentures pursuant to the Exchange Offer does not constitute a tax-free
reorganization under the Code, a holder generally would recognize gain or loss
equal to the difference between the amount realized on the exchange (less
amounts deemed to be attributable to any accrued but unpaid interest on the
Third Series Debentures, which amounts will be taxable as ordinary interest
income) and the holder's tax basis in the Third Series Debentures surrendered in
exchange therefor. Under certain Treasury regulations, as discussed below under
"Original Issue Discount," the amount realized on the exchange would be equal to
the "issue price" of the New Debentures received in the exchange, which should
be the fair market value of such New Debentures at the time of issuance assuming
that the New Debentures exchanged therefor are considered to be publicly traded
under such Treasury regulations, which should be the case. A holder's tax basis
in its Third Series Debentures generally would equal the cost of such Third
Series Debentures to such holder. Gain or loss recognized by a holder on the
exchange of Third Series Debentures for New Debentures generally would be
long-term capital gain or loss if the holder has held the Third Series
Debentures for more than one year at the time of the exchange. Under current
law, net capital gains of individuals are, under certain circumstances, taxed at
lower rates than items of ordinary income. The ability of holders to offset
capital losses against ordinary income is limited.
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<PAGE> 16
ORIGINAL ISSUE DISCOUNT ON NEW DEBENTURES
Under certain recently promulgated Treasury regulations, the New Debentures
may be considered to be issued with original issue discount for United States
federal income tax purposes. Holders of New Debentures issued with original
issue discount will be subject to the special tax accounting rules provided by
the Code. Holders of such New Debentures should be aware that, as described in
greater detail below, they generally must include original issue discount in
ordinary gross income for United States federal income tax purposes as it
accrues, in advance of the receipt of any payments attributable to that income.
A New Debenture will be considered to be issued with original issue
discount if the original issue discount on such New Debenture equals or exceeds
a de minimis amount, which is one-quarter of one percent of the principal amount
of the New Debentures multiplied by six, the number of complete years to their
maturity. The amount of original issue discount on any New Debenture will be the
difference between the issue price of such New Debenture, which should be its
fair market value at issuance if the New Debenture is considered to be publicly
traded (which should be the case), and the stated redemption price at maturity,
which in the case of a New Debenture will be the principal amount.
In general, each holder of a New Debenture, whether such holder uses the
cash or the accrual method of tax accounting, will be required to include in
ordinary gross income the sum of the "daily portions" of original issue discount
on that New Debenture for all days during the taxable year that the holder owns
the New Debenture. The daily portions of original issue discount on a New
Debenture are determined by allocating to each day in any accrual period a
ratable portion of the original issue discount allocable to that accrual period.
Accrual periods may be of any length and may vary in length over the term of a
New Debenture provided that each accrual period is no longer than one year and
each scheduled payment of principal or interest occurs at the end of an accrual
period. In the case of an initial holder, the amount of original issue discount
on a New Debenture allocable to each accrual period is determined by multiplying
the "adjusted issue price" (as defined below) of the New Debenture by a
fraction, the numerator of which is the annual yield to maturity of the New
Debenture and the denominator of which is the number of accrual periods in a
year. The "adjusted issue price" of a New Debenture at the beginning of any
accrual period will be the sum of its "issue price" and the amount of original
issue discount allocable to all prior accrual periods and includible in the
gross income of any holder. For this purpose, all payments on a New Debenture
will first be viewed as payments of previously accrued original issue discount,
and then as a payment of principal. As a result of this "constant yield" method
of including original issue discount in income, the amounts includible in income
by a holder in respect of a New Debenture are lesser in the early years and
greater in the later years than the amounts that would be includible on a
straight-line basis.
A subsequent holder of a New Debenture that purchases such New Debenture at
a cost less than its stated principal amount also generally will be required to
include in gross income the daily portions of original issue discount,
calculated as described above. However, if a holder acquires that New Debenture
at a lower yield to maturity than the yield of the New Debenture as determined
for original issue discount purposes with respect to the initial purchaser of
the New Debenture, the holder may reduce its periodic inclusions of original
issue discount income to reflect such lower yield to maturity.
PREMIUM AND MARKET DISCOUNT ON NEW DEBENTURES
A holder of a New Debenture that purchases the New Debenture at a cost
greater than its principal amount will be considered to have purchased the New
Debenture at a premium, and may amortize such premium, using a constant yield
method, over the remaining term of the New Debenture. With respect to a holder
that does not elect to amortize bond premium, the amount of bond premium will be
included in the holder's tax basis when the New Debenture matures or is disposed
of by the holder.
If a holder of a New Debenture purchases the New Debenture at a price that
produces a yield to maturity greater than the yield to maturity at which such
New Debenture first was issued, the New Debenture generally will be considered
to bear "market discount" in the hands of such holder. In such case, gain
realized by the holder on the sale or retirement of the New Debenture generally
will be treated as ordinary income to the extent of the market discount that
accrued on the New Debenture while held by such holder. In addition, the
15
<PAGE> 17
holder could be required to defer the deduction of a portion of the interest
paid on any indebtedness incurred or continued to purchase or carry the New
Debenture. In general terms, market discount on a New Debenture will be treated
as accruing ratably over the term of such New Debenture, or, at the election of
the holder, under a constant yield method.
