-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AT2GdmFkmVfDVT6BlvbQVbyC0nUsHK3KBXqmeixiRJ+5SuRzebFFWrrOgwmBuomI NBxmxqu8cUPnv0OBzGe65w== 0000950123-02-000986.txt : 20020414 0000950123-02-000986.hdr.sgml : 20020414 ACCESSION NUMBER: 0000950123-02-000986 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 20020206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STERLING BANCORP CENTRAL INDEX KEY: 0000093451 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 132565216 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-82296 FILM NUMBER: 02529087 BUSINESS ADDRESS: STREET 1: 430 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10022-3299 BUSINESS PHONE: 2128268044 MAIL ADDRESS: STREET 1: 430 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10022-3299 FORMER COMPANY: FORMER CONFORMED NAME: STANDARD PRUDENTIAL CORP /NEW/ DATE OF NAME CHANGE: 19781210 FORMER COMPANY: FORMER CONFORMED NAME: STANDARD PRUDENTIAL UNITED CORP DATE OF NAME CHANGE: 19681125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STERLING BANCORP TRUST I CENTRAL INDEX KEY: 0001166585 IRS NUMBER: 136382423 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-82296-01 FILM NUMBER: 02529088 BUSINESS ADDRESS: STREET 1: C/O STERLING BANCORP STREET 2: FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10019-6108 BUSINESS PHONE: 2127573300 MAIL ADDRESS: STREET 1: C/O STERLING BANCORP STREET 2: 650 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10019-6108 S-3 1 y56473s-3.txt STERLING BANCORP AND STERLING BANCORP TRUST I AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 6, 2002 REG. NOS. 333- AND 333 -01 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- STERLING BANCORP STERLING BANCORP TRUST I (Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its trust NEW YORK agreement) (State or other jurisdiction of incorporation or DELAWARE organization of registrant) (State or other jurisdiction of incorporation or 13-2565216 organization of registrant) (I.R.S. Employer Identification No.) 37-6382423 (I.R.S. Employer Identification No.)
--------------------- C/O STERLING BANCORP 650 FIFTH AVENUE 650 FIFTH AVENUE NEW YORK, NEW YORK 10019-6108 NEW YORK, NEW YORK 10019-6108 (212) 757-3300 (212) 757-3300 (Address, including zip code, and telephone number, (Address, including zip code, and telephone number, including area including area code, of registrant's principal executive offices) code, of registrant's principal executive offices)
--------------------- JOHN W. TIETJEN EXECUTIVE VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER STERLING BANCORP 650 FIFTH AVENUE NEW YORK, NEW YORK 10019-6108 TEL: (212) 757-3300 FAX: (212) 757-8287 (Name, address, including zip code, and telephone number, including area code, of agent for service of each registrant) WITH COPIES TO: DANIEL DUNSON, ESQ. THOMAS D. WASHBURNE, JR., ESQ. SULLIVAN & CROMWELL MICHAEL W. CONRON, ESQ. 125 BROAD STREET VENABLE, BAETJER AND HOWARD, LLP NEW YORK, NEW YORK 10004 TWO HOPKINS PLAZA, SUITE 1800 TEL: (212) 558-4000 BALTIMORE, MARYLAND 21201 FAX: (212) 558-3588 TEL: (410) 244-7400 FAX: (410) 244-7742
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the registration statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. --------------------- CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- PROPOSED PROPOSED TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE - --------------------------------------------------------------------------------------------------------------------------------- Preferred Securities of Sterling Bancorp Trust I............................... 2,500,000 securities(2) $10 $25,000,000 $2,300 - --------------------------------------------------------------------------------------------------------------------------------- Junior Subordinated Deferrable Interest Debentures of Sterling Bancorp(3)..... $25,000,000(4) 100% $25,000,000 N/A - --------------------------------------------------------------------------------------------------------------------------------- Sterling Bancorp Guarantee with respect to Preferred Securities(5)(6)......... N/A N/A N/A N/A - --------------------------------------------------------------------------------------------------------------------------------- Total................................... $25,000,000 100% $25,000,000 $2,300 - --------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the registration fee. (2) Includes 300,000 Preferred Securities subject to underwriters' over-allotment option. (3) The Junior Subordinated Deferrable Interest Debentures will be purchased by Sterling Bancorp Trust I with the proceeds of the sale of the Preferred Securities. (4) Includes $3,000,000 of Junior Subordinated Deferrable Interest Debentures relating to 300,000 Preferred Securities subject to underwriters' over-allotment option. (5) No separate consideration will be received for Sterling Bancorp Guarantee. (6) This registration statement is deemed to cover the Junior Subordinated Deferrable Interest Debentures of Sterling Bancorp, the rights of holders of Junior Subordinated Deferrable Interest Debentures of Sterling Bancorp under the Indenture, the rights of holders of Preferred Securities of Sterling Bancorp Trust I under the trust agreement, the rights of holders of the Preferred Securities under the Guarantee and the Expense Agreement which, taken together fully, irrevocably and unconditionally guarantee the respective obligations of Sterling Bancorp Trust I under the Preferred Securities. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED , 2002 PROSPECTUS 2,200,000 CUMULATIVE TRUST PREFERRED SECURITIES STERLING BANCORP TRUST I % CUMULATIVE TRUST PREFERRED SECURITIES (LIQUIDATION AMOUNT $10 PER PREFERRED SECURITY) FULLY, IRREVOCABLY AND UNCONDITIONALLY GUARANTEED ON A SUBORDINATED BASIS, AS DESCRIBED IN THIS PROSPECTUS, BY [STERLING BANCORP LOGO] STERLING BANCORP --------------------- Sterling Bancorp Trust I is offering 2,200,000 preferred securities at $10 per security. Sterling Bancorp Trust I will purchase % subordinated debentures of Sterling Bancorp using the proceeds from its offering of the preferred securities. The subordinated debentures have the same payment terms as the preferred securities. We have applied to list the preferred securities on the New York Stock Exchange under the trading symbol "STL-PrA." We expect that the preferred securities will begin trading on the New York Stock Exchange within 30 days after they are first issued. --------------------- INVESTING IN THE PREFERRED SECURITIES INVOLVES RISKS THAT ARE DESCRIBED IN THE "RISK FACTORS" SECTION BEGINNING ON PAGE 12 OF THIS PROSPECTUS. --------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The preferred securities are not savings accounts, deposits or obligations of any bank and are not insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation or any other governmental agency.
PER PREFERRED SECURITY TOTAL --------- ----------- Public offering price....................................... $10.00 $22,000,000 Underwriting commission to be paid by Sterling Bancorp...... See below See below Proceeds, before expenses, to Sterling Bancorp Trust I...... $10.00 $22,000,000
This is a firm commitment underwriting. The trust will invest the proceeds of the sale of the preferred securities in the subordinated debentures. We have agreed to pay the underwriters as compensation for arranging the investment of the proceeds of this offering in the debentures, $ per preferred security ($ for all preferred securities and $ if the over-allotment option referred to below is exercised in full). The trust has granted the underwriters a 30-day option to purchase up to 300,000 additional preferred securities on the same terms and conditions set forth above solely to cover over-allotments, if any. --------------------- FERRIS, BAKER WATTS RYAN, BECK & CO., LLC Incorporated The date of this prospectus is , 2002. TABLE OF CONTENTS
PAGE ---- Summary..................................................... 3 Risk Factors................................................ 12 Forward-Looking Statements.................................. 17 Regulatory Considerations................................... 18 Use of Proceeds............................................. 18 Capitalization.............................................. 19 Accounting Treatment........................................ 20 Sterling Bancorp Trust I.................................... 21 Description of Preferred Securities......................... 22 Description of Subordinated Debentures...................... 35 Description of Guarantee.................................... 46 Relationship Among the Preferred Securities, the Subordinated Debentures, the Expense Agreement and the Guarantee................................................. 49 Book-Entry Issuance......................................... 50 United States Federal Income Tax Consequences............... 52 ERISA Considerations........................................ 55 Underwriting................................................ 56 Validity of Securities...................................... 58 Experts..................................................... 58 Where You Can Find More Information and Information We Incorporate by Reference.................................. 58
ABOUT THIS PROSPECTUS: - You should rely only on the information contained in or incorporated by reference into this document. We have not authorized anyone to provide you with information that is different from that contained in this document. - We are not, and our underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. - You should assume that the information contained in this document is accurate as of the date on the front cover of this prospectus, regardless of the time of delivery of this document or of any sale of the preferred securities. - This prospectus does not constitute an offer to sell, or the solicitation of any offer to buy, any securities other than the securities to which it relates. 2 SUMMARY This summary highlights information contained elsewhere in, or incorporated by reference into, this prospectus. Because this is a summary, it may not contain all of the information that is important to you. Therefore, you should also read the more detailed information in this prospectus, our financial statements and the other information that is incorporated by reference in this prospectus, before making a decision to invest in the preferred securities. As used in this prospectus, the words "we," "our" and "us" may, depending upon the context, refer to Sterling Bancorp or to Sterling Bancorp and its consolidated subsidiaries taken as a whole. OVERVIEW OF STERLING BANCORP We are headquartered in New York City, and are a financial holding company subject to the regulation and supervision of the Board of Governors of the Federal Reserve System, which we refer to as the "Federal Reserve." Our principal subsidiary is Sterling National Bank, which we refer to as "the bank." The bank was organized under the National Bank Act and commenced operations in New York City in 1929. As a national bank, the bank is principally subject to the supervision, examination and reporting requirements of the Office of the Comptroller of the Currency, as well as the Federal Deposit Insurance Corporation. We maintain seven offices in New York. We have operations in New York City and the tri-state area, as well as Virginia and other mid-Atlantic states and conduct business throughout the United States. On January 24, 2002, we released our year 2001 results. For the year ended December 31, 2001, we reported net income of $19.4 million, representing $1.80 per share, calculated on a diluted basis. At December 31, 2001, our total assets were $1.5 billion, total loans outstanding were $808.7 million, total deposits were $1.0 billion, and total shareholders' equity was $128.5 million. Principal factors that drove our results for year 2001 were strong growth of loans and demand deposits, growth in mortgage banking business, as well as our continued disciplined approach to managing funding costs. We believe that our geographic and product diversity and a client base with no significant industry concentration provide us with the essential elements for managing risk. Since 1996, our net income has grown at a compounded annual growth rate of 18.6%, total loans have grown at a compounded average growth rate of 11.7%, and total deposits have grown at a compounded average growth rate of 11.4%. PRODUCTS AND SERVICES We provide a full range of banking and financial services products. These products and services include commercial lending, asset-based financing, factoring/accounts receivable management, international trade financing, commercial and residential mortgage lending and brokerage, equipment leasing, corporate and consumer deposit services, trust, estate administration, investment management and investment services. Business lending, depository and related financial services are furnished to a wide range of customers in diverse industries, including commercial, industrial and financial companies, as well as government and non-profit entities. - Commercial Lending and Asset-based Financing. The bank provides loans to small and medium sized businesses. The businesses are diversified across industries, and the loans range in size from $250,000 to $12 million. Business loans can be tailored to meet customers' specific long- and short- term needs, and include secured and unsecured lines of credit, business installment loans, business lines of credit, and debtor-in-possession financing. Our loans are often collateralized by assets, such as accounts receivable, inventory, equipment or real property. As of December 31, 2001, our outstanding loan balance for commercial and industrial lending was $520 million, representing approximately 64% of our total loan portfolio. There are no industry concentrations exceeding 10% of loans, gross, in the bank's loan portfolio. Approximately 72% of our loans were to borrowers located in the metropolitan New York area. - Factoring. Through its factoring subsidiary, the bank provides accounts receivable management services. Sterling Factors Corporation, which we refer to as "Factors," purchases clients' accounts receivable, assumes credit risk on approved orders and handles credit and collection details and bookkeeping requirements. Income for these services is derived from commission charges for receivables serviced and interest charged on advances to the client. For these services, Factors receives factoring commissions paid by the clients plus interest 3 charged on advances. The accounts receivable factored are for clients primarily engaged in the apparel and textile industries. - Dealer Receivable Financing. Through our subsidiary, Sterling Financial Services Company, Inc., we provide loans to independent dealers who market products, such as housewares, appliances, automobiles and educational material to consumers on an installment basis with repayment terms between 12 and 48 months. We administer these installment contracts for the dealer by providing billing, payment processing and other bookkeeping services. We generally lend up to 80% of the value of the borrower's collateral. More than 65% of the payments are received electronically. - Equipment Leasing. The bank offers equipment leasing services in the New York metropolitan area and across the United States through direct leasing programs, third party sources and vendor programs. The bank finances small and medium-sized equipment leases with an average term of 24 to 30 months. The outstanding loan balance for equipment leases was approximately $91 million. At December 31, 2001, equipment leases comprised approximately 11% of our total loan portfolio. - Residential and Commercial Mortgages. The bank's real estate loan portfolio consists of real estate loans on one to four family residential properties and commercial properties. The residential mortgage banking and brokerage business is conducted through Sterling National Mortgage Company, Inc. offices located principally in New York and Virginia. The mortgage company originates conforming residential mortgage loans throughout the tri-state metropolitan area, as well as in Virginia and other mid-Atlantic states for resale. The mortgage company also originates non-conforming residential mortgage loans, for its own portfolio and for resale. Commercial real estate financing is offered through loan programs on income producing and owner-occupied properties, professional co-ops and condos through our real estate lending department. This department also offers interim financing and development for commercial properties. At December 31, 2001, the outstanding loan balance for real estate loans was $161 million, representing approximately 20% of total loans outstanding. - International Trade Finance. Through its international division, International Banking Facility and Hong Kong trade services subsidiary, the bank offers financial services to its customers and correspondents in the world's major financial centers. These services consist of financing import and export transactions, issuance of letters of credit and creation of banker's acceptances. In addition to its direct worldwide correspondent banking relationships, active bank account relationships are maintained with leading foreign banking institutions in major financial centers. - Trust Services. The bank's trust department provides a variety of fiduciary, investment management, custody and advisory and corporate agency services to individuals, corporations and foundations. The bank acts as trustee for pension, profit-sharing, 401(k) and other employee benefit plans and personal trusts and estates. For corporations, the bank acts as trustee, transfer agent, registrar and in other corporate agency capacities. KEY COMPONENTS OF OUR CURRENT BUSINESS STRATEGY - Focus on niche high-margin products. With over 70 years of history, we have established a firm presence in the markets we serve. Our product and service offerings have evolved to reflect the growth of our client mix. Niche, high-margin products such as factoring, asset-based lending and trade finance continue to contribute to our 34 consecutive quarters of year-over-year double-digit earnings growth. - Maintain strong asset quality. Our commitment to high credit quality is reflected in our strict underwriting standards. Senior management is actively involved in the credit underwriting process in order to maintain a strong asset base. Our non-performing assets represented 0.17% of our total assets as of December 31, 2001 and have averaged 0.19% over the past 5 years. - Take advantage of opportunities afforded by bank consolidation. Major consolidations that have taken place in the New York market have created a large underserved small and middle market niche, which we serve. We are 4 among a small group of banks with assets between $1 billion and $20 billion that service the small business market in New York City. - Offer high-touch personalized customer service. We are a community style bank with a focus on businesses in one of the largest markets in the world. Our clients and customers enjoy access to all levels of decision-makers. We establish long-term client relationships by being proactive in meeting customers' needs, offering a broad range of products and services, and being in constant contact with the client. Our motto "our doors are open all the way to the top" is not merely a slogan, but a tradition of personalized service that illustrates how we have been doing business for over 70 years. --------------------- Our and the trust's principal executive office is located at 650 Fifth Avenue, New York, New York 10019-6108, and our telephone number is (212) 757-3300. STERLING BANCORP TRUST I The trust is a statutory business trust created under Delaware law. We created the trust only to issue and sell the common and preferred securities, and to purchase the subordinated debentures from us. The trust has a term of 30 years, but may be dissolved earlier as provided in the trust agreement. 5 THE OFFERING The following is a brief summary of the offering of the preferred securities. You should refer to "Description of Preferred Securities," "Description of Subordinated Debentures" and "Description of Guarantee" for a more detailed description of the preferred securities and the subordinated debentures. Unless we state otherwise, the information in this prospectus does not include 300,000 preferred securities that may be issued to the underwriters pursuant to their over-allotment option. If the underwriters exercise their over-allotment option in full, the total number of preferred securities will be 2,500,000 and the aggregate principal amount of subordinated debentures will be $25,774,000. The issuer.................... Sterling Bancorp Trust I Securities the trust is offering...................... The trust is issuing 2,200,000 preferred securities. Each preferred security represents a preferred undivided beneficial interest in the assets of the trust. The trust will sell the preferred securities to the public for cash. The trust will also issue common securities, which will represent common undivided beneficial interests in the assets of the trust. We will purchase all of the common securities from the trust for cash. Offering price................ $10 per preferred security, plus any accumulated and unpaid distributions from the original issue date. Subordinated debentures....... The trust will use the cash it receives from the sale of the preferred and common securities to purchase subordinated debentures from us, which are due on , 2032. The assets of the trust will consist solely of the subordinated debentures and payments received on the subordinated debentures. The subordinated debentures will have payment terms similar to those of the preferred securities, and the trust will rely on the payments it receives on the subordinated debentures to make all payments on the preferred securities. When the trust will pay distributions to you.......... Your purchase of the preferred securities entitles you to receive cumulative cash distributions at a % annual rate. Distributions will accumulate from the date the trust issues the preferred securities and are to be paid quarterly on , , and of each year, beginning , 2002. As long as the preferred securities are represented by a global security, the record date for distributions on the preferred securities will be the fifteenth day, whether or not a business day, immediately preceding the relevant distribution date. We may defer the payment of cash distributions, as described below. When the trust must redeem the preferred securities.......... The debentures will mature and we must redeem the preferred securities on , 2032, unless in our sole discretion we accelerate the date of maturity. We may shorten the maturity date to a date not earlier than , 2007. We will not shorten the maturity date unless we have received the prior approval of the Federal Reserve, if required by law or regulation. Redemption of the preferred securities before , 2032 is possible.............. The trust must redeem the preferred securities when we repay the subordinated debentures because they mature, are accelerated or are redeemed. We may redeem all or part of the subordinated debentures before they are due, at a price equal to their principal 6 amount plus interest accrued to the date of redemption at any time on or after , 2007. In addition, we may redeem all of the debentures at any time within 90 days following any of the following events: - a "tax event," which occurs if existing laws or regulations or their interpretation or application change, causing the interest we pay on the debentures no longer to be deductible by us for federal income tax purposes; or causing the trust to become subject to federal income tax or to certain other taxes or governmental charges; - a "capital treatment event," which occurs if the capital adequacy guidelines of the Federal Reserve change so that the preferred securities no longer qualify as Tier 1 capital; or - an "investment company event," which occurs if existing laws or regulations change, requiring the trust to register as an investment company. If your preferred securities are redeemed by the trust, you will receive the liquidation amount of $10 per preferred security, plus any accrued and unpaid distributions to the date of redemption. Upon prior approval of the Federal Reserve, if required, we may also redeem the debentures at any time, and from time to time, in an amount equal to the liquidation amount of any preferred securities we repurchase, plus a proportionate amount of common securities, but only by surrendering to the property trustee a like amount of the preferred securities and common securities that we then own. In exchange for the trust securities surrendered by us, the property trustee will cause to be released to us for cancellation debentures with a principal amount equal to the liquidation amount of trust securities, plus any accumulated but unpaid distribution then held by the property trustee allocable to those trust securities. After the date of redemption involving an exchange by us, the trust securities we surrender will no longer be deemed outstanding and the debentures redeemed in exchange for the trust securities will be cancelled. We have the option to extend the interest payment period... The trust will rely solely on payments made by us under the debentures to pay distributions on the preferred securities. As long as we are not in default under the indenture relating to the debentures, we will have the right, one or more times, to defer interest payments on the subordinated debentures for up to 20 consecutive quarters, but not beyond , 2032. Each period during which interest payments are deferred is called an "extension period." Each time we defer interest payments on the subordinated debentures: - the trust also will defer the payment of distributions on the preferred securities; - you will still accumulate distributions at an annual rate of % of the liquidation amount of the preferred securities; and 7 - these accumulated distributions will earn interest at the same rate, compounded quarterly, until paid. At the end of any extension period, we will pay to the trust all accrued and unpaid interest under the debentures. The trust will then pay all accumulated and unpaid distributions to you. You will still be taxed if distributions on the preferred securities are deferred....... If a deferral of payment occurs, you will be required to accrue interest income and include it in your gross income for United States federal income tax purposes, even if you are a cash basis taxpayer. We are guaranteeing payments on the preferred securities... We will fully and unconditionally guarantee payments on the preferred securities, but only to the extent that the trust has funds legally and immediately available to make those payments. If we do not make payments on the debentures, the trust will not have sufficient funds to make payments on the preferred securities. If this is the case, your remedy is to institute a legal proceeding directly against us for enforcement of payments under the debentures. Our obligations under the guarantee will rank junior in right of payment to our senior debt. We can dissolve the trust and cause an exchange of preferred securities for subordinated debentures.................... We have the right at any time to dissolve the trust. In that event, the property trustee will either: - distribute the subordinated debentures to you, subject to the prior approval of the Federal Reserve and satisfaction of any creditors of the trust, if required by law or regulation; or - if the property trustee decides that distributing the subordinated debentures is not practical, distribute assets of the trust to you in an amount equal to the liquidation amount of the preferred securities plus accumulated and unpaid distributions. In all cases, however, the trust will make distributions only to the extent that the trust has available assets after the trust has satisfied all of its liabilities to its creditors. If we distribute the subordinated debentures, we will use our reasonable efforts to list the subordinated debentures on the New York Stock Exchange or any other stock exchange or automated quotation system on which the preferred securities are then listed or quoted. How the securities will rank in right of payment........... Our obligations under the preferred securities, debentures and guarantee are unsecured and will rank as follows with regard to right of payment: - the preferred securities will rank equally with the common securities of the trust. The trust will pay distributions on the preferred securities and the common securities ratably. However, if we default with respect to the debentures, then no distributions on or redemptions of the common securities of the trust or our common stock will be paid until all accumulated and unpaid distributions on the preferred securities have been paid; 8 - our obligations under the debentures and the guarantee are unsecured and generally will rank junior in priority to our existing and future senior and subordinated indebtedness; and - because we are a holding company, the debentures and the guarantee will effectively be subordinated to all depositors' claims, as well as existing and future liabilities of our subsidiaries. Voting rights of the preferred securities.................... Except in limited circumstances, holders of the preferred securities will have no voting rights. Proposed New York Stock Exchange symbol............... STL-PrA. You will not receive certificates representing your preferred securities.......... The preferred securities will be represented by a global security that will be deposited with and registered in the name of The Depository Trust Company, or its nominee. This means that, except in limited circumstances, you will not receive a certificate for the preferred securities, and your beneficial ownership interests will be recorded through the DTC book-entry system. How the proceeds of this offering will be used......... The trust will invest the proceeds from the sale of the preferred and common securities in the subordinated debentures. We estimate the net proceeds, before expenses, to us from the sale of the subordinated debentures to the trust, after deducting underwriting expenses and commissions, to be approximately $21.2 million, or $24.1 million if the underwriters exercise their over-allotment option in full. We intend to use the proceeds for general corporate purposes, which may include the repurchase of our common stock, the repayment of our debt and investments in or advances to our existing or future subsidiaries. We are reimbursing the trust for expenses.................. We have agreed in the expense agreement to reimburse the trust for any expenses and liabilities it may incur, other than amounts payable for the securities. Trustees and Administrators... The Bank of New York will act as property trustee and The Bank of New York (Delaware) will act as Delaware trustee, and they will conduct the business and affairs of the trust. In addition, John C. Millman, our President, and John W. Tietjen, our Executive Vice President, Treasurer and Chief Financial Officer, will initially act as administrative trustees of the trust. Before buying the preferred securities you should carefully consider the "Risk Factors" beginning on page 12. 9 SELECTED CONSOLIDATED FINANCIAL DATA The following table contains our selected consolidated financial information and other financial data. The selected balance sheet and summary of operations data, insofar as they relate to the years ended December 31, 2000 and 1999 are derived from our consolidated financial statements which are incorporated by reference in this prospectus, and have been audited by KPMG LLP. The selected balance sheet and summary of operations data for the years ended December 31, 1998 and 1997 are derived from our consolidated financial statements and have also been audited by KPMG LLP. The selected consolidated financial data as of and for the year ended December 31, 2001 is derived from unaudited consolidated financial statements. In our opinion, all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of financial position and results of operations as of and for the year ended December 31, 2001 have been included. This information should be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes incorporated by reference into this prospectus from our Annual Report on Form 10-K for the year ended December 31, 2000 and the financial statements and other information and data included in our Current Report on Form 8-K filed on January 28, 2002. Results for past periods are not necessarily indicative of results that may be expected for any future period.
AS OF OR FOR THE YEAR ENDED DECEMBER 31, --------------------------------------------------------------- 2001 2000 1999 1998 1997 ----------- ---------- ---------- ---------- ---------- (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) SUMMARY OF OPERATIONS Total interest income............ $ 95,866 $ 97,125 $ 79,245 $ 73,779 $ 67,596 Total interest expense........... 26,816 34,242 25,783 24,341 22,024 Net interest income.............. 69,050 62,883 53,462 49,438 45,572 Provision for loan losses........ 7,401 6,563 5,584 5,389 3,075 Net securities gains............. -- -- -- 86 -- Noninterest income............... 24,123 22,373 17,944 16,362 12,972 Noninterest expenses............. 53,695 50,280 41,582 38,297 35,707 Income before taxes.............. 32,077 28,413 24,240 22,200 19,762 Provision for income taxes....... 12,689 11,854 9,676 9,403 8,874 Net income....................... 19,388 16,559 14,564 12,797 10,888 Per common share -- basic...... 1.90 1.64 1.42 1.23 1.08 -- diluted... 1.80 1.59 1.36 1.17 1.02 Dividends per common share....... 0.66 0.58 0.50 0.43 0.37 PERIOD END BALANCE SHEETS Investment securities............ $ 576,028 $ 433,797 $ 457,402 $ 329,806 $ 384,951 Loans, net of unearned discounts...................... 808,687 750,888 689,096 640,206 558,482 Total assets..................... 1,482,871 1,270,749 1,218,887 1,044,445 1,019,980 Noninterest-bearing deposits..... 356,303 341,039 291,808 329,020 312,462 Interest-bearing deposits........ 628,621 525,243 570,712 373,782 418,946 Shareholders' equity............. 128,477 117,016 105,240 102,151 92,623
10
AS OF OR FOR THE YEAR ENDED DECEMBER 31, --------------------------------------------------------------- 2001 2000 1999 1998 1997 ----------- ---------- ---------- ---------- ---------- (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) AVERAGE BALANCE SHEETS Investment securities............ $ 468,861 $ 453,237 $ 379,872 $ 336,690 $ 304,753 Loans, net of unearned discounts...................... 705,216 634,980 556,630 512,711 446,268 Total assets..................... 1,267,856 1,165,707 1,022,698 935,964 838,354 Noninterest-bearing deposits..... 292,918 258,347 237,324 224,780 199,431 Interest-bearing deposits........ 594,303 536,523 452,734 409,027 377,301 Long-term convertible subordinated debentures........ -- -- -- -- 4,618 Shareholders' equity............. 123,935 107,584 102,361 96,644 82,515 PROFITABILITY AND PERFORMANCE RATIOS Return on average total assets... 1.53% 1.42% 1.42% 1.37% 1.30% Return on average tangible shareholders' equity........... 18.86 19.16 17.94 16.95 17.75 Return on average shareholders' equity......................... 15.64 15.39 14.23 13.24 13.20 Dividend payout ratio............ 32.03 29.57 27.98 27.47 26.64 Average shareholders' equity to average total assets........... 9.78 9.23 10.01 10.33 9.84 Net interest margin (tax-equivalent basis)......... 6.23 6.13 5.97 6.12 6.37 ASSET QUALITY RATIOS Loans/assets, period end......... 54.54% 59.09% 56.53% 61.30% 54.75% Net charge-offs/loans, period end............................ 0.75 0.67 0.67 0.61 0.43 Nonperforming loans/loans, period end............................ 0.22 0.27 0.21 0.19 0.25 Allowance/loans, period end...... 1.74 1.69 1.61 1.59 1.55 LIQUIDITY AND CAPITAL RATIOS Average loans to average deposits....................... 79.49% 79.88% 80.66% 80.89% 77.38% Average equity to average assets......................... 9.78 9.23 10.01 10.33 9.84 Tier 1 risk-based capital........ 12.44 12.14 11.86 11.38 10.57 Total risk-based capital......... 13.70 13.39 13.11 12.63 11.82 Leverage ratio................... 7.79 8.14 7.75 8.67 8.31 EARNINGS TO FIXED CHARGES(1) Including interest on deposits... 2.15x 1.81x 1.91x 1.89x 1.87x Excluding interest on deposits... 4.62x 3.28x 3.47x 3.49x 3.56x
- --------------- (1) For purposes of computing the ratios of earnings to fixed charges, earnings represent net income plus applicable income taxes and fixed charges. Fixed charges, excluding interest on deposits, include interest expense (other than on deposits) and the proportion deemed representative of the interest factor of rent expense, net of income from subleases. Fixed charges, including interest on deposits, include all interest expense and the proportion deemed representative of the interest factor of rent expense, net of income from subleases. Pretax earnings required for preferred stock dividends were computed using tax rates for the applicable year. 11 RISK FACTORS An investment in the preferred securities involves a number of risks. Some of these risks relate to the preferred securities and others relate to us and the financial services industry generally. We urge you to read all of the information contained in this prospectus. In addition, we urge you to consider carefully the following factors in evaluating an investment in the trust before you purchase the preferred securities offered by this prospectus. RISKS RELATING TO THE PREFERRED SECURITIES Because the trust will rely on the payments it receives on the subordinated debentures to make all payments on the preferred securities, and because the trust may distribute the subordinated debentures in exchange for the preferred securities upon liquidation of the trust, you are making an investment decision with regard to the subordinated debentures as well as the preferred securities. You should carefully review the information in this prospectus about both of these securities. THE SUBORDINATED DEBENTURES AND THE GUARANTEE RANK LOWER THAN ANY OF OUR OTHER INDEBTEDNESS, AND OUR HOLDING COMPANY STRUCTURE EFFECTIVELY SUBORDINATES ANY CLAIMS AGAINST US TO THOSE OF OUR SUBSIDIARIES' CREDITORS. The subordinated debentures are not secured by any of our property or assets. Our obligations under the subordinated debentures will rank junior in right of payment to all of our senior debt. "Senior debt" includes substantially all of our current and future indebtedness, other than trade accounts payable and accrued liabilities arising in the ordinary course of business. Since we are a holding company, our right to participate in any asset distribution of any of our subsidiaries, on liquidation, reorganization or otherwise, will rank junior to all creditors of that subsidiary, except to the extent that we may ourselves be a creditor of that subsidiary. The rights of holders of preferred securities or subordinated debentures to benefit from those distributions will also be junior to those prior claims. Consequently, the guarantee, the subordinated debentures and, therefore, the preferred securities of the trust, will be effectively subordinated to all liabilities of our subsidiaries. You should look only to our assets for payments on the guarantee and the subordinated debentures and the preferred securities. The subordinated debentures, the indenture and the guarantee do not limit our or our subsidiaries' ability to incur additional indebtedness, including indebtedness that ranks senior to the subordinated debentures and the guarantee. For more information on the subordination of the debentures, please refer to "Description of Subordinated Debentures -- Subordination of the subordinated debentures." For more information on the subordination of the guarantee, please refer to "Description of Guarantee -- Status of the guarantee." OUR RIGHT TO POSTPONE INTEREST PAYMENTS ON THE SUBORDINATED DEBENTURES AND THE TAX TREATMENT OF THE PREFERRED SECURITIES COULD ADVERSELY AFFECT MARKET PRICES FOR THE PREFERRED SECURITIES. The market price of the preferred securities may be more volatile than the market prices of similar securities that are not subject to these rights, since we have the right to defer interest payments on the subordinated debentures. Any exercise of this right could cause the market price of the preferred securities to decline. Accordingly, the preferred securities that you purchase, whether in this offering or in the secondary market, or the subordinated debentures that you may receive on liquidation of the trust, may trade at a discount to the price that you paid for the preferred securities. If you sell your preferred securities before the record date for the payment of distributions, you will not receive payment of a distribution for the period before the disposition. However, you will be required to include accrued but unpaid interest on the subordinated debentures through the date of disposition as ordinary income for United States federal income tax purposes. In addition, if we have, at any time, deferred interest payments on the subordinated debentures, you will be required to add the amount of the accrued but unpaid interest to your tax basis in the preferred securities. Your increased tax basis in the preferred securities will increase the amount of any capital loss or decrease the amount of any capital gain that you may have 12 otherwise realized on the sale. You cannot offset ordinary income against capital losses for United States federal income tax purposes, except in a few limited cases. For more information on the tax consequences of selling your preferred securities before the record date for payment of distributions, see "United States Federal Income Tax Consequences -- Sale or redemption of preferred securities." PAYMENTS ON PREFERRED SECURITIES ARE DEPENDENT ON OUR PAYMENTS ON SUBORDINATED DEBENTURES, AND IF WE FAIL TO MAKE A PAYMENT IT WILL ADVERSELY AFFECT YOU. The ability of the trust to timely pay distributions on the preferred securities and to pay the liquidation amount is dependent solely upon our making the related payments on the subordinated debentures when due. If we default on our obligation to pay principal of or interest on the subordinated debentures, the trust will not have sufficient funds to pay distributions or the liquidation amount. As a result, you will not be able to rely upon the guarantee for payment of these amounts. Instead, you or the property trustee may sue us to enforce the rights of the trust under the subordinated debentures, as described under "Relationship Among the Preferred Securities, the Subordinated Debentures, the Expense Agreement and the Guarantee -- Full and unconditional guarantee of payments and other amounts due on the preferred securities." You will have no protection under the terms of the preferred securities or the indenture against any sudden decline in our credit quality resulting from any highly leveraged transaction, takeover, merger, recapitalization or similar restructuring or change in control. DISTRIBUTION PAYMENTS ON THE PREFERRED SECURITIES COULD BE DEFERRED FOR SUBSTANTIAL PERIODS, BUT YOU WOULD CONTINUE TO RECOGNIZE INCOME FOR TAX PURPOSES. As long as there is no event of default under the indenture that has occurred but has not been cured, we will have the right, one or more times, to defer interest payments on the subordinated debentures for up to 20 consecutive quarters, but not beyond , 2032. There is no limit on the number of extension periods that we may impose. Extension periods are periods during which we defer interest payments on the subordinated debentures. If we defer interest payments on the subordinated debentures, the trust also will defer payment of distributions on the preferred securities. During an extension period, you will still accumulate distributions at an annual rate of % of the liquidation amount of the preferred securities. If we exercise our right to defer interest payments on the subordinated debentures, the preferred securities may trade at a price that does not fully reflect the value of accumulated but unpaid distributions on the preferred securities. If you sell your preferred securities during an extension period, you may not receive the same return on your investment as someone else who continues to hold the preferred securities. For more information on the deferral of distributions on the preferred securities during an extension period, see "Description of Preferred Securities -- Distributions on the preferred securities -- Extension period." If we exercise our option to defer interest on the subordinated debentures, you will be required, for United States federal income tax purposes, from the beginning of an extension period, to accrue interest income with respect to the subordinated debentures each year using a constant yield method. You will also be required to include those amounts in your gross income whether or not you receive any cash distributions relating to those interest payments. You also will not receive the cash related to any accrued and unpaid interest from the trust if you sell the preferred securities before the end of any extension period. For more information on the tax consequences of interest deferral, see "United States Federal Income Tax Consequences -- Interest income and original issue discount" and "-- Sale or redemption of preferred securities." WE MAY REDEEM THE SUBORDINATED DEBENTURES AT OUR OPTION ON OR AFTER , 2007 IF A "TAX EVENT," A "CAPITAL TREATMENT EVENT" OR AN "INVESTMENT COMPANY EVENT" OCCURS, AND YOU MAY NOT BE ABLE TO REINVEST YOUR PRINCIPAL AT THE SAME OR A HIGHER RATE OF RETURN. We will have an option to redeem the subordinated debentures -- and therefore cause the trust to redeem a like amount of the common and preferred securities -- at any time on or after , 2007. You should 13 assume that we will exercise our redemption option if we are able to refinance at a lower interest rate or it is in our interest to redeem the subordinated debentures at that time. Consequently, your preferred securities could be redeemed as early as five years after the issue date. In addition, if a tax event, a capital treatment event or an investment company event, as further described below, occurs, we have the right to redeem the subordinated debentures in whole, but not in part, within 90 days. If we redeem the subordinated debentures, the trust will be required to redeem the preferred securities. Thus, it is possible that the preferred securities could be redeemed before , 2007. A tax event could result from amendments or changes in U.S. federal income tax laws or regulations, including those arising from judicial decisions or administrative pronouncements, that could have adverse tax consequences for us or the trust in connection with the subordinated debentures or the preferred securities. Legislation has been introduced in the United States Congress that generally would deny an interest deduction for interest paid or accrued on debt instruments that are not included as liabilities in the certified annual report of an issuer. This legislation is proposed to be effective for instruments issued on or after the date of enactment of such legislation and consequently, as drafted, this legislation would not affect the preferred securities or subordinated debentures. While this legislation has not been enacted into law, we can give no assurances that this or similar legislation will not ultimately be enacted or what the effective date of any such legislation might be. If this or similar legislation were to apply to the subordinated debentures, we would not be able to deduct interest payments on the subordinated debentures, and, consequently, such legislation would result in a tax event as described in "Description of Preferred Securities -- Redemption of the common and preferred securities or exchange upon liquidation of the trust -- Liquidation of the trust and distribution of the subordinated debentures." See "United States Federal Income Tax Consequences -- Possible tax law changes." A capital treatment event could result from amendments or changes in laws, including those arising from judicial decisions or administrative pronouncements, that could have adverse consequences for us under the capital adequacy guidelines of the Federal Reserve. For more information on these events and on redemption generally, see "Description of Preferred Securities -- Redemption of the common and preferred securities or exchange upon liquidation of the trust." An investment company event could result from changes in laws or regulations that could cause the trust to be deemed an "investment company" under the Investment Company Act of 1940, which could have adverse consequences for us or the trust. THE TRUST MAY DISTRIBUTE THE SUBORDINATED DEBENTURES IN EXCHANGE FOR THE PREFERRED SECURITIES, WHICH COULD AFFECT THE MARKET PRICE AND COULD BE A TAXABLE EVENT. The trust will terminate upon the occurrence of the events described under "Description of Preferred Securities -- Liquidation distribution of the common and preferred securities upon termination," including if we elect to terminate the trust. After we terminate the trust and after satisfying all liabilities to the trust's creditors, the property trustee may distribute the subordinated debentures to the holders of the common and preferred securities in exchange for those securities. We must use our best efforts to list the subordinated debentures on the New York Stock Exchange or any other stock exchange or automated quotation system on which the preferred securities are then listed or quoted if the subordinated debentures are distributed to holders. However, we can give no assurance that the subordinated debentures will be approved for listing or that a trading market will exist for the subordinated debentures. For further information on this exchange, see "Description of Preferred Securities -- Redemption of the common and preferred securities or exchange upon liquidation of the trust." We cannot predict the market prices for the subordinated debentures that may be distributed. Accordingly, the subordinated debentures that you receive upon an exchange distribution, or the preferred securities that you hold pending a distribution, may trade at a discount to the price that you paid for the preferred securities. 14 Under current United States federal income tax law and assuming, as we expect, that the trust will not be classified as an association taxable as a corporation, you would not be taxed if the property trustee distributed the subordinated debentures to you upon liquidation of the trust. However, if a tax event were to occur and the trust was taxed on income received or accrued on the subordinated debentures, you and the trust could be taxed on that distribution. For more information on the tax consequences of an exchange, see "United States Federal Income Tax Consequences -- Distribution of the subordinated debentures to holders of the preferred securities." WE HAVE MADE ONLY LIMITED COVENANTS IN THE INDENTURE AND THE TRUST AGREEMENT, WHICH MAY NOT PROTECT YOUR INVESTMENT IN THE EVENT WE EXPERIENCE SIGNIFICANT ADVERSE CHANGES IN OUR FINANCIAL CONDITION OR RESULTS OF OPERATIONS. The indenture governing the debentures and the trust agreement governing the trust do not require us to maintain any financial ratios or specified levels of net worth, revenues, income, cash flow or liquidity, and therefore do not protect holders of the debentures or the preferred securities in the event we experience significant adverse changes in our financial condition or results of operations. The indenture prevents us and any subsidiary from incurring, in connection with the issuance of any trust preferred securities or any similar securities, indebtedness that is senior in right of payment to the debentures. Except as described above, neither the indenture nor the trust agreement limits our ability or the ability of any subsidiary to incur additional indebtedness that is senior in right of payment to the debentures. Therefore, you should not consider the provisions of these governing instruments as a significant factor in evaluating whether we will be able to comply with our obligations under the debentures or the guarantee. AS A HOLDER OF PREFERRED SECURITIES YOU HAVE LIMITED VOTING RIGHTS, AND WE CAN AMEND THE TRUST AGREEMENT TO CHANGE THE TERMS AND CONDITIONS OF THE ADMINISTRATION, OPERATION AND MANAGEMENT OF THE TRUST WITHOUT YOUR CONSENT. Holders of preferred securities will have limited voting rights relating principally to the amendment of the trust agreement and the guarantee. Holders of preferred securities will not be entitled to appoint, remove or replace the property trustee or the Delaware trustee except upon the occurrence of the events described in "Description of Preferred Securities -- Removal of issuer trustees." In general, we can replace or remove any of the trustees of the trust. In addition, we generally may amend the trust agreement and the indenture without the consent of the holders of preferred securities. For further information on these provisions, see "Description of Preferred Securities -- Voting rights of holders of the preferred securities; amendment of the trust agreement" and "-- Removal of issuer trustees." THERE HAS BEEN NO PRIOR MARKET FOR THE PREFERRED SECURITIES, AND THE MARKET PRICE MAY DECLINE AFTER YOU INVEST. Before this offering, there has been no market for the preferred securities. Although the trust has applied to list the preferred securities on the New York Stock Exchange, a listing does not guarantee that a trading market for the preferred securities will develop. If a trading market for the preferred securities does develop, a listing will not guarantee the depth of that market and your ability to easily sell your preferred securities. RISKS RELATED TO AN INVESTMENT IN STERLING BANCORP OUR PROFITABILITY DEPENDS SIGNIFICANTLY ON LOCAL AND OVERALL ECONOMIC CONDITIONS, AND THE FINANCIAL SERVICES INDUSTRY MAY BE SIGNIFICANTLY AFFECTED IF ECONOMIC CONDITIONS DETERIORATE. Our success is dependent on the economic conditions of the communities we serve and the general economic conditions of the United States. We have operations in New York City and the tri-state area, as well as Virginia and other mid-Atlantic territories and conduct business throughout the United States. The economic conditions in these areas and throughout the United States have a significant impact on loan demand, the ability of borrowers to repay these loans and the value of the collateral securing these loans. A 15 significant decline in general economic conditions will affect local economic conditions and could negatively affect the financial results of our banking operations. Factors influencing general economic conditions include inflation, recession, unemployment and other factors beyond our control. The economies of the United States and many other nations are currently suffering from a recession. There can be no assurance that this recession will not materially adversely affect the banking industry and its participants, including us. The depth and length of the recession may be exacerbated and prolonged as a result of the events of September 11, 2001 and the more recent terrorist activities and threats. Our clientele of small and medium sized businesses could be significantly affected by the recession and this may result in an increase of defaults on outstanding loans and reduce demand for future loans, both of which could adversely affect us. In particular, we have experienced a moderation of loan growth in the last quarter of 2001 compared to the first three quarters of the year. If this trend continues, loan growth could slow further and thereby adversely affect our results of operations and financial condition. Further, we focus on niche products, such as factoring, asset-based lending and trade finance, and if the use of any of these products declines as a result of the current economic climate, that may adversely affect us. FLUCTUATIONS IN INTEREST RATES COULD REDUCE OUR PROFITABILITY. We realize income primarily from the difference between interest earned on loans and investments and the interest paid on deposits and borrowings. We expect that we will periodically experience "gaps" in the interest rate sensitivities of our assets and liabilities, meaning that either our interest-earning assets will be more sensitive to changes in market interest rates than our interest-bearing liabilities, or vice versa. In either event, if market interest rates should move contrary to our position, this "gap" will work against us, and our earnings may be negatively affected. We are unable to predict fluctuations of market interest rates, which are affected by, among other factors, changes in the following: - inflation rates; - levels of business activity; - unemployment levels; - money supply; and - domestic and foreign financial markets. Our asset-liability management strategy, which is designed to mitigate our risk from changes in market interest rates, may not be able to mitigate changes in interest rates from having a material adverse effect on our results of operations and financial condition. IF OUR ALLOWANCE FOR LOAN LOSSES IS NOT SUFFICIENT TO COVER ACTUAL LOAN LOSSES, OUR EARNINGS COULD DECREASE. Our loan customers may not repay their loans according to the terms of these loans, and the collateral securing the payment of these loans may be insufficient to assure repayment. We may experience significant credit losses which could have a material adverse effect on our operating results. We make various assumptions and judgments about the collectibility of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the size of the allowance for loan losses, we rely on our experience and our evaluation of economic conditions. If our assumptions prove to be incorrect, our current allowance for loan losses may not be sufficient to cover loan losses inherent in our loan portfolio and adjustments may be necessary due to unfavorable economic conditions or adverse developments in our loan portfolio. Material additions to our allowance would materially decrease our net income. In addition, federal and state regulators periodically review our allowance for loan losses and may require us to increase our provision for loan losses or recognize further loan charge-offs. Any increase in our loan 16 allowance or loan charge-offs as required by these regulatory agencies could have a material adverse effect on our results of operations and financial condition. COMPETITION WITH OTHER FINANCIAL INSTITUTIONS COULD ADVERSELY AFFECT OUR PROFITABILITY. We face vigorous competition from banks and other financial institutions, including savings and loan associations, savings banks, finance companies and credit unions. A number of these banks and other financial institutions have substantially greater resources and lending limits, larger branch systems and a wider array of banking services. To a limited extent, we also compete with other providers of financial services, such as money market mutual funds, brokerage firms, consumer finance companies and insurance companies. This competition may reduce or limit our margins on banking, investment management and trust services, reduce our market share and adversely affect our results of operations and financial condition. The Gramm-Leach-Bliley Act of 1999 (the "Gramm Act") has expanded the permissible activities of a bank holding company. The Gramm Act allows qualifying bank holding companies to elect to be treated as financial holding companies. A financial holding company may engage in activities that are financial in nature or are incidental or complementary to financial activities. The Gramm Act also eliminated restrictions imposed by the Glass-Steagall Financial Services Law, adopted in the 1930s, which prevented banking, insurance and securities firms from fully entering each other's business. While it is uncertain what the full impact of this legislation will be, it is likely to result in further consolidation in the financial services industry. In addition, removal of these restrictions will likely increase the number of entities providing banking services and thereby create additional competition. WE RELY HEAVILY ON OUR MANAGEMENT TEAM, AND THE UNEXPECTED LOSS OF KEY MANAGERS MAY ADVERSELY AFFECT OUR OPERATIONS. Our success to date has been strongly influenced by our ability to attract and to retain senior management experienced in banking and financial services. Our ability to retain executive officers and the current management teams of each of our lines of business will continue to be important to successful implementation of our strategies. We do not have employment or non-compete agreements with all of these key employees. The unexpected loss of services of any key management personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business and financial results. WE OPERATE IN A HIGHLY REGULATED ENVIRONMENT AND MAY BE ADVERSELY AFFECTED BY CHANGES IN FEDERAL AND STATE LAWS AND REGULATIONS. We are subject to extensive regulation, supervision and examination by federal and state banking authorities. Any change in applicable regulations or federal or state legislation could have a substantial impact on us and our results of operations. Additional legislation and regulations may be enacted or adopted in the future that could significantly affect our powers, authority and operations, which could have a material adverse effect on our financial condition and results of operations. Further, regulators have significant discretion and power to prevent or remedy unsafe or unsound practices or violations of laws by banks and bank holding companies in the performance of their supervisory and enforcement duties. The exercise of regulatory power may have a negative impact on our results of operations and financial condition. FORWARD-LOOKING STATEMENTS This prospectus contains or incorporates statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, which is referred to as the "Securities Act" and Section 21E of the Securities Exchange Act of 1934, as amended, which is referred to as the "Exchange Act." These statements can be identified by the use of forward-looking language such as "will likely result," "may," "are expected to," "is anticipated," "estimate," "projected," "intends to," or other similar words. Our actual results, performance or achievements could be significantly different from the results expressed in or implied by these forward-looking statements. These statements are subject to risks and uncertainties, including but not limited to risks described in this prospectus or the documents incorporated by 17 reference. When considering these forward-looking statements, you should keep in mind these risks, uncertainties and other cautionary statements made in this prospectus and the documents incorporated by reference. You should not place undue reliance on any forward-looking statement, which speaks only as of the date made. You should refer to our periodic and current reports filed with the SEC for specific risks which could cause actual results to be significantly different from those expressed or implied by these forward-looking statements. We discuss these uncertainties and others in the section of this prospectus named "Risk Factors." REGULATORY CONSIDERATIONS Because we are a financial holding company under the Bank Holding Company Act, the Federal Reserve regulates, supervises and examines us and our consolidated subsidiaries. For a discussion of the material elements of the regulatory framework applicable to financial holding companies, bank holding companies and their subsidiaries and specific information relevant to us, please refer to our annual report on Form 10-K for the fiscal year ended December 31, 2000, quarterly reports on Form 10-Q, Form 8-K and any subsequent reports we file with the SEC, which are incorporated by reference in this prospectus. This regulatory framework is intended primarily for the protection of depositors and the federal deposit insurance funds and not for the protection of our or the trust's security holders. As a result of this regulatory framework, our earnings are affected by actions of the Federal Reserve, the Office of Comptroller of the Currency, which regulates our banking subsidiary, and the Federal Deposit Insurance Corporation, which insures the deposits of our banking subsidiary within certain limits. Our earnings are also affected by general economic conditions, our management policies and legislative action. In addition, there are numerous governmental requirements and regulations that affect our business activities. A change in applicable statutes, regulations or regulatory policy may have a material effect on our business. Depository institutions, like our bank subsidiary, are also affected by various federal laws, including those relating to consumer protection and similar matters. We also have other financial services subsidiaries regulated, supervised and examined by the Federal Reserve, as well as other relevant state and federal regulatory agencies and self-regulatory organizations. Our non-bank subsidiaries may be required to comply with other laws and regulations of the federal government or the various states in which they are authorized to do business. USE OF PROCEEDS The trust will invest the proceeds from the sale of the preferred and common securities in the subordinated debentures. We estimate the net proceeds, before expenses, to us from the sale of the subordinated debentures to the trust, after deducting underwriting expenses and commissions, to be approximately $21.2 million, or $24.1 million, if the underwriters exercise their over-allotment option in full. We intend to use the proceeds for general corporate purposes, which may include the repurchase of our common stock, the repayment of our debt and investments in or advances to our existing or future subsidiaries. 18 CAPITALIZATION The following table sets forth our consolidated capitalization as of December 31, 2001 and as adjusted to give effect to the consummation of the offering of the preferred securities. The following data should be read in conjunction with our consolidated financial statements and notes thereto incorporated elsewhere by reference.
AS OF DECEMBER 31, 2001 ----------------------- AS ACTUAL ADJUSTED ---------- ---------- (IN THOUSANDS) Total Long-term Debt........................................ $ 95,350 $ 95,350 -------- -------- Corporation-obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust(1)......................... $ -- $ 22,000(2) -------- -------- Shareholders' Equity Preferred Stock........................................... $ 2,346 $ 2,346 Common Stock.............................................. 10,835 10,835 Capital Surplus........................................... 98,488 98,488 Retained Earnings......................................... 32,420 32,420 Accumulated Other Comprehensive Income.................... 1,119 1,119 Treasury Stock, at Cost................................... (15,543) (15,543) Unearned Compensation..................................... (1,188) (1,188) -------- -------- Total Shareholders' Equity................................ $128,477 $128,477 -------- -------- Total Capitalization........................................ $223,827 $245,827 ======== ======== Capital Ratios(3) Total Shareholders' Equity to Total Assets................ 8.66% 8.54% Tier 1 Risk-based Capital Ratio(4)........................ 12.44 15.02 Total Risk-based Capital Ratio(4)......................... 13.70 16.27 Leverage Ratio(4)(5)...................................... 7.79 9.25
- --------------- (1) As described in this prospectus, the trust will hold $22,681,000 of subordinated debentures, issued by us to the trust, as its sole assets. The subordinated debentures will mature on , 2032, which date may be shortened to a date not earlier than , 2007. We own all of the common securities of the trust, which accrue distributions at the rate of % per annum. (2) If the underwriters exercise their over-allotment option in full, guaranteed preferred beneficial interests in our junior subordinated deferrable interest debentures will aggregate $25,000,000, and the sole assets of the trust will be $25,774,000 of subordinated debentures issued by us to the trust. (3) The capital ratios, as adjusted, are computed including the estimated proceeds from the sale of the preferred securities in a manner consistent with Federal Reserve regulations. (4) The preferred securities have been structured to qualify as Tier 1 capital. However, in calculating the amount of Tier 1 qualifying capital, the preferred securities can only be included up to the amount constituting 25% of total Tier 1 core capital elements (including preferred securities). As adjusted for this offering and assuming that the over-allotment option is exercised in full, our Tier 1 capital as of December 31, 2001 would have been approximately $131.2 million, of which $25.0 million would have been attributable to the preferred securities offered by this prospectus. If the over-allotment option is exercised in full, as adjusted for this offering, the capital ratios would be as follows: total shareholders' equity to total Assets would be 8.52%, the Tier 1 Risk-based Capital Ratio would be 15.37%, the Total Risk-based Capital Ratio would be 16.62% and the Leverage Ratio would be 9.45%. (5) The leverage ratio is Tier 1 capital divided by average quarterly assets after deducting intangible assets and net deferred tax assets in excess of regulatory maximum limits. 19 ACCOUNTING TREATMENT For financial reporting purposes, the trust will be treated as our subsidiary and, accordingly, the accounts of the trust will be included in our consolidated financial statements. The preferred securities will be presented as a separate line item in our consolidated balance sheets, entitled "Corporation -- Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust" and appropriate disclosure about the preferred securities, the guarantee and the subordinated debentures will be included in the notes to our consolidated financial statements. For financial reporting purposes, we will record distributions payable on the preferred securities as a non-interest expense in the consolidated statements of income. We have agreed that our future financial reports will include, in an audited note to the financial statements, disclosure that: - the trust is wholly-owned; - the sole assets of the trust are the subordinated debentures; and - our obligations under the subordinated debentures, the relevant indenture, trust agreement, guarantee and expense agreement, in the aggregate, constitute our full and unconditional guarantee of the trust's obligations under the preferred securities. 20 STERLING BANCORP TRUST I Sterling Bancorp Trust I is a statutory business trust created under Delaware law pursuant to the trust agreement and the filing of a certificate of trust with the Delaware Secretary of State on February 1, 2002. The trust's business and affairs are conducted by the property trustee, and two individual administrative trustees who are our employees, officers or affiliates. The trust has a term of 30 years but may be dissolved earlier as provided in the trust agreement. The trust exists exclusively to: - issue and sell the common and preferred securities; - use the proceeds from the sale of common and preferred securities to acquire subordinated debentures issued by us; and - engage in only those other activities necessary or incidental thereto, such as registering the transfer of the preferred securities. The trust will have no assets other than the subordinated debentures and the right to receive reimbursement of some expenses from us. Consequently, the trust will have no revenue other than payments under the subordinated debentures and the expense agreement. Upon issuance of the preferred securities offered by this prospectus, the purchasers in this offering will own all of the issued and outstanding preferred securities of the trust. We will own all of the common securities. The common securities will rank on a parity, and payments will be made on them ratably, with the preferred securities. However, upon the occurrence and continuance of an event of default under the trust agreement resulting from an event of default under the indenture, our rights as holder of the common securities to payment in respect of distributions and payments upon liquidation, redemption or otherwise will be subordinated to the rights of the holders of the preferred securities, as described under "Description of Preferred Securities -- Subordination of the common securities." We will acquire the common securities in an aggregate liquidation amount equal to at least 3% of the total capital of the trust. The principal executive office of the trust is at 650 Fifth Avenue, New York, New York 10019-6108, Attention: Treasurer and Chief Financial Officer, and its telephone number is (212) 757-3300. It is anticipated that the trust will not be required to file reports under the Exchange Act. 21 In this prospectus, (1) the "indenture" means the indenture, as amended and supplemented from time to time, between us and The Bank of New York, as trustee, referred to as the "debenture trustee," and (2) the "trust agreement" means the trust agreement relating to the trust among us, as depositor, The Bank of New York, as property trustee, The Bank of New York, as Delaware trustee and the administrative trustees named in that agreement and the several holders of preferred securities. We refer to the property trustee, the Delaware trustee and the administrative trustees collectively as the "issuer trustees." DESCRIPTION OF PREFERRED SECURITIES The following is a summary of the terms of the preferred securities. This summary together with the summary of the subordinated debentures and the guarantee set forth under the captions "Description of Subordinated Debentures," "Description of Guarantee" and "Relationship Among the Preferred Securities, the Subordinated Debentures, the Expense Agreement and the Guarantee" contains a description of all of the material terms of the preferred securities but is not complete. We refer you to the forms of the trust agreement, the subordinated indenture, the preferred securities, the subordinated debentures and the guarantee and expense agreements that have been filed as exhibits to the registration statement of which this prospectus forms a part. Pursuant to the terms of the trust agreement, the issuer trustees on behalf of the trust will issue the preferred securities and the common securities. The preferred securities will represent preferred beneficial interests in the trust. As a holder of preferred securities you will be entitled to a preference in some circumstances with respect to distributions and amounts payable on redemption or liquidation over the common securities, as well as other benefits as described in the trust agreement. The preferred securities will rank on a parity, and payments will be made ratably with the common securities, except as described under "--Subordination of the common securities." Legal title to the subordinated debentures will be held by the property trustee in trust for the benefit of the holders of the preferred securities and common securities. The guarantee will be a guarantee on a subordinated basis with respect to the common and preferred securities. The guarantee will not, however, guarantee payment of distributions or amounts payable on redemption or liquidation of the preferred securities when the trust does not have funds on hand available to make those payments. For more information on the payments guaranteed by the guarantee, see "Description of Guarantee." DISTRIBUTIONS ON THE PREFERRED SECURITIES Payment of distributions on the preferred securities. The preferred securities represent preferred beneficial interests in the trust, and cash distributions on the preferred securities will be payable at the annual rate of % of the stated liquidation amount of $10. The distributions are payable quarterly on , , and of each year, to the holders of the preferred securities at the close of business on the fifteenth day immediately preceding the relevant distribution date. Distributions will accumulate from the date of original issuance. The first distribution payment date for the preferred securities will be , 2002. The amount of distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in a partial month during that period. If any date on which distributions are payable on the preferred securities is not a business day, then payment of the distributions payable on that date will be made on the next succeeding day that is a business day. No additional distributions or other payment in respect of that delay will be made. However, if that business day is in the next succeeding calendar year, payment of that distribution shall be made on the immediately preceding business day. A "business day" means any day other than a Saturday or a Sunday, or a day on which banking institutions in the City of New York are authorized or required by law or executive order to remain closed or a day on which the corporate trust office of the property trustee or the debenture trustee is closed for business. The paying agent for the preferred securities is The Bank of New York. Extension period. So long as no event of default under the indenture has occurred and is continuing, we have the right under the indenture to defer payments of interest on the subordinated debentures at any time 22 for a period not exceeding 20 consecutive quarters. Any period for which interest is deferred is referred to as an "extension period." However, no extension period may extend beyond , 2032. Once an extension period has terminated and we have paid all accrued and unpaid interest, we can choose to begin a new extension period. As a consequence of any deferral of interest payments by us, quarterly distributions on the preferred securities will also be deferred by the trust. Distributions to which holders of the preferred securities are entitled will accumulate additional distributions on the preferred securities at the annual rate of %, compounded quarterly from the relevant payment date for these distributions. The term "distributions" as used in this prospectus includes any additional distributions. See "Description of Subordinated Debentures -- Option to defer interest payments on the subordinated debentures" for more information on deferral of interest payments and prohibitions of dividend and other payments by us during an extension period. The revenue of the trust available for distribution to holders of the preferred securities will be limited to payments under the subordinated debentures. If we do not make interest payments on the subordinated debentures, the property trustee will not have funds available to pay distributions on the preferred securities. The payment of distributions is guaranteed by us on a limited basis as described under "Description of Guarantee," if and to the extent the trust has funds legally available for the payment of those distributions and cash sufficient to make those payments. Distributions on the preferred securities will be payable to the holders of the preferred securities as they appear on the register of the trust on the relevant record dates, which, as long as the preferred securities remain in book-entry form, will be the fifteenth day, whether or not a business day, immediately preceding the relevant distribution date. Payment will be made as described under "Book-entry issuance." REDEMPTION OF THE COMMON AND PREFERRED SECURITIES OR EXCHANGE UPON LIQUIDATION OF THE TRUST Mandatory redemption of the common and preferred securities. Upon the repayment or redemption, in whole or in part, of the subordinated debentures, whether at stated maturity, upon acceleration or upon earlier redemption as provided in the indenture, the proceeds from the repayment or redemption will be applied by the property trustee to redeem a like amount of the common and preferred securities. This amount will be allocated between the common securities and the preferred securities in proportion to their respective liquidation amounts, upon not less than 30 nor more than 60 days' notice prior to the date fixed for repayment or redemption. The redemption price for the preferred securities is equal to the aggregate liquidation amount of the preferred securities plus accumulated and unpaid distributions to the date of redemption. For a description of the stated maturity and redemption provisions of the subordinated debentures, see "Description of Subordinated Debentures -- Maturity of the subordinated debentures" and "-- Redemption of the subordinated debentures." If less than all of any of the subordinated debentures are to be repaid or redeemed on a redemption date, then the proceeds from the repayment or redemption will be allocated ratably to the redemption of the preferred securities and the common securities. We will have the right to redeem the subordinated debentures: - at any time on or after , 2007, in whole or in part; or - at any time within 90 days following a "tax event," "a capital treatment" event or an "investment company event," which are events described under "-- Tax event, capital treatment event or investment company event redemption," but only in whole. In either case we have to receive prior approval by the Federal Reserve if approval is then required under applicable Federal Reserve capital guidelines or policies. Liquidation of the trust and distribution of the subordinated debentures. We will have the right at any time to dissolve the trust and, after satisfaction of the liabilities of creditors of the trust, distribute the subordinated debentures to you in exchange for your preferred securities. We will commit to the Federal Reserve that, so long as we or any of our affiliates is a holder of common securities, we will not exercise that 23 right until we obtain the approval of the Federal Reserve to do so, if approval is then required under applicable Federal Reserve capital guidelines or policies. Under current United States federal income tax law, a distribution of subordinated debentures in exchange for preferred securities would not be a taxable event to you. Should there be a change in law, a change in legal interpretation, a tax event or other circumstances, however, the distribution of the subordinated debentures could be a taxable event to you. For more information on what may cause this distribution to constitute a taxable event, see "United States Federal Income Tax Consequences -- Distribution of the subordinated debentures to holders of the preferred securities." Tax event, capital treatment event or investment company event redemption. If a tax event, capital treatment event or investment company event in respect of the preferred securities and common securities occurs and is continuing, we have the right to redeem the subordinated debentures in whole, but not in part, and thereby cause a mandatory redemption, of the preferred securities and common securities in whole, but not in part, at the redemption price within 90 days following the occurrence of that tax event, capital treatment event or investment company event. We cannot redeem the subordinated debentures in part. If a tax event, capital treatment event or investment company event in respect of the preferred securities and common securities has occurred and is continuing, and we do not elect: - to redeem the subordinated debentures and thereby cause a mandatory redemption of the preferred securities; or - to dissolve the trust and cause the subordinated debentures to be distributed to holders in exchange for the preferred securities and common securities upon liquidation of the trust as described above; the preferred securities will remain outstanding and additional sums may be payable on the subordinated debentures. "Additional sums" means the additional amounts as may be necessary in order that the amount of distributions then due and payable by the trust on the preferred securities and common securities will not be reduced as a result of any additional taxes, duties and other governmental charges to which the trust has become subject as a result of a tax event. "Capital treatment event" means the reasonable determination by us that, as a result of any amendment to any laws or any regulations, there is more than an insubstantial risk that we will not be entitled to treat an amount equal to the aggregate liquidation amount of the preferred securities as "Tier 1 Capital" for purposes of the then current capital adequacy guidelines of the Federal Reserve. "Investment company event" means the receipt by the trust and us of an opinion of counsel experienced in such matters to the effect that the trust is or will be considered an "investment company" that is required to be registered under the Investment Company Act, as a result of a change in law or regulation or a change in interpretation or application of law or regulation. "Like amount" means: - with respect to a redemption of any of the common or preferred securities, common or preferred securities having a liquidation amount equal to the principal amount of subordinated debentures to be contemporaneously redeemed in accordance with the indenture, the proceeds of which will be used to pay the redemption price of the common and preferred securities; and - with respect to a distribution of subordinated debentures to holders of any of the common or preferred securities in connection with a dissolution or liquidation of the trust, subordinated debentures having a principal amount equal to the liquidation amount of the common or preferred securities in respect of which that distribution is made. "Liquidation amount" means the stated amount per preferred security and common security of $10. 24 "Tax event" with respect to the trust means the receipt by the trust of an opinion of counsel experienced in such matters to the effect that, as a result of any amendment to any laws or any regulations, there is more than an insubstantial risk that: - the trust is, or will be within 90 days of the date of that opinion, subject to United States Federal income tax with respect to income received or accrued on the corresponding subordinated debentures; - we may not, or within 90 days of the opinion we will not be able to deduct interest that we must pay on the subordinated debentures in whole or in part for United States Federal income tax purposes; or - the trust is, or will be within 90 days of the date of that opinion, subject to more than a minimal amount of other taxes, duties or other governmental charges. After the liquidation date fixed for any distribution of the subordinated debentures for any of the preferred securities: - the preferred securities will no longer be deemed to be outstanding; - DTC or its nominee, as the record holder of the preferred securities, will receive a registered global certificate or certificates representing the subordinated debentures to be delivered upon that distribution; and - any certificates representing the preferred securities not held by DTC or its nominee will be deemed to represent the subordinated debentures until those certificates are presented to the administrative trustees or their agent for transfer or reissuance. There can be no assurance as to the market prices for the preferred securities or the subordinated debentures if a dissolution and liquidation were to occur. Accordingly, the preferred securities that an investor may purchase, or the subordinated debentures that an investor may receive on dissolution and liquidation, may trade at a discount to the price that that investor paid to purchase the preferred securities offered hereby. If we elect neither to redeem the subordinated debentures prior to maturity nor to liquidate the trust and distribute the subordinated debentures to holders of the preferred securities in exchange therefor, the preferred securities will remain outstanding until the stated maturity of the subordinated debentures. If we elect to dissolve the trust and thereby cause the subordinated debentures to be distributed to holders of the preferred securities in exchange therefor upon liquidation of the trust, we will continue to have the right to shorten the maturity of the subordinated debentures, if the conditions described under "Description of Subordinated Debentures -- Maturity of the subordinated debentures" are met. LIQUIDATION VALUE OF THE PREFERRED SECURITIES The amount payable on the preferred securities if the trust is liquidated is $10 per preferred security plus accumulated and unpaid distributions, which may be in the form of a distribution of a like amount of subordinated debentures, unless the exceptions described under "-- Distribution on the common and preferred securities upon dissolution and liquidation of the trust" apply. DISTRIBUTION ON THE COMMON AND PREFERRED SECURITIES UPON DISSOLUTION AND LIQUIDATION OF THE TRUST Pursuant to the trust agreement, the trust will automatically dissolve upon expiration of its term of 30 years and will terminate on the first to occur of: (1) some bankruptcy, dissolution or liquidation events of the holder of the common securities; (2) the distribution of a like amount of the subordinated debentures to the holders of the common or preferred securities, if we, as depositor: - have given written direction to the property trustee to dissolve the trust; and - have received prior approval of the Federal Reserve if then so required under applicable capital guidelines or policies; 25 (3) redemption of all of the preferred securities as described under "-- Redemption of the common and preferred securities or exchange upon liquidation of the trust -- Mandatory redemption of the common and preferred securities"; and (4) the entry of an order for the dissolution of the trust by a court of competent jurisdiction. If an early dissolution occurs as described in clause (1), (2) or (4) above, the trust will be liquidated by the issuer trustees as quickly as possible by distributing, after satisfaction of liabilities to creditors of the trust as provided by applicable law, to the holders of the common and preferred securities in exchange for a like amount of the subordinated debentures, unless that distribution is determined by the property trustee not to be practical. In the latter event the holders will be entitled to receive out of the assets of the trust available for distribution to holders, after satisfaction of liabilities to creditors of the trust as provided by applicable law, an amount equal to the aggregate of the liquidation amount plus accrued and unpaid distributions on the preferred securities to the date of payment. If this distribution upon liquidation of the trust can be paid only in part because the trust has insufficient assets available to pay that distribution in full, then the amounts payable directly by the trust on the preferred securities will be paid ratably. The holder(s) of the common securities will be entitled to receive distributions upon any liquidation ratably with the holders of the preferred securities, except that if a debenture event of default has occurred and is continuing, the preferred securities will have a priority over the common securities. PROCEDURES FOR REDEEMING THE PREFERRED SECURITIES Preferred securities redeemed on each redemption date will be redeemed at the redemption price with the proceeds from the contemporaneous redemption of the subordinated debentures. Redemptions of the preferred securities will be made and the redemption price will be payable on each redemption date only to the extent that the trust has funds on hand available for the payment of the redemption price. For more information on the subordination of payments to the holders of the common securities see "-- Subordination of the common securities." If the property trustee gives a notice of redemption in respect of the preferred securities, then, by 12:00 noon, New York City time, on the redemption date, to the extent funds are available, the property trustee will deposit irrevocably with DTC funds sufficient to pay the redemption price. Also at that time, the property trustee will give DTC irrevocable instructions and authority to pay the redemption price to the holders of the preferred securities, as further described under "Book-entry issuance." If the preferred securities are no longer in book-entry form, the property trustee, to the extent funds are available, will irrevocably deposit with the paying agent for the preferred securities funds sufficient to pay the redemption price. Also at that time, the property trustee will give that paying agent irrevocable instructions and authority to pay the redemption price to the holders of the preferred securities upon surrender of their certificates evidencing the preferred securities. However, distributions payable on or prior to the redemption date for the preferred securities called for redemption will be payable to the holders of the preferred securities on the relevant record dates for the related distribution dates. If notice of redemption has been given and funds deposited as required, then upon the date of that deposit: - all rights of the holders of the preferred securities so called for redemption will cease, except the right of the holders of the preferred securities to receive the redemption price and any distribution payable in respect of the preferred securities on or prior to the redemption date, but without interest on that redemption price; and - the preferred securities will cease to be outstanding. If any date fixed for redemption of preferred securities is not a business day, then payment of the redemption price payable on that date will be made on the next succeeding day which is a business day, without any interest or other payment in respect of that delay. However, if that business day falls in the next calendar year, that payment will be made on the immediately preceding business day. In each of these cases, payment of the redemption price payable on that date will have the same force and effect as if made on that date. If payment 26 of the redemption price in respect of preferred securities called for redemption is improperly withheld or refused and not paid either by the trust or by us pursuant to the guarantee as described under "Description of Guarantee," distributions on the preferred securities will continue to accrue at the then applicable rate from the redemption date originally established by the trust for the preferred securities to the date that redemption price is actually paid. In this case the actual payment date will be the date fixed for redemption for purposes of calculating the redemption price. We or our subsidiaries may at any time and from time to time purchase outstanding preferred securities by tender offer, in the open market or by private agreement. Upon prior approval of the Federal Reserve, if required, we may also redeem the debentures at any time, and from time to time, in an amount equal to the liquidation amount of any preferred securities we repurchase, plus a proportionate amount of common securities, but only by surrendering to the property trustee a like amount of the preferred securities and common securities that we then own. In exchange for the trust securities surrendered by us, the property trustee will cause to be released to us for cancellation debentures with a principal amount equal to the liquidation amount of trust securities, plus any accumulated but unpaid distribution then held by the property trustee allocable to those trust securities. After the date of redemption involving an exchange by us, the trust securities we surrender will no longer be deemed outstanding and the debentures redeemed in exchange for the trust securities will be cancelled. Payment of the redemption price on the preferred securities and any distribution of subordinated debentures to holders of preferred securities will be made to the recordholders as they appear on the register for the preferred securities on the relevant record date, which is the fifteenth day, whether or not a business day, immediately preceding the relevant redemption date or liquidation date. If less than all of the preferred securities and common securities issued by the trust are to be redeemed on a redemption date, then the aggregate liquidation amount of the preferred securities and common securities to be redeemed will be allocated proportionately to the preferred securities and the common securities based upon the relative liquidation amounts of these classes. The particular preferred securities to be redeemed will be selected on a proportional basis not more than 60 days prior to the redemption date by the property trustee from the outstanding preferred securities not previously called for redemption, by a method the property trustee deems fair and appropriate and which may provide for the selection for redemption of portions equal to $10 or an integral multiple of $10 in excess of $10, of the liquidation amount of preferred securities of a denomination larger than $10. The property trustee will promptly notify the securities registrar in writing of the preferred securities selected for redemption and, in the case of the preferred securities selected for partial redemption, the liquidation amount to be redeemed. For all purposes of the trust agreement, unless the context otherwise requires, all provisions relating to the redemption of the preferred securities to be redeemed either in whole or in part relate to the portion of the aggregate liquidation amount of preferred securities which has been or is to be redeemed. Notice of any redemption will be mailed at least 30 days, but not more than 60 days before the redemption date to each holder of common and preferred securities to be redeemed at the holder's registered address. Unless we default in payment of the redemption price on the subordinated debentures, on and after the redemption date, interest will cease to accrue on the preferred securities, subordinated debentures or portions of either called for redemption. SUBORDINATION OF THE COMMON SECURITIES Payment of distributions on, and the redemption price of, the preferred securities and common securities, will be made proportionately based on the liquidation amount of the preferred securities and common securities. However, if on any distribution date, redemption date or liquidation date a debenture event of default has occurred and is continuing: - no payment of any distribution on, or redemption price of, or distribution upon liquidation of the trust in respect of any of the common securities; and 27 - no other payment on account of the redemption, liquidation or other acquisition of any of the common securities will be made unless payment in full of: - all accumulated and unpaid distributions on all of the outstanding preferred securities for all distribution periods terminating on or prior thereto; or - in the case of payment of the redemption price, the full amount of that redemption price on all of the trust's outstanding preferred securities then called for redemption; or - in the case of payment of the distribution upon liquidation of the trust, the full amount of that distribution on all outstanding preferred securities will have been made or provided for. All funds available to the property trustee will first be applied to the payment in full of all distributions on, or the redemption price of, the preferred securities then due and payable. In the case of any event of default under the trust agreement resulting from a debenture event of default, we, as holder of the common securities, will be deemed to have waived any right to act with respect to that event of default under the trust agreement until the effect of all of those events of default with respect to the preferred securities have been cured, waived or otherwise eliminated. Until any events of default under the trust agreement with respect to the preferred securities have been cured, waived or otherwise eliminated, the property trustee will act solely on behalf of the holders of the preferred securities and not on our behalf as holder of the common securities, and only the holders of the preferred securities will have the right to direct the property trustee to act on their behalf. EVENTS OF DEFAULT UNDER THE TRUST AGREEMENT WITH RESPECT TO THE PREFERRED SECURITIES; NOTICE Any one of the following events constitutes an "event of default" under the trust agreement with respect to the preferred securities: - the occurrence of a debenture event of default under the indenture, as described under "Description of Subordinated Debentures -- Debenture events of default"; - default by the trust in the payment of any distribution when it becomes due and payable, and continuation of that default for a period of 30 days; - default by the trust in the payment of the redemption price of any security when it becomes due and payable; - default in the performance, or breach, in any material respect, of any covenant or warranty of the issuer trustees in the trust agreement, other than a covenant or warranty a default in the performance of which or the breach of which is dealt with in the second or third bullet point above, and continuation of that default or breach for a period of 60 days after the holders of at least 25% in aggregate liquidation amount of the outstanding preferred securities of the trust have given, by registered or certified mail, to the defaulting issuer trustee or trustees, by, a written notice specifying that default or breach and requiring it to be remedied and stating that the notice is a "notice of default" under the trust agreement; or - the occurrence of some bankruptcy or insolvency events with respect to the property trustee and our failure to appoint a successor property trustee within 90 days of those events. Within five business days after the occurrence of any event of default actually known to the property trustee, the property trustee will transmit notice of that event of default to the holders of the preferred securities, the administrative trustees and us, as depositor, unless that event of default has been cured or waived. We, as depositor, and the administrative trustees are required to file annually with the property trustee a certificate as to whether or not they are in compliance with all the conditions and covenants applicable to them under the trust agreement. 28 If a debenture event of default has occurred and is continuing, the preferred securities have a preference over the common securities as described above under "-- Distribution on the common and preferred securities upon dissolution and liquidation of the trust." The existence of an event of default does not entitle you to accelerate the maturity of your preferred securities. REMOVAL OF ISSUER TRUSTEES Unless a debenture event of default has occurred and is continuing, any issuer trustee may be removed at any time by the holder of the common securities. If a debenture event of default has occurred and is continuing, the property trustee and the Delaware trustee may be removed at that time by the holders of a majority in liquidation amount of the outstanding preferred securities. The holders of the preferred securities will not have the right to vote to appoint, remove or replace the administrative trustees. Those voting rights are vested exclusively in us as the holder of the common securities. No resignation or removal of a trustee and no appointment of a successor trustee will be effective until the acceptance of appointment by the successor trustee in accordance with the provisions of the trust agreement. CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE Unless an event of default has occurred and is continuing, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the trust property may at the time be located, we, as the holder of the common securities, and the administrative trustees will have power to appoint one or more persons either to act as: - a co-trustee, jointly with the property trustee, of all or any part of the trust property; or - to act as separate trustee of that property; to vest in that person or persons in that capacity any property, title, right or power deemed necessary or desirable, subject to the provisions of the trust agreement. In case a debenture event of default has occurred and is continuing, the property trustee alone will have power to make that appointment. MERGER OR CONSOLIDATION OF ISSUER TRUSTEES - Any person into which the property trustee, the Delaware trustee or any administrative trustee that is not a natural person may be merged or converted or with which it may be consolidated; or - any person resulting from any merger, conversion or consolidation to which that trustee will be a party; or - any person succeeding to all or substantially all the corporate trust business of that trustee will be the successor of that trustee under the trust agreement, if that person is otherwise qualified and eligible. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST The trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other person, except as described in this subsection or as described under "-- Distribution on the common and preferred securities upon dissolution and liquidation of the trust". The trust may, at our request, with the consent of the 29 administrative trustees and without the consent of the holders of the preferred securities, the property trustee or the Delaware trustee, - merge with or into, consolidate with, amalgamate with, or be replaced by; or - convey, transfer or lease its properties and assets substantially as an entirety to a trust organized under the laws of any State if the following conditions are met: - the successor entity either: - expressly assumes all of the obligations of the trust with respect to the preferred securities; or - substitutes for the preferred securities other securities having substantially the same terms as the preferred securities so long as the successor securities rank the same as the preferred securities in priority with respect to distributions and payments upon liquidation, redemption and otherwise; - we expressly appoint a trustee of the successor entity possessing the same powers and duties as the property trustee as the holder of the subordinated debentures; - the successor securities are listed, or any successor securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the preferred securities are then listed; - the merger or similar transaction does not cause the preferred securities to be downgraded by any nationally recognized statistical rating organization which assigns ratings to the preferred securities; - the merger or similar transaction does not adversely affect the material rights of the holders of the preferred securities in any material respect; - the successor entity has a purpose substantially identical to that of the trust; - prior to the merger or similar transaction, we have received an opinion from independent counsel to the trust experienced in those matters to the effect that: - the transaction does not adversely affect the material rights, preferences and privileges of the holders of the preferred securities, including any successor securities, in any material respect; and - following the transaction, neither the trust nor any successor entity will be required to register as an investment company under the Investment Company Act of 1940, as amended; and - we or any permitted successor or assignee owns all of the common securities of the successor entity and guarantee the obligations of the successor entity under the successor securities at least to the extent provided by the guarantee. However, the trust will not, except with the consent of holders of 100% in liquidation amount of the preferred securities, enter into any merger or similar transaction if that would cause the trust or the successor entity to be classified as an association taxable as a corporation or as other than a grantor trust for United States Federal income tax purposes. VOTING RIGHTS OF HOLDERS OF THE PREFERRED SECURITIES; AMENDMENT OF THE TRUST AGREEMENT The holders of the preferred securities will have no voting rights, except as provided in this subsection and under "Description of Guarantee -- Amendments to and assignment of the guarantee" and as otherwise required by law and the trust agreement. The trust agreement may be amended by us and the administrative trustees, without the consent of the holders of the preferred securities for any of the following reasons: - to cure any ambiguity, correct or supplement any provisions in the trust agreement that may be inconsistent with any other provision; or 30 - to make any other provisions with respect to matters or questions arising under the trust agreement which shall not be inconsistent with the other provisions of the trust agreement; or - to modify, eliminate or add to any provisions of the trust agreement to the extent necessary to ensure that: - for United States Federal income tax purposes, the trust will be classified as a grantor trust and will not be classified as an association taxable as a corporation at all times that any common or preferred securities are outstanding; or - to ensure that the trust will not be required to register as an "investment company" under the Investment Company Act. However, that action may not adversely affect in any material respect the interests of any holder of preferred securities, and any such amendment of the trust agreement shall become effective when notice of that amendment is given to the holders of common and preferred securities. We and the administrative trustees may amend the trust agreement with: - the consent of holders representing not less than a majority of the outstanding common and preferred securities, based upon liquidation amounts; and - receipt by the issuer trustees of an opinion of counsel to the effect that the amendment or the exercise of any power granted to the issuer trustees in accordance with the amendment will not cause the trust to be taxable as a corporation or affect the trust's status as a grantor trust for United States Federal income tax purposes or the trust's exemption from status as an "investment company" under the Investment Company Act. If such amendment will adversely affect the Delaware trustee and the property trustee, we would also need to get their approval. However, without the consent of each holder of common and preferred securities, the trust agreement may not be amended to: - change the amount or timing of any distribution on the common or preferred securities or otherwise adversely affect the amount of any distribution required to be made in respect of the common or preferred securities as of a specified date; or - restrict the right of a holder of common or preferred securities to institute suit for the enforcement of any payment on or after that date. So long as any subordinated debentures are held by the property trustee, the issuer trustees will not: - direct the time, method and place of conducting any proceeding for any remedy available to the debenture trustee, or executing any trust or power conferred on the property trustee with respect to the subordinated debentures; - waive any past default that is waivable under the indenture; - exercise any right to rescind or annul a declaration that the principal of all the subordinated debentures shall be due and payable; or - consent to any amendment, modification or termination of the indenture or the subordinated debentures, where a consent is required without, in each case, obtaining the prior approval of the holders of a majority in aggregate liquidation amount of all outstanding preferred securities. However, where a consent under the indenture would require the consent of each holder of subordinated debentures affected thereby, the property trustee will not give consent without the prior consent of each holder of the corresponding preferred securities. The issuer trustees shall not revoke any action previously authorized or approved by a vote of the holders of the preferred securities except by subsequent vote of the holders of the preferred securities. The property 31 trustee shall notify each holder of preferred securities of any notice of default with respect to the subordinated debentures. In addition to obtaining the foregoing approvals of the holders of the preferred securities, prior to taking any of the foregoing actions, the issuer trustees shall obtain an opinion of counsel experienced in these matters to the effect that: - the trust will not be classified as an association taxable as a corporation for United States Federal income tax purposes on account of that action; and - the action would not affect the trust's status as a grantor trust for United States Federal income tax purposes. Any required approval of holders of preferred securities may be given at a meeting of holders of preferred securities convened for that purpose or pursuant to written consent. The property trustee will cause a notice of any meeting at which holders of preferred securities are entitled to vote to be given to each holder of record of preferred securities in the manner described in the trust agreement. No vote or consent of the holders of preferred securities will be required for the trust to redeem and cancel the preferred securities in accordance with the trust agreement. Neither us, the issuer trustees, any of our affiliates or any issuer trustees will be entitled to vote or consent under any of the circumstances described above any of the preferred securities that are owned by it. For purposes of the vote or consent, their preferred securities will be treated as if they were not outstanding. REGISTRATION OF GLOBAL PREFERRED SECURITIES The preferred securities will be represented by a global certificate registered in the name of The Depository Trust Company, referred to as "DTC," or its nominee. Beneficial interests in the preferred securities will be shown on, and transfers of those beneficial interests will be effected only through, records maintained by participants in DTC. Except as described in this subsection, preferred securities in certificated form will not be issued in exchange for the global certificates. Upon the issuance of a global security, and the deposit of that global security with or on behalf of DTC, DTC or its nominee will credit, on its book-entry registration and transfer system, the respective aggregate liquidation amounts of the individual preferred securities represented by the global securities to the accounts of participants. These accounts will be designated by the dealers, underwriters or agents with respect to the preferred securities. Ownership of beneficial interests in a global security will be limited to participants or persons that may hold interests through participants. With respect to the interests of participants, ownership of beneficial interests in the global security will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee. With respect to interests of persons who hold through participants, that ownership will be shown on, and the transfer of that ownership will be effected only through, records of participants. The laws of some states require that some purchasers of securities take physical delivery of the securities in definitive form. These limits and laws may impair the ability to transfer beneficial interests in a global security. So long as DTC, or its nominee, is the registered owner of the global security, DTC or its nominee, will be considered the sole owner or holder of the preferred securities represented by the global security for all purposes under the indenture governing the preferred securities. Except as provided below in this subsection, owners of beneficial interests in a global security will not: - be entitled to have any of the individual preferred securities of the series represented by the global security registered in their names; - receive or be entitled to receive physical delivery of any of the preferred securities of that series in definitive form; or - be considered the owners or holders of the preferred securities under the indenture. 