SALE, EXCHANGE OR REDEMPTION OF NEW DEBENTURES
In general, subject to the market discount rules discussed above, the sale,
exchange or redemption of the New Debentures will result in capital gain or loss
equal to the difference, if any, between the holder's adjusted tax basis (as
adjusted for original issue discount accrued through the date of sale) in such
New Debentures and the amount of cash and the fair market value of any property
received. Any such capital gain or loss recognized by a holder of New Debentures
will be long-term capital gain or loss if the holding period of the debt
instrument exceeds one year. Otherwise, such capital gain or loss will be
short-term capital gain or loss.
TAX TREATMENT TO THE COMPANY
A taxpayer must generally include in gross income the amount of any
indebtedness discharged (in whole or in part) without consideration. For
purposes of determining whether the Company must recognize income from discharge
of indebtedness pursuant to the exchange contemplated by the Exchange Offer, the
Company will be treated as satisfying the Third Series Debentures with an amount
of money equal to the issue price of the New Debentures, which should be their
fair market value. If the fair market value of the New Debentures is less than
the principal amount of the Third Series Debentures exchanged therefor, then the
Company will be in receipt of discharge of indebtedness income to the extent of
the difference.
The Company believes that the New Debentures will be treated as debt for
federal income tax purposes. However, the IRS may contend that they represent an
equity interest in the Company for tax purposes. If the New Debentures were
treated as equity, the Company would be permanently denied deductions for
interest (including original issue discount) paid or accrued on the New
Debentures.
DESCRIPTION OF DEBENTURES
The New Debentures are to be issued under an Indenture to be dated as of
August 1, 1994 between the Company and United States Trust Company of New York
("U.S. Trust"), as Trustee, ("the New Indenture"). A copy of the New Indenture
has been filed as an exhibit to the Application for Qualification of the
Indenture under the Trust Indenture Act of 1939, on Form T-3 filed by the
Company with the Securities and Exchange Commission ("SEC"). The Third Series
Debentures were also issued under an Indenture between the Company and U.S.
Trust, as Trustee, (the "Third Series Indenture"). The form of the Third Series
Indenture was filed as an exhibit to Registration Statement No. 2-97263, filed
with the SEC in connection with the offering of the Third Series Debentures.
With the exception of a limited number of changes, the New Indenture is
identical to the Third Series Indenture and references below to the "Indenture"
are to each of these indentures and references to "Debentures" mean each of the
New and the Third Series Debentures. Set forth below is a description of the
basic terms of the Debentures. The statements under this caption relating to the
Debentures and the Indenture are summaries and do not purport to be complete.
Such summaries make use of terms defined in the Indenture and are qualified in
their entirety by express reference to the Indenture.
Form. The Debentures are issuable as registered Debentures without coupons
in denominations of $1,000 and integral multiples thereof. The several
denominations of Debentures are interchangeable in like aggregate principal
amounts, subject to the limitations and upon payment of any tax or other
governmental charge as provided in the Indenture.
Maturity and Interest. The principal amount of the New Debentures will be
due on July 1, 2001. The Debentures will bear interest from August 1, 1994,
payable semiannually on January 1 and July 1 of each year commencing January 1,
1995 to the persons in whose names the Debentures are registered at the close of
business on the preceding December 15 or June 15.
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<PAGE> 18
For the initial interest payment to be made on January 1, 1995, interest
will be determined on the basis of one-half of one percentage point ( 1/2%)
above the prime rate of Chemical Bank in effect at the end of each day from July
1, 1994 through December 1, 1994.
For subsequent interest payments, interest will be determined on the basis
of one-half of one percentage point ( 1/2%) above the prime rate of Chemical
Bank in effect at the end of each day during the respective periods, December 2
through May 31 of each year for the interest payment made on July 1, and June 1
through December 1 for the interest payment made on January 1.
All interest calculations will be rounded to the nearest 0.05 of a
percentage point.
For example, if the prime rate of Chemical Bank on December 2, 1994 was
6 1/2%, and such rate increased to 7% on February 21, 1995 and decreased to
6 1/2% on March 13, 1995, the interest rate for the period January 1 through
June 30, 1995 would be computed as follows:
(7% X 81 days* + 7 1/2% X 20 days + 7% X 80 days) / 181 days** = 7.05%
The interest on a $1,000 Debenture for such period would be $34.97 (the
amount obtained by multiplying $1,000 by 7.05% (the rate calculated above
rounded to the nearest 0.05 of a percentage point) and then multiplying this
result by the fraction 181/365 (the number of days in the period divided by the
number of days in the year)).
If Chemical Bank shall cease to establish a reference rate comparable to
that which it presently establishes, there shall be substituted thereafter for
the prime rate of Chemical Bank rate a rate or formula specified by the Company
which in its judgment provides a reasonable equivalent to the prime rate of
Chemical Bank as presently established and which, if feasible, shall be based on
a rate established by Chemical or another New York Clearing House member bank.
Conversion. The New Debentures are convertible at the principal amount
thereof into Common Shares of the Company at any time on or before the close of
business on July 1, 2001, except that, in the event that New Debentures are
called for redemption, the right to convert Debentures which are called for
redemption terminates at the close of business on the date fixed for redemption.
The present conversion rate is $8.75 per share. Such conversion rate is subject
to adjustment in case the Company pays to the holders of Common Shares a
dividend payable in Common Shares or in any other securities or assets (other
than cash payable out of consolidated earnings or earned surplus); or, if it
subdivides or combines its Common Shares; or if there is a split, reverse split
or other reclassification of the Common Shares; or if rights or warrants are
issued to all holders of Common Shares entitling them to purchase Common Shares
or other securities at a price per share less than the then-current market
price. No adjustment in the conversion rate is required if the Company otherwise
issues, in exchange for cash, property or services, Common Shares or any
security carrying rights to acquire Common Shares. No adjustment in the
conversion rate is required unless such adjustment will require an increase or
decrease of at least 50 cents in such rate; adjustments not made by reason of
this provision will be carried forward and taken into account at the time of any
subsequent adjustment. On conversion, no adjustment for accrued interest or
dividends will be made.