32 Situations when a global security will be exchanged for a certificated security. A global security will be exchangeable for preferred securities registered in the names of persons other than DTC or its nominee only if: - DTC notifies the trust that it is unwilling or unable to continue as a depository for the global security and no successor depository shall have been appointed by the trust: - within 90 days; or - if at any time DTC ceases to be a clearing agency registered under the Exchange Act, at the time DTC ceases to be so registered; - the trust in its sole discretion determines that the global security is so exchangeable; or - an event of default under the indenture with respect to the subordinated debentures has occurred and is continuing. In each of these cases, the administrative trustees will notify DTC and instruct DTC to notify you of the exchange of your global security for definitive certificates. Any global security that is exchangeable pursuant to the preceding sentence will be exchangeable for definitive certificates registered in such names that DTC directs. It is expected that these instructions will be based upon directions received by DTC from its participants with respect to ownership of beneficial interests in the global security. If preferred securities are issued in definitive form, the preferred securities will be in denominations of $10 and integral multiples of $10 and may be transferred or exchanged at the offices described below in this subsection. Payments on preferred securities represented by a global security. Payments on preferred securities represented by a global security will be made to DTC, as the depositary for the preferred securities. If preferred securities are issued in certificated form: - the liquidation amount and distributions will be payable; - the transfer of the preferred securities will be registrable; and - preferred securities will be exchangeable for preferred securities of other denominations of a like aggregate liquidation amount at either: - the corporate office of the property trustee in New York, New York; or - the offices of any paying agent appointed by the administrative trustees. Payment of any distribution may be made at the option of the administrative trustees by check mailed to the address of the persons entitled thereto or by wire transfer. In addition, if the preferred securities are issued in certificated form, the record dates for payment of distributions will be the fifteenth day, whether or not a business day, immediately preceding the relevant distribution date. For a description of DTC and the terms of the depositary arrangements relating to payments, transfers, voting rights, redemptions and other notices and other matters see "Book-entry issuance." We expect that DTC or its nominee, upon receipt of any payment of liquidation amount, premium or distributions, including any payment of redemption price, in respect of a permanent global security representing any of the preferred securities immediately will credit participants' accounts with payments in amounts proportionate to their respective beneficial interest in the aggregate liquidation amount of the global security for the preferred securities as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in the global security held through these participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name." These payments will be the responsibility of these participants. PAYMENT AND PAYING AGENCY Payments in respect of the preferred securities will be made to DTC, which will credit the relevant accounts at DTC on the distribution dates. If the preferred securities are not held by DTC, these payments will be made by check mailed to the address of the holder entitled thereto as that address appears on the 33 Register. The paying agent will initially be the property trustee and any co-paying agent chosen by the property trustee and acceptable to the administrative trustees and us. Payment will be made at the corporate trust office of the property trustee in New York City. That office is currently located at 101 Barclay Street, New York, New York 10286. The paying agent will be permitted to resign as paying agent upon 30 days' written notice to the property trustee and us. If the property trustee will no longer be the paying agent, the administrative trustees will appoint a successor, which will be a bank or trust company acceptable to the administrative trustees and us, to act as paying agent. REGISTRAR AND TRANSFER AGENT The property trustee will act as registrar and transfer agent for the preferred securities. Registration of transfers of preferred securities will be effected without charge by or on behalf of the trust, but upon payment of any tax or other governmental charges that may be imposed in connection with any transfer or exchange. The trust will not be required to register the transfer of any preferred securities that have been called for redemption. INFORMATION CONCERNING THE PROPERTY TRUSTEE Other than during the occurrence and continuance of an event of default, the property trustee undertakes to perform only the duties specifically described in the trust agreement. After an event of default, the property trustee must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the property trustee is under no obligation to exercise any of the powers vested in it by the trust agreement at the request of any holder of preferred securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. If no event of default has occurred and the property trustee is: - required to decide between alternative courses of action; - required to construe ambiguous provisions in the trust agreement; or - is unsure of the application of any provision of the trust agreement; and - the matter is not one on which holders of preferred securities are entitled under the trust agreement to vote then the property trustee will take action as we direct. If not so directed, the property trustee will take the action it deems advisable and in the best interests of the holders of the common and preferred securities and will have no liability except for its own bad faith, negligence or willful misconduct. MISCELLANEOUS The administrative trustees are authorized and directed to conduct the affairs of and to operate the trust in a way that: - the trust (1) will not be deemed to be an "investment company" required to be registered under the Investment Company Act or (2) classified as an association taxable as a corporation or as other than a grantor trust for United States Federal income tax purposes; and - so that the subordinated debentures will be treated as our indebtedness for United States Federal income tax purposes. In this connection, we and the administrative trustees are authorized to take any action, consistent with applicable law, the certificate of trust of the trust or the trust agreement, that we and the administrative trustees determine in our discretion to be necessary or desirable, as long as the action does not materially adversely affect the interests of the holders of the related preferred securities. Holders of the preferred securities have no preemptive or similar rights. The trust may not borrow money or issue debt or mortgage or pledge any of its assets. 34 DESCRIPTION OF SUBORDINATED DEBENTURES The subordinated debentures will be issued under an indenture between us and The Bank of New York as debenture trustee. The indenture is qualified under the Trust Indenture Act. Concurrently with the issuance of the preferred securities, the trust will invest the proceeds of the preferred securities, together with the consideration we pay for the common securities, in the subordinated debentures that we issue. The subordinated debentures initially will be issued in an aggregate principal amount equal to $22,681,000, which is the sum of the maximum aggregate stated liquidation amounts of the preferred securities and the common securities. If the over allotment option is exercised in full by the underwriters the total aggregate principal amount of the subordinated debentures issued to the trust would be $25,774,000. INTEREST ON THE SUBORDINATED DEBENTURES The subordinated debentures will bear interest at the annual rate of % of their principal amount, payable quarterly in arrears on , , and of each year, commencing , 2002, to the person in whose name each subordinated debenture is registered at the close of business on the business day next preceding an interest payment date. We anticipate that, until any liquidation of the trust, the subordinated debentures will be held in the name of the property trustee in trust for the benefit of the holders of the common and preferred securities. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in a partial month during that period. If any date on which interest is payable on the subordinated debentures is not a business day, then payment of the interest payable on that date will be made on the next succeeding day that is a business day. If that business day is in the next succeeding calendar year, the payment will be made on the immediately preceding business day. Accrued interest that is not paid on the interest payment date will bear additional interest to the extent permitted by law at the annual rate of %, compounded quarterly from the interest payment date. The term "interest" as used in this prospectus includes quarterly interest payments, interest on quarterly interest payments not paid on the interest payment date and additional sums, which are described below under "-- Additional sums we may have to pay on the subordinated debentures." MATURITY OF THE SUBORDINATED DEBENTURES The subordinated debentures will mature on , 2032. This maturity date may be shortened at any time by us to any date not earlier than , 2007. However, we must commit to the Federal Reserve not to do so without its prior approval if approval is then required under applicable Federal Reserve capital guidelines or policies. If we elect to shorten the stated period to maturity of the subordinated debentures, we will give notice to the debenture trustee, and the debenture trustee will give notice of the shortening to the holders of the subordinated debentures no more than 30 and no less than 60 days prior to the effectiveness of the shortening. SUBORDINATION OF THE SUBORDINATED DEBENTURES The subordinated debentures will be unsecured and will rank junior and be subordinate in right of payment to all of our senior debt. Substantially all of our existing indebtedness constitutes senior debt. At December 31, 2001, our senior debt totaled approximately $293.3 million. The subordinated debentures will rank on a parity with any other series of junior subordinated debentures that we may issue and will be unsecured and subordinate and junior in right of payment to all of our senior debt. We are a non-operating holding company and almost all of the operating assets of us and our consolidated subsidiaries are owned by these subsidiaries. We rely primarily on dividends from our subsidiaries to meet our obligations. Because we are a holding company, our right to participate in any distribution of assets of any subsidiary, including the Bank, upon the subsidiary's liquidation or reorganization or otherwise (and thus the ability of holders of the preferred securities to benefit indirectly from the distribution), is subject to the prior claims of creditors of that subsidiary, except to the extent that we are a creditor of that subsidiary. Accordingly, the subordinated debentures will be effectively subordinated to all existing and future liabilities of our subsidiaries, 35 and holders of subordinated debentures should look only to our assets for payments on the subordinated debentures. The indenture does not limit our incurrence or issuance of other secured or unsecured debt, including senior debt, whether under the indenture or any existing or other indenture that we may enter into in the future or otherwise. We expect from time to time to incur additional indebtedness constituting senior debt. If we default in the payment of any principal or interest, or any other amount payable on any senior debt when it becomes due and payable, whether at maturity or at a date fixed for redemption or by declaration of acceleration or otherwise, then, unless and until: - the default has been cured or waived or has ceased to exist; or - all senior debt has been paid no direct or indirect payment, whether in cash, property, securities, by set-off or otherwise, may be made or agreed to be made on the subordinated debentures, or in respect of any redemption, repayment, retirement, purchase or other acquisition of any of the subordinated debentures. As used in this prospectus, "senior debt" means any obligation of us to our creditors, whether now outstanding or subsequently incurred. Senior debt does not, however, include any obligation as to which, in the instrument creating or evidencing the obligation or pursuant to which the obligation is outstanding, it is provided that the obligation is not senior debt, except for trade accounts payable and accrued liabilities arising in the ordinary course of business. Senior debt includes our outstanding subordinated debt securities and any subordinated debt securities issued in the future with substantially similar subordination terms. Senior debt does not, however, include the subordinated debentures or any junior subordinated debt securities issued in the future with subordination terms substantially similar to those of the subordinated debentures. Substantially all of our existing indebtedness constitutes senior debt. If any of the following events occur, in connection with a bankruptcy proceeding relating to us, our creditors or our property: - an insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other similar proceeding; - a proceeding for the liquidation, dissolution or other winding up of us, voluntary or involuntary; whether or not involving insolvency or bankruptcy proceedings; - an assignment by us for the benefit of creditors; or - any other marshalling of our assets; then all senior debt, including any interest on that debt accruing after the commencement of any proceedings, will first be paid in full before any payment or distribution, whether in cash, securities or other property, will be made on account of the subordinated debentures. If that occurs, any payment or distribution on account of the subordinated debentures that would be payable or deliverable but for the subordination provisions will be paid or delivered directly to the holders of senior debt. It will be paid or delivered in accordance with the priorities then existing among these holders until all senior debt and any interest on that debt accruing after the commencement of any proceedings has been paid in full. If any proceeding occurs after payment in full of all sums owing with respect to senior debt, the holders of subordinated debentures, together with the holders of any of our obligations ranking on a parity with the subordinated debentures, will be entitled to be paid from our remaining assets the amounts they are owed at the time before any payment or other distribution will be made on account of any: - capital stock; or - our obligations ranking junior to the subordinated debentures. If any holder of subordinated debentures receives a payment, distribution or security that contravene any of the subordinated terms described above and before all the senior debt has been paid in full, that payment must be paid over to the holders of the senior debt according to the priorities for payment then existing to the 36 payment of all senior debt remaining unpaid to the extent necessary to pay all of the senior debt in full. By reason of this subordination, if we become insolvent, holders of senior debt may receive more, ratably, and holders of the subordinated debentures may receive less, ratably, than our other creditors. This subordination will not prevent the occurrence of any event of default under the indenture. OPTION TO DEFER INTEREST PAYMENTS ON THE SUBORDINATED DEBENTURES So long as no event of default under the indenture has occurred and is continuing, we have the right under the indenture at any time or from time to time during the term of the subordinated debentures to defer payment of interest on the subordinated debentures for a period not exceeding 20 consecutive quarters with respect to each extension period. No extension period, however, may extend beyond the stated maturity of the subordinated debentures, which is , 2032. At the end of an extension period, we must pay all interest then accrued and unpaid on the subordinated debentures, together with interest on the unpaid interest, at the annual rate of %, compounded quarterly from the interest payment date, to the extent permitted by applicable law. During an extension period, interest will continue to accrue and holders of subordinated debentures or holders of preferred securities while that series is outstanding will be required to accrue interest income for United States federal income tax purposes. For more information about the tax consequences of an extension period, see "United States Federal Income Tax Consequences -- Interest income and original issue discount." During any extension period, we may not: - declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of our capital stock; or - make any payment of principal of or any interest on or repay, repurchase or redeem any of our debt securities, including other subordinated debentures, that rank on a parity in all respects with or junior in interest to the subordinated debentures, except for any of the following: - repurchases, redemptions or other acquisitions of our shares of capital stock in connection with: - any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors or consultants; - a dividend reinvestment or stockholder stock purchase plan; or - the issuance of our capital stock, or securities convertible into or exercisable for the capital stock, as consideration in an acquisition transaction entered into prior to the applicable extension period; - as a result of any exchange or conversion of: - any class or series of our capital stock, or any capital stock of any of our subsidiaries, for any class or series of our capital stock; or - any class or series of our indebtedness for any class or series of our capital stock; - the purchase of fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of the capital stock or the security being converted or exchanged; - any declaration of a dividend in connection with any stockholder's rights plan, or the issuance of rights, stock or other property under any stockholder's rights plan, or the redemption or repurchase of rights pursuant thereto; or - any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of the warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks on a parity with or junior to the stock. Before the termination of any extension period, we may further defer the payment of interest on the subordinated debentures. However, no extension period may exceed 20 consecutive quarters or extend beyond the stated maturity of the subordinated debentures, which is , 2032. Upon the termination of any 37 extension period and the payment of all interest then accrued and unpaid, together with interest on that interest at the rate of % per annum compounded quarterly, to the extent permitted by applicable law, we may elect to begin a new extension period. Interest may only be due and payable at the end of an extension period. We must give the property trustee, the administrative trustees and the debenture trustee notice of our election to begin the extension period at least one business day prior to the earlier of: - the date on which distributions on the preferred securities would have been payable except for the election to begin an extension period; and - the date on which the property trustee is required to give notice to the New York Stock Exchange or any other stock exchange or automated quotation system on which the preferred securities are then listed or quoted or to holders of preferred securities of the record date or the date the distributions are payable. The debenture trustee shall give notice of our election to begin a new extension period to the holders of the subordinated debentures. There is no limitation on the number of times that we may elect to impose an extension period. We have no current intention of exercising our right to defer payment of interest by extending the interest payment period on the subordinated debentures. ADDITIONAL SUMS WE MAY HAVE TO PAY ON THE SUBORDINATED DEBENTURES If the trust is required to pay any additional taxes, duties or other governmental charges as a result of a tax event, we will pay as additional amounts on the subordinated debentures the amounts required so that the distributions payable by the trust will not be reduced as a result of any additional taxes, duties or other governmental charges. Pursuant to the expense agreement, we, as the holder of the common securities, will agree to pay all debts and other obligations, other than with respect to the preferred securities, and all costs and expenses of the trust. The expenses include costs and expenses relating to the organization of the trust, the fees and expenses of the issuer trustees and the costs and expenses relating to the operation of the trust. The form of expense agreement is included as Exhibit D to the form of trust agreement, which has been filed as an exhibit to the registration statement of which this prospectus forms a part. REDEMPTION OF THE SUBORDINATED DEBENTURES The subordinated debentures are redeemable prior to their stated maturity at our option if we receive prior approval by the Federal Reserve and this approval is then required under applicable capital guidelines or policies: - on or after , 2007, in whole at any time or in part from time to time, with not less than 30 days' and not more than 60 days' notice; or - at any time in whole, but not in part, prior to , 2007 and within 90 days following the occurrence and continuation of a tax event, a capital treatment event or an investment company event in either case at a redemption price equal to the accrued and unpaid interest on the redeemed subordinated debentures to the date fixed for redemption, plus 100% of the principal amount of the subordinated debenture. You should refer to "Description of Preferred Securities -- Redemption of the common and preferred securities or exchange upon liquidation of the trust -- Tax event, capital treatment event or investment company event redemption" for information on what constitutes a "tax event," a "capital treatment event" and an "investment company event." Subordinated debentures in denominations larger than $10 may be redeemed in part but only in integral multiples of $10. The redemption price for any redeemed subordinated debenture will equal any accrued and unpaid interest, including additional interest, until the redemption date, plus 100% of the principal amount of that subordinated debenture. 38 Notice of any redemption will be mailed at least 45 days but not more than 75 days before the redemption date to each holder of subordinated debentures to be redeemed at its registered address. Unless we default in payment of the redemption price, on and after the redemption date interest will cease to accrue on the subordinated debentures or on the portions of them called for redemption. The subordinated debentures will not be subject to any sinking fund. DISTRIBUTION OF THE SUBORDINATED DEBENTURES Under some circumstances involving the dissolution of the trust, subordinated debentures may be distributed to the holders of the preferred securities in exchange for them upon liquidation of the trust after satisfaction of liabilities to creditors of the trust as provided by applicable law. This exchange is described further under "Description of Preferred Securities -- Redemption of the common and preferred securities or exchange upon liquidation of the trust." If distributed to holders of preferred securities, the subordinated debentures will initially be issued in the form of one or more global securities. If this occurs, DTC, or any successor depositary for the preferred securities, will act as depositary for the subordinated debentures. It is anticipated that the depositary arrangements for the subordinated debentures would be substantially identical to those in effect for the preferred securities, as further described below under "-- Registration of the subordinated debentures." If subordinated debentures are distributed to the holders of preferred securities in exchange for them upon liquidation of the trust, we will use our best efforts to list the subordinated debentures on the New York Stock Exchange or any other stock exchange or automated quotation system on which the preferred securities are then listed or quoted. There can be no assurance as to the market price of any subordinated debentures that may be distributed to the holders of preferred securities. REGISTRATION OF THE SUBORDINATED DEBENTURES If subordinated debentures are distributed to holders of the preferred securities, the subordinated debentures will be represented by global certificates registered in the name of DTC or its nominee. Beneficial interests in the subordinated debentures will be shown on, and transfers of those beneficial interests will be effected only through, records maintained by participants in DTC. Except as described in this subsection, subordinated debentures in certificated form will not be issued in exchange for the global certificates. See "Book-entry issuance." Situations when a global security will be exchanged for a certificated security. A global security will be exchangeable for subordinated debentures registered in the names of persons other than DTC or its nominee only if: - DTC notifies us that it is unwilling or unable to continue as a depositary for the global security and we have not appointed a successor depositary: - within 90 days; or - if at any time DTC ceases to be a clearing agency registered under the Exchange Act, at the time DTC ceases to be so registered; - we in our sole discretion determine that the global security is so exchangeable; or - an event of default under the indenture with respect to the subordinated debentures has occurred and is continuing. Any global security that is exchangeable pursuant to the preceding sentence will be exchangeable for definitive certificates registered in such names as DTC directs. It is expected that these instructions will be based upon directions received by DTC from its participants with respect to ownership of beneficial interests in the global security. If the subordinated debentures are issued in definitive form, the subordinated debentures will be in denominations of $10 and integral multiples of $10 and may be transferred or exchanged at the offices described below in this subsection. 39 Payments on subordinated debentures represented by a global security. Payments on subordinated debentures represented by a global security will be made to DTC, as the depositary for the subordinated debentures. If subordinated debentures are issued in certificated form: - principal and interest will be payable; - the transfer of the subordinated debentures will be registrable; and - subordinated debentures will be exchangeable for subordinated debentures of other denominations of a like aggregate principal amount at either - the corporate office of the debenture trustee in New York, New York; or at - the offices of any paying agent or transfer agent appointed by us. However, payment of interest may be made at our option by check mailed to the address of the persons entitled thereto or by wire transfer. In addition, if the subordinated debentures are issued in certificated form and not held by the property trustee, the record dates for payment of interest will be the fifteenth day, whether or not a business day, immediately preceding the interest payment date. For a description of DTC and the terms of the depositary arrangements relating to payments, transfers, voting rights, redemptions and other notices and other matters see "Book-entry issuance." PAYMENT AND PAYING AGENTS Payment of the principal and of interest on the subordinated debentures will be made either: - at the office of the debenture trustee in New York, New York; or - at the office of the paying agent or paying agents as we may designate from time to time. However, at our option payment of any interest may be made, except in the case of global subordinated debentures: - by check mailed to the address of the person entitled thereto as the address appears in the securities register; or - by transfer to an account maintained by the person entitled thereto as specified in the securities register. In either case proper transfer instructions must have been received by the regular record date. Payment of any interest on subordinated debentures will be made to the person in whose name each subordinated debenture is registered at the close of business on the regular record date for the interest, except in the case of defaulted interest. We may at any time designate additional paying agents or rescind the designation of any paying agent; however, we will at all times be required to maintain a paying agent in New York, New York for the subordinated debentures. Any moneys deposited with the debenture trustee or any paying agent, or held by us in trust, for the payment of the principal of and any interest on any subordinated debenture and remaining unclaimed for two years after that principal and any interest has become due and payable will, at the request of us, be repaid to us. The holder of the subordinated debenture can thereafter look, as a general unsecured creditor, only to us for payment. DENOMINATIONS OF THE SUBORDINATED DEBENTURES The subordinated debentures will be issuable only in registered form without coupons in denominations of $10 and any integral multiple of $10. 40 TRANSFER OF THE SUBORDINATED DEBENTURES Subordinated debentures will be exchangeable for other subordinated debentures. Subordinated debentures may be presented for exchange, and may be presented for registration of transfer (with the form of transfer endorsed on them, or a satisfactory written instrument of transfer, duly executed): - at the office of the appropriate securities registrar; or - at the office of any transfer agent designated by us for the purpose with respect to any of the subordinated debentures without service charge and upon payment of any taxes and other governmental charges as described in the indenture. We will initially appoint the trustee as securities registrar and transfer agent under the indenture. We may at any time rescind the designation of any transfer agent or approve a change in the location through which any transfer agent acts, only if we maintain a transfer agent in New York, New York. If any redemption occurs, neither we nor the debenture trustee will be required to: - issue, register the transfer of or exchange subordinated debentures during the period beginning at the opening of business 15 days before the day of selection for redemption of subordinated debentures and ending at the close of business on the day of mailing of the relevant notice of redemption; or - transfer or exchange any subordinated debentures so selected for redemption, except, where we redeem any subordinated debentures in part, in which case we will transfer or exchange any portion that we did not redeem. RESTRICTIONS ON PAYMENTS ON THE SUBORDINATED DEBENTURES We will also covenant, as to the subordinated debentures, that we will not, and will not permit any of our subsidiaries to: - declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of our or their capital stock; or - make any payment of principal of or interest on or repay or repurchase or redeem any of our or their debt securities, including other subordinated debentures, that rank ratably in all respects with or junior in interest to the subordinated debentures, except for any of the following: - repurchases, redemptions or other acquisitions of shares of our capital stock in connection with: - any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors or consultants; - a dividend reinvestment or stockholder stock purchase plan; or - the issuance of our capital stock, or securities convertible into or exercisable for the capital stock, as consideration in an acquisition transaction entered into prior to the applicable extension period; - as a result of any exchange or conversion of: - any class or series of our capital stock (or any capital stock of any of our subsidiaries) for any class or series of our capital stock; or - any class or series of our indebtedness for any class or series of our capital stock; - the purchase of fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of the capital stock or the security being converted or exchanged; - any declaration of a dividend in connection with any stockholder's rights plan, or the issuance of rights, stock or other property under any stockholder's rights plan, or the redemption or repurchase of rights pursuant thereto; or 41 - any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of the warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks on a parity with or junior to the stock if at that time - any event of which we have actual knowledge has occurred that: - with the giving of notice or the lapse of time, or both, would constitute an "event of default" under the indenture with respect to the subordinated debentures of the series; and - in respect of which we have not taken reasonable steps to cure; - if the subordinated debentures are held by the trust, we are in default with respect to our payment of any obligations under the guarantee relating to the preferred securities; or - we have given notice of our selection of an extension period as provided in the indenture with respect to the subordinated debentures and have not rescinded that notice, or the extension period is continuing. MODIFICATION OF THE INDENTURE From time to time we and the debenture trustee may, without the consent of the holders of any of the subordinated debentures, amend, waive or supplement the indenture for specified purposes, including, among other things, curing ambiguities, defects or inconsistencies. This action may not, however materially adversely affect: - the interest of the holders of preferred securities; and - qualifying, or maintaining the qualification of, the indenture under the Trust Indenture Act. The indenture also contains provisions permitting us and the debenture trustee, with the consent of the holders of not less than a majority in principal amount of each outstanding subordinated debenture affected, to modify in any manner the rights of the holders of the series of the subordinated debentures. However, the consent of the holder of each outstanding subordinated debenture so affected is necessary to do any of the following: - change the stated maturity of any of the subordinated debentures; or - reduce the principal amount of any of the subordinated debentures; or - reduce the rate of interest of any of the subordinated debentures; or - extend the time of payment of interest on any of the subordinated debentures; or - reduce the percentage of principal amount of subordinated debentures. However, for so long as any of the preferred securities remain outstanding, no modification may be made that adversely affects the holders of the preferred securities in any material respect, and no termination of the indenture may occur, and no waiver of any event of default or compliance with any covenant under the indenture may be effective, without the prior consent of the holders of at least a majority of the aggregate liquidation amount of all outstanding preferred securities affected unless and until the principal of the subordinated debentures and all accrued and unpaid interest on them have been paid in full and certain other conditions have been satisfied. In addition, any amendment impairing a holder's right to receive principal and interest, including any additional interest, requires the prior consent of each holder of preferred securities. In addition, we and the debenture trustee may execute, without the consent of any holder of subordinated debentures, any supplemental indenture for the purpose of creating a new series of junior subordinated debentures. 42 DEBENTURE EVENTS OF DEFAULT The indenture provides that any one or more of the following events that has occurred and is continuing constitutes a "debenture event of default": - failure for 30 days to pay any interest on the subordinated debentures when due, including any additional interest, unless we are deferring that interest payment during an extension period; or - failure to pay any principal on the subordinated debentures when due whether at maturity or upon redemption; or - failure to observe or perform any other covenants contained in the indenture for 90 days after written notice to us from the debenture trustee or the holders of at least 25% in aggregate outstanding principal amount of the subordinated debentures; or - some events involving our bankruptcy, insolvency or reorganization. The holders of a majority in aggregate outstanding principal amount of subordinated debentures have the right to direct the time, method and place of conducting any proceeding for any remedy available to the debenture trustee. The debenture trustee or the holders of not less than 25% in aggregate outstanding principal amount of subordinated debentures may declare the principal due and payable immediately upon a debenture event of default. Should the debenture trustee or the holders of the subordinated debentures fail to make that declaration, the holders of at least 25% in aggregate liquidation amount of the preferred securities will have that right. The holders of a majority in aggregate outstanding principal amount of subordinated debentures may annul that declaration. If the holders of the subordinated debentures fail to annul that declaration and waive the default, the holders of a majority in aggregate liquidation amount of the preferred securities will have that right. The holders of a majority in aggregate outstanding principal amount of the subordinated debentures affected thereby may, on behalf of all holders waive any default, except: - a default in the payment of principal or interest, including any additional interest, unless: - the default has been cured; and - a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the debenture trustee; or - a default in respect of a covenant or provision which under the indenture cannot be modified or amended without the consent of the holder of each outstanding subordinated debenture. If the holders of the subordinated debentures fail to waive that default, the holders of a majority in aggregate liquidation amount of the preferred securities will have that right. We are required to file annually with the debenture trustee a certificate as to whether or not we are in compliance with all the conditions and covenants applicable to us under the indenture. If a debenture event of default occurs and is continuing the property trustee will have the right: - to declare the principal of and the interest on the subordinated debentures, and any other amounts payable under the indenture, to be due and payable; and - to enforce its other rights as a creditor with respect to the subordinated debentures. ENFORCEMENT OF RIGHTS BY HOLDERS OF PREFERRED SECURITIES If a debenture event of default with respect to the subordinated debentures: - has occurred and is continuing; and - is attributable to our failure to pay interest or principal on the subordinated debentures on the due date 43 you, as a holder of preferred securities may institute a legal proceeding directly against us for enforcement of payment to you of the principal of or interest, including any additional interest, on the subordinated debentures having a principal amount equal to the aggregate liquidation amount of your preferred securities. We may not amend the indenture to remove that right without the prior written consent of the holders of all of the preferred securities outstanding. If the right to bring a legal proceeding is removed, the trust may be required to file reports under the Exchange Act. We have the right under the indenture to set off any payment we make to a holder of preferred securities in connection with a legal proceeding. The holders of the preferred securities will not be able to exercise directly any remedies other than those described in the preceding paragraph that are available to the holders of the subordinated debentures unless there has been an event of default under the trust agreement, as described under "Description of Preferred Securities -- Events of default under the trust agreement with respect to the preferred securities; notice." CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS The indenture generally permits us to consolidate or merge with another company or firm. We are also permitted to sell substantially all of our assets to another firm, or to buy substantially all of the assets of another firm. However, we may not take any of these actions unless all of the following conditions are met: - the successor is organized under the laws of the United States or any state or the District of Columbia; - the successor expressly assumes our obligations on the subordinated debentures issued under the indenture; - immediately after giving effect thereto, no debenture event of default, and no event which, after notice or lapse of time or both, would become a debenture event of default, has occurred or is continuing; and - other conditions as prescribed by the indenture are met. The general provisions of the indenture do not afford holders of the subordinated debentures protection if a highly leveraged or other transaction involving us that may adversely affect holders of the subordinated debentures occurs. SATISFACTION AND DISCHARGE OF OUR OBLIGATIONS UNDER THE INDENTURE We can satisfy and discharge our obligations under the indenture in a number of events, including if: - all subordinated debentures not previously delivered to the debenture trustee for cancellation: - have become due and payable; or - will become due and payable at their stated maturity within one year and - we deposit or cause to be deposited with the debenture trustee funds, in trust, for the purpose and in an amount in the currency or currencies in which the subordinated debentures are payable, sufficient to pay and discharge the entire indebtedness on the subordinated debentures not previously delivered to the debenture trustee for cancellation, for the principal and any interest, including any additional interest, to the date of the deposit or to the stated maturity. Following this discharge, the indenture will cease to be of further effect, except that we will have to pay all other sums due pursuant to the indenture and to provide the officers' certificates and opinions of counsel described in that agreement. TRUST EXPENSES Pursuant to the expense agreement for the subordinated debentures, we, as holder of the common securities, will irrevocably and unconditionally agree with the trust that we will pay to the trust, and reimburse the trust for, the full amounts of any costs, expenses or liabilities of the trust, other than obligations of the trust 44 to pay to the holders of the preferred securities or other similar interests in the trust the amounts due the holders pursuant to the terms of the preferred securities or other similar interests. That payment obligation will include any costs, expenses or liabilities of the trust that are required by applicable law to be satisfied in connection with a termination of the trust. LAW GOVERNING THE INDENTURE AND THE SUBORDINATED DEBENTURES The indenture and the subordinated debentures will be governed by and construed in accordance with the laws of the State of New York. INFORMATION CONCERNING THE DEBENTURE TRUSTEE The debenture trustee has all the duties and responsibilities specified with respect to an indenture trustee under the Trust Indenture Act. Subject to those provisions, the debenture trustee is under no obligation to exercise any of the powers vested in it by the indenture at the request of any holder of subordinated debentures, unless offered reasonable indemnity by the holder against the costs, expenses and liabilities which might be incurred thereby. The debenture trustee is not required to expend or risk its own funds or otherwise incur personal financial liability in the performance of its duties if the debenture trustee reasonably believes that repayment or adequate indemnity is not reasonably assured to it. 45 DESCRIPTION OF GUARANTEE We will execute and deliver the guarantee concurrent with the trust's issuance of the preferred securities for the benefit of the holders of the preferred securities. In the guarantee, we will irrevocably agree to pay in full on a subordinated basis the following payments, which are referred to as "guarantee payments," to the holders of the preferred securities, as and when due, to the extent not paid by or on behalf of the trust, and regardless of any defense, right of set-off or counterclaim that the trust may have or assert other than the defense of payment: - any accumulated and unpaid distributions required to be paid on the preferred securities, to the extent that the trust has funds on hand available to make those distributions at that time; - the redemption price with respect to the preferred securities called for redemption by the trust, to the extent that the trust has funds on hand available to pay the redemption price at that time; and - upon a voluntary or involuntary termination, winding-up or liquidation of the trust (unless the subordinated debentures are distributed to holders of the preferred securities), the lesser of: - the aggregate of the liquidation amount and all accumulated and unpaid distributions to the date of payment, to the extent that the trust has funds on hand available for them at that time; and - the amount of assets of the trust remaining available for distribution to holders of the preferred securities after payment of creditors of the trust as required by applicable law. Our obligation to make a guarantee payment may be satisfied by direct payment of the required amounts by us to the holders of the preferred securities or by causing the trust to pay these amounts to the holders. We have, through the guarantee, the trust agreement, the subordinated debentures, the indenture and the expense agreement, taken together, fully, irrevocably and unconditionally guaranteed all of the trust's obligations under the preferred securities. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes the guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the trust's obligations under the preferred securities. This effect is described further under "Relationship Among the Preferred Securities, the Subordinated Debentures and the Guarantee." The guarantee will be qualified as an indenture under the Trust Indenture Act of 1939, as amended. The Bank of New York will act as the indenture trustee under the guarantee for the purposes of compliance with the Trust Indenture Act and will hold the guarantee for the benefit of the holders of the preferred securities. In this capacity we refer to the Bank of New York as the "guarantee trustee." The Bank of New York will also act as debenture trustee for the subordinated debentures and as property trustee. EVENTS OF DEFAULT UNDER THE GUARANTEE An event of default under the guarantee will occur upon our failure to perform any of our payment obligations under the guarantee or to perform any non-payment obligations if the non-payment default remains unremedied for 30 days. In any such event of default, the holders of not less than a majority in aggregate liquidation amount of the preferred securities have the right to: - direct the time, method and place of conducting any proceeding for any remedy available to the guarantee trustee in respect of the guarantee; or - direct the exercise of any trust power conferred upon the guarantee trustee under the guarantee. Any holder of the preferred securities may institute a legal proceeding directly against us to enforce its rights under the guarantee without first instituting a legal proceeding against the trust, the guarantee trustee or any other person or entity. If we were to default on our obligation to pay amounts payable under the subordinated debentures, the trust would lack funds for the payment of distributions or amounts payable on redemption of 46 the preferred securities or otherwise. In that case, holders of the preferred securities would not be able to rely upon the guarantee for payment of these amounts. Instead, if: - any event of default under the indenture has occurred and is continuing; and - the event is attributable to our failure to pay interest on or principal of the subordinated debentures on the payment date; then a holder of preferred securities may institute a legal proceeding directly against us pursuant to the terms of the indenture for enforcement of payment to the holder of the principal of or any interest on the subordinated debentures having a principal amount equal to the aggregate liquidation amount of the preferred securities of the holder. In connection with a legal proceeding, we will have a right to set-off under the indenture to the extent of any payment we make to the holder of common or preferred securities in the legal proceeding. Except as described in this subsection, holders of preferred securities will not be able to exercise directly any other remedy available to the holders of the subordinated debentures or assert directly any other rights in respect of the subordinated debentures. The trust agreement provides that each holder of preferred securities by acceptance of that agreement agrees to the provisions of the guarantee, the expense agreement and the indenture. We, as guarantor, are required to file annually with the guarantee trustee a certificate as to whether or not we are in compliance with all the conditions and covenants applicable to us under the guarantee. SUBORDINATION OF THE GUARANTEE The guarantee will rank subordinate and junior in right of payment to all of our senior debt. Because we are a holding company, our right to participate in any distribution of assets of any subsidiary upon the subsidiary's liquidation or reorganization or otherwise, is subject to the prior claims of creditors of that subsidiary, except to the extent we are a creditor of that subsidiary. Accordingly, our obligations under the guarantee will be effectively subordinated to all existing and future liabilities of our subsidiaries, and claimants should look only to our assets for payments under the guarantee. See "Sterling Bancorp" for a description of our subsidiaries. The guarantee does not limit our incurrence or issuance of other secured or unsecured debt, including senior debt, whether under the indenture, any other existing indenture or any other indenture that we may enter into in the future or otherwise. STATUS OF THE GUARANTEE The guarantee will constitute our unsecured obligation and will rank subordinate and junior in right of payment to all of our senior debt in the same manner as subordinated debentures. The guarantee will rank on a parity with all other guarantees that we have issued. The guarantee will constitute a guarantee of payment and not of collection, which means that the guaranteed party may institute a legal proceeding directly against us to enforce its rights under the guarantee without first instituting a legal proceeding against any other person or entity. The guarantee will be held for the benefit of the holders of the preferred securities. The guarantee will not be discharged except by payment of the guarantee payments in full to the extent not paid by the trust or upon distribution to the holders of the preferred securities of the subordinated debentures. The guarantee does not place a limitation on the amount of additional senior debt that we may incur. We expect from time to time to incur additional indebtedness constituting senior debt. AMENDMENTS TO AND ASSIGNMENT OF THE GUARANTEE The guarantee may not be amended without the prior approval of the holders of not less than a majority of the aggregate liquidation amount of the outstanding preferred securities. However, no vote will be required for any changes which do not materially adversely affect the material rights of holders of the preferred securities. The manner of obtaining approval will be as described under "Description of Preferred Securities -- Voting rights of holders of the preferred securities; amendment of the trust agreement." All guarantees and agreements contained in the guarantee bind our successors, assigns, receivers, trustees and representatives and inure to the benefit of the holders of the preferred securities then outstanding. 47 INFORMATION CONCERNING THE GUARANTEE TRUSTEE The guarantee trustee, other than during the occurrence and continuance of a default by us in performance of the guarantee, undertakes to perform only those duties as are specifically described in the guarantee. After any default, the guarantee trustee must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Apart from that, the guarantee trustee is under no obligation to exercise any of the powers vested in it by the guarantee at the request of any holder of preferred securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. TERMINATION OF THE GUARANTEE The guarantee will terminate and be of no further force and effect upon: - full payment of the redemption price of the preferred securities; - full payment of the amounts payable upon liquidation of the trust; or - upon distribution of subordinated debentures to the holders of the preferred securities in exchange for them. The guarantee will continue to be effective or will be reinstated if at any time any holder of the preferred securities must restore payment of any sums paid under these preferred securities or the guarantee. LAW GOVERNING THE GUARANTEE The guarantee will be governed by and construed in accordance with the laws of the State of New York. THE EXPENSE AGREEMENT Pursuant to the expense agreement we entered into under the trust agreement, we will irrevocably and unconditionally guarantee to each person or entity to whom the trust becomes indebted or liable, the full payment of any costs, expenses or liabilities of the trust, other than obligations of the trust to pay to the holders of any preferred securities or other similar interests in the trust of the amounts due the holders pursuant to the terms of the preferred securities or other similar interests. The expense agreement will be enforceable by third parties. 48 RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE SUBORDINATED DEBENTURES, THE EXPENSE AGREEMENT AND THE GUARANTEE FULL AND UNCONDITIONAL GUARANTEE OF PAYMENTS AND OTHER AMOUNTS DUE ON THE PREFERRED SECURITIES We have irrevocably guaranteed payments of distributions and other amounts due on the preferred securities -- to the extent the trust has funds available for the payment of these distributions as set forth under "Description of Guarantee." Taken together, our obligations under the subordinated debentures, the indenture, the related trust agreement, the related expense agreement, and the related guarantee provide, in the aggregate, a full, irrevocable and unconditional guarantee of payments of distributions and other amounts due on the preferred securities. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes the guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the trust's obligations under the preferred securities. If and to the extent that we do not make payments on any of the subordinated debentures, the trust will not pay distributions or other amounts due on the preferred securities. The guarantee does not cover payment of distributions when the trust does not have sufficient funds to pay these distributions. In that event, the remedy of a holder of the preferred securities is to institute a legal proceeding directly against us pursuant to the terms of the indenture for enforcement of payment of amounts of these distributions to the holder. Our obligations under the guarantee are subordinate and junior in right of payment to all of our senior debt. SUFFICIENCY OF PAYMENTS ON THE SUBORDINATED DEBENTURES AND THE PREFERRED SECURITIES As long as payments of interest and other payments are made when due on the subordinated debentures, these payments will be sufficient to cover distributions and other payments due on the preferred securities, primarily because: - the aggregate principal amount of the subordinated debentures will be equal to the sum of the aggregate stated liquidation amount of the preferred securities and related common securities; - the interest rate and interest and other payment dates on the subordinated debentures will match the distribution rate and distribution and other payment dates for the preferred securities; - we will pay for all and any costs, expenses and liabilities of the trust except the trust's obligations to holders of the preferred securities under the preferred securities; and - the trust agreement provides that the trust will not engage in any activity that is not consistent with the limited purposes of the trust. Except as otherwise provided in the indenture, we have the right to set-off any payment we are otherwise required to make under the indenture to the extent we have made, or are concurrently on the date of the payment making, a payment under the related guarantee. ENFORCEMENT RIGHTS OF HOLDERS OF THE PREFERRED SECURITIES A holder of the preferred securities may institute a legal proceeding directly against us to enforce its rights under the related guarantee without first instituting a legal proceeding against the guarantee trustee, the trust or any other person or entity. A default or event of default under any of our senior debt would not constitute a default or event of default under the indenture. However, if there are payment defaults under, or acceleration of, our senior debt, the subordination provisions of the indenture provide that no payments may be made in respect of the subordinated debentures until that senior debt has been paid in full or any payment default under the indenture has been cured or waived. Failure to make required payments on any of the subordinated debentures would constitute an event of default under the indenture. 49 LIMITED PURPOSE OF THE TRUST Preferred securities evidence a beneficial interest in the trust, and the trust exists for the sole purpose of issuing the preferred securities and common securities and investing the proceeds of those securities in subordinated debentures and engaging in only those other activities necessary or incidental thereto. A principal difference between the rights of a holder of a preferred security and a holder of a subordinated debenture is that a holder of a subordinated debenture is entitled to receive from us the principal amount of and interest accrued on subordinated debentures held, while a holder of preferred securities is entitled to receive distributions from the trust -- or from us under the guarantee -- if and to the extent the trust has funds available for the payment of these distributions. RIGHTS OF THE HOLDERS OF THE PREFERRED SECURITIES UPON DISSOLUTION OF THE TRUST Upon any voluntary or involuntary dissolution, winding-up or liquidation of the trust involving the liquidation of the subordinated debentures, the holders of the preferred securities will be entitled to receive, out of the assets held by the trust, the distribution upon the liquidation in cash, as described under "Description of Preferred Securities -- Distribution on the common and preferred securities upon dissolution and liquidation of the trust." Upon any voluntary or involuntary liquidation or bankruptcy of us, the property trustee, as holder of the subordinated debentures, would be a subordinated creditor of us, subordinated in right of payment to all senior debt as described in the indenture, but entitled to receive payment in full of principal and interest, before any of our stockholders receive payments or distributions. Since we are the guarantor under the guarantee and have agreed to pay for all costs, expenses and liabilities of the trust, other than the trust's obligations to the holders of the preferred securities, the positions of a holder of the preferred securities and a holder of the subordinated debentures relative to other creditors and to our stockholders upon our liquidation or bankruptcy are expected to be substantially the same. BOOK-ENTRY ISSUANCE DTC will act as securities depositary for all of the preferred securities and the subordinated debentures. The preferred securities and the subordinated debentures will be issued only as fully-registered securities registered in the name of Cede & Co. (DTC's nominee). One or more fully-registered global certificates will be issued for the preferred securities of the trust and the subordinated debentures, representing in the aggregate the total number of the preferred securities or aggregate principal balance of subordinated debentures, respectively, and will be deposited with DTC. DTC has informed us that it is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants deposit with DTC. DTC also facilitates the settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants' accounts, thereby eliminating the need for physical movement of securities certificates. DTC is owned by a number of its direct participants, which include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, and by The New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to indirect participants, which are securities brokers and dealers, banks and trust companies that clear through or maintain custodial relationships with direct participants, either directly or indirectly. The rules applicable to DTC and its participants are on file with the SEC. Purchases of preferred securities or subordinated debentures within the DTC system must be made by or through direct participants, which will receive a credit for the preferred securities or subordinated debentures on DTC's records. The ownership interest of each beneficial owner of each preferred security and each subordinated debenture is in turn to be recorded on the direct and indirect participants' records. Beneficial owners will not receive written confirmation from DTC of their purchases, but beneficial owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their 50 holdings, from the direct or indirect participants through which the beneficial owners purchased preferred securities or subordinated debentures. Transfers of ownership interests in the preferred securities or subordinated debentures are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in preferred securities or subordinated debentures, except if use of the book-entry system for the preferred securities of the trust or subordinated debentures is discontinued. DTC has no knowledge of the actual beneficial owners of the preferred securities or subordinated debentures; DTC's records reflect only the identity of the direct participants to whose accounts the preferred securities or subordinated debentures are credited, which may or may not be the beneficial owners. The participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct participants and indirect participants to beneficial owners and the voting rights of direct participants, indirect participants and beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices will be sent to Cede & Co. as the registered holder of the preferred securities or subordinated debentures. If less than all preferred securities or the subordinated debentures are being redeemed, DTC's current practice is to determine by lot the amount of the interest of each direct participant to be redeemed. Although voting with respect to the preferred securities or the subordinated debentures is limited to the holders of record of the preferred securities or subordinated debentures, in those instances in which a vote is required, neither DTC nor Cede & Co. will itself consent or vote with respect to preferred securities or subordinated debentures. Under its usual procedures, DTC would mail an omnibus proxy to the relevant trustee as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those direct participants to whose accounts the preferred securities or subordinated debentures are credited on the record date. Those direct participants are identified in a listing attached to the omnibus proxy. Distribution payments on the preferred securities or the subordinated debentures will be made by the relevant trustee to DTC. DTC's practice is to credit direct participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payments on that payment date. Payments by participants to beneficial owners will be governed by standing instructions and customary practices and will be the responsibility of the participant and not of DTC, the relevant trustee, the trust or us, unless any statutory or regulatory requirements as may be in effect from time to time directs otherwise. Payment of distributions to DTC is the responsibility of the relevant trustee, disbursement of these payments to direct participants is the responsibility of DTC, and disbursements of these payments to the beneficial owners is the responsibility of direct and indirect participants. DTC may discontinue providing its services as securities depositary with respect to any of the preferred securities or the subordinated debentures at any time by giving reasonable notice to the relevant trustee and us. If a successor securities depositary is not obtained, definitive preferred security or subordinated debenture certificates representing the preferred securities or subordinated debentures are required to be printed and delivered. We, at our option, may decide to discontinue use of the system of book-entry transfers through DTC, or through a successor depositary. After a debenture event of default, the holders of a majority in liquidation preference of preferred securities or aggregate principal amount of subordinated debentures may determine to discontinue the system of book-entry transfers through DTC. In that event, definitive certificates for the preferred securities or subordinated debentures will be printed and delivered. According to DTC, the foregoing information has been provided to the financial community for information purposes only and is not intended to serve as a representation, warranty or contract notification of any kind. Neither we nor the trust has any responsibility for the performance by DTC or its participants of their respective obligations as described in this prospectus or under the rules and procedures governing their respective operations. 51 UNITED STATES FEDERAL INCOME TAX CONSEQUENCES The following is a summary of the material United States federal income tax consequences of the purchase, ownership and disposition of preferred securities. This summary only addresses those tax consequences to a person that acquires preferred securities on their original issue at their original offering price and that is a "United States person." A United States person is: - an individual citizen or resident of the United States; - a domestic corporation; - an estate the income of which is subject to United States federal income tax without regard to its source; or - a trust if a United States court is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust. This summary does not address all tax consequences that may be applicable to a United States person that is a beneficial owner of preferred securities, nor does it address the tax consequences to - persons that are not United States persons; - persons to whom special treatment may be applied under United States federal income tax law, such as banks, insurance companies, thrift institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations, traders in securities that elect to mark to market and dealers in securities or currencies; - persons that will hold preferred securities as part of a position in a "straddle" or as part of a "hedging," "conversion" or other integrated investment transaction for United States federal income tax purposes; - persons whose functional currency is not the United States dollar; or - persons that do not hold preferred securities as capital assets. The statements of law or legal conclusion described in this summary constitute the opinion of Sullivan & Cromwell, counsel to us and the trust. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed Treasury regulations, Internal Revenue Service ("IRS") rulings and pronouncements and judicial decisions now in effect, all of which may change at any time. Those changes may be applied retroactively in a manner that could cause the tax consequences to vary substantially from the consequences described in this section, possibly adversely affecting a beneficial owner of preferred securities. The authorities on which this summary is based may be interpreted in various ways, and it is therefore possible that the United States federal income tax treatment of the purchase, ownership and disposition of preferred securities may differ from the treatment described in this section. PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE UNITED STATES FEDERAL TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF PREFERRED SECURITIES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS. CLASSIFICATION OF THE TRUST Under current law and assuming compliance with the trust agreement, the trust will not be classified as an association taxable as a corporation for United States federal income tax purposes. As a result, a United States person that is a beneficial owner of preferred securities, who is referred to as a "securityholder," will be required to include in its gross income its ratable share of the interest income, including any original issue discount ("OID"), paid or accrued with respect to the subordinated debentures whether or not cash is actually distributed to the securityholders. For more information on this inclusion, see "-- Interest income and original issue discount." No amount included in income with respect to the preferred securities will be eligible for the dividends-received deduction. 52 INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT Under applicable United States Treasury regulations, a contingency that stated interest will not be timely paid that is "remote" will be ignored in determining whether a debt instrument is issued with OID. As a result of terms and conditions of the subordinated debentures that prohibit payments with respect to our capital stock and indebtedness if we elect to defer interest payments, we believe that the likelihood of our exercising our option to defer payments is remote. Based on the foregoing, we believe that the subordinated debentures will not be considered to be issued with OID at the time of their original issuance and, accordingly, a securityholder should include in gross income that holder's allocable share of interest on the subordinated debentures, although the IRS could take a contrary position. The following discussion assumes that unless and until we exercise our own option to defer interest on the subordinated debentures, the subordinated debentures will not be treated as issued with OID. If the option to defer any payment of interest was determined not to be "remote" or if we exercised our option to defer any payment of interest, the subordinated debentures would be treated as issued with OID at the time of issuance or at the time of that exercise, as the case may be, and all stated interest on the subordinated debentures would thereafter be treated as OID as long as the subordinated debentures remained outstanding. In that event, all of a securityholder's taxable interest income with respect to the subordinated debentures would be accounted for as OID on a constant yield method regardless of that holder's method of tax accounting, and actual distributions of stated interest would not be reported as taxable income. Consequently, a securityholder would be required to include OID in gross income even though we would not make any actual cash payments during an extension period. DISTRIBUTION OF SUBORDINATED DEBENTURES TO HOLDERS OF THE PREFERRED SECURITIES Under current law, a distribution by the trust of the subordinated debentures as described under the caption "Description of Preferred Securities -- Redemption of the common and preferred securities or exchange upon liquidation of the trust" will be non-taxable and will result in the securityholder receiving directly its ratable share of the subordinated debentures previously held indirectly through the trust, with a holding period and aggregate tax basis equal to the holding period and aggregate tax basis that securityholder had in the preferred securities before that distribution. If, however, the liquidation of the trust were to occur because the trust is subject to United States federal income tax with respect to income accrued or received on the subordinated debentures, as the case would be if the trust were treated as an association taxable as a corporation, the distribution of subordinated debentures to securityholders by the trust would be a taxable event to the trust and each securityholder, and each securityholder would recognize gain or loss as if the securityholder had exchanged the preferred securities for the subordinated debentures it received upon the liquidation of the trust. A securityholder will include interest in income in respect of subordinated debentures received from the trust in the manner described above under "-- Interest income and original issue discount." SALE OR REDEMPTION OF THE PREFERRED SECURITIES A securityholder that sells preferred securities or completely redeems them for cash will recognize gain or loss equal to the difference between its adjusted tax basis in the preferred securities and the amount realized on the sale of the preferred securities. A securityholder's adjusted tax basis in the preferred securities generally will be its initial purchase price. If the subordinated debentures are deemed to be issued with OID as a result of our deferral of interest payments, a securityholder's adjusted tax basis in the preferred securities generally will be its initial purchase price, increased by OID previously includible in that securityholder's gross income to the date of disposition and decreased by distributions or other payments received on the preferred securities since and including the date of the first extension period. That gain or loss generally will be capital gain or loss, except to the extent any amount realized is treated as a payment of accrued interest with respect to that securityholder's ratable share of the subordinated debentures required to be included in income. That gain or loss will also be long-term capital gain or loss if the preferred securities have been held for more than one year. If we exercise our option to defer any payment of interest on the subordinated debentures, the preferred securities may trade at a price that does not fully reflect the value of accrued but unpaid interest with respect 53 to the underlying subordinated debentures. If that deferral occurs, and if you dispose of your preferred securities between record dates for payments of distributions, and consequently do not receive a distribution from the trust for the period prior to that disposition, you will nevertheless be required: - to include as ordinary income accrued but unpaid interest on the subordinated debentures through the date of disposition; and - to add that amount to its adjusted tax basis in its preferred securities disposed of. You would recognize a capital loss on the disposition of its preferred securities to the extent the selling price, which may not fully reflect the value of accrued but unpaid interest, is less than your adjusted tax basis in the preferred securities, which will include accrued but unpaid interest. Capital losses cannot be applied to offset ordinary income for United States federal income tax purposes, except in a few limited cases. BACKUP WITHHOLDING TAX AND INFORMATION REPORTING If you are a noncorporate securityholder, information reporting requirements, on Form 1099, generally will apply to: - payments of interest, including OID accrued, on preferred securities; and - payments of the proceeds from the disposition of preferred securities effected at a United States office of a broker. Additionally, backup withholding will apply to those payments to a noncorporate securityholder that: - fails to provide an accurate taxpayer identification number; - is notified by the IRS that the securityholder has failed to report all interest and dividends required to be shown on their respective United States federal income tax return; - in some circumstances, fails to comply with applicable certification requirements. Any amounts withheld from you under the backup withholding rules will be allowed as a refund or credit against your United States federal income tax liability, provided the required information is furnished to the IRS on a timely basis. POSSIBLE TAX LAW CHANGES Prospective investors should be aware that legislation has recently been introduced in the United States Congress that, if enacted, would deny an interest deduction to issuers of instruments such as the subordinated debentures. This legislation is proposed to be effective for instruments issued on or after the date of enactment of such legislation. Consequently, as drafted, this legislation would not affect the preferred securities or subordinated debentures or otherwise result in a tax event as described in "Description of Preferred Securities -- Redemption of the common and preferred securities or exchange upon liquidation of the trust -- Liquidation of the trust and distribution of the subordinated debentures." There can be no assurance, however, that this or similar legislation will not ultimately be enacted, or what the effective date of any such legislation might be, or that other changes will not occur after the date of this prospectus that would adversely affect the tax treatment of the subordinated debentures. Such a change could, if applicable to the subordinated debentures or preferred securities, give rise to a tax event, which would permit us to cause a redemption of the preferred securities. A shortening of the stated maturity of the subordinated debentures as described under "Description of Subordinated Debentures -- Maturity of the subordinated debentures" after a tax event may be treated as a taxable disposition of the subordinated debentures. 54 ERISA CONSIDERATIONS A fiduciary of a pension, profit-sharing or other employee benefit plan covered by the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), should consider the fiduciary standards of ERISA in the context of the plan's particular circumstances before authorizing an investment in the preferred securities. Among other factors, the fiduciary should consider whether the investment would satisfy the prudence and diversification requirements of ERISA and would be in accordance with the documents governing the plan. Section 406 of ERISA and Section 4975 of the Code prohibit an employee benefit plan from engaging in some transactions involving "plan assets" with persons who are "parties in interest" under ERISA or "disqualified persons" under the Code with respect to the plan. Therefore, a fiduciary of an employee benefit plan should also consider whether an investment in the preferred securities might constitute or give rise to a prohibited transaction under ERISA and the Code. The prohibited transaction rules under Section 4975 of the Code also apply to individual retirement accounts. The U.S. Department of Labor (the "DOL") has issued a final regulation with regard to whether the underlying assets of an entity in which employee benefit plans acquire equity interests would be deemed to be plan assets. The regulation provides that the underlying assets of an entity will not be considered to be plan assets if the equity interests acquired by employee benefit plans are "publicly-offered securities" -- that is, they are: - widely held, which means they are owned by more than 100 investors independent of us and of each other; - freely transferable; and - sold as part of an offering pursuant to an effective registration statement under the Securities Act and then timely registered under Section 12(b) or 12(g) of the Exchange Act. It is expected that the preferred securities will meet the criteria of "publicly-offered securities" above. The underwriters expect that the preferred securities will be beneficially held by at least 100 independent investors at the conclusion of the offering; there are no restrictions imposed on the transfer of the preferred securities and the preferred securities will be sold as part of an offering pursuant to an effective registration statement under the Securities Act, and then will be timely registered under the Exchange Act. Even if the assets of the trust are not deemed to be plan assets, we and some of our subsidiaries could be a party in interest or disqualified person with respect to an employee benefit plan or an individual retirement account purchasing the preferred securities, which may result in a prohibited transaction in the absence of an applicable exemption. Special caution should be exercised before purchasing preferred securities in that event, including a determination about the availability of a class exemption issued by the DOL, which could apply to exempt the purchase of those securities from the prohibited transaction provisions of ERISA and the Code -- e.g., Prohibited Transaction Exemption 84-14, for transactions determined by independent qualified professional asset managers, Prohibited Transaction Exemption 90-1, for transactions involving insurance company pooled separate accounts, Prohibited Transaction Exemption 91-38, for transactions involving bank collective investment funds, Prohibited Transaction Exemption 95-60 for transactions involving insurance company general accounts, and Prohibited Transaction Exemption 96-23, for transactions determined by in-house asset managers. Due to the complexity of these rules and the penalties imposed upon persons involved in prohibited transactions, it is especially important that the fiduciary of an employee benefit plan, or the person making the investment decision on behalf of an individual retirement account, considering the purchase of preferred securities consult with its counsel regarding the consequences under ERISA and Section 4975 of the Code of the acquisition of those securities. Employee benefit plans which are governmental plans, as defined in Section 3(32) of ERISA, and some church plans, as defined in section 3(33) of ERISA, generally need not meet ERISA requirements. 55 UNDERWRITING Subject to the terms and conditions of the underwriting agreement, the underwriters have severally agreed to purchase from the trust, and the trust has agreed to sell to them, an aggregate of 2,200,000 preferred securities in the amounts listed below opposite their names.
NUMBER OF PREFERRED UNDERWRITERS SECURITIES - ------------ ---------- Ferris, Baker Watts, Incorporated........................... Ryan, Beck & Co., LLC....................................... Total.................................................. 2,200,000 =========
Under the terms and conditions of the underwriting agreement, the underwriters are committed to accept and pay for all of the preferred securities, if any are taken. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriter may be increased or, in some cases, the underwriting agreement may be terminated. In the underwriting agreement, the obligations of the underwriters are subject to approval of some legal matters by their counsel, including the authorization and the validity of the preferred securities, and to other conditions contained in the underwriting agreement, such as receipt by the underwriters of officers' certificates and legal opinions. If the underwriters sell more preferred securities than the total number set forth in the table above, the underwriters have an option to buy up to an additional 300,000 preferred securities from the trust to cover those sales. They may exercise that option for 30 days. If any preferred securities are purchased pursuant to this option, the underwriters will severally purchase preferred securities in approximately the same proportion as set forth in the table above. If the underwriters exercise their over-allotment option, a ratable number of common securities of the trust will be issued so that the common securities will continue to equal at least 3% of the total capital of the trust. In addition, the aggregate principal amount of subordinated debentures will be increased in a corresponding proportion up to an additional $3,093,000, as described under "Description of Subordinated Debentures." The underwriters propose to offer the preferred securities directly to the public at the public offering price listed on the cover page of this prospectus, and to some securities dealers (who may include the underwriters) at this price, less a concession not in excess of $ per preferred security. The underwriters may allow, and the selected dealers may reallow, a concession not in excess of $ per preferred security to some brokers and dealers. After the preferred securities are released for sale to the public, the offering price and other selling terms may, from time to time, be changed by the underwriters. The expenses of the offering, not including underwriting commissions, are estimated to be $400,000. The table below shows the price and proceeds on a per preferred security and aggregate basis assuming both no exercise and full exercise of the underwriters' option to purchase up to an additional 300,000 preferred securities. The proceeds to be received by the trust, as shown in the table below, do not reflect estimated expenses payable by us.
PER PREFERRED WITHOUT SECURITY OPTION WITH OPTION ------------- ----------- ----------- Public offering price......................... $10.00 $22,000,000 $25,000,000 Proceeds, before expenses, to the trust....... $ $ Underwriting commission....................... $ $ Net proceeds, before expenses, to Sterling Bancorp..................................... $ $
The offering of the preferred securities is made for delivery when, as and if accepted by the underwriters and subject to prior sale and to withdrawal, cancellation or modification of the offering without notice. The underwriters reserve the right to reject any order for the purchase of the preferred securities. 56 We and the trust have agreed to indemnify the underwriters against several liabilities, including liabilities under the Securities Act. We have applied to have the preferred securities listed for trading on the New York Stock Exchange under the symbol "STL-PrA", and trading is expected to begin within a 30-day period after the initial delivery of the preferred securities. The underwriters have advised the trust that they presently intend to make a market in the preferred securities after the commencement of trading on the New York Stock Exchange, but are not obligated to do so, and may discontinue market making at any time without notice. We cannot assure you as to the liquidity of the preferred securities or that an active and liquid market will develop or, if developed that the market will continue. The offering price and distribution rate have been determined by negotiations between the underwriters and us, and the offering price of the preferred securities may not be indicative of the market price following the offering. The underwriters will have no obligation to make a market in the preferred securities, however, and may cease market-making activities, if commenced, at any time. In connection with the offering, the underwriters may engage in transactions that are intended to stabilize, maintain or otherwise affect the price of the preferred securities during and after the offering, such as the following: - the underwriters may over-allot or otherwise create a short position in the preferred securities for their own account by selling more preferred securities than have been sold to them; - the underwriters may elect to cover any short position by purchasing preferred securities in the open market; - the underwriters may stabilize or maintain the price of the preferred securities by bidding; - the underwriters may engage in passive market making transactions; and - the underwriters may impose penalty bids, under which selling concessions allowed to other broker-dealers participating in this offering are reclaimed if preferred securities previously distributed in the offering are repurchased in connection with stabilization transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market price at a level above that which might otherwise prevail in the open market. The imposition of a penalty bid may also affect the price of the preferred securities to the extent that it discourages resales. No representation is made as to the magnitude or effect of any such stabilization or other transactions. Such transactions may be effected on the New York Stock Exchange or otherwise and, if commenced, may be discontinued at any time. Because the National Association of Securities Dealers, Inc. may view the preferred securities as interests in a direct participation program, the offer and sale of the preferred securities is being made in compliance with the provisions of Rule 2810 under the NASD Conduct Rules. 57 VALIDITY OF SECURITIES Certain matters of Delaware law relating to the validity of the preferred securities, the enforceability of the trust agreement and the formation of the trust will be passed upon by Richards, Layton & Finger, P.A., One Rodney Square, Wilmington, Delaware 19801, special Delaware counsel to us and the trust. The validity of the guarantee and the subordinated debentures will be passed upon for us by Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, and for the underwriters by Venable, Baetjer and Howard, LLP, Two Hopkins Plaza, Suite 1800, Baltimore, Maryland 21201. Sullivan & Cromwell and Venable, Baetjer and Howard, LLP will rely on the opinion of Richards, Layton & Finger, P.A. as to matters of Delaware law. Certain matters relating to United States federal income tax considerations will be passed upon for us by Sullivan & Cromwell. EXPERTS Our consolidated financial statements as of December 31, 2000 and 1999 and for each of the years in the three-year period ended December 31, 2000, included in our 2000 annual report on Form 10-K, have been incorporated in this prospectus by reference in reliance upon the report of KPMG LLP, independent certified public accountants, and upon the authority of that firm as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION AND INFORMATION WE INCORPORATE BY REFERENCE We and the trust have filed a registration statement with the SEC. This prospectus is part of the registration statement but the registration statement also contains additional information and exhibits. We also file proxy statements, annual, quarterly and special reports and other information with the SEC. You may read and copy the registration statement and any reports, proxy statements and other information at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 and the SEC's Regional Offices in New York, New York and Chicago, Illinois. You can call the SEC for further information about their public reference rooms at 1-800-SEC-0330. These materials are also available at the SEC's website at "http://www.sec.gov". Our common stock, $1.00 par value, is listed on the New York Stock Exchange. Reports and other information concerning us can be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. The SEC allows us to incorporate documents by reference in this prospectus. This means that by listing or referring to a document which we have filed with the SEC in this prospectus, that document is considered to be a part of this prospectus and should be read with the same care. When we update the information contained in documents which have been incorporated by reference, by making future filings with the SEC, the information incorporated by reference in this prospectus is considered to be automatically updated. The documents listed below are incorporated by reference into this prospectus: - Our Annual Report on Form 10-K for the year ended December 31, 2000; - Our Quarterly Reports on Form 10-Q, for the quarters ended March 31, 2001, June 30, 2001 and September 30, 2001; - Our Current Report on Form 8-K filed on January 28, 2002; and - Any documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and before the termination of the offering of the preferred securities. 58 You may request a free copy of any or all of these filings by writing or telephoning us at the following address: Sterling Bancorp 650 Fifth Avenue New York, New York 10019-6108 Attention: Treasurer and Chief Financial Officer Telephone number: (212) 757-3300 We are not including separate financial statements of the trust. We and the trust do not consider those financial statements to be material to holders of the preferred securities because: - the trust is a newly formed special purpose entity and has no operating history or independent operations; - the trust is not engaged in and does not propose to engage in any activity other than holding as trust assets our subordinated debentures and issuing the common and preferred securities; - taken together, our obligations under the subordinated debentures, the indenture, the related trust agreement, the related expense agreement and the related guarantee provide, in the aggregate, a full, irrevocable and unconditional guarantee of payments of distributions and other amounts due on the preferred securities; and - we do not expect the trust to file periodic reports under the Exchange Act. 59 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2,200,000 CUMULATIVE TRUST PREFERRED SECURITIES STERLING BANCORP TRUST I % CUMULATIVE TRUST PREFERRED SECURITIES (LIQUIDATION AMOUNT $10 PER PREFERRED SECURITY) FULLY IRREVOCABLY AND UNCONDITIONALLY GUARANTEED ON A SUBORDINATED BASIS, AS DESCRIBED IN THIS PROSPECTUS, BY [STERLING BANCORP LOGO] STERLING BANCORP -------------------- PROSPECTUS -------------------- FERRIS, BAKER WATTS INCORPORATED RYAN, BECK & CO., LLC , 2002 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth all expenses that we will have to pay in connection with the issuance and distribution of the Securities, other than underwriting discounts and commissions. We will bear all of these expenses: SEC Registration Fee........................................ $ 2,300 NYSE listing fee............................................ $ 33,000* Legal Fees and Expenses..................................... $230,000* Fees and Expenses of Trustee................................ $ 24,200* Accountants' Fees and Expenses.............................. $ 60,000* Blue Sky Fees and Expenses.................................. $ 5,000* Printing and Engraving Fees and Expenses.................... $ 40,000* Miscellaneous Expenses...................................... $ 5,500* -------- Total.................................................. $400,000* ========
- --------------- * Estimated ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Pursuant to the statutes of the State of New York, a director or officer of a corporation is entitled, under specified circumstances, to indemnification by the corporation against reasonable expenses, including attorneys' fees, incurred by him or her in connection with the defense of a civil or criminal proceeding to which he or she has been made, or threatened to be made, a party by reason of the fact that he or she was a director or officer of that corporation. In some circumstances, indemnity is provided against judgments, fines and amounts paid in settlement. In general, indemnification is available where the director or officer acted in good faith, for a purpose that director or officer reasonably believed to be in the best interests of the corporation. Specific court approval is required in some cases. The foregoing statement is qualified in its entirety by reference to Sections 715, 717 and 721 through 725 of the New York Business Corporation Law (the "NYBCL"). We have adopted provisions in our Bylaws which provide that we will indemnify any person who is made, or threatened to be made, a party to an action or proceeding, whether civil or criminal, including any action by or in our right to procure a judgment in our favor or an action by of or in the right of any other corporation of any type or kind, domestic or foreign, including, but not limited to, any of our subsidiaries, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any of our directors or officers served in any capacity at our request, by reason of the fact that he, his testator or intestate, was our director or officer, or served that other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines (including any excise tax deemed a fine pursuant to Section 722 of the NYBCL or any successor provision), amounts paid in settlement (but only if that settlement was made with our prior written consent or if that consent was unreasonably refused or withheld for an unreasonably long period after written request thereof) and reasonable expenses, including attorneys' fees incurred as a result of that pending or threatened action or proceeding (including any appeal therein). Our Bylaws further state that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled. Any director or officer of any of our subsidiaries shall be presumed to serve at our request. II-1 Our Bylaws further state that these rights to indemnification and advancement of expenses are supplementary to and not in derogation of the rights that the indemnified person may have under Sections 722, 723 and 724 of the NYBCL or any successor provisions or other applicable law. Our Business Trust Board Resolutions provide that, to the extent permitted by applicable law and not prohibited by our Certificate of Incorporation or Bylaws, we shall (i) indemnify and hold harmless each and every past and present director and officer of us against any and all losses, claims, damages or liabilities to which such officer or director may become subject, under the Securities Act of the Exchange Act, as the same may be amended from time to time, any state law, any Blue Sky or securities law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise in connection with the registration statement or amendments (including, without limitation, post-effective amendments) or supplements thereto or any preliminary or final prospectuses or amendments or supplements thereto or any other document used or statement made in connection with offers or sales of the offered securities, and (ii) reimburse each such director and officer for any legal or other expenses reasonably incurred by him or her in connection with investigation or defending any such action or claim. Reference is made to the indemnity provisions in the underwriting agreement, which is filed as Exhibit 1 to this registration statement. Under the trust agreements, we will agree to indemnify each trustee of the trust for, and to hold it harmless against, any loss, liability or expense (including the reasonable compensation and the expenses and disbursements of its agents and counsel) incurred without negligence or bad faith, arising out of or in connection with the acceptance or administration of the trust or the performance of each such trustee's duties thereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties thereunder. This indemnification shall survive the termination of the trust agreements. We have customary Director's and Officer's liability insurance, as permitted by Section 726 of NYBCL. II-2 ITEM 16. EXHIBITS. The following exhibits are on file with the SEC, and are incorporated into this prospectus by reference.
NUMBER DESCRIPTION METHOD OF FILING - ------ ----------- ---------------- 1 Form of Underwriting Agreement for Preferred Securities. Filed herewith. 4-a Form of Junior Subordinated Indenture. Filed herewith. 4-b Form of Subordinated Debenture. Filed herewith. 4-c Form of Preferred Security. Filed as Exhibit D to Exhibit 4-e. 4-d Trust Agreement and Certificate of Trust of Sterling Bancorp Filed herewith. Trust I. 4-e Form of Amended and Restated Trust Agreement for Preferred Filed herewith. Securities. 4-f Form of Guarantee Agreement. Filed herewith. 4-g Form of Expense Agreement. Filed as Exhibit C to Exhibit 4-e. 5-a Opinion of Sullivan & Cromwell, special counsel to Sterling Filed herewith. Bancorp, as to the legality of the Subordinated Debentures and the Guarantee. 5-b Opinion of Richards, Layton & Finger, P.A., special Delaware Filed herewith. counsel to Sterling Bancorp and Sterling Bancorp Trust I, as to the validity of the Preferred Securities. 8 Opinion of Sullivan & Cromwell re: tax matters. Filed herewith. 12 Computation of Ratio of Earnings to Fixed Charges. Filed herewith. 23-a Consent of KPMG, independent auditors. Filed herewith. 23-b Consent of Sullivan & Cromwell. Filed as part of Exhibit 5-a. 23-c Consent of Richards, Layton & Finger, P.A. Filed as part of Exhibit 5-b. 24 Power of Attorney of Sterling Bancorp. (contained on page Filed herewith. II-6) 25-a Form T-1 Statement of Eligibility under the Trust Indenture Filed herewith. Act of 1939, as amended, of The Bank of New York, as Trustee under the Junior Subordinated Indenture. 25-b Form T-1 Statement of Eligibility under the Trust Indenture Filed herewith. Act of 1939, as amended, of The Bank of New York, as Delaware Trustee under the Amended and Restated Trust Agreement. 25-c Form T-1 Statement of Eligibility under the Trust Indenture Filed herewith. Act of 1939, as amended, of The Bank of New York, as Guarantee Trustee under the Guarantee Agreement.
ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered II-3 therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby also undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Sterling Bancorp certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of New York, State of New York, on the 6th day of February, 2002. STERLING BANCORP By: /s/ JOHN W. TIETJEN ------------------------------------ John W. Tietjen Executive Vice President, Treasurer and Chief Financial Officer II-5 Each person whose signature appears below constitutes and appoints Louis J. Cappelli, John C. Millman, John W. Tietjen and Joseph J. Cicero or any one of them, to act as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, of him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement and to file the same, with exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons on the 1st day of February, 2002, in the capacities and on the date indicated.
SIGNATURE TITLE --------- ----- /s/ LOUIS J. CAPPELLI Chairman of the Board, Chief Executive Officer - --------------------------------------------------- and Director Louis J. Cappelli /s/ JOHN W. TIETJEN Executive Vice President, Treasurer and Chief - --------------------------------------------------- Financial Officer John W. Tietjen /s/ JOSEPH J. CICERO Senior Vice President and Controller - --------------------------------------------------- Joseph J. Cicero /s/ JOHN C. MILLMAN Director - --------------------------------------------------- John C. Millman /s/ ROBERT ABRAMS Director - --------------------------------------------------- Robert Abrams /s/ WALTER FELDESMAN Director - --------------------------------------------------- Walter Feldesman /s/ HENRY J. HUMPHREYS Director - --------------------------------------------------- Henry J. Humphreys /s/ MAXWELL M. RABB Director - --------------------------------------------------- Maxwell M. Rabb
II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Sterling Bancorp Trust I certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of New York, State of New York, on the 6th day of February, 2002. STERLING BANCORP TRUST I (Co-registrant) By: STERLING BANCORP, as Depositor By: /s/ JOHN W. TIETJEN ------------------------------------ John W. Tietjen Executive Vice President, Treasurer and Chief Financial Officer II-7 STERLING BANCORP REGISTRATION STATEMENT ON FORM S-3 INDEX TO EXHIBITS The following exhibits are on file with the SEC, and are incorporated into this prospectus by reference.
NUMBER DESCRIPTION METHOD OF FILING - ------ ----------- ---------------- 1 Form of Underwriting Agreement for Preferred Securities. Filed herewith. 4-a Form of Junior Subordinated Indenture. Filed herewith. 4-b Form of Subordinated Debenture. Filed herewith. 4-c Form of Preferred Security. Filed as Exhibit D to Exhibit 4-e. 4-d Trust Agreement and Certificate of Trust of Sterling Bancorp Filed herewith. Trust I. 4-e Form of Amended and Restated Trust Agreement for Preferred Filed herewith. Securities. 4-f Form of Guarantee Agreement. Filed herewith. 4-g Form of Expense Agreement. Filed as Exhibit C to Exhibit 4-e. 5-a Opinion of Sullivan & Cromwell, special counsel to Sterling Filed herewith. Bancorp, as to the legality of the Subordinated Debentures and the Guarantee. 5-b Opinion of Richards, Layton & Finger, P.A., special Delaware Filed herewith. counsel to Sterling Bancorp and Sterling Bancorp Trust I, as to the validity of the Preferred Securities. 8 Opinion of Sullivan & Cromwell re: tax matters. Filed herewith. 12 Computation of Ratio of Earnings to Fixed Charges. Filed herewith. 23-a Consent of KPMG, independent auditors. Filed herewith. 23-b Consent of Sullivan & Cromwell. Filed as part of Exhibit 5-a. 23-c Consent of Richards, Layton & Finger, P.A. Filed as part of Exhibit 5-b. 24 Power of Attorney of Sterling Bancorp. (contained on page Filed herewith. II-6) 25-a Form T-1 Statement of Eligibility under the Trust Indenture Filed herewith. Act of 1939, as amended, of The Bank of New York, as Trustee under the Junior Subordinated Indenture. 25-b Form T-1 Statement of Eligibility under the Trust Indenture Filed herewith. Act of 1939, as amended, of The Bank of New York, as Trustee under the Amended and Restated Trust Agreement. 25-c Form T-1 Statement of Eligibility under the Trust Indenture Filed herewith. Act of 1939, as amended, of The Bank of New York, as Guarantee Trustee under the Guarantee Agreement.