Optional Redemption. The New Debentures will be redeemable at the option
of the Company, at any time on or after August 1, 1997 as a whole or from time
to time in part, upon not less than 30 days' notice, at 100% of the unpaid
principal amount thereof, together in each case with accrued interest to the
redemption date. The New Debentures will be redeemable, in whole or in part,
prior to August 1, 1997 at the option of the Company, if for a period of 30
consecutive Business Days (the "Consecutive Period") the Closing Price of the
Common Shares has been at least 140% of the conversion price then in effect, at
a redemption price equal to 100% of the unpaid principal amount thereof,
together with accrued interest to the redemption date.
- ---------------
*The rate 1/2% above the prime rate of Chemical Bank multiplied by the
number of days (including weekends and holidays) the 6 1/2% prime rate was in
effect.
**The total number of days beginning December 2, 1994 (30 days prior to the
interest rate period) through May 31, 1995 (30 days prior to the interest
payment date).
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<PAGE> 19
Redemptions shall be made by giving at least 30 days notice of the scheduled
redemption date to the holders of New Debentures which are to be redeemed. Such
notice shall be given within 30 days of the last day of the Consecutive Period
in the case of redemptions prior to August 1, 1997. Holders of New Debentures
which are intended to be redeemed by the Company shall have the continued right
to convert their New Debentures to Common Shares, in whole or in part, at any
time prior to the date fixed for redemption. If less than all New Debentures are
to be redeemed, the Trustee shall select, in such manner in its discretion as it
shall deem appropriate and fair, the New Debentures to be redeemed; provided,
however, that the Trustee shall select New Debentures of denominations of $1,000
for redemption in whole only.
Subordination. The indebtedness evidenced by the Debentures (including
principal and interest) is subordinated in right of payment to the prior payment
in full of all Senior Indebtedness of the Company. "Senior Indebtedness" is
defined as (a) all indebtedness, evidenced by a note or similar instrument
whether now outstanding or hereafter created, incurred, assumed, issued or
guaranteed by the Company which is for borrowed money, and (b) renewals,
extensions and refundings of such indebtedness, unless in any case it is
provided that the particular indebtedness, renewal, extension or refunding is
not Senior Indebtedness. At April 30, 1994, the approximate amount of Senior
Indebtedness of the Company was $16.5 million. The New Debentures will rank pari
passu with the Company's outstanding Third Series Debentures and pari passu with
its Floating Interest Rate Convertible Subordinated Debentures, Fourth Series,
due 1998.
Such subordination will affect the Company's obligation to make repayments
with respect to the Debentures in connection with dissolution, winding up,
liquidation or reorganization of the Company or in the event that a default in
the payment of any Senior Indebtedness beyond any applicable grace period, or
other event of default with respect to Senior Indebtedness that would permit
acceleration of maturity thereof, shall have occurred and be continuing, or if a
payment with respect to the Debentures would result in any such event of default
with respect to Senior Indebtedness, or if any payment with respect to Senior
Indebtedness is then due and payable. The foregoing provisions will not change
the relative rights of the holders of the Debentures and creditors of the
Company other than the holders of Senior Indebtedness. By reason of such
subordination, in the event of insolvency, however, the holders of the
Debentures may recover less ratably than the creditors of the Company who are
not holders of Senior Indebtedness.
Modification and Amendment. The Indenture contains provisions permitting
the Company and the Trustee, with the consent of the holders of not less than
66 2/3% in principal amount of the Debentures at the time outstanding, to modify
the Indenture or any supplemental indenture or the rights of the holders of the
Debentures; provided that no such modification may (i) extend the fixed maturity
of any Debentures, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or impair the conversion rights
of the holders of Debentures without the consent of the holder of each Debenture
so affected, or (ii) reduce the aforesaid percentage of Debentures, the consent
of the holders of which is required for any such modification, without the
consent of the holders of all Debentures then outstanding.
Events of Default. An "Event of Default" is defined to mean: failure to
pay principal when due, either at maturity, upon redemption or otherwise;
failure to pay interest when due for 30 days; failure to perform any other
covenant in the Indenture for 60 days after notice; any default in the
conversion of the Debentures and continuance of such default for 60 days after
notice of such default; certain events of bankruptcy, insolvency or
reorganization of the Company; and any default under any indenture or instrument
evidencing indebtedness of the Company for borrowed money if such default is not
waived or cured and would permit acceleration of such indebtedness. The
Indenture provides that the Trustee shall, within 90 days after the occurrence
of a default, give to the holders of Debentures notice of all uncured defaults
known to it (the term "default" to include the events specified above without
grace periods); provided that, except in the case of default in payment of
principal or interest in respect of the Debentures, the Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of the Debentureholders.
The Company is required to furnish to the Trustee within 120 days after the
close of each fiscal year a statement of certain officers of the Company to the
effect that review of the activities of the Company has been made with a view to
determining whether its obligations under the Indenture have been complied with
18
<PAGE> 20
and as to whether such officers have obtained knowledge of any default under the
Indenture during such fiscal year.