II-8 EX-1 3 y56473ex1.txt FORM OF UNDERWRITING AGREEMENT Exhibit 1 $[22,000,000] (AGGREGATE LIQUIDATION AMOUNT) STERLING BANCORP TRUST I [ ]% PREFERRED SECURITIES (LIQUIDATION AMOUNT $10.00 PER PREFERRED SECURITY) UNDERWRITING AGREEMENT [ ], 2002 [ ]:00 p.m. FERRIS, BAKER WATTS, INCORPORATED RYAN, BECK & CO., LLC As Representatives of the Several Underwriters Identified In Schedule I Hereto, c/o Ferris, Baker Watts, Incorporated 100 Light Street Baltimore, MD 21202 Ladies and Gentlemen: SECTION 1. INTRODUCTION. Sterling Bancorp, a New York corporation and bank holding company and financial holding company under the Bank Holding Company Act of 1956, as amended (the "Company"), and Sterling Bancorp Trust I, a statutory business trust created under the Delaware Business Trust Act (the "Delaware Act") (the "Trust" and, together with the Company, sometimes the "Offerors"), propose, upon the terms and subject to the conditions set forth in this underwriting agreement (this "Agreement") that the Trust issue and sell to the several underwriters named in Schedule I hereto (each an "Underwriter" and, collectively, the "Underwriters"), for which Ferris, Baker Watts, Incorporated and Ryan, Beck & Co., LLC are acting as representatives (the "Representatives"), with respect to the proposed issuance and sale by the Trust of its [ ]% Preferred Securities, with a liquidation amount of $10.00 per Preferred Security (the "Securities"), the terms of which are more fully described in the Prospectus (as hereinafter defined). Such Securities will be issued pursuant to the Amended and Restated Trust Agreement, dated [ ], 2002 (the "Trust Agreement") among the Company as Depositor and The Bank of New York (Delaware), as Delaware Trustee and The Bank of New York, as Property Trustee. The Preferred Securities will be guaranteed by the Company with respect to distributions and payments upon liquidation, redemption and otherwise (the "Guarantee") pursuant to and to the extent provided by a Guarantee Agreement (the "Guarantee Agreement"), dated [ ], 2002, between the Company and The Bank of New York, as Guarantee Trustee (the "Guarantee Trustee"). The entire proceeds of the sale of the Securities to be issued pursuant hereto and the common securities of the Trust (the "Common Securities") will be used to purchase an equivalent dollar amount of junior subordinated debentures (the "Subordinated Debentures") to be issued by the Company pursuant to a Junior Subordinated Indenture (the "Indenture"), dated [ ], 2002 between the Company and The Bank of New York, as Debenture Trustee (the "Debenture Trustee"). The 2,200,000 Securities proposed to be sold by the Trust are referred to herein as the "Firm Securities." The Offerors also propose to grant to the Underwriters an option to purchase up to an additional 300,000 Securities, referred to herein as the "Additional Securities" (and, together with the Firm Securities, the "Preferred Securities"), if requested by the Underwriters as provided in Section 3 hereof. The registration statement on Form S-3 (file nos. 333-[ ] and 333-[ ] under the Securities Act of 1933, as amended (the "Securities Act") with respect to the Preferred Securities, the Subordinated Debentures and the Guarantee, as amended at the time it is, or was declared effective by the Securities and Exchange Commission (the "Commission"), including a form of prospectus, and, in the event of any amendment thereto after the effective date, such registration statement as so amended (but only from and after the effectiveness of such amendment), including a registration statement (if any) filed pursuant to Rule 462(b) of the rules and regulations of the Commission under the Securities Act (the "Securities Act Rules and Regulations") increasing the size of the offering registered under the Securities Act and information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rules 430A(b) and 434(d) of the Securities Act Rules and Regulations, is hereinafter called the "Registration Statement." The prospectus included in the Registration Statement at the time it is, or was declared effective by the Commission and any related prospectus supplement, or supplements relating to the Preferred Securities, the Guarantee or the Subordinated Debentures as previously filed with or promptly hereafter filed with the Commission pursuant to Rule 424(b) of the Securities Act Rules and Regulations, is hereinafter called the "Prospectus", except that if any prospectus filed by the Offerors with the Commission pursuant to Rule 424(b) of the Securities Act Rules and Regulations or any other such prospectus provided to the Underwriters by the Offerors for use in connection with the offering of the Preferred Securities (whether or not required to be filed by the Offerors with the Commission pursuant to Rule 424(b) of the Securities Act Rules and Regulations) differs from the prospectus on file at the time the Registration Statement is, or was declared effective by the Commission, the term "Prospectus" shall refer to such differing prospectus from and after the time such prospectus is filed with the Commission or transmitted to the Commission for filing pursuant to such Rule 424(b) or from and after the time it is first provided to the Underwriters by the Offerors for such use. The 2 term "Preliminary Prospectus" as used herein means the preliminary prospectus included in any Registration Statement prior to the time it becomes, or became, effective under the Securities Act and any prospectus subject to completion as described in Rule 430A of the Securities Act Rules and Regulations. Any reference to the term "Registration Statement," the Prospectus and the Preliminary Prospectus shall include the documents incorporated therein by reference. The terms "supplement" and "amendment" or "amend" as used in this Agreement shall include all documents subsequently filed by the Company with the Commission pursuant to the Exchange Act that are deemed to be incorporated by reference in the Prospectus. SECTION 2. REPRESENTATIONS, WARRANTIES, AND AGREEMENTS OF THE OFFERORS. (a) The Offerors, jointly and severally, represent and warrant to, and agree with, each of the Underwriters, as of the date hereof, as of the Closing Date and as of each Option Closing Date (as each such term is defined in Section 5 hereof), if any, (except in respect of such representations as are specified as being made as of a particular date) as follows: (i) The Registration Statement has been prepared by the Offerors in conformity in all material respects with the requirements of the Securities Act, the Securities Act Rules and Regulations, the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the rules and regulations of the Commission under the Trust Indenture Act (the "Trust Indenture Act Rules and Regulations") and has been filed with the Commission. The Offerors have prepared and filed such amendments thereto, if any, and such amended preliminary prospectuses, if any, as may have been required to the date hereof, and will file such additional amendments thereto and such amended prospectuses as may hereafter be required. If the Offerors have elected to rely upon Rule 462(b) of the Securities Act Rules and Regulations to increase the size of the offering registered under the Securities Act, the Offerors will prepare and file with the Commission a registration statement with respect to such increase pursuant to such Rule. If the Offerors have elected not to rely upon Rule 430A of the Securities Act Rules and Regulations, the Offerors have prepared and will promptly file an amendment to the Registration Statement and an amended prospectus if necessary to complete the Prospectus. If the Offerors have elected to rely upon Rule 430A of the Securities Act Rules and Regulations, they will prepare and file a prospectus pursuant to Rule 424(b) that discloses the information previously omitted from the prospectus in reliance upon Rule 430A. Copies of the Registration Statement, any amendment thereto and any Preliminary Prospectus filed with the Commission, including the exhibits, financial statements and schedules thereto, have been delivered by the Offerors to the Representatives on behalf of the Underwriters. 3 (ii) If the Registration Statement or any post-effective amendment thereto has been declared effective, the Commission has not issued any stop order suspending the effectiveness thereof or any order preventing or suspending the use of any Preliminary Prospectus, the Prospectus, the Registration Statement or any amendment or supplement thereto, and the Commission has not instituted or threatened to institute any proceedings with respect to such an order. (iii) The Registration Statement, on the date it was or is declared effective by the Commission, each Preliminary Prospectus, on the date of the filing thereof with the Commission, and the Prospectus and any amendment or supplement thereto, on the date of filing thereof with the Commission (or if not filed, on the date provided by the Offerors to the Underwriters in connection with offering and sale of the Preferred Securities) at the Closing Date and at each Option Closing Date, if any, conformed or will conform in all material respects with the requirements of the Securities Act, the Securities Act Rules and Regulations, the Trust Indenture Act and the Trust Indenture Act Rules and Regulations. The Registration Statement, on the date it was or is declared effective by the Commission, upon the filing or first delivery to the Underwriters of the Prospectus (or any supplement to the Prospectus) at the Closing Date and at the Option Closing Date, if any, did not and will not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; each Preliminary Prospectus on the date of the filing thereof with the Commission, and the Prospectus and any amendment or supplement thereto on the date of filing thereof with the Commission (or if not filed, on the date provided by the Offerors to the Underwriters in connection with the offering and sale of the Preferred Securities) at the Closing Date and at each Option Closing Date, if any, did not and will not include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the foregoing representation and warranty shall not apply to (i) any statements or omissions made in reliance upon, and in conformity with, information furnished in writing to the Offerors by an Underwriter through the Representatives or by the Delaware Trustee, the Property Trustee, the Guarantee Trustee or the Debenture Trustee expressly for use therein (as identified in Section 9(b) hereof) and (ii) that part of the Registration Statement which constitutes the Statement of Eligibility and Qualification under the Trust Indenture Act. As of the date that the Registration Statement was or is declared effective by the Commission, as of the date that each Preliminary Prospectus was filed with the Commission, as of the date that the Prospectus and any amendment or supplement thereto was or is filed with the Commission (or if not filed, on the date provided by the Offerors to the Underwriters in connection with offering and sale of the Preferred Securities), at the Closing Date and at each Option Closing Date, if any, no event has or will have occurred which should have been set forth in an amendment or supplement to the Registration Statement or the Prospectus which has not then been set forth in such an amendment or supplement. The documents incorporated by reference in each Preliminary Prospectus on the date of the filing thereof with the Commission, and the Prospectus and any amendment or 4 supplement thereto on the date of filing thereof with the Commission (or if not filed, on the date provided by the Company to the Underwriters in connection with the offering and sale of the Securities) or from which information is so incorporated by reference, including any amendments or supplements thereto, when such documents became effective or were filed with the Commission, as the case may be, complied in all material respects with the requirements of the Securities Act, the Securities Act Rules and Regulations, the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), the rules and regulations of the Commission under the Exchange Act (the "Exchange Act Rules and Regulations"), the Trust Indenture Act, and the Trust Indenture Act Rules and Regulations, as applicable, and any further documents so filed and incorporated by reference, including any amendments or supplements thereto, when such documents become effective or are filed with the Commission, as the case may be, will comply in all material respects with the requirements of the Securities Act, the Securities Act Rules and Regulations, the Exchange Act, the Exchange Act Rules and Regulations, the Trust Indenture Act, and the Trust Indenture Act Rules and Regulations, as applicable; no such incorporated document contained or will contain an untrue statement of material fact or omitted or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and when read together with the other information in each Preliminary Prospectus on the date of the filing thereof with the Commission, and the Prospectus and any amendment or supplement thereto on the date of filing thereof with the Commission (or if not filed, on the date provided by the Company to the Underwriters in connection with the offering and sale of the Securities), at the Closing Date and at the Option Closing Date, if any, did not or will not, as the case may be, include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (iv) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of New York, its jurisdiction of incorporation, and is not required to be qualified as a foreign corporation for the transaction of business under the laws of any other jurisdiction in which it owns or leases properties or conducts any business, and has all power and authority necessary to own or hold its properties and assets and to conduct the business in which it engages as described in or contemplated by the Registration Statement and the Prospectus, except where the failure to so qualify or be in good standing would not result in Material Adverse Effect. The Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. (v) Each of Sterling Banking Corporation, Sterling National Bank, Sterling Factors Corporation, Sterling National Mortgage Company, Inc., Sterling National Servicing, Inc., Sterling Trade Services, Inc., Sterling National Asia Limited, Hong Kong, Sterling Holding Company of Virginia, Inc. and Sterling Real Estate Holding Company Inc. (the "Subsidiaries" and each, a "Subsidiary") has been duly incorporated and is validly existing as a corporation or national banking association, as the case may be, in good standing under the laws of the jurisdiction in which it is 5 organized or chartered, as the case may be, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, and has all power and authority necessary to own or hold its properties and assets and to conduct the business in which it engages as described in or contemplated by the Registration Statement and the Prospectus, except where failure to so qualify or be in good standing would not result in a Material Adverse Effect as hereinafter defined. All eligible deposit accounts issued by Sterling National Bank (the "Bank Subsidiary" and, with the Non-bank Subsidiaries, the "Subsidiaries" and, individually, a "Subsidiary") are insured by the Federal Deposit Insurance Corporation (the "FDIC") up to the maximum applicable amount in accordance with applicable law and the rules and regulations of the FDIC and no proceedings for the termination or revocation of such insurance are pending or, to the best knowledge of the Offerors, threatened. Except for the Bank Subsidiary, no other Subsidiary issues or has any outstanding deposit accounts that are eligible under applicable law and the rules and regulations of the FDIC for FDIC insurance. The Subsidiaries are all of the direct and indirect subsidiaries of the Company. The Bank Subsidiary and Sterling Financial Services Company, Inc. constitute the only "significant subsidiaries" of the Company as defined in Rule 1-02 of Regulation S-X of the Commission. (vi) The Trust has been duly created and is validly existing in good standing as a statutory business trust under the Delaware Act, is not required to be qualified as a foreign corporation for the transaction of business under the laws of any other jurisdiction and has all power and authority necessary to own or hold its properties and assets and to conduct the business in which it is engaged as described in or contemplated by the Registration Statement and the Prospectus. The Trust has conducted, and will conduct, no business other than as contemplated by the Trust Agreement and as described in or contemplated by the Registration Statement and the Prospectus. The Trust is not a party to or otherwise bound by any agreement other than those described in the Prospectus. At and after such time as the Company has purchased Common Securities equal to at least 3% of the total equity of the Trust, the Trust will be classified for United States federal income tax purposes as a grantor trust and not as an association taxable as a corporation and the Trust is and will be treated as a consolidated subsidiary of the Company pursuant to generally accepted accounting principles. (vii) The Company has all power and authority necessary to enter into, execute, deliver and perform its obligations under and with respect to the Indenture, the Trust Agreement and the Guarantee Agreement. All necessary corporate proceedings of the Company have been duly taken to authorize the execution, delivery and performance by the Company of its obligations under the Indenture, the Trust Agreement and the Guarantee Agreement. The Indenture, the Trust Agreement and the Guarantee Agreement have been duly authorized, and when executed and delivered by the Company, will be the valid and binding obligations of the Company, enforceable against the Company, in accordance with their respective terms (except as such 6 enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors' rights and by the application of equitable principles relating to the availability of remedies, and except as rights to indemnity or contribution may be limited by federal or state securities laws and the public policy underlying such laws). The Indenture has been or will be duly qualified under the Trust Indenture Act. The Indenture, the Trust Agreement and the Guarantee Agreement conform or will conform in all material respects to the descriptions thereof contained in the Registration Statement and the Prospectus and are in substantially the forms filed as exhibits to the Registration Statement. (viii) The Company has all power and authority necessary to enter into, execute, deliver and perform its obligations under and with respect to the Subordinated Debentures. All necessary corporate proceedings of the Company have been duly taken to authorize the execution, issuance, delivery and performance by the Company of its obligations under the Subordinated Debentures. The Subordinated Debentures have been duly authorized and, when issued by the Company against payment therefor, as contemplated by the Prospectus, will be the valid and binding obligations of the Company, enforceable against the Company in accordance with their terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors' rights and by the application of equitable principles relating to the availability of remedies, and except as rights to indemnity or contribution may be limited by federal or state securities laws and the public policy underlying such laws) and will be in the form contemplated by, and entitled to the benefits provided by, the Indenture. The Subordinated Debentures conform or will conform in all material respects to the description thereof contained in the Registration Statement and the Prospectus. (ix) The Trust has all power and authority necessary to enter into, execute, deliver and perform its obligations under, and with respect to, the Preferred Securities. All necessary trust action on the part of the Trust has been duly taken to authorize the execution, issuance, sale, delivery and performance by the Trust of its obligations under the Preferred Securities. The Preferred Securities have been duly authorized by the Trust Agreement, and when issued by the Trust against payment therefor as contemplated by the Prospectus, will be validly issued and (subject to the terms of the Trust Agreement) fully paid and nonassessable undivided beneficial interests in the assets of the Trust, entitled to the benefits provided by the Trust Agreement. Good and marketable title to the Preferred Securities will pass to the Underwriters on the Closing Date, or the applicable Option Closing Date, if any, free and clear of all liens, security interests, pledges, charges, mortgages or other defects or encumbrances of any kind or nature. The issuance of the Preferred Securities is not subject to preemptive or other similar rights, and holders of Preferred Securities will be entitled to the same limitation of personal liability under Delaware law as is extended to stockholders of 7 private corporations for profit organized under the General Corporation Law of the State of Delaware. The Preferred Securities conform or will conform in all material respects to the descriptions thereof contained in the Registration Statement and the Prospectus. (x) The Trust has all power and authority necessary to enter into, execute, deliver and perform its obligations under, and with respect to, the Common Securities. All necessary trust action on the part of the Trust has been duly taken to authorize the execution, issuance, delivery and performance by the Trust of its obligations under the Common Securities. The Common Securities have been duly authorized by the Trust Agreement and, when issued and delivered by the Trust to the Company against payment therefor as contemplated by the Prospectus, will be validly issued and (subject to the terms of the Trust Agreement) fully paid undivided beneficial interests in the assets of the Trust, entitled to the benefits provided by the Trust Agreement. At the Closing Date, and at the Option Closing Date, if any, all of the issued and outstanding Common Securities will be directly owned by the Company free and clear of all liens, security interests, pledges, charges, mortgages or other defects or encumbrances of any kind or nature. The issuance of the Common Securities is not subject to preemptive or other similar rights. The Common Securities conform or will conform in all material respects to the description thereof contained in the Registration Statement and the Prospectus. (xi) The Company has the duly authorized capital stock set forth in the Prospectus. All of the shares of capital stock of the Company issued and outstanding have been duly and validly authorized and issued, are fully paid and nonassessable, without personal liability attaching to the ownership thereof, and none of such shares have been issued or are owned or held in violation of any preemptive or other similar rights. All of the issued and outstanding shares of capital stock of each Subsidiary has been duly authorized, validly issued and are fully paid and nonassessable and all such shares are held, in the case of the Bank Subsidiary, Sterling Banking Corporation and Sterling Financial Services Company, Inc., by the Company, in the case of Sterling Trade Services, Inc., Sterling Factors Corporation, Sterling National Mortgage Company, Inc., Sterling Holding Company of Virginia, Inc. and Sterling National Servicing, Inc., by the Bank Subsidiary, in the case of Sterling National Asia Limited Hong Kong, by the Sterling Trade Services, Inc., and in the case of Sterling Real Estate Holding Company Inc. by Sterling Holding Company of Virginia, Inc. free and clear of any liens, security interests, pledges, charges, mortgages or other defects or encumbrances of any kind or nature. (xii) The consolidated financial statements of the Company and the related notes and schedules thereto included in the Registration Statement and the Prospectus comply in all material respects with the requirements of the Securities Act and the Securities Act Rules and Regulations and, if applicable, the Exchange Act and the Exchange Act Rules and Regulations at the dates and for the periods indicated, are accurate in all material respects and fairly present the financial condition, results of 8 operations, stockholders' equity and cash flows, and the other information of the Company and its consolidated subsidiaries at the respective dates and for the respective periods specified therein. Such financial statements and the related notes and schedules thereto have been prepared in all material respects in accordance with generally accepted accounting principles consistently applied throughout the periods presented (except as otherwise noted therein) and have been properly derived from the books and records of the Company, and such financial statements as are audited have been examined by KPMG LLP, who are independent public accountants within the meaning of the Securities Act and the Securities Act Rules and Regulations, as indicated in their reports filed therewith. The selected financial information and statistical data set forth under the captions ["Prospectus Summary -- Consolidated Financial Data," "Capitalization," "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business"] in the Prospectus (and in documents incorporated by reference into the Prospectus) in all material respects fairly present the information set forth therein, have been derived from the financial statements or operating records of the Company and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement and the Prospectus. No other financial statements or financial information, except that which is contained in the Registration Statement or the Prospectus is required, by Form S-3, the Securities Act Rules and Regulations or otherwise, to be included in the Registration Statement or the Prospectus. (xiii) Since the respective dates as of which information is given in the Prospectus, and except as otherwise may be stated therein or contemplated thereby: (A) none of the Company, any Subsidiary or the Trust has entered into any transaction or incurred any liability or obligation, direct, contingent or otherwise, which is material to the Company and the Subsidiaries, taken as a whole or to the Trust; (B) there has not been any change in the outstanding capital stock of the Company or any material increase in the long-term debt of the Company or any Subsidiary, except indebtedness and deposit liabilities incurred by the Bank Subsidiary in the ordinary course of its banking business, or any event or circumstance giving rise to a Material Adverse Effect (as hereinafter defined) relating to the Company, any Subsidiary or the Trust; (C) none of the Company, any Subsidiary or the Trust has sustained any loss or damage (whether or not insured) which has resulted in, or reasonably could be expected, individually or in the aggregate, to result in, a Material Adverse Effect to the Company, any Subsidiary or the Trust; (D) there has not been any material interference with the business of the Company or any Subsidiary or of the Trust from any labor dispute or court or governmental action, order or decree; (E) the Company has not paid or declared any dividend or other distribution with respect to its capital stock except for the stock dividend to be declared to holders of common stock of record on or about February 21, 2002 (the "Dividend"); (F) there has not been any change, contingent or otherwise, in the direct or indirect control of the Company, any Subsidiary or the Trust and, to the best knowledge of the Offerors, there do not exist any circumstances which would reasonably be expected to result in such a change; (G) there is no litigation pending or, to the best knowledge of the Offerors, threatened against the Company, any 9 Subsidiary or the Trust which is required by the Securities Act and the Securities Act Rules and Regulations to be set forth in the Registration Statement or the Prospectus (or any documents incorporated therein by reference) which has not been so set forth; and (H) there has not occurred any other event, and there has arisen no set of circumstances required by the Securities Act and the Securities Act Rules and Regulations to be set forth in the Registration Statement or the Prospectus, which has not been so set forth. "Material Adverse Effect" means (i) when used in connection with the Company, any development, change or effect that is materially adverse to the business, properties, assets, net worth, financial condition or results of operations of the Company and the Subsidiaries, taken as a whole and (ii) when used in connection with the Trust, any development, change or effect that is materially adverse to the business, properties, assets, net worth, condition (financial or other) or results of operations of the Trust. None of the Company, any of the Subsidiaries or the Trust has any material contingent liabilities that are not disclosed in the Prospectus. (xiv) Other than as set forth in the Prospectus, there are no pending actions, suits, proceedings, or investigations or, to the best knowledge of the Offerors, threatened or contemplated actions, suits or proceedings, before any court, regulatory body, administrative agency or other governmental body that (A) challenge the validity of this Agreement, or of any action taken or to be taken by the Company or the Trust pursuant to or in connection herewith; (B) are required to be disclosed in the Registration Statement or the Prospectus which are not so disclosed; (C) if determined adversely to the Company or the Trust, reasonably could be expected, individually or in the aggregate, to have a Material Adverse Effect thereon; or (D) reasonably could be expected to materially and adversely affect the consummation of this Agreement and the transactions contemplated hereby. Any such proceedings that are set forth in the Prospectus are fairly and accurately summarized therein. (xv) Each of the Company and the Trust has all power and authority to enter into, execute, deliver and perform its obligations under, and with respect to, this Agreement. All necessary corporate or trust proceedings, as the case may be, of the Company and the Trust have been duly taken to authorize the execution, delivery and performance by the Company and the Trust of this Agreement. This Agreement has been duly authorized, executed and delivered by the Company and the Trust and constitutes a valid and binding obligation of the Company and of the Trust, enforceable against each in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application relating to, or affecting, the enforcement of creditors' rights and by the application of equitable principles relating to the availability of remedies, and except as rights to indemnity or contribution may be limited by federal or state securities laws and the public policy underlying such laws). (xvi) None of the Company, any of the Subsidiaries or the Trust is in default in the performance or observance of any obligation, agreement, covenant or 10 condition contained in any contract, indenture, mortgage, loan agreement, note, lease, franchise, license, bond or other evidence of indebtedness or other agreement or instrument to which it is a party, by which it may be bound or to which any of its assets, properties or businesses are or may be subject, except for such defaults that would not, individually or in the aggregate, have a Material Adverse Effect on the Company or the Trust, as the case may be. The Company's and the Trust's execution and delivery of this Agreement, and the Company's execution of the Indenture, the Trust Agreement and the Guarantee Agreement, and the consummation by the Company and/or the Trust of the transactions contemplated hereby and thereby, including, without limitation, the issuance, sale and delivery of the Preferred Securities and the Common Securities by the Trust and of the Subordinated Debentures by the Company, and the conduct of their respective businesses as described in or contemplated by the Registration Statement and the Prospectus, will not violate any provision of the charter, bylaws or other governing documents of the Company, any Subsidiary, the Trust Agreement, the Trust's certificate of trust filed with the state of Delaware on February 1, 2002 (the "Certificate of Trust"), or similar constructive documents of any of them and will not result in the breach of, or be in contravention of, constitute a default under, cause (or permit) the maturation or acceleration of any liability or the termination of any rights under, or result in the creation or imposition of any lien, security interest, pledge, charge, mortgage or other defect in or encumbrance upon, any assets, property or business of the Company, any Subsidiary or the Trust pursuant to the terms of any material contract, indenture, mortgage, loan agreement, note, lease, franchise, license, bond, other evidence of indebtedness, or other agreement or instrument to which the Company, any such Subsidiary or the Trust is a party, by which it is bound or to which any of its assets, properties or businesses are subject, or, assuming compliance with the Securities Act, the Securities Act Rules, the Exchange Act, the Exchange Act Rules and Regulations, the Trust Indenture Act, the Trust Indenture Act Rules and Regulations, applicable state securities or Blue Sky laws, any statute, judgment, decree, order, rule or regulation applicable to the Company, any Subsidiary or the Trust of any arbitrator, court, regulatory body, administrative agency or other governmental body, except those, if any, that are described in the Prospectus or those which would not, individually or in the aggregate, have a Material Adverse Effect on the Company or the Trust, as the case may be. (xvii) All executed agreements, or copies of executed agreements, filed as exhibits to the Registration Statement to which the Company, any Subsidiary or the Trust is a party, by which any of them is or may be bound, or to which any of their respective assets, properties or businesses are or may be subject, have been duly and validly authorized, executed and delivered by the Company, such Subsidiary or the Trust, as the case may be, and constitute the legal, valid and binding agreements of the Company, such Subsidiary or the Trust, enforceable against it in accordance with its terms (except as such enforceability may be limited by applicable banking laws and regulations, applicable bankruptcy, insolvency, reorganization or other laws of general application relating to, or affecting the enforcement of creditors' rights, and application of equitable principles relating to the availability of remedies, and except as rights to indemnity or contribution may be limited 11 by federal or state securities laws and the public policy underlying such laws). The descriptions and summaries contained in the Registration Statement of contracts and other documents are accurate and fairly present in all material respects the information required to be disclosed with respect thereto by the Securities Act and the Securities Act Rules and Regulations, and there are no contracts, other documents, transactions or circumstances which are required by the Securities Act and the Securities Act Rules and Regulations to be described in the Registration Statement, or filed as exhibits thereto, which are not so described or filed. The exhibits which have been filed are complete and correct copies of the documents of which they purport to be copies. (xviii) The Company and each of the Subsidiaries has good and marketable title in fee simple to all real property and good and marketable title to all other property and assets owned thereby as set forth in the Prospectus, in each case free and clear of all liens, security interests, pledges, charges, mortgages and other defects or encumbrances of any kind or nature, except such as are described in the Prospectus or such as do not materially affect the value of any such property, and do not interfere with the use made, or proposed to be made, of such property by the Company or such Subsidiary. Any real properties held or used by the Company or any Subsidiary under lease are held or used under valid, subsisting and enforceable leases, such leases are in full force and effect, the Company or the Subsidiary, as the case may be, is not in default in respect of any material terms of any such lease and enjoys peaceful and undisturbed possession thereunder and, to the best knowledge of the Offerors, there are no claims that have been asserted by any party adverse to the Company's or the Subsidiary's right as lessee under any such lease or affecting or challenging the Company's or the Subsidiary's right to continue possession of the premises subject to any such lease which, individually or in the aggregate, would have a Material Adverse Affect on the Company. No real property owned, held or used by the Company or any Subsidiary is situated in an area which is or, to the best knowledge of the Offerors, will be, subject to zoning, use, or building code restrictions that would prohibit (and no state of facts relating to the actions or inaction of another person or entity or his or its ownership, leasing, or use of any real or personal property exists or will exist which would prevent) the continued effective ownership, holding or use of such real property in the business of the Company or the Subsidiary as described in or contemplated by the Registration Statement and the Prospectus. (xix) All legally required proceedings in connection with the issuance and sale of the Common Securities, the Preferred Securities, and the Subordinated Debentures and the Guarantee in accordance with this Agreement and as contemplated by the Registration Statement and the Prospectus have been taken and no consent, authorization, approval, order, registration, license, certificate, declaration or permit of or from, or filing with, any court, regulatory body, administrative agency or other governmental body, is required in connection with the execution and delivery of this Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement, or the issuance and sale of the Common Securities, the Preferred Securities or the Subordinated Debentures, or the 12 consummation by each of the Company and the Trust of the transactions contemplated by this Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement, except such as have been described in the Prospectus or may be required, under the Securities Act, the Securities Act Rules and Regulations, the Exchange Act, the Exchange Act Rules and Regulations, the Trust Indenture Act, the Trust Indenture Act Rules and Regulations and such as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Preferred Securities by the Underwriters, from the New York Stock Exchange, Inc. (the "NYSE") to have the Preferred Securities listed thereon, and by the National Association of Securities Dealers, Inc. (the "NASD") in connection with the terms and conditions set forth in this Agreement. No consent of any party to any contract, agreement, mortgage, loan agreement, note, franchise, lease, bond, other evidence of indebtedness or other agreement or instrument, or any arrangement or understanding to which the Company or the Trust is a party, by which either of them may be bound or to which any of their respective assets, properties or businesses are or may be subject, is required for the execution, delivery or performance of this Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement, or the issuance and sale of the Common Securities, the Preferred Securities or the Subordinated Debentures, or the consummation by each of the Company and the Trust of the transactions contemplated by this Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement. (xx) None of the Company, any Subsidiary or the Trust, or the conduct of their respective businesses as described in or contemplated by the Prospectus, is in violation of any federal, state or local statute, administrative regulation or other law, the consequence of which violation(s), individually or in the aggregate, would have a Material Adverse Effect on the Company or the Trust, as the case may be, or which could in any way, individually or in the aggregate, impair or delay the consummation of the transactions contemplated by this Agreement, the Indenture, the Trust Agreement, or the Guarantee Agreement, or the issuance and sale of the Common Securities, the Preferred Securities, or of the Subordinated Debentures, or the consummation by each of the Company and by the Trust of the other transactions contemplated by this Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement. (xxi) None of the Company, any of the Subsidiaries or the Trust is in violation of any provision of its charter, bylaws, the Trust Agreement or the Certificate of Trust, as the case may be, or other governing or constitutive documents; none of the Company, any of the Subsidiaries or the Trust is (or, as a result of the passage of time or based on its projected plans of operations, will be) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, agreement, mortgage, loan agreement, note, franchise, lease, bond, other evidence of indebtedness or other agreement or instrument to which it is a party, by which it may be bound or to which any of its assets, properties or businesses are, or may be, subject which, individually or in the aggregate, would have a Material Adverse Effect on the Company or the Trust, as the case may be, or which could in any way, individually 13 or in the aggregate, impair or delay the consummation of the transactions contemplated by this Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement, or the issuance and sale of the Common Securities, the Preferred Securities or the Subordinated Debentures, or the consummation by the Company and the Trust of the other transactions contemplated by this Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement, and each contract, agreement, mortgage, loan agreement, note, franchise, lease, bond, other evidence of indebtedness and other agreement and instrument is in full force and effect and is a legal, valid and binding obligation of the Company, the relevant Subsidiary or the Trust, as the case may be. (xxii) No action has been taken with respect to the Company, any Subsidiary or the Trust, and, to the best knowledge of the Offerors, no federal, state or local statute, administrative regulation, or other law has been enacted, adopted or issued by any governmental agency that suspends the effectiveness of the Registration Statement, prevents or suspends the use of any Preliminary Prospectus or the Prospectus or suspends the sale of the Preferred Securities in any jurisdiction referred to in Section 6(c) hereof. No injunction, restraining order or order of any nature by a federal or state court of competent jurisdiction has been issued with respect to the Company, any Subsidiary or the Trust that could in any way prevent the issuance of the Preferred Securities, the Common Securities or the Subordinated Debentures, suspend the effectiveness of the Registration Statement, prevent or suspend the use of any Preliminary Prospectus or the Prospectus or suspend the sale of the Preferred Securities in any jurisdiction referred to in Section 6(c) hereof; and every request of the Commission, or any securities authority or agency of any jurisdiction, for additional information (to be included in the Registration Statement or the Prospectus or otherwise) has been complied with in all material respects. (xxiii) The statements set forth in the Prospectus under the captions ["Sterling Bancorp Trust I," "Description of Preferred Securities," "Description of Subordinated Debentures," "Description of Guarantee" and "Relationship Among the Preferred Securities, the Subordinated Debentures, the Expense Agreement and the Guarantee," "Underwriting" (except, with respect to statements under the caption "Underwriting" for information furnished in writing to the Company by the Underwriters through the Representatives expressly for use therein (as identified in Section 9(b) hereof)), and in the documents incorporated by reference into the Prospectus under the captions ["Business," "Management," "Supervision and Regulation," ] insofar as they purport to describe the provisions of the laws and the provisions of documents referred to therein, accurately and fairly summarize such provisions in all material respects and there are no other provisions of law or of documents which are required by the Securities Act or the Securities Act Rules and Regulations to be described therein. (xxiv) The Company has received, subject to notice of issuance, approval to have the Preferred Securities listed on the NYSE and the Company knows of no reason which is likely to adversely affect such approval. 14 (xxv) None of the Company, any of the Subsidiaries or the Trust is and, after giving effect to the offering and sale of the Preferred Securities, the Common Securities and the Subordinated Debentures, will not be, an "investment company" or an "affiliated person" of or a "promoter" or "principal underwriter" of or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"). (xxvi) To the best of the Offerors' knowledge, each of the Company, each of the Subsidiaries and the Trust owns, or is licensed or otherwise has sufficient right to use, the proprietary knowledge, trademarks, service marks, trade names, trademark registrations, service mark registrations, logo marks, copyrights and rights (collectively, "Intellectual Property") necessary for the conduct of its business as described in, or contemplated by, the Registration Statement and the Prospectus. To the best knowledge of the Offerors, none of the activities engaged in by the Company, any of the Subsidiaries or the Trust infringes upon, or otherwise conflicts with, Intellectual Property rights of others, except where such infringement would not have, individually or in the aggregate, a Material Adverse Effect. No claims have been asserted or, to the best knowledge of the Offerors, threatened against the Company, any of the Subsidiaries or the Trust by any person with respect to the use of any such Intellectual Property or challenging or questioning the validity or effectiveness of any such Intellectual Property, except where such claims if determined adversely, would not have, individually or in the aggregate, a Material Adverse Effect. (xxvi) No labor disturbance(s) by, or labor dispute(s) with, the employees of the Company or any of the Subsidiaries exists or, to the best knowledge of the Offerors, is threatened or imminent which, individually or in the aggregate, would have a Material Adverse Effect on the Company. (xxvii) Each of the administrators under the Trust Agreement (each of the "Administrators") is an employee of the Company and has been duly authorized to execute and deliver the Trust Agreement. (xxviii) To the best knowledge of the Offerors, no hazardous substances, hazardous wastes, pollutants or contaminants have been deposited or disposed of in, on or under the properties of the Company, or any of the Subsidiaries (including properties owned, managed or controlled by a Subsidiary in connection with its lending activities) during the period in which the Company or any Subsidiary has owned, occupied, managed, controlled or operated such properties, in violation of any environmental, safety, health or similar laws or regulations, orders, decrees or permits relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Regulations"), or any order, judgment, decree or permit which would require remedial action under any Environmental Regulations, except for any violations or remedial actions which would not have, individually or in the aggregate, a Material Adverse Effect on the Company. 15 (xxix) Each of the Company, each of the Subsidiaries and the Trust is in compliance with all applicable federal or state laws and the rules and regulations thereunder, applicable thereto including, without limitation, all such laws, rules and regulations relating to discrimination in the hiring, promotion or pay of employees, any applicable federal or state wages and hours law, and the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), applicable to their respective businesses, except where such noncompliance would not, individually or in the aggregate, have a Material Adverse Effect on the Company or the Trust, as the case may be. (xxx) The employee benefit plans, including employee welfare benefit plans, of the Company and each of the Subsidiaries (the "Employee Plans") have been operated in compliance with the applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended (the "Code"), all regulations, rulings and announcements promulgated or issued thereunder and all other applicable governmental laws and regulations (except to the extent such noncompliance would not, individually or in the aggregate, have a Material Adverse Effect on the Company). No reportable event under Section 4043(b) of ERISA or to the best of the Offerors' knowledge, any prohibited transaction under Section 406 of ERISA has occurred with respect to any employee benefit plan maintained by the Company or any of the Subsidiaries and, except where such occurrence would not have individually or in the aggregate, a Material Adverse Effect on the Company. There are no pending or, to the Offerors' best knowledge, threatened claims by, or on behalf of, any Employee Plan, any employee or beneficiary covered under any such Plan or any governmental authority or otherwise involving such Plans or any of their respective fiduciaries (other than for routine claims for benefits and, except where such occurrence would not have individually or in the aggregate, a Material Adverse Effect on the Company). All Employee Plans that are group health plans have been operated in compliance with the group health plan continuation coverage requirements of Section 4980B of the Code in all material respects. (xxxi) Each of the Company, each of the Subsidiaries and the Trust has all power and authority necessary, has obtained, maintained in effect and holds all consents, authorizations, approvals, orders, registrations, licenses, certificates, declarations and permits of and from, and has made all declarations and filings with all courts, regulatory bodies, administrative agencies, or other governmental bodies, necessary to own, lease, license and use its assets and properties and conduct its business in the manner described in or contemplated by the Registration Statement and Prospectus, except where such failure to obtain any such consents or make such filings would not have, individually or in the aggregate, a Material Adverse Effect. None of the Company, any of the Subsidiaries or the Trust has received any notice of proceedings relating to the use of its assets and properties as to the conduct of its business, and, to the best knowledge of the Offerors, no governmental body is considering limiting, suspending, modifying or revoking, any such consent, authorization, approval, order, registration, license certificate, declaration or permit which, individually or in the aggregate, if the subject of an unfavorable determination, would have a Material Adverse Effect on the Company. None of the Company, any of the Subsidiaries or the Trust is party to or otherwise subject to any consent decree, memorandum of understanding, written 16 commitment or other supervisory agreement with the Board of Governors of the Federal Reserve System or any Federal Reserve Bank (the "Federal Reserve"), the Comptroller of the Currency, the FDIC, or any other federal or state authority or agency responsible for the supervision, regulation or insurance of depository institutions, mortgage companies and their subsidiaries and holding companies (any "Bank Regulator"). None of the Company, any of the Subsidiaries or the Trust has received any notice of, and to the best knowledge of the Offerors, has not been threatened with, and/or has not been sued and is not under investigation with respect to a violation, or a possible violation, of any provision of any law, regulation, license, permit or order, except such violation(s) as would not, individually, or in the aggregate, have a Material Adverse Effect on the Company or the Trust, as the case may be. (xxxii) The Bank Subsidiary is in good standing with the Comptroller of the Currency and the New York State Banking Department and no other Bank Regulator has jurisdiction over the Bank Subsidiary. Sterling Banking Corporation is in good standing with the Banking Department of the State of New York and no other Bank Regulator has jurisdiction over the Sterling Banking Corporation. The activities of the Company, the Bank Subsidiary and Sterling Banking Corporation are permitted under applicable federal and state banking laws, rules and regulations. Except for the Company, the Bank Subsidiary and Sterling Banking Corporation, no Subsidiary is subject to regulation by a Bank Regulator. Each of the Company, the Bank Subsidiary and Sterling Banking Corporation have all necessary approvals, including approvals of each Bank Regulator having jurisdiction over it. Each of the Company, the Bank Subsidiary and Sterling Banking Corporation has filed with the appropriate governmental authorities each and every statement, report, information or form required to be filed by it pursuant to any applicable law, regulation, license, permit or order, except where the failure(s) to so file would not, individually or in the aggregate, have a Material Adverse Effect on the Company; all such filings or submissions were in compliance in all material respects with applicable laws and regulations when filed; and no deficiencies have been asserted by any regulatory commission, agency or authority with respect to such filings or submissions, except where the failure(s) to so file or cure would not, individually or in the aggregate, have such a Material Adverse Effect on the Company. No report or application filed by the Company, the Bank Subsidiary or Sterling Banking Corporation with any Bank Regulator (each such report or application, together with all exhibits thereto, a "Regulatory Report"), as of the date it was filed, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein, or necessary to make the statements therein not misleading when made, or failed to comply with the applicable requirements of the applicable Bank Regulators, as the case may be. (xxxiii) The books, records, accounts and systems of internal accounting controls of the Company and of each of the Subsidiaries comply in all respects with the requirements of Section 13(b)(2) of the Exchange Act, except where the failure(s) to so comply would not, individually or in the aggregate, have a Material Adverse Effect on the Company. 