Rights on Default. The Trustee or the holders of 25% of the Debentures are
authorized to declare the principal of all Debentures due and payable upon the
happening of any Event of Default specified in the Indenture, but the holders of
a majority in principal amount of the Debentures are authorized to waive any
default and rescind such declaration if the default is cured. Subject to the
provisions of the Indenture relating to the duties of the Trustee, the Trustee
is under no obligation to exercise any of its rights or powers under the
Indenture, at the request, order or direction of any of the Debentureholders,
unless 25% of the Debentureholders shall have so directed and offered to the
Trustee reasonable indemnity. Subject to such provision for indemnification, the
holders of a majority in principal amount of the Debentures at the time
outstanding have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee.
DESCRIPTION OF COMMON SHARES
The Company's Common Shares, $1 par value, are entitled to one vote per
share on all matters and, subject to the rights of any outstanding Preferred
Shares, to such dividends as may be declared by the Board of Directors out of
funds legally available therefor, and, upon liquidation of the Company, to share
pro rata in its remaining net assets. Common Shares do not have cumulative
voting or preemptive rights.
The Company has authorized 641,288 Preferred Shares, $5 par value, which
may be issued from time to time in one or more series with such dividend,
voting, redemption, liquidation and other provisions as fixed by the Board of
Directors. There were outstanding on May 31, 1994, 1,288 Preferred Shares,
Series B and 250,000 Preferred Shares, Series D. Each Series B share is entitled
to cumulative dividends at the rate of $0.10 per year, to one vote per share
(voting with the Common Shares except as otherwise required by law) and to
payment (preferential to the Common Shares) upon liquidation or redemption equal
to accrued and unpaid dividends to the date of redemption or liquidation plus an
amount which is $20 in the case of involuntary liquidation and $28 otherwise;
each Series D share (all of such shares are owned by the Company's Employee
Stock Ownership Trust) is entitled to dividends at the rate of $0.6125 per year,
to one vote per share (voting with the Common Shares except as otherwise
required by law), is convertible into one Common Share, and is entitled to a
liquidation preference (together with accrued dividends) of $10.
19
<PAGE> 21
STERLING BANCORP
THE EXCHANGE AGENT: UNITED STATES TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand:
UNITED STATES TRUST COMPANY (212) 420-6152 UNITED STATES TRUST COMPANY
OF NEW YORK OF NEW YORK
770 BROADWAY, 7TH FLOOR Confirm by Telephone: 65 BEAVER STREET, GROUND FLOOR
NEW YORK, NEW YORK 10003 NEW YORK, NEW YORK 10005
ATTENTION: CORPORATE TRUST ATTENTION: CORPORATE TRUST
SERVICES (800) 548-6565 SERVICES
</TABLE>
REQUESTS FOR ADDITIONAL INFORMATION SHOULD BE DIRECTED TO
JERROLD GILBERT, SECRETARY,
540 MADISON AVENUE (SECOND FLOOR), NEW YORK, N.Y. 10022
AT (212) 826-8044 (CALL COLLECT)
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE PAGE
---- ----
<S> <C> <S> <C>
Additional Information................ 2 Price Range of Common Shares and
Offering Summary...................... 3 Third Series Debentures............... 8
Selected Financial Data............... 6 The Exchange Offer.................... 9
The Company........................... 7 Certain Federal Income Tax
Ratios of Earnings to Fixed Charges... 7 Consequences.......................... 13
Recent Transactions in the Company's Description of Debentures............. 16
Securities.......................... 7 Description of Common Stock........... 19
</TABLE>
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<PAGE> 1
LETTER OF TRANSMITTAL
FOR
STERLING BANCORP
OFFER TO EXCHANGE ITS
FLOATING INTEREST RATE CONVERTIBLE SUBORDINATED
DEBENTURES, SERIES V, DUE JULY 1, 2001
FOR ANY AND ALL OF ITS
FLOATING INTEREST RATE CONVERTIBLE SUBORDINATED
DEBENTURES, THIRD SERIES, DUE JULY 1, 1996
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JULY 29,
1994 UNLESS THE EXCHANGE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF
OLD DEBENTURES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE EXPIRATION
DATE.
TO: UNITED STATES TRUST COMPANY OF NEW YORK, EXCHANGE AGENT
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND:
UNITED STATES TRUST COMPANY (212) 420-6152 UNITED STATES TRUST COMPANY
OF NEW YORK OF NEW YORK
770 BROADWAY, 7TH FLOOR CONFIRM BY TELEPHONE: 65 BEAVER STREET, GROUND FLOOR
NEW YORK, NEW YORK 10003 NEW YORK, NEW YORK 10005
ATTENTION: CORPORATE TRUST (800) 548-6565 ATTENTION: CORPORATE TRUST
SERVICES SERVICES
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA
TELEGRAM, TELEX OR FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE
A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY
BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW DEBENTURES FOR THEIR OLD
DEBENTURES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW)
THEIR OLD DEBENTURES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
By execution hereof, the undersigned acknowledges receipt of the offering
circular dated June 9, 1994 (the "Offering Circular"), of Sterling Bancorp, a
New York corporation (the "Company"), which, together with this Letter of
Transmittal and the instructions hereto (the "Letter of Transmittal"),
constitute the Company's offer (the "Exchange Offer") to exchange $1,000
principal amount of its Floating Interest Rate Convertible Subordinated
Debentures, Series V, due July 1, 2001 (the "New Debentures"), for each $1,000
principal amount of its outstanding Floating Interest Rate Convertible
Subordinated Debentures, Third Series, due July 1, 1996 (the "Old Debentures"),
upon the terms and subject to the conditions set forth in the Prospectus.