17 (xxxiv) None of the Company, any of the Subsidiaries or the Trust or any of their respective officers, directors, trustees or affiliates (within the meaning of the Securities Act Rules and Regulations) has taken, directly or indirectly, any action designed to, or that might reasonably be expected to, result in stabilization or manipulation of the price of any securities of the Company or the Trust. (xxxv) None of the Company, any of the Subsidiaries, or the Trust or any other person associated with or acting on behalf of the Company, any of the Subsidiaries or the Trust has distributed or will distribute any prospectus or other offering material in connection with the offering or sale of the Preferred Securities other than a Preliminary Prospectus, Prospectus or other materials permitted by the Securities Act and the Securities Act Rules and Regulations to be distributed by the Company and the Trust. (xxxvi) The minute books of the Company are current and contain a correct record of all corporate action reflected therein as taken by the Boards of Directors and shareholders of the Company and a correct and complete record of the ratification by the Boards of Directors of the Company of all corporate action taken by such Boards for which such minute books do not contain a record, and all signatures contained therein are true signatures of the persons whose signatures they purport to be. (xxxvii) Except as described in the Prospectus, to the best knowledge of the Offerors there is no loss or threatened loss of any one or more customers, suppliers, or accounts of the Company or any of the Subsidiaries which loss(es) would, individually or in the aggregate, have a Material Adverse Effect on the Company. (xxxviii) Except pursuant to this Agreement, the Company has not incurred, directly or indirectly, any liability for a fee, commission or other compensation or reimbursement on account of the employment of a broker, finder agent, investment adviser or otherwise in connection with the transactions contemplated by this Agreement, the Indenture, the Trust Agreement, or the Guarantee Agreement. (xxxix) There are no business relationships or related party transactions of the nature described in Item 404 of Regulation S-K of the Commission involving the Company, any of the Subsidiaries or the Trust and any person referred to in Items 401 or 404 of Regulation S-K, except as required to be described, and as so described, in the Prospectus (or the documents incorporated by reference into the Prospectus). (xl) The conditions for use of Form S-3 by the Offerors for offering of the Preferred Securities on the terms set forth in this Agreement, as set forth in the General Instructions thereto, have been satisfied. (xli) The Company and each of the Subsidiaries maintains insurance of the types and in amounts which the Company reasonably believes to be 18 adequate for the conduct of their respective businesses and the value of their prospective properties, and in such amounts and with such deductibles as are customary for companies in the same or similar businesses, all of which insurance is in full force and effect. (xlii) No Tax Event, Capital Treatment Event or Investment Company Event (as each such term is defined in the Indenture) has occurred. (b) Any certificate signed by any officer of the Company or Administrator of the Trust, and delivered to the Representatives or to counsel to the Underwriters, shall be deemed a representation and warranty by the Company and each of the Subsidiaries or of the Trust, as the case may be, to the Underwriters as to the matters covered thereby. SECTION 3. PURCHASE OF SECURITIES BY THE UNDERWRITERS. On the basis of the representations, warranties, covenants and agreements herein contained, and subject to the terms and conditions herein set forth, the Trust agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Trust, the respective number of Firm Securities set forth opposite the name of each such Underwriter in Schedule I hereto at a purchase price of $10.00per Firm Security (the "Purchase Price"). As compensation to the Underwriters for their commitments hereunder and in view of the fact that the proceeds of the sale of the Preferred Securities (together with the entire proceeds from the sale by the Trust to the Company of the Common Securities) will be used to purchase the Subordinated Debentures, on the Closing Date the Company hereby agrees to pay to the Representatives, on behalf of the several Underwriters, a commission of $0.375 per Firm Security ($825,000 in the aggregate). On the basis of the representations, warranties, covenants and agreements herein contained, and subject to the terms and conditions herein set forth, the Offerors agree to issue and sell to each of the Underwriters, and each of the Underwriters shall have the one-time right to purchase from the Trust, severally and not jointly, up to an aggregate of 300,000 Additional Securities at the Purchase Price. Additional Securities may be purchased as provided in Section 5 hereof solely for the purpose of covering over-allotments, if any, made in connection with the offering of the Firm Securities. If the Representatives, on behalf of the Underwriters, elect to exercise such option, you shall so notify the Company in writing not later than 30 days after the date of this Agreement, which notice shall specify the number of Option Securities to be purchased by the Underwriters and the date on which such Option Securities are to be purchased. Such date may be the same as the Closing Date (as defined below) but not earlier than the Closing Date nor later than 10 business days after the date of such notice. If any Additional Securities are to be purchased, each Underwriter, severally and not jointly, agrees to purchase the number of Additional Securities that bears the same proportion to the total number of Additional Securities to be purchased as the number of Firm 19 Securities set forth opposite the name of such Underwriter in Schedule I bears to the total number of Firm Securities. As compensation to the Underwriters for their commitments hereunder and in view of the fact that the proceeds of the sale of the Preferred Securities (together with the entire proceeds from the sale by the Trust to the Company of the Common Securities) will be used to purchase the Subordinated Debentures, on the Option Closing Date the Company hereby agrees to pay to the Representatives, on behalf of the several Underwriters, a commission of $0.375 per Additional Security purchased on the Option Closing Date (up to an aggregate of $112,500). SECTION 4. OFFERING OF THE PREFERRED SECURITIES BY THE UNDERWRITERS. The Company and the Trust are advised that the Underwriters propose to make a public offering of the Firm Securities, on the terms and conditions set forth in the Registration Statement from time to time as and when the Representatives deem advisable after the Registration Statement becomes effective. Because the NASD is expected to view the Firm Securities as interests in a direct participation program, the offering of the Preferred Securities is being made in compliance with the applicable provisions of Rule 2810 of the NASD's Conduct Rules. SECTION 5. DELIVERY OF AND PAYMENT FOR THE PREFERRED SECURITIES. (a) Delivery to the Underwriters of, and payment to the Trust for, the Firm Securities shall be made at 10:00 a.m., New York, NY time, on the third (or if the Firm Securities are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m., on the fourth) full business day (such time and date being referred to as the "Closing Date") following the date of the initial public offering of the Firm Securities as advised to the Representatives by the Company, at such place as the Representatives shall designate. (b) Delivery to the Underwriters of, and payment for, any Additional Securities to be purchased by the Underwriters shall be made at such place as the Representatives shall designate, at 10:00 a.m., New York, NY time, on such date or dates (individually, an "Option Closing Date" and collectively, the "Option Closing Dates"), which may be the same as the Closing Date, but shall, in no event, be earlier than the Closing Date, as shall be specified in a written notice from the Representatives to the Offerors of the Underwriters' determination to purchase a number, specified in said notice, of Additional Securities. Any such notice may be given at any time within thirty (30) calendar days after the effective date of this Agreement. (c) The Preferred Securities will be delivered by the Trust to the Underwriters on the Closing Date or the applicable Option Closing Date, as the case may be, against payment of the Purchase Price therefor by wire transfer of same-day funds, payable to the order of the Trust to an account designated thereby. Delivery of the Preferred Securities may be made by credit through full fast transfer to the accounts at The Depository Trust Company designated by the Representatives. The Preferred 20 Securities shall be represented in the form of one or more fully registered global notes (the "Global Notes") in book-entry form registered in the name of the nominee of The Depository Trust Company. The Global Note(s) representing the Preferred Securities shall be made available for examination by the Representatives not later than 10:00 a.m., New York, NY time, on the last business day prior to the Closing Date or the applicable Option Closing Date, as the case may be, with any transfer taxes payable upon initial issuance or the transfer thereof duly paid by the Company for the respective accounts of the Underwriters against payment of the Purchase Price therefor. (d) The documents to be delivered on the Closing Date or on an Option Closing Date, as the case may be, by or on behalf of the parties hereto pursuant to Section 8 hereof, including the cross-receipt for the Preferred Securities to be purchased and any additional documents requested by the Underwriters, will be delivered at the offices of Venable, Baetjer and Howard, LLP, Suite 1800, 2 Hopkins Plaza, Baltimore, Maryland 21201, or such other location as the Representatives may designate (the "Closing Location"). (e) A meeting will be held at the Closing Location at 2:00 p.m., New York, NY time, on the business day next preceding Closing Date and each Option Closing Date, if any, or at such other time(s) as is mutually agreed upon by the parties hereto, at which meeting(s) the final drafts of the documents to be delivered pursuant to the preceding paragraph will be available for review by the parties hereto. SECTION 6. COVENANTS OF THE COMPANY AND THE TRUST. The Offerors, jointly and severally, covenant and agree with each of the Underwriters as follows: (a) The Offerors will use their respective best efforts to cause the Registration Statement, if not effective at the time of execution of this Agreement, to become effective as promptly as practicable thereafter. If required, the Offerors will file the Prospectus, and any amendments or supplements thereto, with the Commission in the manner, and within the time period, required by Rule 424(b) under the Securities Act. During any time when a prospectus relating to the Preferred Securities is required to be delivered under the Securities Act, each of the Offerors will comply in all material respects with all requirements imposed by the Securities Act and the Securities Act Rules and Regulations to the extent necessary to permit the continuance of sales of, or dealings in, the Preferred Securities in accordance with the provisions hereof and as contemplated by the Registration Statement and the Prospectus. With respect to any registration statement, prospectus, amendment (including any post-effective amendment), or supplement to be filed with the Commission in connection with the Preferred Securities, the Offerors will provide a copy of each such document to the Representatives a reasonable time prior to the date such document is proposed to be filed with the Commission. Any such registration statement, prospectus, amendment or supplement, when filed, will comply in all material respects with the Securities Act and the Securities Act Rules and Regulations. In the event that the Registration Statement is effective at the 21 time of execution of this Agreement, but the total number of Preferred Securities subject to this Agreement exceeds the number of Preferred Securities covered by the Registration Statement, the Offerors promptly will file with the Commission on the date hereof a registration statement pursuant to Rule 462(b) of the Rules and Regulations in accordance with the requirements of such Rule and will make payment of the filing fee therefor in accordance with the requirements of Rule 111(b) of the Rules and Regulations. (b) The Offerors will advise the Representatives promptly and, if requested by the Representatives, will confirm such advice in writing (i) when the Registration Statement, as amended, has become effective; (ii) if the provisions of Rule 430A of the Securities Act Rules and Regulations will be relied upon, when the Prospectus has been filed in accordance with said Rule 430A; (iii) when any post-effective amendment to the Registration Statement becomes effective; (iv) of any request made by the Commission for amendments or supplements to the Registration Statement, any Preliminary Prospectus or Prospectus or additional information; (v) of the issuance by the Commission, any state securities commission or any other regulatory authority of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto, preventing or suspending the use of any Preliminary Prospectus or Prospectus, any amendment or supplement thereto, or preventing or suspending the qualification of the securities for offering or sale in any jurisdiction, or the institution or threat of any investigation or proceedings for any such purposes by the Commission, any state securities commission or any other regulatory authority; and (vi) of the receipt of any comments from the Commission regarding the Registration Statement, any post-effective amendment thereto, the Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto. The Offerors will use their best efforts to prevent the issuance of any stop order by the Commission, and if at any time the Commission shall issue any stop order, the Offerors will use their best efforts to obtain the withdrawal of such stop order at the earliest possible moment. (c) The Offerors will cooperate with the Representatives, the Underwriters and counsel to the Underwriters in qualifying or registering the Preferred Securities for sale, or obtaining an exemption therefrom, under the securities or Blue Sky laws of such jurisdictions as the Representatives shall designate, and will continue such qualifications or registrations or exemptions in effect so long as requested by the Representatives to complete the distribution of the Preferred Securities. Notwithstanding the foregoing, neither of the Offerors shall be required to qualify as a foreign corporation or to file a general consent to service of process in any such jurisdiction where it is not presently qualified. (d) The Offerors consent to the use of the Prospectus (and any amendment or supplement thereto) by the Underwriters and all dealers to whom the Preferred Securities may be sold, in connection with the offering or sale of the Preferred Securities, and for such period of time thereafter as the Prospectus is required by law to be delivered in connection therewith. If, at any time when a prospectus relating to the 22 Preferred Securities is required under the Securities Act to be delivered in connection with sales of the securities by an underwriter or dealer, any event occurs as a result of which the Prospectus, as then amended or supplemented, would include any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading, or if it becomes necessary at any time to amend or supplement the Prospectus to comply with the Securities Act or the Securities Act Rules and Regulations, the Offerors promptly will so notify the Representatives and will prepare and file with the Commission an amendment to the Registration Statement or an amendment or supplement to the Prospectus which will correct such statement or omission or effect such compliance. The Offerors will provide a copy of each such amendment or supplement to the Representatives a reasonable time prior to the date on which it is proposed to be filed with the Commission. (e) As soon as practicable, but in any event not later than forty-five (45) calendar days after the end of the twelve (12) month period beginning on the day after the end of the fiscal quarter of the Offerors during which the effective date of the Registration Statement occurs (ninety (90) calendar days in the event that such quarter is the last fiscal quarter), the Offerors, to the extent not exempt pursuant to the Securities Act, the Securities Act Rules and Regulations or the exemptive authority of the Commission, will make generally available to their security holders, in the manner specified in Rule 158(b) of the Securities Act Rules and Regulations, and will deliver to the Representatives, an earnings statement which will be in the detail required by, and will otherwise comply with, the provisions of Section 11(a) of the Securities Act and Rule 158(a) of the Securities Act Rules and Regulations, which statement need not be audited unless required by the Securities Act or the Securities Act Rules and Regulations, covering a period of at least twelve (12) consecutive months after the effective date of the Registration Statement. (g) The Offerors will furnish, without charge, to the Representatives or on the Representatives' order, at such place as the Representatives may designate, copies of each Preliminary Prospectus, the Registration Statement and any amendments thereto, any registration statement filed pursuant to Rule 462(b) (of which copies two (2) will include all financial statements and exhibits) and the Prospectus, and all amendments and supplements thereto, in each case as soon as available and in such quantities as the Representatives may reasonably request. (h) Each of the Offerors will use its best efforts to cause the Preferred Securities to be duly approved for listing on the NYSE, subject to notice of issuance, prior to the Closing Date and to cause the Preferred Securities to remain listed for at least thirty-six (36) months thereafter. (i) None of the Offerors, any of the Subsidiaries or any of their officers, directors, trustees or affiliates, (within the meaning of the Securities Act Rules 23 and Regulations) will take, directly or indirectly, any action designed to, or which might reasonably be expected to, cause or result in stabilization or manipulation of the price of any securities of the Offerors. (j) The Offerors will apply the net proceeds from the sale of the Common Securities, the Preferred Securities and the Subordinated Debentures in the manner, and for the purposes, set forth in the Prospectus. Pending application of the net proceeds of the sale of the Common Securities, the Preferred Securities and the Subordinated Debentures in such manner, the Offerors will operate their businesses in such manner, and for such purposes, and each will invest such net proceeds in such securities so as not to become an "investment company" as such term is defined under the Investment Company Act. (k) To the extent not exempt pursuant to the Securities Act, the Securities Act Rules and Regulations or the exemptive authority of the Commission, each of the Offerors will timely file all such reports, forms or other documents as may be required from time to time, under the Securities Act, the Securities Act Rules and Regulations, the Exchange Act and the Exchange Act Rules and Regulations, and all such reports, forms and documents so filed will comply as to form and substance with the applicable requirements under the Securities Act, the Securities Act Rules and Regulations, the Exchange Act and the Exchange Act Rules and Regulations which may from time to time be applicable thereto. Each of the Offerors shall comply with the provisions of all undertakings contained in the Registration Statement. (l) Neither of the Offerors shall, prior to the exercise in full or expiration of the Underwriters' option to purchase Additional Securities, offer, sell, contract to sell or otherwise dispose of any securities issued or guaranteed by the Trust or the Company that, in the reasonable judgment of the Representatives are substantially similar to the Preferred Securities, without the prior written consent of the Representatives. (m) The Offerors will not, prior to the exercise in full or termination or expiration of the Underwriters' option to purchase the Additional Securities, incur any material liability or obligation, direct or contingent, or enter into any material transaction, other than in the ordinary course of business, except as described in or contemplated by the Registration Statement and the Prospectus. (n) Neither of the Offerors shall enter into any contractual agreement with respect to the distribution of the Preferred Securities except for the arrangements with the Underwriters pursuant hereto. (o) Each of the Offerors will use its best efforts to comply, or cause to be complied, with the conditions to the Underwriters' obligations set forth in Section 8 hereof. 24 SECTION 7. EXPENSES. (a) If the Underwriters purchase the Firm Securities in accordance with the terms of this Agreement, the Company shall pay all costs, expenses and fees incident to the performance of its obligations, and those of the Trust, under this Agreement including, without limitation, the costs and expenses associated with (i) the printing and filing of the Registration Statement as originally filed and any amendments and exhibits thereto; (ii) the filing fee of the NASD and expenses relating to any review of the offering and listing of the Preferred Securities on the NYSE; (iii) all costs and expenses incurred in connection with the preparation, issuance and delivery of the Preferred Securities to the Underwriters; (iv) the fees and disbursements of the Trust's and the Company's counsel and accountants; (v) all costs and expenses in connection with the qualification of the Preferred Securities under state securities laws in accordance with the provisions of Section 6(c), including filing fees and the reasonable fees and disbursements of counsel to the Underwriters in connection therewith and in connection with the preparation of the preliminary and final Blue Sky memoranda up to $10,000; (vi) the fees and expenses of the Property Trustee, the Delaware Trustee, the Indenture Trustee, and the Guarantee Trustee, and any agent of the Property Trustee, the Delaware Trustee, the Indenture Trustee, and the Guarantee Trustee, and the fees and disbursements of Trustees' counsel, in connection with the Trust Agreement and the issuance and delivery of the Preferred Securities. (b) If the purchase of the Firm Securities as herein contemplated is not consummated for any reason other than the Underwriters' default under this Agreement or by reason of Section 11(a) hereof, the Company shall pay all costs, expenses and fees incident to the performance of its obligations, and those of the Trust, under this Agreement and shall reimburse the several Underwriters for their reasonable out-of-pocket expenses (including but not limited to counsel fees and disbursements) in connection with any investigation made by them, and any preparation made by them in respect of marketing of the Firm Securities or in contemplation of the performance by them of their obligations hereunder; provided, however, that in no event shall the amount of such reimbursement exceed $125,000 in the aggregate. SECTION 8. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of each Underwriter to purchase and pay for the number of Firm Securities set forth opposite the name of such Underwriter in Schedule I on the Closing Date, and the ratable portion of any Additional Securities on any Option Closing Date, are subject to the continuing accuracy of the representations and warranties of the Offerors contained herein as of the date hereof, as of the Closing Date and as of any such Option Closing Date, as the case may be, as if they had been made on, and as of, the Closing Date or any such Option Closing Date; the accuracy, on, and as of, the Closing Date or any such Option Closing Date, of the statements of officers or trustees of the Offerors, as the case may be, made pursuant to the provisions hereof; the performance by the Offerors, on and 25 as of the Closing Date or any such Option Closing Date, of their respective covenants and agreements hereunder; and the following additional conditions: (a) The Registration Statement shall have been declared effective, and the Prospectus (containing the information omitted pursuant to Rule 430(A)) shall have been filed with the Commission not later than the Commission's close of business on the second business day following the date hereof or such later time and date to which the Representatives shall have consented. No stop order suspending the effectiveness of the Registration Statement, or any post-effective amendment thereto, or any order preventing or suspending the use of any Prospectus, or any amendment or supplement thereto, shall have been issued, and no proceedings for that purpose shall have been instituted or shall be pending or, to the best knowledge of the Offerors or the Representatives, shall be contemplated or threatened by the Commission. The Offerors shall have complied with any request of the Commission for additional information (to be included in the Registration Statement or the Prospectus or otherwise). No stop orders suspending the sale of the Preferred Securities in any jurisdiction referred to in Section 6(c) shall have been issued, and no proceedings for that purpose shall have been instituted or shall be pending or, to the best knowledge of the Offerors or the Representatives, shall be contemplated or threatened by the officials of any such jurisdiction. (b) The Representatives shall not have advised the Offerors that the Registration Statement contains an untrue statement of fact which, in the Representatives' opinion, is material, or omits to state a fact which, in the Representatives' opinion, is material and is required to be stated therein or is necessary to make the statements therein not misleading, or that the Prospectus, or any supplement thereto, contains an untrue statement of fact which, in the Representatives' opinion, is material, or omits to state a fact which, in the Representatives' opinion, is material and is required to be stated therein or is necessary to make the statements therein not misleading. (c) On or prior to the Closing Date, and the Option Closing Date, if any, the Representatives shall have received from counsel to the Underwriter, such opinion or opinions with respect to the issuance and sale of the Common Securities, the Preferred Securities and the Subordinated Debentures, the Registration Statement and the Prospectus and such other related matters as the Representatives reasonably may request, and such counsel shall have received such documents and other information as it requests to enable it to pass upon such matters. (d) On the Closing Date, and the Option Closing, if any, the Representatives shall receive: (i) The favorable opinion, dated as of the Closing Date or the Option Closing Date, of Sullivan & Cromwell, counsel to the Company, substantially in the form and substance of Exhibit A-1 attached hereto, and the favorable opinion of Jerrold Gilbert, Esq., General Counsel of the Company, substantially in the form of 26 Exhibit A-2 attached hereto. In rendering such opinion, each counsel may state that it is passing only on matters of New York, Delaware and United States federal law. In rendering such opinion, each counsel may rely upon an opinion or opinions, each dated the Closing Date or Option Closing Date, of other counsel retained by it, the Company or the Trust as to laws of any jurisdiction other than the United States or the State of New York, provided that (A) such reliance is expressly authorized by each opinion so relied upon and a copy of each such opinion is delivered to the Underwriter and (B) counsel to the Company shall state in its opinion that it and the Underwriters are justified in relying thereon. Insofar as such opinions involve factual matters, such counsel may rely, to the extent such counsel deems proper, upon certificates of officers and trustees of the Company, any of the Subsidiaries and the Trust, as the case may be, and certificates of public officials. (ii) The favorable opinion, dated the Closing Date or the Option Closing Date, of Richards, Layton & Finger, P.A., counsel to The Bank of New York, as the Delaware Trustee, the Property Trustee, the Debenture Trustee and the Guarantor Trustee, substantially in the form and substance of Exhibit B attached hereto. (iii) The favorable opinion, dated the Closing Date or the Option Closing Date, of Richards, Layton & Finger, P.A., special Delaware counsel to the Company and the Trust, substantially in the form and substance of Exhibit C attached hereto. In rendering the opinions contemplated by clauses (ii) and (iii) above, counsel may rely upon an opinion or opinions, each dated the Closing Date or such Option Closing Date, of other counsel retained by it or the Company as to laws of any jurisdiction other than the United States or the State of Delaware, provided that (A) such reliance is expressly authorized by each opinion so relied upon and a copy of each such opinion is delivered to the Representatives and (B) counsel shall state in its opinion that it believes that it and the Underwriters are justified in relying thereon. Insofar as such opinions involve factual matters, such counsel may rely, to the extent such counsel deems proper, upon certificates of officers and trustees of the Company, any of the Subsidiaries and the Trust, as the case may be, and certificates of public officials, provided that copies of all such opinions shall be attached to the opinion. (e) On or prior to the Closing Date and each Option Closing Date, if any, counsel to the Underwriters shall have been furnished such documents, certificates and opinions as they may reasonably request in order to evidence the accuracy, completeness or satisfaction of any of the representations or warranties of the Company or the Trust or conditions herein contained. (f) On the date hereof the Representatives shall have received a "cold comfort" letter from KPMG LLP, independent certified public accountants, dated such date and addressed to the Underwriters, in form and substance satisfactory to the 27 Representatives, with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus. (g) On the Closing Date, and each Option Closing Date, if any, the Representatives shall have received from KPMG LLP a letter, dated as of the such date, to the effect that they reaffirm the statements made in the letter furnished pursuant to Section 8(f). (h) On the Closing Date and each Option Closing Date, if any, the Underwriters shall have received a certificate, dated such date, of the President and the principal financial or accounting officer of the Company to the effect that each such person has carefully examined the Registration Statement and the Prospectus, and any amendments or supplements thereto, and this Agreement, and that, to the best of such officer's knowledge: (i) the representations and warranties of the Company in this Agreement are true and correct in all material respects, as if made on, and as of, the Closing Date or the applicable Option Closing Date, as the case may be, and the Company has complied with all agreements and covenants and satisfied all conditions contained in this Agreement on its part to be performed or satisfied at or prior to the Closing Date or such Option Closing Date; (ii) no stop order suspending the effectiveness of the Registration Statement or post-effective amendment thereto or suspending the use of any Prospectus or amendment or supplement thereto or the qualification of the Preferred Securities for offering or sale has been issued, and no proceedings for that purpose have been instituted or are pending or, to the best knowledge of each such person, are contemplated or threatened under the Securities Act or any applicable state securities or Blue Sky statute, and any and all filings required by Rule 424, Rule 430A and Rule 462(b) have been timely made; (iii) the Registration Statement and Prospectus and, if any, each amendment and each supplement thereto, contain all statements and information required by the Securities Act or the Securities Act Rules and Regulations to be included therein, and neither the Registration Statement or the Prospectus, nor any amendment or supplement thereto, includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and (iv) Since the respective dates as of which information is given in the Prospectus, and except as otherwise may be stated therein or contemplated thereby: (A) none of the Company, any Subsidiary or the Trust has entered into any transaction or incurred any liability or obligation, direct, contingent or otherwise, which is material to the Company and the Subsidiaries, taken as a whole or to the Trust; (B) there has not been any 28 change in the outstanding capital stock of the Company or any material increase in the long-term debt of the Company or any Subsidiary, except indebtedness and deposit liabilities incurred by the Bank Subsidiary in the ordinary course of its banking business, or any event or circumstance giving rise to a Material Adverse Effect (as hereinafter defined) relating to the Company, any Subsidiary or the Trust; (C) none of the Company, any Subsidiary or the Trust has sustained any loss or damage (whether or not insured) which has resulted in, or reasonably could be expected, individually or in the aggregate, to result in, a Material Adverse Effect to the Company, any Subsidiary or the Trust; (D) there has not been any material interference with the business of the Company or any Subsidiary or of the Trust from any labor dispute or court or governmental action, order or decree; (E) the Company has not paid or declared any dividend or other distribution with respect to its capital stock except for the Dividend; (F) there has not been any change, contingent or otherwise, in the direct or indirect control of the Company, any Subsidiary or the Trust and, to the best knowledge of the Offerors, there do not exist any circumstances which would reasonably be expected to result in such a change; (G) there is no litigation pending or, to the best knowledge of the Offerors, threatened against the Company, any Subsidiary or the Trust which is required by the Securities Act and the Securities Act Rules and Regulations to be set forth in the Registration Statement or the Prospectus (or any documents incorporated therein by reference) which has not been so set forth; and (H) there has not occurred any other event, and there has arisen no set of circumstances required by the Securities Act and the Securities Act Rules and Regulations to be set forth in the Registration Statement or the Prospectus, which has not been so set forth. References to the Registration Statement and the Prospectus in this Section 8(h) are to such documents as amended and supplemented at the date of the certificate required hereby. (i) On the Closing Date, and each Option Closing Date, if any, the Underwriters shall have received a certificate, dated the Closing Date, of the Administrators to the effect that each such Administrator has carefully examined the Registration Statement and the Prospectus, and any amendments or supplements thereto, and this Agreement, and that to the best of such Administrators' knowledge: (A) the representations and warranties of the Trust in this Agreement are true and correct in all material respects, as if made on, and as of, the Closing Date and each Option Closing Date, if any, and the Trust has complied with all agreements and covenants and satisfied all conditions contained in this Agreement on its part to be performed or satisfied at or prior to the Closing Date or such Option Closing Date; (B) no stop order suspending the effectiveness of the Registration Statement, or any post-effective amendment thereto, suspending the use of any Prospectus, or any amendment or supplement thereto, or suspending the qualification of the Preferred Securities for offering or sale has been issued, and no proceedings for 29 that purpose have been instituted or are pending or, to the best knowledge of each such person, are contemplated or threatened under the Securities Act or any applicable state securities or Blue Sky statute, and any and all filings required by Rule 424, Rule 430A and Rule 462(b) have been timely made; and (C) the Registration Statement and Prospectus and, if any, each amendment and supplement thereto, contain all statements and information required by the Securities Act and the Rules and the Securities Act Regulations to be included therein, and neither the Registration Statement or the Prospectus nor any amendment or supplement thereto includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading. References to the Registration Statement and the Prospectus in this Section 8(i) are to such documents as amended and supplemented at the date of the certificate required hereby. (j) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus up to and including the Closing Date or the applicable Option Closing Date, as the case may be, there has not been a material adverse change in the business or financial condition of the Company and its subsidiaries considered as one enterprise, or the Trust, as the case may be that, in each case in the judgment of the Representatives, makes it impractical or inadvisable to make or consummate the public offering, sale or delivery of the Preferred Securities on the terms and in the manner contemplated in the Prospectus and the Registration Statement. (k) Prior to the Closing Date, the Preferred Securities shall have been duly authorized for listing, subject to notice of issuance, on the NYSE. (l) Prior to the Closing Date, the Preferred Securities shall have been qualified under the securities or Blue Sky laws of such jurisdictions as the Representatives shall have designated or an exemption therefrom shall be available; (m) Prior to the Closing Date, the legality and sufficiency of the authorization, issuance and sale or transfer and sale of the Preferred Securities hereunder, the execution and delivery of this Agreement and all corporate proceedings and other legal matters incident thereto, and the form of the Registration Statement and the Prospectus (except financial statements) shall have been approved by counsel to the Underwriters exercising reasonable judgment. (n) Prior to the Closing Date, the NASD, upon review of the terms of the public offering of the Preferred Securities contemplated hereby, shall have indicated that it has no objection to the underwriting arrangements pertaining to the sale of the 30 Preferred Securities and the Underwriters' participation in the sale of the Preferred Securities as so contemplated. All opinions, certificates, letters and documents to be furnished by the Offerors will comply with the provisions hereof only if they are reasonably satisfactory in all material respects to the Representatives and to counsel for the Underwriters. The Offerors shall furnish the Underwriters with manually signed or conformed copies of such opinions, certificates, letters and documents in such quantities as the Representatives reasonably request. The certificates delivered under this Section 8 shall constitute representations, warranties and agreements of the Offerors as to all matters set forth therein as fully and effectively as if such matters had been set forth in Section 2 of this Agreement. If any condition to the Underwriters' obligations hereunder to be satisfied prior to or at the Closing Date or any Option Closing Date is not so satisfied or waived by the Representatives, in their discretion, this Agreement, at the Representatives' election, will terminate upon notification to the Offerors without liability on the part of any Underwriter (including the Representatives), or the Offerors, except for the expenses to be paid by the Company pursuant to Section 7 hereof and except to the extent provided in Section 9 hereof. SECTION 9. INDEMNIFICATION. (a) The Offerors agree, jointly and severally, to indemnify and hold harmless each Underwriter, and its officers, directors, partners, employees and agents and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all losses, claims, damages, liabilities or expenses whatsoever (which shall include, for all purposes of this Section 9, but not be limited to, attorneys' fees and any and all fees and expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever and any and all amounts paid in settlement), joint or several (and actions in respect thereof), to which such Underwriter, officer, director, partner, employee, agent, counsel or controlling person may become subject, under the Securities Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or the Prospectus or any Preliminary Prospectus, or any Blue Sky application or other document executed by the Offerors specifically for the purposes of qualifying, or based upon written information furnished by the Offerors in any state or other jurisdiction in order to qualify, any or all of the Preferred Securities under the securities or Blue Sky laws thereof (any such application, document or information being hereinafter called a "Blue Sky Application"), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not 31 misleading, and will reimburse, as incurred, expenses of such Underwriter, partner, employee, agent or controlling person in connection with investigating, defending or appearing as a third party witness in connection with any such loss, claim, damage, liability, expense or action; provided, however, that neither of the Offerors will be liable in any such case to the extent that any such loss, claim, damage, liability, expense or action arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in any of such documents in reliance upon and in conformity with information furnished in writing to the Offerors on behalf of such Underwriter through the Representatives expressly for use therein (as identified in Section 9(b) hereof); and provided, further, that such indemnity with respect to any Preliminary Prospectus shall not inure to the benefit of any Underwriter (or to the benefit of any person controlling such Underwriter) from whom the person asserting any such loss, claim, damage, liability or action purchased Preferred Securities which are the subject thereof to the extent that any such loss, claim, damage, liability or action (i) results from the fact that such Underwriter failed to send or give a copy of the Prospectus to such person at or prior to the confirmation of the sale of such Preferred Securities to such person in any case where such delivery is required by the Securities Act or (ii) arises out of or is based upon an untrue statement or omission of a material fact contained in such Preliminary Prospectus that was corrected in the Prospectus, unless such failure resulted from non-compliance by the Offerors with Section 6(d) hereof. The indemnity agreement in this Section 9(a) shall be in addition to any liability which the Offerors may otherwise have. (b) Each of the Underwriters agrees severally, but not jointly, to indemnify and hold harmless the Offerors, each of their respective directors or trustees, as the case may be, each of their respective officers or Administrators, as the case may be, who has signed the Registration Statement, their respective employees and agents and each person, if any, who controls either of the Offerors within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all losses, claims, damages, liabilities or expenses whatsoever (which shall include, for all purposes of this Section 9, but not be limited to, attorneys' fees and any and all fees and expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever and any and all amounts paid in settlement), (and actions in respect thereof) to which the Offerors or any such director, trustee, Administrator, officer, employee, agent or controlling person may become subject, under the Securities Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or the Prospectus or any Preliminary Prospectus, or in any Blue Sky Application, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with information 32 furnished in writing by the Underwriters through the Representatives to the Offerors expressly for use therein. The Company and the Trust acknowledge that the statements with respect to the public offering of the Preferred Securities set forth under the caption "Underwriting" and the stabilization legend in the Prospectus have been furnished by the Underwriters to the Offerors expressly for use therein and constitute the only information furnished in writing by or on behalf of the Underwriters for inclusion in the Prospectus. The indemnity agreement contained in this Section 9(b) shall be in addition to any liability which the Underwriters may otherwise have. (c) Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against one or more indemnifying parties under this Section 9, notify such indemnifying party or parties of the commencement thereof; but the failure so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under Section 9(a) or Section 9(b) to the extent that the indemnifying party was not actually prejudiced by such omission. In case any such action is brought against an indemnified party and it notifies an indemnifying party or parties of the commencement thereof, the indemnifying party or parties against which a claim is to be made will be entitled to participate therein and, to the extent that it or they may wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party has reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and otherwise to participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, which approval shall not be unreasonably denied or delayed, the indemnifying party will not be liable to such indemnified party under this Section 9 for any legal or other expenses (other than the reasonable costs of investigation) subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party has employed such counsel in connection with the assumption of such different or additional legal defenses in accordance with the proviso to the immediately preceding sentence, (ii) the indemnifying party has not employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, or (iii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) at the same time for all such indemnified parties and that all such fees and 33 expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Ferris, Baker Watts, in the case of parties indemnified pursuant to Section 9(a), and by the Company, in the case of parties indemnified pursuant to Section 9(b). No indemnifying party shall be liable in the event of any settlement of any such action effected without its consent except as provided in Section 9(e) hereof. (d) If the indemnification provided for in this Section 9 is unavailable or insufficient to hold harmless an indemnified party under Section 9(a) or Section 9(b) above in respect of any losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (or actions in respect thereof) (i) in such proportion as is appropriate to reflect the relative benefits received by each of the contributing parties, on the one hand, and the party to be indemnified, on the other hand, from the offering of the Preferred Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above and the indemnifying party was actually prejudiced by such omission, then in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of each of the contributing parties, on the one hand, and the party to be indemnified, on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, if applicable, the extent that the indemnifying party was actually prejudiced by the failure of the indemnified party to give the notice required under subsection (c) above, as well as any other relevant equitable considerations. In any case where the Company and/or the Trust is a contributing party and the Underwriters are the indemnified party, the relative benefits received by the Company and/or the Trust on the one hand, and the Underwriters, on the other hand, shall be deemed to be in the same proportion as the total net proceeds from the initial offering and issuance of the Preferred Securities (before deducting expenses) bear to the total underwriting compensation received by the Underwriters hereunder, in each case as set forth in the table on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and/or the Trust or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to above in this Section 9(d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 9(d), the Underwriters shall not be required to contribute any amount in excess of the underwriting discounts applicable to the Preferred Securities purchased by the Underwriters hereunder. The Underwriters' obligations to contribute pursuant to this Section 9(d) are several in proportion to their respective underwriting obligations, and not joint. No person guilty of 34 fraudulent misrepresentations (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9(d), (i) each person, if any, who controls an Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Underwriter and (ii) each director of the Company, each trustee of the Trust, each officer of the Company or trustee of the Trust who has signed the Registration Statement, and each person, if any, who controls the Company or the Trust within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company or the Trust, as the case may be. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect to which claim for contribution may be made against another party or parties under this Section 9(d), notify such party or parties from whom contribution may be sought, but the omission so to notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any other obligation (x) it or they may have hereunder or otherwise than under this Section 9(d) or (y) to the extent that such party or parties were not actually prejudiced by such omission. The contribution agreement set forth above shall be in addition to any liabilities which any indemnifying party may otherwise have. (e) No indemnifying party shall, without the prior written consent of the indemnified parties, settle, compromise or consent to the entry of any judgement with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 9 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party and all liability arising out of such litigation, investigation, proceeding or claim, and (ii) does not include a statement as to or an admission of fault, culpability or the failure to act by or on behalf of any indemnified party. SECTION 10. REPRESENTATIONS, ETC. TO SURVIVE DELIVERY. The representations, warranties, agreements, covenants, indemnities and statements contained shall remain in full force and effect, regardless of (a) any termination of this Agreement; (b) any investigation made by or on behalf of the Underwriters or by or on behalf of any person controlling the Underwriters, or by or on behalf of the Offerors; and (c) delivery of and payment for the Preferred Securities. SECTION 11. EFFECTIVE DATE AND TERMINATION. (a) This Agreement shall become effective at 9:00 a.m., New York, NY time, on the first business day following the date hereof, or at such earlier time after the Registration Statement becomes effective as the Representatives, in their sole discretion, shall release the Preferred Securities for the sale to the public, unless prior to 35 such time the Representatives shall have received written notice from the Company on behalf of itself and the Trust that they elect that this Agreement shall not become effective, or the Representatives shall have given written notice to the Offerors that the Representatives on behalf of the Underwriters elects that this Agreement shall not become effective; provided, however, that the provisions of this Section 11 and of Section 7 and Section 9 hereof shall at all times be effective. For purposes of this Section 11(a), the Preferred Securities to be purchased hereunder shall be deemed to have been so released upon the earlier of notification by the Representatives to securities dealers releasing such Preferred Securities for offering or the release by the Representatives for publication of the first newspaper advertisement which is subsequently published relating to the Preferred Securities. (b) This Agreement (except for the provisions of Sections 7 and 9 hereof) may be terminated by the Representatives by written notice to the Company and the Trust in the event that either of the Offerors has failed to comply in any respect with any of the provisions of this Agreement required on its part to be complied with at or prior to the Closing Date or any Option Closing Date, or if any of the representations or warranties of the Offerors are not accurate in any respect or if the covenants, agreements or conditions of, or applicable to, the Offerors herein contained have not been complied with in any respect or satisfied within the time specified or the Closing Date or any Option Closing Date, as the case may be, or if prior to the Closing Date or Option Closing Date: (i) the Company, any of the Subsidiaries or the Trust shall have sustained a loss by strike, fire, flood, accident or other calamity of such a character, as to interfere materially with the conduct of the business and operations of the Company and its Subsidiaries considered as one enterprise, or the Trust, as the case may be, regardless of whether or not such loss was insured; (ii) trading in the securities of the Company or in securities generally on the New York Stock Exchange shall have been suspended or a material limitation on such trading shall have been imposed or minimum or maximum prices shall have been established on either such exchange or market; (iii) a general banking moratorium shall have been declared by New York, Delaware or United States authorities; (iv) there shall have been an outbreak or escalation of hostilities between the United States and any foreign power or an outbreak or escalation of any other insurrection or armed conflict involving the United States if the effect of any such event in the judgment of the Representatives makes it impractical or inadvisable to proceed with the public offering or the delivery of the Preferred Securities on the terms and in the manner contemplated in the Prospectus; 36 (v) there shall have occurred any material adverse market conditions involving the United States, or any change in national political, financial or economic conditions, the effect of which in the judgment of the Representatives makes it impractical or inadvisable to proceed with the public offering or the delivery of the Preferred Securities on the terms and in the manner contemplated in the Prospectus; (vi) the Company's independent public accountants shall have imposed qualifications in certifying to material items including, without limitation, information in the footnotes to the financial statements or matters incident to the issuance and sale of the Common Securities, the Preferred Securities or the Subordinated Debentures; or (vii) there shall have been a material adverse change in the business or financial condition of the Company and its Subsidiaries considered as one enterprise, or the Trust, as the case may be that, in each case, in the judgment of the Representatives, makes it impracticable or inadvisable to make or consummate the public offering, sale or delivery of the Preferred Securities on the terms and in the manner contemplated in the Prospectus and the Registration Statement. (c) Termination of this Agreement shall be without liability of any party to any other party other than as provided in Sections 7 and 9 hereof. SECTION 12. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters shall fail or refuse (otherwise than for a reason sufficient to justify the termination of this Agreement under the provisions of Section 8 or 11 hereof) to purchase and pay for the number of Preferred Securities agreed to be purchased by such Underwriter or Underwriters upon tender of such number of Preferred Securities in accordance with the terms hereof, and the number of such Preferred Securities shall not exceed ten percent (10%) of the Preferred Securities required to be purchased on the Closing Date, then, each of the non-defaulting Underwriters shall purchase and pay for (in addition to the number of such Preferred Securities which it has severally agreed to purchase hereunder) its proportionate share (based on the monetary obligations of the several Underwriters hereunder on account of the purchase of Preferred Securities, excluding the Preferred Securities allocable to the defaulting Underwriter or Underwriters) which the defaulting Underwriter or Underwriters shall have so failed or refused to purchase on such Closing Date. In such case, the Representatives, on behalf of the Underwriters, shall have the right to postpone the Closing Date to a date not exceeding seven (7) full business days after the date originally fixed as such Closing Date pursuant to the terms hereof in order that any necessary changes in the Registration Statement, the Prospectus or any other documents or arrangements may be made. If one or more of the Underwriters shall fail or refuse (otherwise than for a reason sufficient to justify the termination of this Agreement under the provisions of Section 8 or 11 hereof) to purchase and pay for the number of Preferred Securities agreed 37 to be purchased by such Underwriter or Underwriters upon tender to the Representatives on behalf thereof of such Preferred Securities in accordance with the terms hereof and the number of such Preferred Securities shall equal or exceed ten percent (10%) of the Preferred Securities required to be purchased by all the Underwriters on the Closing Date (unless within forty-eight (48) hours after such default arrangements to the satisfaction of the Representatives shall have been made for the purchase of the defaulted Preferred Securities by an Underwriter or Underwriters) and subject to the provisions of Section 11(b) hereof, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or on the part of the Company or the Trust except as otherwise provided in Sections 7 and 9 hereof. As used in this Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section 12. Nothing in this Section 12, and no action taken hereunder, shall relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. SECTION 13. DEFAULT BY THE COMPANY OR THE TRUST. If the Trust shall fail at the Closing Date to sell and deliver the number of Preferred Securities which it is obligated to sell hereunder or the Company fails to deliver the number of Subordinated Debentures required to be delivered pursuant to the Trust Agreement, then this Agreement shall terminate without any liability on the part of any non-defaulting party. Nothing in this Section 13 shall relieve the Trust or the Company so defaulting from liability, if any, in respect of such default. SECTION 14. NOTICES. All communications hereunder shall be in writing and if sent to the Representatives shall be mailed or delivered or sent by facsimile transmission and confirmed by letter to Ferris, Baker Watts, Incorporated at 100 Light Street, Baltimore, MD 21202, Attention: Steven L. Shea (facsimile number: (410) 659-4632) or, if sent to the Company or the Trust, shall be mailed or delivered or sent by facsimile transmission and confirmed by letter to the Company at 650 Fifth Avenue, New York, NY 10019-6108, Attention: John W. Tietjen (facsimile number: (212) 757-8287). SECTION 15. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon the Company, the Trust and each Underwriter and the respective successors and legal representatives thereof, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person, except that the representations, warranties, indemnities and contribution agreements of the Company and the Trust contained in this Agreement shall also be for the benefit of the officers, directors, partners, employees and agents of each Underwriter and any person or persons, if any, who control any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and except that the Underwriters' indemnity and contribution agreements shall also be for the benefit of the directors of the Company, the trustees of the Trust, the officers of the Company who have 38 signed the Registration Statement on behalf of the Company or in the Company's role as Depositor under the Trust Agreement, the Administrators of the Trust, their respective employees and agents, and any person or persons, if any, who control the Company or the Trust within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act. No purchaser of Preferred Securities from the Underwriters will be deemed a successor because of such purchase. SECTION 16. APPLICABLE LAW; JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the choice of law or conflict of law principles thereof. Each party hereto consents to the jurisdiction of each court in which any action is commenced seeking indemnity or contribution pursuant to Section 9 above and agrees to accept, either directly or through an agent, service of process of each such court. SECTION 17. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. 39 * * * * * * * If the foregoing is in accordance with your understanding, please sign and return to us three (3) counterparts hereof, and upon your acceptance hereof, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement among each of the Underwriters, the Company and the Trust in accordance with the terms hereof. Very truly yours, STERLING BANCORP By: ________________________________ Name: Title: STERLING BANCORP TRUST I By: STERLING BANCORP AS DEPOSITOR By: ________________________________ Name: Title: ACCEPTED AS OF THE DATE HEREOF FERRIS, BAKER WATTS, INCORPORATED 100 LIGHT STREET BALTIMORE, MD 21202 BY: FERRIS, BAKER WATTS, INCORPORATED ON BEHALF OF EACH OF THE UNDERWRITERS By: ________________________________ Name: Title: RYAN, BECK & CO., LLC 220 SOUTH ORANGE AVENUE 40 LIVINGSTON, NJ 07039-5817 BY: RYAN, BECK & CO., LLC ON BEHALF OF EACH OF THE UNDERWRITERS By: ________________________________ Name: Title: 41 SCHEDULE I NUMBER OF PREFERRED SECURITIES TO BE PURCHASED BY EACH UNDERWRITER
Number of Preferred Securities to be Name of Underwriter Percentage Purchased from the Trust - -------------------------------------- ---------- ------------------------------------ Ferris, Baker Watts, Incorporated Ryan, Beck & Co., LLC