This Letter of Transmittal is to be used by Holders (as defined below) if:
(i) certificates representing Old Debentures are to be physically delivered to
the Exchange Agent herewith by Holders; (ii) tender of Old Debentures is to be
made by book-entry transfer to the Exchange Agent's account at The Depository
Trust Company ("DTC") pursuant to the procedures set forth in the Offering
Circular under "The Exchange Offer -- Procedures for Tendering" by any financial
institution that is a participant in DTC and whose name appears on a security
position listing as the owner of Old Debentures (such participants, acting on
behalf of Holders are referred to herein, together with such Holders, as "Acting
Holders"); or (iii) tender of Old Debentures is to be made according to the
guaranteed delivery procedures set forth in the Prospectus under "The Exchange
Offer -- Guaranteed Delivery Procedure." Delivery of documents to DTC does not
constitute delivery to the Exchange Agent.
<PAGE> 2
The term "Holder" with respect to the Exchange Offer means any person: (i)
in whose name Old Debentures are registered on the books of the Company or any
other person who has obtained a properly completed bond power from the
registered Holder; or (ii) whose Old Debentures are held of record by DTC who
desires to deliver such Old Debentures by book-entry transfer at DTC.
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 Debentures must
complete this letter in its entirety.
All capitalized terms used herein and not defined shall have the meaning
ascribed to them in the Offering Circular.
The instructions included with this Letter of Transmittal must be followed.
Questions and requests for assistance or for additional copies of the
Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Exchange Agent. See Instruction 8 herein.
HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OLD
DEBENTURES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
<PAGE> 3
List below the Old Debentures to which this Letter of Transmittal relates.
If the space provided below is inadequate, list the certificate numbers and
principal amounts on a separately executed schedule and affix the schedule to
this Letter of Transmittal. Tenders of Old Debentures will be accepted only in
principal amounts equal to $1,000 or integral multiples thereof.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD DEBENTURES
- --------------------------------------------------------------------------------------------------------------------
CERTIFICATE AGGREGATE
NUMBER(S)* PRINCIPAL
(ATTACH SIGNED AMOUNT
NAME(S) AND ADDRESS(ES) OF HOLDER(S) LIST IF TENDERED (IF LESS
(PLEASE FILL IN, IF BLANK) NECESSARY) THAN ALL)**
- ------------------------------------------------------------------------ --------------------- ---------------------
<S> <C> <C>
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
-------------------- ---------------------
- ---------------------------------------------------------------------------------------------- ---------------------
TOTAL PRINCIPAL AMOUNT OF OLD DEBENTURES TENDERED
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer.
** Need not be completed by Holders who wish to tender with respect to all Old Debentures listed. See Instruction 2.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
/ / CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED BY DTC TO THE
EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _________________________________________
DTC Book-Entry Account No.: ____________________________________________
If Holders desire to tender Old Debentures pursuant to the Exchange Offer and
(i) certificates representing such Old Debentures are not lost but are not
immediately available, (ii) time will not permit this Letter of Transmittal,
certificates representing such Old Debentures or other required documents to
reach the Exchange Agent prior to the Expiration Date or (iii) the procedures
for book-entry transfer cannot be completed prior to the Expiration Date, such
Holders may effect a tender of such Old Debentures in accordance with the
guaranteed delivery procedures set forth in the Prospectus under "The Exchange
Offer -- Guaranteed Delivery Procedures."
/ / CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Holder(s) of Old Debentures: __________________________________
Window Ticket No. (if any): ______________________________________________
Date of Execution of
Notice of Guaranteed Delivery: ___________________________________________
Name of Eligible Institution that Guaranteed Delivery: ___________________
__________________________________________________________________________
If Delivered by Book-Entry Transfer:
Name of Tendering Institution: ___________________________________________
DTC Book-Entry Account No.: ______________________________________________
<PAGE> 5
Subject to the terms of the Exchange Offer, the undersigned hereby tenders
to the Company the principal amount of Old Debentures indicated above. Subject
to and effective upon the acceptance for exchange of the principal amount of Old
Debentures tendered in accordance with this Letter of Transmittal, the
undersigned sells, assigns and transfers to the Company all right, title and
interest in and to the Old Debentures tendered hereby. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent its agent and
attorney-in-fact (with full knowledge that the Exchange Agent also acts as the
agent of the Company and as Trustee under the Indenture for the Old Debentures
and the New Debentures) with respect to the tendered Old Debentures with full
power of substitution to deliver certificates for such Old Debentures for
cancellation in accordance with the Indenture for the Old Debentures, all in
accordance with the terms of the Exchange Offer. The power of attorney granted
in this paragraph shall be deemed irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that he or she has full
power and authority to tender, sell, assign and transfer the Old Debentures
tendered hereby and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claim, when the same are acquired by the Company.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the assignment and transfer of the Old Debentures tendered
hereby.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Old Debentures when the Company has given oral or
written notice thereof to the Exchange Agent. If any tendered Old Debentures are
not accepted for exchange pursuant to the Exchange Offer for any reason,
certificates for any such unaccepted Old Debentures will be returned (except as
noted below with respect to tenders through DTC), without expense, to the
undersigned at the address shown below or at a different address shown below or
at a different address as may be indicated under "Special Issuance Instructions"
as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned and every obligation under this Letter of Transmittal shall be
binding upon the undersigned's heirs, personal representatives, successors and
assigns.
The undersigned understands that tenders of Old Debentures pursuant to the
procedures described under the caption "The Exchange Offer -- Procedures for
Tendering" in the Offering Circular and in the instructions hereto will
constitute a binding agreement between the undersigned and the Company upon the
terms and subject to the conditions of the Exchange Offer.
<PAGE> 6
Unless otherwise indicated under "Special Issuance Instructions," please
issue the certificates representing the New Debentures issued in exchange for
the Old Debentures accepted for exchange and return any Old Debentures not
tendered or not exchanged, in the name(s) of the undersigned (or in either such
event in the case of Old Debentures tendered by DTC, by credit to the account at
DTC). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please send the certificates representing the New Debentures
issued in exchange for the Old Debentures accepted for exchange and any
certificates for Old Debentures not tendered or not exchanged (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signatures, unless, in either event, tender is being made through
DTC. In the event that both "Special Issuance Instructions" and "Special
Delivery Instructions" are completed, please issue the certificates representing
the New Debentures issued in exchange for the Old Debentures accepted for
exchange and return any Old Debentures not tendered or not exchanged in the
name(s) of, and send said certificates to, the person(s) so indicated. The
undersigned recognizes that the Company has no obligation pursuant to the
"Special Issuance Instructions" and "Special Delivery Instructions" to transfer
any Old Debentures from the name of the registered holder(s) thereof if the
Company does not accept for exchange any of the Old Debentures so tendered.
<PAGE> 7
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF
OLD DEBENTURES REGARDLESS OF WHETHER OLD DEBENTURES ARE BEING PHYSICALLY
DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the Holder(s) of Old
Debentures exactly as their name(s) appear(s) on certificate(s) for Old
Debentures or, if tendered by a participant in DTC, exactly as such
participant's name appears on a security position listing as the owner of Old
Debentures, or by person(s) authorized to become registered Holder(s) by
endorsements and documents transmitted with this Letter of Transmittal. If
signature is by a trustee, executor, administrator, guardian, attorney-in-fact,
officer or other person acting in a fiduciary or representative capacity, such
person must set forth his or her full title below under "Capacity" and submit
evidence satisfactory to the Company of such person's authority to so act. See
Instruction 3 herein.
If the signature appearing below is not of the registered Holder(s) of the
Old Debentures, then the registered Holder(s) must sign a valid proxy.
<TABLE>
<S> <C>
X ______________________________________ Date: ______________________________
X ______________________________________ Date: ______________________________
Signature(s) of Holder(s) or
Authorized Signatory
Name(s): _______________________________ Address: ___________________________
_______________________________ ___________________________
(Please Print) (Including Zip Code)
Capacity: ______________________________ Area Code and Telephone No.: _______
Social Security No.: ___________________
</TABLE>
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
SIGNATURE GUARANTEE (SEE INSTRUCTION 3 HEREIN)
CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION
- --------------------------------------------------------------------------------
(Name of Eligible Institution Guaranteeing Signatures)
- --------------------------------------------------------------------------------
(Address (including zip code) and Telephone Number (including area code) of
Firm)
- --------------------------------------------------------------------------------
(Authorized Signature)
- --------------------------------------------------------------------------------
(Printed Name)
- --------------------------------------------------------------------------------
(Title)
Date:
--------------------
<PAGE> 8
- -------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTION 4 HEREIN)
To be completed ONLY if certificates for the New Debentures issued pursuant to
the Exchange Offer or for any principal amount of Old Debentures not tendered
for exchange are to be issued in the name of someone other than the person or
persons whose signature(s) appear(s) within this Letter of Transmittal or
issued to an address different from that shown in the box entitled
"Description of Old Debentures" within this Letter of Transmittal, or if Old
Debentures tendered by book-entry transfer that are not accepted for purchase
are to be credited to an account maintained at DTC.
Name:
------------------------------------------------------------------------
(Please Print)
Address:
--------------------------------------------------------------------
(Please Print)
-----------------------------------------------------------------------------
Zip Code
-----------------------------------------------------------------------------
Taxpayer Identification or
Social Security Number
(See Substitute Form W-9 herein)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTION 4 HEREIN)
To be completed ONLY if certificates for the New Debentures issued pursuant to
the Exchange Offer or for any principal amount of Old Debentures not tendered
for exchange are to be sent to someone other than the person or persons whose
signature(s) appear(s) within this Letter of Transmittal or issued to an
address different from that shown in the box entitled "Description of Old
Debentures" within this Letter of Transmittal.
Name:
------------------------------------------------------------------------
(Please Print)
Address:
--------------------------------------------------------------------
(Please Print)
-----------------------------------------------------------------------------
Zip Code
-----------------------------------------------------------------------------
Taxpayer Identification or
Social Security Number
(See Substitute Form W-9 herein)
- -------------------------------------------------------------------------------
<PAGE> 9
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER AND THE SOLICITATION
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD DEBENTURES. The
certificates for the tendered Old Debentures (or a confirmation of a book-entry
transfer into the Exchange Agent's account at DTC of all Old Debentures
delivered electronically), as well as a properly completed and duly executed
copy of this Letter of Transmittal or facsimile hereof and any other documents
required by this Letter of Transmittal must be received by the Exchange Agent at
its address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. The method of delivery of the tendered Old Debentures, this
Letter of Transmittal and all other required documents to the Exchange Agent is
at the election and risk of the Holder and, except as otherwise provided below,
the delivery will be deemed made only when actually received by the Exchange
Agent. Instead of delivery by mail, it is recommended that the Holder use an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure timely delivery. No Letter of Transmittal or Old Debentures
should be sent to the Company.
Holders who wish to tender their Old Debentures and (i) whose Old
Debentures are not immediately available or (ii) who cannot deliver their Old
Debentures, this Letter of Transmittal or any other documents required hereby to
the Exchange Agent prior to the Expiration Date must tender their Old Debentures
and follow the guaranteed delivery procedures set forth in the Offering
Circular. Pursuant to such procedures: (i) such tender must be made by or
through an Eligible Institution; (ii) prior to the Expiration Date, the Exchange
Agent must have received from the Eligible Institution a properly completed and
duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or
hand delivery) setting forth the name and address of the Holder of the Old
Debentures, the certificate number or numbers of such Old Debentures and the
principal amount of Old Debentures tendered, stating that the tender is being
made thereby and guaranteeing that, within five business days after the
Expiration Date, this Letter of Transmittal (or facsimile hereof) together with
the certificate(s) representing the Old Debentures (or a confirmation of
electronic delivery of book-entry delivery into the Exchange Agent's account at
DTC) and any required documents will be deposited by the Eligible Institution
with the Exchange Agent; and (iii) such properly completed and executed Letter
of Transmittal (or facsimile hereof), as well as all other documents required by
this Letter of Transmittal and the certificate(s) representing all tendered Old
Debentures in proper form for transfer (or a confirmation of electronic mail
delivery of book-entry delivery into the Exchange Agent's account at DTC), must
be received by the Exchange Agent within five business days after the Expiration
Date, all as provided in the Prospectus under the caption "Guaranteed Delivery
Procedures." Any Holder of Old Debentures who wishes to tender his Old
Debentures pursuant to the guaranteed delivery procedures described above must
ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior
to 5:00 p.m., New York City time, on the Expiration Date.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Old Debentures will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Old Debentures not properly tendered or any Old Debentures the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right to waive any irregularities or
conditions of tender as to particular Old Debentures. The Company's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in this Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Old Debentures must be cured within such time as the Company shall determine.
Neither the Company, the Exchange Agent nor any other person shall be under any
duty to give notification of defects or irregularities with respect to tenders
of Old Debentures, nor shall any of them incur any liability for failure to give
such notification. Tenders of Old Debentures will not be deemed to have been
made until such defects or irregularities have been cured or waived. Any Old
Debentures received by the Exchange Agent that are not properly tendered and as
to which the defects or irregularities have not been cured or waived will be
returned without cost by the Exchange Agent to the tendering Holders of Old
Debentures, unless otherwise provided in this Letter of Transmittal, as soon as
practicable following the Expiration Date.
<PAGE> 10
2. PARTIAL TENDERS. Tenders of Old Debentures will be accepted in all
denominations of $1,000 and integral multiples in excess thereof. If less than
the entire principal amount of any Old Debentures is tendered, the tendering
Holder should fill in the principal amount tendered in the third column of the
chart entitled "Description of Old Debentures." The entire principal amount of
Old Debentures delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated. If the entire principal amount of all Old
Debentures is not tendered, Old Debentures for the principal amount of Old
Debentures not tendered and a certificate or certificates representing New
Debentures issued in exchange of any Old Debentures accepted will be sent to the
Holder at his or her registered address, unless a different address is provided
in the appropriate box on this Letter of Transmittal or unless tender is made
through DTC, promptly after the Old Debentures are accepted for exchange.
3. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or facsimile hereof) is
signed by the registered Holder(s) of the Old Debentures tendered hereby, the
signature must correspond with the name(s) as written on the face of the Old
Debentures without alteration, enlargement or any change whatsoever.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder(s) of Old Debentures tendered and the certificate(s) for New
Debentures issued in exchange therefor is to be issued (or any untendered
principal amount of Old Debentures is to be reissued) to the registered Holder,
such Holder need not and should not endorse any tendered Old Debentures, nor
provide a separate bond power. In any other case, such holder must either
properly endorse the Old Debentures tendered or transmit a properly completed
separate bond power with this Letter of Transmittal, with the signatures on the
endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered Holder(s) of any Old Debentures listed, such Old
Debentures must be endorsed or accompanied by appropriate bond powers signed as
the name of the registered Holder(s) appears on the Old Debentures.
If this Letter of Transmittal (or facsimile hereof) or any Old Debentures
or bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, or officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing, and
unless waived by the Company, evidence satisfactory to the Company of their
authority so to act must be submitted with this Letter of Transmittal.
Endorsements on Old Debentures or signatures on bond powers required by
this Instruction 3 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal (or facsimile hereof) must be
guaranteed by an Eligible Institution unless the Old Debentures tendered
pursuant thereto are tendered (i) by a registered Holder (including any
participant in DTC whose name appears on a security position listing as the
owner of Old Debentures) who has not completed the box set forth herein entitled
"Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" or (ii) for the account of an Eligible Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering Holders should
indicate, in the applicable spaces, the name and address to which New Debentures
or substitute Old Debentures for principal amounts not tendered or not accepted
for exchange are to be issued or sent, if different from the name and address of
the person signing this Letter of Transmittal (or in the case of tender of the
Old Debentures through DTC, if different from DTC). In the case of issuance in a
different name, the taxpayer identification or social security number of the
person named must also be indicated.
<PAGE> 11
5. TRANSFER TAXES. The Company will pay all transfer taxes, if any,
applicable to the exchange of Old Debentures pursuant to the Exchange Offer. If,
however, certificates representing New Debentures or Old Debentures for
principal amounts not tendered or accepted for exchange are to be delivered to,
or are to be registered or issued in the name of, any person other than the
registered Holder of the Old Debentures tendered hereby, or if tendered Old
Debentures are registered in the name of any person other than the person
signing this Letter of Transmittal, or if a transfer tax is imposed for any
reason other than the exchange of Old Debentures pursuant to the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
Holder or any other person) will be payable by the tendering Holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with this Letter of Transmittal, the amount of such transfer taxes
will be billed directly to such tendering Holder.
Except as provided in this Instruction 5, it will not be necessary for
transfer tax stamps to be affixed to the Old Debentures listed in this Letter of
Transmittal.
6. WAIVER OF CONDITIONS. The Company reserves the absolute right to amend,
waive or modify specified conditions in the Exchange Offer in the case of any
Old Debentures tendered.
7. MUTILATED, LOST, STOLEN OR DESTROYED OLD DEBENTURES. Any tendering
Holder whose Old Debentures have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address indicated herein for further
instruction.
8. REQUEST FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance and requests for additional copies of the Offering Circular or this
Letter of Transmittal may be directed to the Exchange Agent at the address
specified in the Offering Circular or to Jerrold Gilbert, Executive Vice
President, General Counsel and Secretary, 540 Madison Avenue, New York, NY
10028, (212) 826-8044.
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
CERTIFICATE SURRENDERED OLD DEBENTURES TENDERED OLD DEBENTURES ACCEPTED
<S> <C> <C>
- ------------------------------ ------------------------------ -------------------------------
- ------------------------------ ------------------------------ -------------------------------
- ------------------------------ ------------------------------ -------------------------------
- ------------------------------ ------------------------------ -------------------------------
- ---------------------------------------------------------------------------------------------
Delivery Prepared by Checked by Date
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
IMPORTANT TAX INFORMATION
Under federal income tax laws, a Holder whose tendered Old Debentures are
accepted pursuant to the Exchange Offer is required to provide the Exchange
Agent (as payer) with such Holder's correct Taxpayer Identification Number
("TIN") or Substitute Form W-9 below or otherwise establish a basis for
exemption from backup withholding. If such Holder is an individual, the TIN is
his social security number. If the Exchange Agent is not provided with the
correct TIN, a $50 penalty may be imposed by the Internal Revenue Service, and
payments made with respect to Old Debentures purchased pursuant to the Exchange
Offer may be subject to backup withholding.
Certain Holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt Holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Exchange Agent a properly completed U.S. Treasury Form W-8, signed under
penalties of perjury, attesting to that Holder's exempt status. A Form W-8 can
be obtained from the Exchange Agent. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
<PAGE> 12
If backup withholding applies, the Exchange Agent is required to withhold
31% of any payments made to the Holder or other payee. Backup withholding is not
an additional federal income tax. Rather, the federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to the Exchange
Offer, the Holder is required to provide the Exchange Agent with either: (i) the
Holder's correct TIN by completing the form below, certifying that the TIN
provided on Substitute Form W-9 is correct (or that such Holder is awaiting a
TIN) and that (A) the Holder has not been notified by the Internal Revenue
Service that the Holder is subject to backup withholding as a result of failure
to report all interest or dividends or (B) the Internal Revenue Service has
notified the Holder that the Holder is no longer subject to backup withholding;
or (ii) an adequate basis for exemption.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered Holder of
the Old Debentures. If the Old Debentures are held in more than one name or are
held not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
<PAGE> 13
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT _________________________________
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW Social Security Number
OR ______________________________
Employer Identification Number
--------------------------------------------------------------------------------------------
PART 2 -- CERTIFICATION -- Under Penalties of Perjury, I PART 3 --
PAYER'S REQUEST FOR TAXPAYER certify that: Awaiting TIN / /
IDENTIFICATION NUMBER (TIN) (1) The number shown on this form is my correct Taxpayer
DEPARTMENT OF THE TREASURY Identification Number (or I am waiting for a number
INTERNAL REVENUE SERVICE to be issued to me) and
(2) I am not subject to backup withholding because (a) I
am exempt from backup withholding or (b) I have not
been notified by the Internal Revenue Service ("IRS")
that I am currently subject to backup withholding as
a result of failure to report all interest or
dividends, or (c) the IRS has notified me that I am
no longer subject to backup withholding.
--------------------------------------------------------------------------------------------
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) in Part 2 above if you have
been notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received another
notification from the IRS stating that you are no longer subject to backup
withholding, do not cross out item (2).
_________________________________________ ________________________
SIGNATURE DATE
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO HOLDERS OF NEW DEBENTURES PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within 60 days, 31 percent
of all reportable payments made to me thereafter will be withheld until I
provide a number.
__________________________________________ ____________________
Signature Date
<PAGE> 14
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
UNITED STATES TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND:
UNITED STATES TRUST COMPANY (212) 420-6152 UNITED STATES TRUST COMPANY
OF NEW YORK OF NEW YORK
770 BROADWAY, 7TH FLOOR CONFIRM BY TELEPHONE: 65 BEAVER STREET, GROUND FLOOR
NEW YORK, NEW YORK 10003 NEW YORK, NEW YORK 10005
ATTENTION: CORPORATE TRUST (800) 548-6565 ATTENTION: CORPORATE TRUST
SERVICES SERVICES
</TABLE>