EXHIBIT A-1 TO UNDERWRITING AGREEMENT The opinion of counsel to the Company to be delivered pursuant to Section 8(d)(i)(A) of the Underwriting Agreement shall be substantially to the effect that: (1) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (2) The Indenture and the Guarantee Agreement have been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended, and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (3) The Expense Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (4) The Trust Agreement has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended. (5) The ___% Junior Subordinated Deferrable Interest Debentures of the Company, issued and sold to the Issuer pursuant to the Indenture and the Trust Agreement in an aggregate principal amount of $_________, have been duly authorized, executed and delivered by the Company and, when duly authenticated in accordance with the Indenture and delivered and paid for in accordance with the Trust Agreement, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (6) The filing of the Registration Statement or any amendment thereto and the execution and delivery by the Company of the Guarantee, the Underwriting Agreement, the Indenture, the Trust Agreement and the Expense Agreement do not, and the issuance of the Junior Subordinated Debentures being issued at the Closing Date in accordance with the Indenture, the sale by the Company of the Junior Subordinated Debentures as contemplated in the Prospectus and the performance by the Company of its obligations under the Trust Agreement, the Indenture, the Guarantee, the Expense Agreement, the Underwriting Agreement and the Junior Subordinated Debentures will not, violate the Company's Certificate of Incorporation, as amended, or By-laws, in each case as in effect at the date hereof, or violate any existing Federal law of the United States or law of the State of New York applicable to the Company; provided, however, that we express no opinion with respect to antifraud laws, fraudulent transfer laws, the Employee Retirement Income Security Act of 1974 and related laws and laws that restrict transactions between United States persons and citizens or residents of certain foreign countries; and provided, further, that insofar as performance by the Company of its obligations under the Indenture, the Trust Agreement, the Underwriting Agreement, the Guarantee, the Expense Agreement and the Junior Subordinated Debentures is concerned, we express no opinion as to bankruptcy, insolvency, reorganization, moratorium and similar laws of Federal applicability relating to or affecting creditors' rights. (7) All regulatory consents, authorizations, approvals and filings required to be obtained or made by the Company, as the case may be, on or prior to the date hereof under the Federal laws of the United States and the laws of the State of New York, for the issuance, sale and delivery by the Company to the Trust of the Junior Subordinated Debentures, for the issuance and sale by the Trust of the Trust Preferred Securities and the execution and delivery by the Company of the Guarantee, the Underwriting 44 Agreement, the Indenture, the Trust Agreement and the Expense Agreement, have been obtained or made. (8) The Trust is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (9) We do not know of any documents that are required to be filed as exhibits to the Registration Statement and are not so filed or of any documents that are required to be summarized in the Prospectus and are not so summarized. (10) [Standard S&C Registration Statement Letter] 45 EXHIBIT A-2 TO UNDERWRITING AGREEMENT The opinion of the General Counsel of the Company to be delivered pursuant to Section 8(d)(i) of the Underwriting Agreement shall be substantially to the effect that: 1. The Company has been duly incorporated and is an existing corporation in good standing under the laws of the State of New York. The Bank has been duly organized and is an existing national banking association in good standing under the laws of the United States. Each of the Company and the Bank has the corporate power and authority to own its properties and conduct its business as described in the Prospectus, dated _______, 2002. Neither the Company nor the Bank is required to be qualified as a foreign corporation for the transaction of business under the laws of any other jurisdiction in which it owns or leases properties or conducts any business, except where the failure to so qualify or be in good standing would not result in a Material Adverse Effect. The Company is duly registered as a financial holding company under the Bank Holding Company Act of 1956, as amended. 2. The filing of the Registration Statement or any amendment thereto and the execution and delivery by the Company of the Guarantee, the Underwriting Agreement, the Indenture, the Trust Agreement and the Expense Agreement do not, and the issuance of the Junior Subordinated Debentures being issued at the Closing Date in accordance with the Indenture, the sale by the Company of the Junior Subordinated Debentures as contemplated in the Prospectus and the performance by the Company of its obligations under the Trust Agreement, the Indenture, the Guarantee, the Expense Agreement, the Underwriting Agreement and the Junior Subordinated Debentures will not, result in a default under, or breach of, any material agreement or debt instrument to which the Company or any of its Subsidiaries is a party, as in effect at the date hereof. 3. The statements set forth in the Registration Statement under the caption "Regulatory Considerations", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate. 4. Other than as set forth in the Prospectus, there are no pending proceedings or investigations or, to the best knowledge of counsel, threatened proceedings or investigations, before any court or other government body that are required to be disclosed in the Registration Statement or Prospectus which are not so disclosed. 5. All eligible deposit accounts issued by the Bank are insured by the FDIC up to the maximum applicable amount in accordance with applicable law and the rules and regulations of the FDIC. 6. The Bank is in good standing with the Comptroller of the Currency; the Company is in good standing with the Federal Reserve Board; and Sterling Banking Corporation is in good standing with the Banking Department of the State of New York. The activities of the Company, the Bank Subsidiary and Sterling Banking Corporation are permitted under applicable federal and state banking laws, rules and regulations. A-2 EXHIBIT B TO UNDERWRITING AGREEMENT The opinion of counsel to the Property Trustee and the Delaware Trustee under the Trust Agreement, the Indenture Trustee under the Indenture and the Guarantee Trustee under the Guarantee to be delivered pursuant to Section 8(d)(ii) of the Underwriting Agreement shall be substantially to the effect that: (A) [Trust Company] has been duly incorporated and is validly existing as a corporation in good standing under the laws of Delaware. (B) [Trust Company] has all power and authority necessary to execute, deliver and perform its obligations as Property Trustee under the Trust Agreement, Indenture Trustee under the Indenture and Guarantee Trustee under the Guarantee Agreement and has taken all necessary action to authorize the execution, delivery and performance, by it, of the Trust Agreement, the Indenture and the Guarantee Agreement. (C) Each of the Trust Agreement, the Indenture and the Guarantee Agreement has been duly authorized, executed and delivered by [Trust Company] and constitutes a legal, valid and binding obligation of [Trust Company], enforceable against [Trust Company], in accordance with its terms. (D) The execution, delivery and performance by [Trust Company] of the Trust Agreement, the Indenture and the Guarantee Agreement do not conflict with, or constitute a breach of, the charter or by-laws of [Trust Company]. (E) No consent, approval or authorization of, or registration with or notice to, any governmental authority or agency of the State of Delaware or the United States of America governing the banking or trust powers of [Trust Company] is required for the execution, delivery or performance by [Trust Company] of the Trust Agreement, the Indenture and the Guarantee Agreement. (F) The Junior Subordinated Debentures delivered on the Closing Date (or an Option Closing Date, as the case may be) have been duly authenticated by the Indenture Trustee in accordance with the terms of the Indenture. EXHIBIT C TO UNDERWRITING AGREEMENT The opinion of special Delaware counsel to the Company and the Trust to be delivered pursuant to Section 8(d)(iii) of the Underwriting Agreement shall be substantially to the effect that: (A) The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Act, and all filings required as of the date hereof under the Delaware Act with respect to the creation and valid existence of the Trust as a business trust have been made. (B) Under the Trust Agreement and the Delaware Act, the Trust has all trust power and authority necessary to own property and to conduct its business, all as described in the Prospectus. (C) The Trust Agreement constitutes a valid and binding obligation of the Company and each of the Property Trustee, the Delaware Trustee and each of the Administrative Trustees, and is enforceable against the Company and each of the Property Trustee, the Delaware Trustee and each of the Administrative Trustees, in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors' rights and by the application of equitable principles relating to the availability of remedies). (D) Under the Trust Agreement and the Delaware Act, the Trust has the trust power and authority (i) to execute and deliver, and to perform its obligations under, the Underwriting Agreement and (ii) to issue, and to perform its obligations under, the Preferred Securities and the Common Securities. (E) Under the Trust Agreement and the Delaware Act, the execution and delivery by the Trust of the Underwriting Agreement, and the performance by it of its obligations thereunder, have been duly authorized by all necessary trust action on the part of the Trust. (F) Under the Delaware Act and the Trust Agreement, the certificate attached to the Trust Agreement as Exhibit D is an appropriate form of certificate to evidence ownership of the Preferred Securities. The Preferred Securities have been duly authorized by the Trust Agreement and are duly and validly issued and, subject to the qualifications set forth herein, are fully paid and nonassessable undivided beneficial interests in the assets of the Trust. The holders of Preferred Securities, as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. We note that the holders of Preferred Securities may be obligated, pursuant to the Trust Agreement, to (a) provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers or exchanges of Preferred Securities Certificates and the issuance of replacement Preferred Securities Certificates, and (b) provide security or indemnity in connection with requests of or directions to the Property Trustee to exercise its rights or powers under the Trust Agreement. (G) The Common Securities have been duly authorized for issuance by the Trust Agreement and, when issued, delivered and paid for in accordance with the terms of the Trust Agreement and as described in the Prospectus, will be validly issued fully paid undivided beneficial interests in the assets of the Trust. (H) Under the Trust Agreement and the Delaware Act, the issuance of the Preferred Securities and the Common Securities is not subject to preemptive or similar rights. (I) The issuance and sale by the Trust of the Preferred Securities and the Common Securities, the purchase by the Trust of the Subordinated Debentures, the execution, delivery and performance by the Trust of the Underwriting Agreement, the consummation by the Trust of the transactions contemplated by the Underwriting Agreement and the Prospectus and compliance by the Trust with its obligations under the Underwriting Agreement do not violate (i) any of the provisions of the Certificate of Trust or the Trust Agreement or (ii) any applicable Delaware law or administrative regulation. C-2 EX-4.A 4 y56473ex4-a.txt FORM OF JUNIOR SUBORDINATED INDENTURE EXHIBIT 4-a STERLING BANCORP to THE BANK OF NEW YORK, as Trustee _________________ JUNIOR SUBORDINATED INDENTURE Dated as of _______________, 2002 _________________ STERLING BANCORP Reconciliation and tie between the Trust Indenture Act of 1939 (including cross-references to provisions of Sections 310 to and including 317 which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended by the Trust Reform Act of 1990, are a part of and govern the Indenture whether or not physically contained therein) and the Junior Subordinated Indenture, dated as of __________, 2002.
TRUST INDENTURE INDENTURE ACT SECTION SECTION - ----------- ------- Section 310 (a) (1), (2) and (5)......................................................... 6.9 (a) (3)...................................................................... Not Applicable (a) (4)...................................................................... Not Applicable (b).......................................................................... 6.8 6.10 (c).......................................................................... Not Applicable Section 311 (a).......................................................................... 6.13 (b).......................................................................... 6.13 (b) (2)...................................................................... 7.3(a)(2) Section 312 (a).......................................................................... 7.1 7.2(a) (b).......................................................................... 7.2(b) (c).......................................................................... 7.2(c) Section 313 (a).......................................................................... 7.3(a) (b).......................................................................... 7.3(b) (c).......................................................................... 7.3(a), 7.3(b) (d).......................................................................... 7.3(c) Section 314 (a) (1), (2) and (3)......................................................... 7.4 (a) (4)...................................................................... 10.4 (b).......................................................................... Not Applicable (c) (1)...................................................................... 1.2 (c) (2)...................................................................... 1.2 (c) (3)...................................................................... Not Applicable (d).......................................................................... Not Applicable (e).......................................................................... 1.2 (f).......................................................................... Not Applicable Section 315 (a).......................................................................... 6.1(a) (b).......................................................................... 6.2 7.3(a) (c).......................................................................... 6.1(b) (d).......................................................................... 6.1(c) (d) (1)...................................................................... 6.1(a) (1) (d) (2)...................................................................... 6.1(c) (2) (d) (3)...................................................................... 6.1(c) (3) (e).......................................................................... 5.14 Section 316 (a).......................................................................... 1.1 (a) (1) (A).................................................................. 5.12 (a) (1) (B).................................................................. 5.13 (a) (2)...................................................................... Not Applicable
TRUST INDENTURE INDENTURE ACT SECTION SECTION - ----------- ------- (b).......................................................................... 5.8 (c).......................................................................... 1.4(f) Section 317 (a) (1)...................................................................... 5.3 (a) (2)...................................................................... 5.4 (b).......................................................................... 10.3 Section 318 (a).......................................................................... 1.7
- ---------- Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Junior Subordinated Indenture. TABLE OF CONTENTS
Page ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 1.1. Definitions.................................................................. 1 SECTION 1.2. Compliance Certificate and Opinions.......................................... 9 SECTION 1.3. Forms of Documents Delivered to Trustee...................................... 10 SECTION 1.4. Acts of Holders.............................................................. 10 SECTION 1.5. Notices, Etc. to Trustee and Company......................................... 12 SECTION 1.6. Notice to Holders; Waiver.................................................... 13 SECTION 1.7. Conflict with Trust Indenture Act............................................ 13 SECTION 1.8. Effect of Headings and Table of Contents..................................... 13 SECTION 1.9. Successors and Assigns....................................................... 13 SECTION 1.10. Separability Clause.......................................................... 13 SECTION 1.11. Benefits of Indenture........................................................ 14 SECTION 1.12. Governing Law................................................................ 14 SECTION 1.13. Non-Business Days............................................................ 14 ARTICLE II SECURITY FORMS SECTION 2.1. Forms Generally.............................................................. 14 SECTION 2.2. Form of Face of Security..................................................... 15 SECTION 2.3. Form of Reverse of Security.................................................. 18 SECTION 2.4. Additional Provisions Required in Global Security............................ 21 SECTION 2.5. Form of Trustee's Certificate of Authentication.............................. 21 ARTICLE III THE SECURITIES SECTION 3.1. Title and Terms.............................................................. 21 SECTION 3.2. Denominations................................................................ 24 SECTION 3.3. Execution, Authentication, Delivery and Dating............................... 24 SECTION 3.4. Temporary Securities......................................................... 26 SECTION 3.5. Global Securities............................................................ 26 SECTION 3.6. Registration, Transfer and Exchange Generally................................ 27 SECTION 3.7. Mutilated, Destroyed, Lost and Stolen Securities............................. 28 SECTION 3.8. Payment of Interest and Additional Interest; Interest Rights Preserved....... 29 SECTION 3.9. Persons Deemed Owners........................................................ 30 SECTION 3.10. Cancellation................................................................. 30 SECTION 3.11. Computation of Interest...................................................... 31 SECTION 3.12. Deferrals of Interest Payment Dates.......................................... 31
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Page SECTION 3.13. Right of Set-Off............................................................. 32 SECTION 3.14. Agreed Tax Treatment......................................................... 32 SECTION 3.15. Shortening or Extension of Stated Maturity................................... 32 SECTION 3.16. CUSIP Numbers................................................................ 33 ARTICLE IV SATISFACTION AND DISCHARGE SECTION 4.1. Satisfaction and Discharge of Indenture...................................... 33 SECTION 4.2. Application of Trust Money................................................... 34 ARTICLE V EVENTS OF DEFAULT; REMEDIES SECTION 5.1. Events of Default............................................................ 34 SECTION 5.2. Acceleration of Maturity; Rescission and Annulment........................... 35 SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.............. 37 SECTION 5.4. Trustee May File Proofs of Claim............................................. 37 SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities................... 38 SECTION 5.6. Application of Money Collected............................................... 38 SECTION 5.7. Limitation on Suits.......................................................... 39 SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest; Direct Action by Holders of Capital Securities............... 39 SECTION 5.9. Restoration of Rights and Remedies........................................... 40 SECTION 5.10. Rights and Remedies Cumulative.............................................. 40 SECTION 5.11. Delay or Omission Not Waiver................................................ 40 SECTION 5.12. Control by Holders.......................................................... 40 SECTION 5.13. Waiver of Past Defaults..................................................... 41 SECTION 5.14. Undertaking for Costs....................................................... 41 SECTION 5.15. Waiver of Usury, Stay or Extension Laws..................................... 42 ARTICLE VI THE TRUSTEE SECTION 6.1. Certain Duties and Responsibilities.......................................... 42 SECTION 6.2. Notice of Defaults........................................................... 43 SECTION 6.3. Certain Rights of Trustee.................................................... 43 SECTION 6.4. Not Responsible for Recitals or Issuance of Securities....................... 44 SECTION 6.5. May Hold Securities.......................................................... 44 SECTION 6.6. Money Held in Trust.......................................................... 44 SECTION 6.7. Compensation and Reimbursement............................................... 45 SECTION 6.8. Disqualification; Conflicting Interests...................................... 45 SECTION 6.9. Corporate Trustee Required; Eligibility...................................... 45
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Page SECTION 6.10. Resignation and Removal; Appointment of Successor............................ 46 SECTION 6.11. Acceptance of Appointment by Successor....................................... 47 SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.................. 48 SECTION 6.13. Preferential Collection of Claims Against Company............................ 48 SECTION 6.14. Appointment of Authenticating Agent.......................................... 49 ARTICLE VII HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.................... 51 SECTION 7.2. Preservation of Information, Communications to Holders....................... 51 SECTION 7.3. Reports by Trustee........................................................... 52 SECTION 7.4. Reports by Company........................................................... 52 ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms......................... 52 SECTION 8.2. Successor Company Substituted................................................ 53 ARTICLE IX SUPPLEMENTAL INDENTURES SECTION 9.1. Supplemental Indentures without Consent of Holders........................... 54 SECTION 9.2. Supplemental Indentures with Consent of Holders.............................. 55 SECTION 9.3. Execution of Supplemental Indentures......................................... 56 SECTION 9.4. Effect of Supplemental Indentures............................................ 56 SECTION 9.5. Conformity with Trust Indenture Act.......................................... 56 SECTION 9.6. Reference in Securities to Supplemental Indentures........................... 56 ARTICLE X COVENANTS SECTION 10.1. Payment of Principal, Premium and Interest................................... 57 SECTION 10.2. Maintenance of Office or Agency.............................................. 57 SECTION 10.3. Money for Security Payments to be Held in Trust.............................. 57 SECTION 10.4. Statement as to Compliance................................................... 58 SECTION 10.5. Waiver of Certain Covenants.................................................. 59 SECTION 10.6. Additional Sums.............................................................. 59 SECTION 10.7. Additional Covenants......................................................... 59 SECTION 10.8. Original Issue Discount...................................................... 60
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Page SECTION 10.9. Corporate Existence.......................................................... 61 SECTION 10.10. Maintenance of Trust Existence............................................... 61 SECTION 10.11. Listing on an Exchange....................................................... 61 ARTICLE XI REDEMPTION OF SECURITIES SECTION 11.1. Applicability of This Article................................................ 61 SECTION 11.2. Election to Redeem; Notice to Trustee........................................ 61 SECTION 11.3. Selection of Securities to be Redeemed....................................... 62 SECTION 11.4. Notice of Redemption......................................................... 62 SECTION 11.5. Deposit of Redemption Price.................................................. 63 SECTION 11.6. Payment of Securities Called for Redemption.................................. 63 SECTION 11.7. Right of Redemption of Securities Initially Issued to an Issuer Trust........ 64 ARTICLE XII [RESERVED] ARTICLE XIII SUBORDINATION OF SECURITIES SECTION 13.1. Securities Subordinate to Senior Debt........................................ 64 SECTION 13.2. No Payment When Senior Debt in Default; Payment Over of Proceeds Upon Dissolution, Etc....................................................... 64 SECTION 13.3. Payment Permitted If No Default.............................................. 66 SECTION 13.4. Subrogation to Rights of Holders of Senior Debt.............................. 66 SECTION 13.5. Provisions Solely to Define Relative Rights.................................. 67 SECTION 13.6. Trustee to Effectuate Subordination.......................................... 67 SECTION 13.7. No Waiver of Subordination Provisions........................................ 67 SECTION 13.8. Notice to Trustee............................................................ 68 SECTION 13.9. Reliance on Judicial Order or Certificate of Liquidating Agent............... 68 SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Debt............................. 68 SECTION 13.11. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights................................................................. 69 SECTION 13.12. Article Applicable to Paying Agents.......................................... 69
-iv- JUNIOR SUBORDINATED INDENTURE, dated as of __________, 2002, between STERLING BANCORP, a New York corporation (the "Company"), having its principal office at 650 Fifth Avenue, New York, New York 10019-6108, and THE BANK OF NEW YORK, a national banking association, as Trustee (the "Trustee"). RECITALS OF THE CORPORATION WHEREAS, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured junior subordinated debt securities in series (hereinafter called the "Securities") of substantially the tenor hereinafter provided, including Securities issued to evidence loans made to the Company of the proceeds from the issuance from time to time by one or more business trusts (each an "Issuer Trust") of undivided preferred beneficial interests in the assets of such Issuer Trusts (the "Capital Securities") and undivided common beneficial interests in the assets of such Issuer Trusts (the "Common Securities" and, collectively with the Capital Securities, the "Trust Securities"), and to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered; and WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of any series thereof, as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 1.1. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) The terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; (2) All other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (3) The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation"; (4) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; (5) Whenever the context may require, any gender shall be deemed to include the others; (6) Unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Indenture; and (7) The words "hereby", "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Act" when used with respect to any Holder has the meaning specified in Section 1.4. "Additional Interest" means the interest, if any, that shall accrue on any interest on the Securities of any series the payment of which has not been made on the applicable Interest Payment Date and which shall accrue at the rate per annum specified or determined as specified in such Security. "Additional Sums" has the meaning specified in Section 10.6. "Additional Taxes" means any additional taxes, duties and other governmental charges to which an Issuer Trust has become subject from time to time as a result of a Tax Event. "Administrative Trustees" means, in respect of any Issuer Trust, each Person identified as an "Administrative Trustee" in the related Trust Agreement, solely in such Person's capacity as Administrative Trustee of such Issuer Trust under such Trust Agreement and not in such Person's individual capacity, or any successor administrative trustee appointed as therein provided. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent Member" means any member of, or participant in, the Depositary. "Applicable Procedures" means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of the Depositary for such Security, in each case to the extent applicable to such transaction and as in effect from time to time. "Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 6.14 to act on behalf of the Trustee to authenticate Securities of one or more series. "Bankruptcy Code" means Title 11 of the United States Code or any successor statute thereto, in each case as amended from time to time. "Board of Directors" means the board of directors of the Company or the Executive Committee of the board of directors of the Company (or any other committee of the board of directors of the Company performing similar functions) or a committee designated by the board -2- of directors of the Company (or such committee), comprised of two or more members of the board of directors of the Company or officers of the Company, or both. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, or officers of the Company to which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means any day other than (i) a Saturday or Sunday, (ii) a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed, or (iii) a day on which the Corporate Trust Office of the Trustee, or, with respect to the Securities of a series initially issued to an Issuer Trust for so long as such Securities are held by such Issuer Trust, the "Corporate Trust Office" (as defined in the related Trust Agreement) of the Property Trustee or the Delaware Trustee under the related Trust Agreement, is closed for business. "Capital Securities" has the meaning specified in the first recital of this Indenture. "Capital Treatment Event" means, in respect of any Issuer Trust, the reasonable determination by the Company (as evidenced by an Officers' Certificate delivered to the Trustee) that, as a result of the occurrence of any amendment to, or change (including any announced prospective change) in, the laws (or any rules or regulations thereunder) of the United States or any political subdivision thereof or therein, or as a result of any official or administrative pronouncement or action or judicial decision interpreting or applying such laws, rules or regulations, which amendment or change is effective or such pronouncement, action or decision is announced on or after the date of the issuance of the Capital Securities of such Issuer Trust, there is more than an insubstantial risk that the Company will not be entitled to treat an amount equal to the aggregate Liquidation Amount (as such term is defined in the related Trust Agreement) of such Capital Securities as "Tier 1 Capital" (or the then equivalent thereof) for purposes of the capital adequacy guidelines of the Board of Governors of the Federal Reserve System, as then in effect and applicable to the Company. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date. "Common Securities" has the meaning specified in the first recital of this Indenture. "Common Stock" means the common stock, par value $1 per share, of the Company. "Corporate Trust Office" means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered. "corporation" includes a corporation, association, company, limited liability company, joint-stock company or business trust. -3- "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation. "Company Request" and "Company Order" mean, respectively, the written request or order signed in the name of the Company by its Chairman of the Board of Directors, its Vice Chairman of the Board of Directors, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Debt" means, with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent and without duplication, (i) every obligation of such Person for money borrowed; (ii) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses; (iii) every reimbursement obligation of such Person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such Person; (iv) every obligation of such Person issued or assumed as the deferred purchase price of property or services (but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business); (v) every capital lease obligation of such Person; (vi) all indebtedness of the Company, whether incurred on or prior to the date of this Indenture or thereafter incurred, for claims in respect of derivative products, including interest rate, foreign exchange rate and commodity forward contracts, options and swaps and similar arrangements; and (vii) every obligation of the type referred to in clauses (i) through (vi) of another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed or is responsible or liable for, directly or indirectly, as obligor or otherwise. "Defaulted Interest" has the meaning specified in Section 3.8. "Delaware Trustee" means, with respect to any Issuer Trust, the Person identified as the "Delaware Trustee" in the related Trust Agreement, solely in its capacity as Delaware Trustee of such Issuer Trust under such Trust Agreement and not in its individual capacity, or its successor in interest in such capacity, or any successor Delaware trustee appointed as therein provided. "Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depositary by the Company pursuant to Section 3.1 with respect to such series (or any successor thereto). "Discount Security" means any security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2. "Distributions," with respect to the Trust Securities issued by an Issuer Trust, means amounts payable in respect of such Trust Securities as provided in the related Trust Agreement and referred to therein as "Distributions." "Dollar" or "$" means the currency of the United States of America that, as at the time of payment, is legal tender for the payment of public and private debts. -4- "Event of Default", unless otherwise specified with respect to a series of Securities as contemplated by Section 3.1, has the meaning specified in Article V. "Exchange Act" means the Securities Exchange Act of 1934 or any statute successor thereto, in each case as amended from time to time. "Expiration Date" has the meaning specified in Section 1.4. "Extension Period" has the meaning specified in Section 3.12. "Global Security" means a Security in the form prescribed in Section 2.4 evidencing all or part of a series of Securities, issued to the Depositary or its nominee for such series, and registered in the name of such Depositary or its nominee. "Guarantee Agreement" means, with respect to any Issuer Trust, the Guarantee Agreement executed by the Company for the benefit of the Holders of the Capital Securities issued by such Issuer Trust as modified, amended or supplemented from time to time. "Holder" means a Person in whose name a Security is registered in the Securities Register. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of each particular series of Securities established as contemplated by Section 3.1. "Interest Payment Date" means, as to each series of Securities, the Stated Maturity of an installment of interest on such Securities. "Investment Company Act" means the Investment Company Act of 1940 or any successor statute thereto, in each case as amended from time to time. "Investment Company Event", with respect to an Issuer Trust, means the receipt by such Issuer Trust of an Opinion of Counsel (as defined in the relevant Trust Agreement) experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), such Trust is or will be considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended, which Change in 1940 Act Law becomes effective on or after the date of original issuance of the Preferred Securities of such Issuer Trust under the Trust Agreement. "Issuer Trust" has the meaning specified in the first recital of this Indenture. "Maturity" when used with respect to any Security means the date on which the principal of such Security or any installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Notice of Default" means a written notice of the kind specified in Section 5.1(3). -5- "Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company and delivered to the Trustee. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for or an employee of the Company or any Affiliate of the Company. "Original Issue Date" means the date of issuance specified as such in each Security. "Outstanding" means, when used in reference to any Securities, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose payment money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent in trust for the Holders of such Securities; and (iii) Securities in substitution for or in lieu of which other Securities have been authenticated and delivered or that have been paid pursuant to Section 3.7, unless proof satisfactory to the Trustee is presented that any such Securities are held by Holders in whose hands such Securities are valid, binding and legal obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities that the Trustee knows to be so owned shall be so disregarded. Securities so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor. Upon the written request of the Trustee, the Company shall furnish to the Trustee promptly an Officers' Certificate listing and identifying all Securities, if any, known by the Company to be owned or held by or for the account of the Company, or any other obligor on the Securities or any Affiliate of the Company or such obligor, and subject to the provisions of Section 6.1, the Trustee shall be entitled to accept such Officers' Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are Outstanding for the purpose of any such determination. Notwithstanding anything herein to the contrary, Securities of any series initially issued to an Issuer Trust that are owned by such Issuer Trust shall be deemed to be Outstanding notwithstanding the ownership by the Company or an Affiliate of any beneficial interest in such Issuer Trust. "Paying Agent" means the Trustee or any Person authorized by the Company to pay the principal of (or premium, if any) or interest on, or other amounts in respect of, any Securities on behalf of the Company. -6- "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. "Place of Payment" means, with respect to the Securities of any series, the place or places where the principal of (and premium, if any) and interest on the Securities of such series are payable pursuant to Section 3.1. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security. For the purposes of this definition, any security authenticated and delivered under Section 3.7 in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Proceeding" has the meaning specified in Section 13.2. "Property Trustee" means, with respect to any Issuer Trust, the Person identified as the "Property Trustee" in the related Trust Agreement, solely in its capacity as Property Trustee of such Issuer Trust under such Trust Agreement and not in its individual capacity, or its successor in interest in such capacity, or any successor property trustee appointed as therein provided. "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture or the terms of such Security. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Regular Record Date" for the interest payable on any Interest Payment Date with respect to the Securities of a series means, unless otherwise provided pursuant to Section 3.1 with respect to Securities of such series, the date that is fifteen days next preceding such Interest Payment Date (whether or not a Business Day). "Responsible Officer", when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any vice-chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Rights Plan" means a plan of the Company providing for the issuance by the Company to all holders of its Common Stock, par value $7.50 per share, of rights entitling the holders thereof to subscribe for or purchase shares of any class or series of capital stock of the Company which rights (i) are deemed to be transferred with such shares of such Common Stock, and (ii) are also issued in respect of future issuances of such Common Stock, in each case until the occurrence of a specified event or events. -7- "Securities" or "Security" means any debt securities or debt security, as the case may be, authenticated and delivered under this Indenture. "Securities Act" means the Securities Act of 1933 or any successor statute thereto, in each case as amended from time to time. "Securities Register" and "Securities Registrar" have the respective meanings specified in Section 3.6. "Senior Debt" means the principal of (and premium, if any) and interest, if any (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company whether or not such claim for post-petition interest is allowed in such proceeding), on Debt of the Company, whether incurred on or prior to the date of this Indenture or thereafter incurred, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligations are not superior in right of payment to the Securities or to other Debt that is pari passu with, or subordinated to, the Securities, provided, however, that Senior Debt shall not be deemed to include (a) any Debt of the Company that, when incurred and without respect to any election under Section 1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to the Company, (b) any Debt of the Company to any of its Subsidiaries, (c) any Securities, (d) trade accounts payable of the Company, and (e) accrued liabilities arising in the ordinary course of business of the Company. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.8. "Stated Maturity", when used with respect to any Security or any installment of principal thereof (or premium, if any) or interest (including any Additional Interest) thereon, means the date specified pursuant to the terms of such Security as the fixed date on which the principal of such Security or such installment of principal (or premium, if any) or interest (including any Additional Interest) is due and payable, as such date may, in the case of the stated maturity of the principal on any security, be shortened or extended as provided pursuant to the terms of such Security and this Indenture and, in the case of any installment of interest, subject to the deferral of any such date in the case of any Extension Period. "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For purposes of this definition, "voting stock" means stock that ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "Successor Security" of any particular Security means every Security issued after, and evidencing all or a portion of the same debt as that evidenced by, such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.7 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Tax Event" means the receipt by an Issuer Trust of an Opinion of Counsel (as defined in the relevant Trust Agreement) experienced in such matters to the effect that, as a result of any -8- amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after the date of issuance of the Capital Securities of such Issuer Trust, there is more than an insubstantial risk that (i) such Issuer Trust is, or will be within 90 days of the delivery of such Opinion of Counsel, subject to United States Federal income tax with respect to income received or accrued on the corresponding series of Securities issued by the Company to such Issuer Trust, (ii) interest payable by the Company on such corresponding series of Securities is not, or within 90 days of the delivery of such Opinion of Counsel will not be, deductible by the Company, in whole or in part, for United States Federal income tax purposes, or (iii) such Issuer Trust is, or will be within 90 days of the delivery of such Opinion of Counsel, subject to more than a de minimis amount of other taxes, duties or other governmental charges. "Trust Agreement" means, with respect to any Issuer Trust, the trust agreement or other governing instrument of such Issuer Trust. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument, solely in its capacity as such and not in its individual capacity, until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder and, if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbb), as amended and as in effect on the date as of this Indenture, except as provided in Section 9.5. "Trust Securities" has the meaning specified in the first recital of this Indenture. "Vice President," when used with respect to the Company, means any duly appointed vice president, whether or not designated by a number or a word or words added before or after the title "vice president." SECTION 1.2. Compliance Certificate and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent (including covenants compliance with which constitutes a condition 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 (including covenants compliance with which constitutes a condition precedent), if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. -9- Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than the certificates provided pursuant to Section 10.4) shall include: (1) a statement by each individual signing such certificate or opinion that such individual has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions of such individual contained in such certificate or opinion are based; (3) a statement that, in the opinion of such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of such individual, such condition or covenant has been complied with. SECTION 1.3. Forms of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to matters upon which his or her certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions, or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 1.4. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given to or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments is or are delivered to the Trustee, and, where it is hereby expressly required, to the Company. Such instrument or -10- instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him or her the execution thereof. Where such execution is by a Person acting in other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority. (c) The fact and date of the execution by any Person of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient and in accordance with such reasonable rules as the Trustee may determine. (d) The ownership of Securities shall be proved by the Securities Register. (e) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. (f) The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next succeeding paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date, provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date (as defined below) by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6. -11- The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 5.2, (iii) any request to institute proceedings referred to in Section 5.7(2), or (iv) any direction referred to in Section 5.12, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date, provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company's expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6. With respect to any record date set pursuant to this Section, the party hereto that sets such record date may designate any day as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day, provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto that set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date. (g) Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. SECTION 1.5. Notices, Etc. to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder, any holder of Capital Securities or the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust office, or (2) the Company by the Trustee, any Holder or any holder of Capital Securities shall be sufficient for every purpose (except as otherwise provided in Section 5.1) hereunder if in writing -12- and mailed, first class, postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company. SECTION 1.6. Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Securities Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. If, by reason of the suspension of or irregularities in regular mail service or for any other reason, it shall be impossible or impracticable to mail notice of any event to Holders when said notice is required to be given pursuant to any provision of this Indenture or of the relevant Securities, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 1.7. Conflict with Trust Indenture Act. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by any of Sections 310 to 317, inclusive, of the Trust Indenture Act through operation of Section 318(c) thereof, such imposed duties shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. SECTION 1.8. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 1.9. Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. SECTION 1.10. Separability Clause. If any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. -13- SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors and assigns, the holders of Senior Debt, the Holders of the Securities and, to the extent expressly provided in Sections 5.1, 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and 9.2, the holders of Capital Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 1.12. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 1.13. Non-Business Days. If any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or the Securities) payment of interest or principal (and premium, if any) or other amounts in respect of such Security need not be made on such date, but may be made on the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, until such next succeeding Business Day) except that, if such Business Day falls in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day (in each case with the same force and effect as if made on the Interest Payment Date or Redemption Date or at the Stated Maturity). ARTICLE II SECURITY FORMS SECTION 2.1. Forms Generally. The Securities of each series and the Trustee's certificate of authentication shall be in substantially the forms set forth in this Article, or in such other form or forms as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with applicable tax laws or the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such securities, as evidenced by their execution of the Securities. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3 with respect to the authentication and delivery of such Securities. The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods, if required by any securities exchange on which the Securities may be listed, on a steel engraved border or steel engraved borders or may be produced in any -14- other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such securities. SECTION 2.2. Form of Face of Security. STERLING BANCORP [TITLE OF SECURITY] No. $ STERLING BANCORP, a corporation organized and existing under the laws of New York (hereinafter called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to _______________, or registered assigns, the principal sum of __________ Dollars on __________, ____ [if the Security is a Global Security, then insert, if applicable -- , or such other principal amount represented hereby as may be set forth in the records of the Securities Registrar hereinafter referred to in accordance with the Indenture,] [; provided that the Company may (i) shorten the Stated Maturity of the principal of this Security to a date not earlier than __________, and (ii) extend the Stated Maturity of the principal of this Security at any time on one or more occasions, subject to certain conditions specified in Section 3.15 of the Indenture, but in no event to a date later than __________]. The Company further promises to pay interest on said principal sum from _______, __or from the most recent Interest Payment Date to which interest has been paid or duly provided for, [monthly] [quarterly] [semi-annually] [if applicable, insert -- (subject to deferral as set forth herein)] in arrears on [insert applicable Interest Payment Dates] of each year, commencing _______ , _ , at the rate of _ % per annum, [if applicable insert -- together with Additional Sums, if any, as provided in Section 10.6 of the Indenture] until the principal hereof is paid or duly provided for or made available for payment [if applicable, insert __ ; provided that any overdue principal, premium or Additional Sums and any overdue installment of interest shall bear Additional Interest at the rate of__% per annum (to the extent that the payment of such interest shall be legally enforceable), compounded [monthly] [quarterly] [semi-annually], from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand]. The amount of interest payable for any period less than a full interest period shall be computed on the basis of a 360-day year of twelve 30-day months and the actual days elapsed in a partial month in such period. The amount of interest payable for any full interest period shall be computed by dividing the applicable rate per annum by [twelve/four/two]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest installment [if applicable insert -- , which shall be the [____________ or ____________] (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date]. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any -15- securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. [If applicable, insert -- So long as no Event of Default has occurred and is continuing, the Company shall have the right, at any time during the term of this Security, from time to time to defer the payment of interest on this Security for up to ___consecutive [monthly] [quarterly] [semi-annual] interest payment periods with respect to each deferral period (each an "Extension Period") [If applicable, insert -- , during which Extension Periods the Company shall have the right to make partial payments of interest on any Interest Payment Date, and] at the end of which the Company shall pay all interest then accrued and unpaid including any Additional Interest, as provided below; provided, however, that no Extension Period shall extend beyond the Stated Maturity of the principal of this Security [If Stated Maturity can be shortened or extended, insert -- , as then in effect,] and no such Extension Period may end on a date other than an Interest Payment Date; and provided, further, however, that during any such Extension Period, the Company shall not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's capital stock, or (ii) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to this Security (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Company in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, in connection with a dividend reinvestment or stockholder stock purchase plan or in connection with the issuance of capital stock of the Company (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into prior to the applicable Extension Period, (b) as a result of an exchange or conversion of any class or series of the Company's capital stock (or any capital stock of a Subsidiary of the Company) for any class or series of the Company's capital stock or of any class or series of the Company's indebtedness for any class or series of the Company's capital stock, (c) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection with any Rights Plan, or the issuance of rights, stock or other property under any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or (e) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock). Prior to the termination of any such Extension Period, the Company may further defer the payment of interest, provided that no Extension Period shall exceed ___consecutive [monthly] [quarterly] [semi-annual] interest payment periods, extend beyond the Stated Maturity of the principal of this Security or end on a date other than an Interest Payment Date. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due on any Interest Payment Date, the Company may elect to begin a new Extension Period, subject to the above conditions. No interest shall be due and payable during an Extension Period, except at the end thereof, but each installment of interest that would otherwise have been due and payable during such Extension shall bear Additional Interest (to the extent that the payment of such interest shall be legally enforceable) at the rate of ___% per annum, compounded [monthly] [quarterly] [semi-annually] and calculated as set forth in the first paragraph of this Security, from the dates on which amounts would otherwise have been due and payable until paid or made available for payment. The Company shall give the Holder of this Security and the Trustee notice of its election to begin any Extension Period at least one Business -16- Day prior to the next succeeding Interest Payment Date on which interest on this Security would be payable but for such deferral [if applicable, insert -- or so long as such Securities are held by [insert name of applicable Issuer Trust], at least one Business Day prior to the earlier of (i) the next succeeding date on which Distributions on the Capital Securities of such Issuer Trust would be payable but for such deferral, and (ii) the date on which the Property Trustee of such Issuer Trust is required to give notice to any securities exchange or other applicable self-regulatory organization or to holders of such Capital Securities of the record date or the date such Distributions are payable]. Payment of the principal of (and premium, if any) and interest on this Security will be made at the office or agency of the Company maintained for that purpose in the [insert Place of Payment], in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts [if applicable, insert -- ; provided, however, that at the option of the Company payment of interest may be made (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Securities Register, or (ii) by wire transfer in immediately available funds at such place and to such account as may be designated by the Person entitled thereto as specified in the Securities Register]. The indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Debt, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such actions as may be necessary or appropriate to effectuate the subordination so provided, and (c) appoints the Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Debt, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. STERLING BANCORP By:_____________________________ Name: Title: Attest: -17- __________________________________ [Secretary or Assistant Secretary] SECTION 2.3. Form of Reverse of Security. This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under the Junior Subordinated Indenture, dated as of ___________, _____(herein called the "Indenture"), between the Company and THE BANK OF NEW YORK, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Debt and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [if applicable, insert -- , limited in aggregate principal amount to $ _____]. All terms used in this Security that are defined in the Indenture [if applicable, insert -- or in the Amended and Restated Trust Agreement, dated as of ___________, 200 (as modified, amended or supplemented from time to time, the "Trust Agreement"), relating to [insert name of Issuer Trust] (the "Issuer Trust") among the Company, as Depositor, the Trustees named therein and the Holders from time to time of the Trust Securities issued pursuant thereto, shall have the meanings assigned to them in the Indenture [if applicable, insert -- or the Trust Agreement, as the case may be]. [If applicable, insert -- The Company may at any time, at its option, on or after _________, ____ , and subject to the terms and conditions of Article XI of the Indenture, redeem this Security in whole at any time or in part from time to time, at the following Redemption Prices (expressed as percentages of the principal amount hereof): If redeemed during the 12-month period beginning _____________, Redemption Year Price and thereafter at a Redemption Price equal to 100% of the principal amount hereof, together, in the case of any such redemption, with accrued interest [if applicable, insert -- , including any Additional Interest,] to but excluding the date fixed for redemption.] [If applicable, insert -- In addition, upon the occurrence and during the continuation of a Tax Event or a Capital Treatment Event or an Investment Company Event in respect of the Issuer Trust, the Company may, at its option, at any time within 90 days of the occurrence and during the continuation of such Tax Event, Capital Treatment Event or Investment Company Event, as the case may be, redeem this Security, in whole but not in part, subject to the terms and conditions of Article XI of the Indenture, at a redemption price equal to [insert formula]. -18- [If the Security is subject to redemption of any kind, insert -- In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.] The Indenture contains provisions for satisfaction and discharge of the entire indebtedness of this Security upon compliance by the Company with certain conditions set forth in the Indenture. The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee at any time to enter into a supplemental indenture or indentures for the purpose of modifying in any manner the rights and obligations of the Company and of the Holders of the Securities, with the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series to be affected by such supplemental indenture. The Indenture also contains provisions permitting Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. [If the Security is not a Discount Security, insert -- As provided in and subject to the provisions of the Indenture, if an Event of Default with respect to the Securities of this series at the time Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of this series may declare the principal amount of all the Securities of this series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders) [if applicable, insert -- , provided that, if upon an Event of Default, the Trustee or such Holders fail to declare the principal of all the Outstanding Securities of this series to be immediately due and payable, the holders of at least 25% in aggregate Liquidation Amount of the Capital Securities then Outstanding shall have the right to make such declaration by a notice in writing to the Company and the Trustee]; and upon any such declaration the principal amount of and the accrued interest (including any Additional Interest) on all the Securities of this series shall become immediately due and payable, provided that the payment of principal and interest (including any Additional Interest) on such Securities shall remain subordinated to the extent provided in Article XIII of the Indenture.] [If the Security is a Discount Security, insert -- As provided in and subject to the provisions of the Indenture, if an Event of Default with respect to the Securities of this series at the time Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of this series may declare an amount of principal of the Securities of this series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders) [if applicable, insert -- , provided that, if upon an Event of Default, the Trustee or such Holders fail to declare such principal amount of the Outstanding Securities of this series to be immediately due and payable, the holders of at least 25% in aggregate Liquidation Amount of the Capital Securities then Outstanding shall have the right to make such declaration by a notice in writing to the Company and the Trustee]. The principal amount payable upon such acceleration shall be -19- equal to -- insert formula for determining the amount]. Upon any such declaration, such amount of the principal of and the accrued interest (including any Additional Interest) on all the Securities of this series shall become immediately due and payable, provided that the payment of such principal and interest (including any Additional Interest) on all the Securities of this series shall remain subordinated to the extent provided in Article XIII of the Indenture. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company's obligations in respect of the payment of the principal of and premium and interest, if any, on this Security shall terminate.] No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest [insert if applicable -- including any Additional Interest)] on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Securities Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained under Section 10.2 of the Indenture for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, and thereupon one or more new Securities of this series, of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of this series are issuable only in registered form without coupons in denominations of $______and any integral multiple of $____________ in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Company and, by its acceptance of this Security or a beneficial interest therein, the Holder of, and any Person that acquires a beneficial interest in, this Security agree that for United States Federal, state and local tax purposes it is intended that this Security constitute indebtedness. THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. -20- SECTION 2.4. Additional Provisions Required in Global Security. Unless otherwise specified as contemplated by Section 3.1, any Global Security issued hereunder shall, in addition to the provisions contained in Sections 2.2 and 2.3, bear a legend in substantially the following form: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. SECTION 2.5. Form of Trustee's Certificate of Authentication. The Trustee's certificates of authentication shall be in substantially the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: THE BANK OF NEW YORK, as Trustee By:_____________________________ Authorized officer ARTICLE III THE SECURITIES SECTION 3.1. Title and Terms. The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution or, subject to Section 3.3, set forth or determined in the manner provided in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of a series: (a) the title of the securities of such series, which shall distinguish the Securities of the series from all other Securities; -21- (b) the limit, if any, upon the aggregate principal amount of the Securities of such series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 3.4, 3.6, 3.7, 9.6 or 11.6 and except for any Securities that, pursuant to Section 3.3, are deemed never to have been authenticated and delivered hereunder); provided, however, that the authorized aggregate principal amount of such series may be increased above such amount by a Board Resolution to such effect; (c) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (d) the Stated Maturity or Maturities on which the principal of the Securities of such series is payable or the method of determination thereof, and any dates on which or circumstances under which, the Company shall have the right to extend or shorten such Stated Maturity or Maturities; (e) the rate or rates, if any, at which the Securities of such series shall bear interest, if any, the rate or rates and extent to which Additional Interest, if any, shall be payable in respect of any Securities of such series, the date or dates from which any such interest or Additional Interest shall accrue, the Interest Payment Dates on which such interest shall be payable, the right, pursuant to Section 3.12 or as otherwise set forth therein, of the Company to defer or extend an Interest Payment Date, and the Regular Record Date for the interest payable on any Interest Payment Date or the method by which any of the foregoing shall be determined; (f) the place or places where the principal of (and premium, if any) and interest (including any Additional Interest) on the Securities of such series shall be payable, the place or places where the Securities of such series may be presented for registration of transfer or exchange, any restrictions that may be applicable to any such transfer or exchange in addition to or in lieu of those set forth herein, and the place or places where notices and demands to or upon the Company in respect of the Securities of such series may be made; (g) the period or periods within or the date or dates on which, if any, the price or prices at which and the terms and conditions upon which the Securities of such series may be redeemed, in whole or in part, at the option of the Company, and if other than by a Board Resolution, the manner in which any election by the Company to redeem such Securities shall be evidenced; (h) the obligation or the right, if any, of the Company to redeem, repay or purchase the Securities of such series pursuant to any amortization or analogous provisions, or at the option of a Holder thereof, and the period or periods within which, the price or prices at which, the currency or currencies (including currency unit or units) in which and the other terms and conditions upon which Securities of the series shall be redeemed, repaid or purchased, in whole or in part, pursuant to such obligation; -22- (i) the denominations in which any Securities of such series shall be issuable, if other than denominations of $10 and any integral multiple thereof; (j) if other than Dollars, the currency or currencies (including any currency unit or units) in which the principal of (and premium, if any) and interest and Additional Interest, if any, on the Securities of the series shall be payable, or in which the Securities of the series shall be denominated and the manner of determining the equivalent thereof in Dollars for purposes of the definition of Outstanding; (k) the additions, modifications or deletions, if any, in the Events of Default or covenants of the Company set forth herein with respect to the Securities of such series; (l) if other than the principal amount thereof, the portion of the principal amount of Securities of such series that shall be payable upon declaration of acceleration of the Maturity thereof; (m) if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined); (n) the additions or changes, if any, to this Indenture with respect to the Securities of such series as shall be necessary to permit or facilitate the issuance of the Securities of such series in bearer form, registrable or not registrable as to principal, and with or without interest coupons; (o) any index or indices used to determine the amount of payments of principal of and premium, if any, on the Securities of such series or the manner in which such amounts will be determined; (p) if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends that shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 2.4 and any circumstances in addition to or in lieu of those set forth in Section 3.6 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof; (q) the appointment of any Paying Agent or agents for the Securities of such series; (r) the terms of any right to convert or exchange Securities of such series into any other securities or property of the Company, and the additions or changes, if any, to -23- this Indenture with respect to the Securities of such series to permit or facilitate such conversion or exchange; (s) if such Securities are to be issued to an Issuer Trust, the form or forms of the Trust Agreement, Guarantee Agreement and Expense Agreement relating thereto; (t) if other than as set forth herein, the relative degree, if any, to which the Securities of the series shall be senior to or be subordinated to other series of Securities in right of payment, whether such other series of Securities are Outstanding or not; (u) any addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 5.2; (v) any addition to or change in the covenants set forth in Article X which applies to Securities of the series; and (w) any other terms of the Securities of such series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 9.1(6)). All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided herein or in or pursuant to such Board Resolution and set forth, or determined in the manner provided, in such Officers' Certificate or in any indenture supplemental hereto. If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series. The Securities shall be subordinated in right of payment to Senior Debt as provided in Article XIII. SECTION 3.2. Denominations. The Securities of each series shall be in registered form without coupons and shall be issuable in denominations of $10 and any integral multiple thereof, unless otherwise specified as contemplated by Section 3.1. SECTION 3.3. Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or one of its Vice Presidents, under its corporate seal reproduced or impressed thereon and attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and -24- delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel stating, (1) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 2.1, that such form has been established in conformity with the provisions of this Indenture; (2) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 3.1, that such terms have been established in conformity with the provisions of this Indenture; and (3) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee. Notwithstanding the provisions of Section 3.1 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers' Certificate otherwise required pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued. Each Security shall be dated the date of its authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by the manual signature of one of its authorized officers, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.10, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. -25- SECTION 3.4. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Securities of such series in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities of any series are issued, the Company will cause definitive Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at the office or agency of the Company designated for that purpose without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations having the same Original Issue Date and Stated Maturity and having the same terms as such temporary Securities. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series. SECTION 3.5. Global Securities. (a) Each Global Security issued under this Indenture shall be registered in the name of the Depositary designated by the Company for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture. (b) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (i) such Depositary advises the Trustee in writing that such Depositary is no longer willing or able to properly discharge its responsibilities as Depositary with respect to such Global Security, and the Company is unable to locate a qualified successor, (ii) the Company executes and delivers to the Trustee a Company Order stating that the Company elects to terminate the book-entry system through the Depositary, or (iii) there shall have occurred and be continuing an Event of Default. (c) If any Global Security is to be exchanged for other Securities or cancelled in whole, it shall be surrendered by or on behalf of the Depositary or its nominee to the Securities Registrar for exchange or cancellation as provided in this Article III. If any Global Security is to be exchanged for other Securities or cancelled in part, or if another Security is to be exchanged in whole or in part for a beneficial interest in any Global Security, then either (i) such Global Security shall be so surrendered for exchange or cancellation as provided in this Article III or (ii) the principal amount thereof shall be reduced, subject to Section 3.6(b)(v), or increased by an amount equal to the portion thereof to be so exchanged or cancelled, or equal to the principal amount of such other Security to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records of the Securities Registrar, whereupon the Trustee, in accordance with the Applicable Procedures, shall instruct the -26- Depositary or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender or adjustment of a Global Security by the Depositary, accompanied by registration instructions, the Trustee shall, subject to Section 3.5(b) and as otherwise provided in this Article III, authenticate and deliver any Securities issuable in exchange for such Global Security (or any portion thereof) in accordance with the instructions of the Depositary. The Trustee shall not be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions. (d) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Article III, Section 9.6 or 11.6 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof. (e) Securities distributed to holders of Book-Entry Capital Securities (as defined in the applicable Trust Agreement) upon the dissolution of an Issuer Trust shall be distributed in the form of one or more Global Securities registered in the name of a Depositary or its nominee, and deposited with the Securities Registrar, as custodian for such Depositary, or with such Depositary, for credit by the Depositary to the respective accounts of the beneficial owners of the Securities represented thereby (or such other accounts as they may direct). Securities distributed to holders of Capital Securities other than Book-Entry Capital Securities upon the dissolution of an Issuer Trust shall not be issued in the form of a Global Security or any other form intended to facilitate book-entry trading in beneficial interests in such Securities. (f) The Depositary or its nominee, as the registered owner of a Global Security, shall be the Holder of such Global Security for all purposes under this Indenture and the Securities, and owners of beneficial interests in a Global Security shall hold such interests pursuant to the Applicable Procedures. Accordingly, any such owner's beneficial interest in a Global Security shall be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its Agent Members. Neither the Trustee nor the Securities Registrar shall have any liability in respect of any transfers effected by the Depositary. (g) The rights of owners of beneficial interests in a Global Security shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such owners and the Depositary and/or its Agent Members. SECTION 3.6. Registration, Transfer and Exchange Generally. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. Such register is herein sometimes referred to as the "Securities Register." The Trustee is hereby appointed "Securities Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security at the offices or agencies of the Company designated for that purpose the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series of any authorized denominations of like tenor and aggregate principal amount. -27- At the option of the Holder, Securities may be exchanged for other Securities of the same series of any authorized denominations, of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive. All Securities issued upon any transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange. Every Security presented or surrendered for transfer or exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar, duly executed by the Holder thereof or such Holder's attorney duly authorized in writing. No service charge shall be made to a Holder for any transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Securities. Neither the Company nor the Trustee shall be required, pursuant to the provisions of this Section, (i) to issue, register the transfer of or exchange any Security of any series during a period beginning at the opening of business 15 days before the day of selection for redemption of Securities of that series pursuant to Article XI and ending at the close of business on the day of mailing of the notice of redemption, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except, in the case of any such Security to be redeemed in part, any portion thereof not to be redeemed. SECTION 3.7. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee together with such security or indemnity as may be required by the Company or the Trustee to save each of them harmless, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series, of like tenor and aggregate principal amount, and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security, and (ii) such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series, of like tenor and aggregate principal amount as such destroyed, lost or stolen Security, and bearing a number not contemporaneously outstanding. If any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. -28- Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 3.8. Payment of Interest and Additional Interest; Interest Rights Preserved. Interest and Additional Interest on any Security of any series that is payable, and is punctually paid or duly provided for, on any Interest Payment Date, shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest in respect of Securities of such series, except that, unless otherwise provided in the Securities of such series, interest and any Additional Interest payable on the Stated Maturity of the principal of a Security shall be paid to the Person to whom principal is paid. The initial payment of interest on any Security of any series that is issued between a Regular Record Date and the related Interest Payment Date shall be payable as provided in such Security or in the Board Resolution pursuant to Section 3.1 with respect to the related series of Securities. Any interest on any Security that is due and payable, but is not timely paid or duly provided for, on any Interest Payment Date for Securities of such series (herein called "Defaulted Interest"), shall forthwith cease to be payable to the registered Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series in respect of which interest is in default (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest, which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such -29- Defaulted Interest and the Special Record Date therefor to be mailed, first class, postage prepaid, to each Holder of a Security of such series at the address of such Holder as it appears in the Securities Register not less than 10 days prior to such Special Record Date. The Trustee may, in its discretion, in the name and at the expense of the Company, cause a similar notice to be published at least once in a newspaper, customarily published in the English language on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of the series in respect of which interest is in default may be listed and, upon such notice as may be required by such exchange (or by the Trustee if the Securities are not listed), if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security. SECTION 3.9. Persons Deemed Owners. The Company, the Trustee and any agent of the Company or the Trustee shall treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payment of principal of and (subject to Section 3.8) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. No holder of any beneficial interest in any Global Security held on its behalf by a Depositary shall have any rights under this Indenture with respect to such Global Security, and such Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by a Depositary or impair, as between a Depositary and such holders of beneficial interests, the operation of customary practices governing the exercise of the rights of the Depositary (or its nominee) as Holder of any Security. SECTION 3.10. Cancellation. All Securities surrendered for payment, redemption, transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee, and any such Securities and Securities surrendered directly to the Trustee for any such purpose shall be promptly canceled by it. Notwithstanding any other provision of this Indenture, the Company -30- may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder that the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities shall be destroyed by the Trustee and the Trustee shall deliver to the Company a certificate of such destruction. SECTION 3.11. Computation of Interest. Except as otherwise specified as contemplated by Section 3.1 for Securities of any series, interest on the Securities of each series for any partial period shall be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in any partial month in such period, and interest on the Securities of each series for a full period shall be computed by dividing the rate per annum by the number of interest periods that together constitute a full twelve months. SECTION 3.12. Deferrals of Interest Payment Dates. If specified as contemplated by Section 2.1 or Section 3.1 with respect to the Securities of a particular series, so long as no Event of Default has occurred and is continuing, the Company shall have the right, at any time during the term of such series, from time to time to defer the payment of interest on such Securities for such period or periods as may be specified as contemplated by Section 3.1 (each, an "Extension Period"), during which Extension Periods the Company shall, if so specified as contemplated by Section 3.1, have the right to make partial payments of interest on any Interest Payment Date. No Extension Period shall end on a date other than an Interest Payment Date. At the end of any such Extension Period the Company shall pay all interest then accrued and unpaid on the Securities (together with Additional Interest thereon, if any, at the rate specified for the Securities of such series to the extent permitted by applicable law); provided, however, that no Extension Period shall extend beyond the Stated Maturity of the principal of the Securities of such series; and provided further, however that during any such Extension Period, the Company shall not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's capital stock, or (ii) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to the Securities of such series (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Company in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, in connection with a dividend reinvestment or stockholder stock purchase plan or in connection with the issuance of capital stock of the Company (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into prior to the applicable Extension Period, (b) as a result of an exchange or conversion of any class or series of the Company's capital stock (or any capital stock of a Subsidiary of the Company) for any class or series of the Company's capital stock or of any class or series of the Company's indebtedness for any class or series of the Company's capital stock, (c) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection with any Rights Plan, or the issuance of rights, stock or other property under any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or (e) any dividend in the form of stock, warrants, options -31- or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock). Prior to the termination of any such Extension Period, the Company may further defer the payment of interest, provided that no Extension Period shall exceed the period or periods specified in such Securities, extend beyond the Stated Maturity of the principal of such Securities or end on a date other than an Interest Payment Date. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due on any Interest Payment Date, the Company may elect to begin a new Extension Period, subject to the above conditions. No interest or Additional Interest shall be due and payable during an Extension Period, except at the end thereof, but each installment of interest that would otherwise have been due and payable during such Extension Period shall bear Additional Interest as and to the extent as may be specified as contemplated by Section 3.1. The Company shall give the Holders of the Securities of such series and the Trustee notice of its election to begin any such Extension Period at least one Business Day prior to the next succeeding Interest Payment Date on which interest on Securities of such series would be payable but for such deferral or, with respect to any Securities of a series issued to an Issuer Trust, so long as any such Securities are held by such Issuer Trust, at least one Business Day prior to the earlier of (i) the next succeeding date on which Distributions on the Capital Securities of such Issuer Trust would be payable but for such deferral, and (ii) the date on which the Property Trustee of such Issuer Trust is required to give notice to any securities exchange or other applicable self-regulatory organization or to holders of such Capital Securities of the record date or the date such Distributions are payable. The Trustee shall promptly give notice of the Company's election to begin any such Extension Period to the Holders of the Outstanding Securities of such series. SECTION 3.13. Right of Set-Off. With respect to the Securities of a series initially issued to an Issuer Trust, notwithstanding anything to the contrary herein, the Company shall have the right to set off any payment it is otherwise required to make in respect of any such Security to the extent the Company has theretofore made, or is concurrently on the date of such payment making, a payment under the Guarantee Agreement relating to such Security or to a holder of Capital Securities pursuant to an action undertaken under Section 5.8 of this Indenture. SECTION 3.14. Agreed Tax Treatment. Each Security issued hereunder shall provide that the Company and, by its acceptance of a Security or a beneficial interest therein, the Holder of, and any Person that acquires a beneficial interest in, such Security agree that for United States Federal, state and local tax purposes it is intended that such Security constitutes indebtedness. SECTION 3.15. Shortening or Extension of Stated Maturity. If specified as contemplated by Section 2.1 or Section 3.1 with respect to the Securities of a particular series, the Company shall have the right to (i) shorten the Stated Maturity of the principal of the Securities of such series at any time to any date not earlier than the first date on which the Company has the right to redeem the Securities of such series, and (ii) extend the Stated Maturity of the principal of the Securities of such series at any time at its election for one -32- or more periods, but in no event to a date later than the 49th anniversary of the first Interest Payment Date following the Original Issue Date of the Securities of such series; provided that, if the Company elects to exercise its right to extend the Stated Maturity of the principal of the Securities of such series pursuant to clause (ii), above, at the time such election is made and at the time of extension (A) the Company is not in bankruptcy, otherwise insolvent or in liquidation, (B) the Company is not in default in the payment of any interest or principal on such Securities, (C) if the Issuer Trust has not been liquidated, such Issuer Trust is not in arrears on payments of Distributions on the Capital Securities issued by such Issuer Trust and no deferred Distributions are accumulated, (D) such Securities are rated not less than BBB- by S&P or Baa3 by Moody's or the equivalent by any other nationally recognized statistical rating organization and (E) after such extension, the Securities shall not have a remaining term to maturity of more than 30 years. In the event the Company elects to shorten or extend the Stated Maturity of the Securities of such series, it shall give notice to the Trustee, and the Trustee shall give notice of such shortening or extension to the Holders, no less than 30 and no more than 60 days prior to the effectiveness thereof. SECTION 3.16. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption and other similar or related materials as a convenience to Holders; provided that any such notice or other materials may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of redemption or other materials and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. ARTICLE IV SATISFACTION AND DISCHARGE SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture shall, upon Company Request, cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for and as otherwise provided in this Section 4.1) and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 3.7 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation -33- (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year of the date of deposit, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of subclause (B)(i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for such purpose an amount in the currency or currencies in which the Securities of such series are payable sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest (including any Additional Interest) to the date of such deposit (in the case of Securities that have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.7, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive. SECTION 4.2. Application of Trust Money. Subject to the provisions of the last paragraph of Section 10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by the Trustee, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest (including any Additional Interest) for the payment of which such money or obligations have been deposited with or received by the Trustee. ARTICLE V EVENTS OF DEFAULT; REMEDIES SECTION 5.1. Events of Default. "Event of Default", wherever used herein with respect to the Securities of any series, means any one of the following events (whatever the reason for such Event of Default and -34- whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) except as may be specified pursuant to Section 3.1: (1) default in the payment of any interest upon any Security of that series, including any Additional Interest in respect thereof, when it becomes due and payable, and continuance of such default for a period of 30 days (subject to the deferral of any due date in the case of an Extension Period); or (2) default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or (3) 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 Securities of that series or in this Indenture for a period of 90 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 by registered or certified mail or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of that series; or (4) the entry of a decree or order by a court having jurisdiction in the premises adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization of the Company under the Bankruptcy Code or any other similar applicable Federal or State law, which decree or order shall have continued undischarged and unstayed for a period of 60 days; or the entry of 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 its property, or for the winding up or liquidation of its affairs, which decree or order shall have continued undischarged and unstayed for a period of 60 days; or (5) the commencement by the Company of voluntary proceedings to be adjudicated a bankrupt, or consent by the Company to the filing of a bankruptcy proceeding against it, or the filing by the Company of a petition or answer or consent seeking reorganization under the Bankruptcy Code or any other similar Federal or State law, or consent by the Company to the filing of any such petition, or the consent by the Company to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its property, or the making by the Company of an assignment for the benefit of creditors, or the admission by the Company in writing of its inability to pay its debts generally as they become due; or (6) any other Event of Default provided with respect to Securities of that series. SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. If an Event of Default (other than an Event of Default specified in Section 5.1(4) or 5.1(5)) with respect to Securities of any series at the time Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of that series may declare the principal amount (or, if the Securities of that series are Discount Securities, such portion of the principal amount as may be specified in the terms of that series) of all the Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), provided that, in the case of the Securities of a series issued to an Issuer Trust, if, upon an Event -35- of Default, the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of such series fail to declare the principal of all the Outstanding Securities of such series to be immediately due and payable, the holders of at least 25% in aggregate Liquidation Amount (as defined in the related Trust Agreement) of the related series of Capital Securities issued by such Issuer Trust then outstanding shall have the right to make such declaration by a notice in writing to the Company and the Trustee; and upon any such declaration such principal amount (or specified portion thereof) of and the accrued interest (including any Additional Interest) on all the Securities of such series shall become immediately due and payable. If an Event of Default specified in Section 5.1(4) or 5.1(5) with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of such series (or, if the Securities of such series are Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms of that series) shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable. Payment of principal and interest (including any Additional Interest) on such Securities shall remain subordinated to the extent provided in Article XIII notwithstanding that such amount shall become immediately due and payable as herein provided. At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in aggregate principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (1) the Company has paid or deposited with the Trustee a sum sufficient to pay: (A) all overdue installments of interest on all Securities of such series, (B) any accrued Additional Interest on all Securities of such series, (C) the principal of (and premium, if any, on) any Securities of such series that have become due otherwise than by such declaration of acceleration and interest and Additional Interest thereon at the rate borne by the Securities, and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series that has become due solely by such acceleration, have been cured or waived as provided in Section 5.13. In the case of Securities of a series initially issued to an Issuer Trust, if the Holders of such Securities fail to annul such declaration and waive such default, the holders of a majority in aggregate Liquidation Amount (as defined in the related Trust Agreement) of the related series of Capital Securities issued by such Issuer Trust then outstanding shall also have the right to rescind and annul such declaration and its consequences by written notice to the Company and the Trustee, subject to the satisfaction of the conditions set forth in Clauses (1) and (2) above of this Section 5.2. -36- No such rescission shall affect any subsequent default or impair any right consequent thereon. SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if: (1) default is made in the payment of any installment of interest (including any Additional Interest) on any Security of any series when such interest becomes due and payable and such default continues for a period of 30 days, or (2) default is made in the payment of the principal of (and premium, if any, on) any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest (including any Additional Interest), and, in addition thereto, all amounts owing the Trustee under Section 6.7. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Securities, wherever situated. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. SECTION 5.4. Trustee May File Proofs of Claim. In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, (a) the Trustee (irrespective of whether the principal of the Securities of any series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal (and premium, if any) or interest (including any Additional Interest)) shall be entitled and empowered, by intervention in such proceeding or otherwise, (i) to file and prove a claim for the whole amount of principal (and premium, if any) and interest (including any Additional Interest) owing and -37- unpaid in respect to the Securities and to file such other papers or documents as may be necessary or advisable and to take any and all actions as are authorized under the Trust Indenture Act in order to have the claims of the Holders and any predecessor to the Trustee under Section 6.7 allowed in any such judicial proceedings; and (ii) in particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same in accordance with Section 5.6; and (b) any custodian, receiver, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee for distribution in accordance with Section 5.6, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it and any predecessor Trustee under Section 6.7. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors' or other similar committee. SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, subject to Article XIII and after provision for the payment of all the amounts owing the Trustee and any predecessor Trustee under Section 6.7, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. SECTION 5.6. Application of Money Collected. Any money or property collected or to be applied by the Trustee with respect to a series of Securities pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money or property on account of principal (or premium, if any) or interest (including any Additional Interest), upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee and any predecessor Trustee under Section 6.7; SECOND: Subject to Article XIII, to the payment of the amounts then due and unpaid upon Securities of such series for principal (and premium, if any) and interest (including any Additional Interest) in respect of which or for the benefit of which such money has been -38- collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such series of Securities for principal (and premium, if any) and interest (including any Additional Interest), respectively; and THIRD: The balance, if any, to the Person or Persons entitled thereto. SECTION 5.7. Limitation on Suits. Subject to Section 5.8, no Holder of any Securities of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture or for the appointment of a receiver, assignee, trustee, liquidator, sequestrator (or other similar official) or for any other remedy hereunder, unless: (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series; (2) the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Securities, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders. SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest; Direct Action by Holders of Capital Securities. Notwithstanding any other provision in this Indenture, the Holder of any Security of any series shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Sections 3.8 and 3.12) interest (including any Additional Interest) on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. In the case of Securities of a series issued to an Issuer Trust, any registered holder of the series of Capital Securities issued by such Issuer Trust shall have the right, upon the occurrence of an Event of Default described in Section 5.1(1) or 5.1(2), to institute a suit directly against the Company for enforcement of payment to such holder of principal of (premium, if any) -39- and (subject to Sections 3.8 and 3.12) interest (including any Additional Interest) on the Securities having a principal amount equal to the aggregate Liquidation Amount (as defined in the related Trust Agreement) of such Capital Securities held by such holder. SECTION 5.9. Restoration of Rights and Remedies. If the Trustee, any Holder or any holder of Capital Securities issued by any Issuer Trust has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee, such Holder or such holder of Capital Securities, then and in every such case the Company, the Trustee, such Holders and such holder of Capital Securities shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee, such Holder and such holder of Capital Securities shall continue as though no such proceeding had been instituted. SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise provided in the last paragraph of Section 3.7, no right or remedy herein conferred upon or reserved to the Trustee or the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the Trustee, any Holder of any Security with respect to the Securities of the related Series or any holder of any Capital Security to exercise any right or remedy accruing upon any Event of Default with respect to the Securities of the related series shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders and the right and remedy given to the holders of Capital Securities by Section 5.8 may be exercised from time to time, and as often as may be deemed expedient, by the Trustee, the Holders or the holders of Capital Securities, as the case may be. SECTION 5.12. Control by Holders. The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that: (1) such direction shall not be in conflict with any rule of law or with this Indenture, (2) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction, and -40- (3) subject to the provisions of Section 6.1, the Trustee shall have the right to decline to follow such direction if a Responsible Officer or Officers of the Trustee shall, in good faith, determine that the proceeding so directed would be unjustly prejudicial to the Holders not joining in any such direction or would involve the Trustee in personal liability. SECTION 5.13. Waiver of Past Defaults. The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of any series affected thereby and, in the case of any Securities of a series initially issued to an Issuer Trust, the holders of a majority in aggregate Liquidation Amount (as defined in the related Trust Agreement) of the Capital Securities issued by such Issuer Trust may waive any past default hereunder and its consequences with respect to such series except a default: (1) in the payment of the principal of (or premium, if any) or interest (including any Additional Interest) on any Security of such series (unless such default has been cured and the Company has paid to or deposited with the Trustee a sum sufficient to pay all matured installments of interest (including any Additional Interest) and all principal of (and premium, if any, on) all Securities of that series due otherwise than by acceleration), or (2) in respect of a covenant or provision hereof that under Article IX cannot be modified or amended without the consent of each Holder of any Outstanding Security of such series affected. Any such waiver shall be deemed to be on behalf of the Holders of all the Securities of such series or, in the case of a waiver by holders of Capital Securities issued by such Issuer Trust, by all holders of Capital Securities issued by such Issuer Trust. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 5.14. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security 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, or group of Holders, holding in the aggregate more than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest (including any Additional Interest) on any Security on or after the respective Stated Maturities expressed in such Security. -41- SECTION 5.15. Waiver of Usury, Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VI THE TRUSTEE SECTION 6.1. Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default, (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct except that (1) this Subsection shall not be construed to limit the effect of Subsection (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of Holders pursuant to Section 5.12 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, -42- or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of a series. (d) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (e) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION 6.2. Notice of Defaults. Within 90 days after actual knowledge by a Responsible Officer of the Trustee of the occurrence of any default hereunder with respect to the Securities of any series, the Trustee shall transmit by mail to all Holders of Securities of such series, as their names and addresses appear in the Securities Register, notice of such default, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest (including any Additional Interest) on any Security of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of Securities of such series; and provided, further, that, in the case of any default of the character specified in Section 5.1(3), no such notice to Holders of Securities of such series shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event that is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. SECTION 6.3. Certain Rights of Trustee. Subject to the provisions of Section 6.1: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, Security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; -43- (d) the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, indenture, Security or other paper or document, but the Trustee in its discretion may make such inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. SECTION 6.4. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of the Securities or the proceeds thereof. SECTION 6.5. May Hold Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Securities Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Securities Registrar or such other agent. SECTION 6.6. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company. -44- SECTION 6.7. Compensation and Reimbursement. The Company agrees (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder in such amounts as the Company and the Trustee shall agree from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense (including the reasonable compensation and the expenses and disbursements of its agents and counsel) incurred without negligence or bad faith, arising out of or in connection with the acceptance or administration of this trust or the performance of its duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. This indemnification shall survive the termination of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 5.1(4) or 5.1(5) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under the Bankruptcy Reform Act of 1978 or any successor statute. SECTION 6.8. Disqualification; Conflicting Interests. (a) The Trustee for the Securities of any series issued hereunder shall be subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing herein shall prevent the Trustee from filing with the Commission the application referred to in the second to last paragraph of said Section 310(b). (b) The Trust Agreement and the Guarantee Agreement with respect to each Issuer Trust shall be deemed to be specifically described in this Indenture for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. SECTION 6.9. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be: (a) a corporation organized and doing business under the laws of the United States of America or of any State or Territory or the District of Columbia, authorized under such laws to exercise corporate trust powers and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority, or -45- (b) a corporation or other Person organized and doing business under the laws of a foreign government that is permitted to act as Trustee pursuant to a rule, regulation or order of the Commission, authorized under such laws to exercise corporate trust powers, and subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees, in either case having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then, for the purposes of this Section 6.9, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.9, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VI. Neither the Company nor any Person directly or indirectly controlling, controlled by or under common control with the Company shall serve as Trustee for the Securities of any series issued hereunder. SECTION 6.10. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article VI shall become effective until the acceptance of appointment by the successor Trustee under Section 6.11. (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in aggregate principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with Section 6.8 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 6.9 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company, acting pursuant to the authority of a Board Resolution, may remove the Trustee with respect to the Securities of all series issued hereunder, or (ii) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six months -46- may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to the Securities of all series issued hereunder and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee with respect to the Securities of that or those series. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in aggregate principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee with respect to the Securities of such series and supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, subject to Section 5.14, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to the Holders of Securities of such series as their names and addresses appear in the Securities Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. SECTION 6.11. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the -47- rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts, and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. (c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated, and in case any Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor Trustee or in the name of such successor Trustee, and in all cases the certificate of authentication shall have the full force which it is provided anywhere in the Securities or in this Indenture that the certificate of the Trustee shall have. SECTION 6.13. Preferential Collection of Claims Against Company. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). -48- SECTION 6.14. Appointment of Authenticating Agent. The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities, which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 3.6, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, or of any State or Territory thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of an Authenticating Agent shall be the successor Authenticating Agent hereunder, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent, which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 1.6 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provision of this Section. The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 6.7. -49- If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form: -50- This is one of the Securities of the series designated therein referred to in the within mentioned Indenture. Dated: THE BANK OF NEW YORK, as Trustee By: _______________________________, As Authenticating Agent By:_______________________________ Authorized Officer ARTICLE VII HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders. The Company will furnish or cause to be furnished to the Trustee: (a) semi-annually, on or before June 30 and December 31 of each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of a date not more than 15 days prior to the delivery thereof, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished, in each case to the extent such information is in the possession or control of the corporation and has not otherwise been received by the Trustee in its capacity as Securities Registrar. SECTION 7.2. Preservation of Information, Communications to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as Securities Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.1 upon receipt of a new list so furnished. (b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided in the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of -51- them shall be held accountable by reason of the disclosure of information as to the names and addresses of the Holders made pursuant to the Trust Indenture Act. SECTION 7.3. Reports by Trustee. (a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act, at the times and in the manner provided pursuant thereto. (b) Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than January 31 in each calendar year, commencing with January 31, 2003 after the first issuance of Securities under this Indenture. (c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each securities exchange upon which any Securities are listed and also with the Commission. The Company will notify the Trustee when any Securities are listed on any securities exchange. SECTION 7.4. Reports by Company. The Company shall file with the Trustee and with the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided in the Trust Indenture Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is required to be filed with the Commission. Notwithstanding that the Company may not be required to remain subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall continue to file with the Commission and provide the Trustee with the annual reports and the information, documents and other reports which are specified in Sections 13 and 15(d) of the Exchange Act. The Company also shall comply with the other provisions of Trust Indenture Act Section 314(a). ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms. The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and no Person shall consolidate with or merge into the Company or convey, transfer or lease its properties and assets substantially as an entirety to the Company, unless: (1) if the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the corporation formed by such consolidation or into which the Company is merged or the Person that acquires by conveyance or transfer, or that leases, the properties and assets of the Company substantially as an entirety shall be a corporation, partnership or trust organized and existing under the laws of the United States of America or any State thereof or the District of Columbia and shall expressly -52- assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest (including any Additional Interest) on all the Securities of every series and the performance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction, no Event of Default, and no event that, after notice or lapse of time, or both, would constitute an Event of Default, shall have happened and be continuing; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and any such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with; and the Trustee, subject to Section 6.1, may rely upon such Officers' Certificate and Opinion of Counsel as conclusive evidence that such transaction complies with this Section 8.1. SECTION 8.2. Successor Company Substituted. Upon any consolidation or merger by the Company with or into any other Person, or any conveyance, transfer or lease by the Company of its properties and assets substantially as an entirety to any Person in accordance with Section 8.1, the successor corporation formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; and in the event of any such conveyance, transfer or lease the Company shall be discharged from all obligations and covenants under the Indenture and the Securities. Such successor Person may cause to be executed, and may issue either in its own name or in the name of the Company, any or all of the Securities issuable hereunder that theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor Person instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities that previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication pursuant to such provisions and any Securities that such successor Person thereafter shall cause to be executed and delivered to the Trustee on its behalf for the purpose pursuant to such provisions. All the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture. In case of any such consolidation, merger, sale, conveyance or lease, such changes in phraseology and form may be made in the Securities thereafter to be issued as may be appropriate. -53- ARTICLE IX SUPPLEMENTAL INDENTURES SECTION 9.1. Supplemental Indentures without Consent of Holders. Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Securities contained; or (2) to convey, transfer, assign, mortgage or pledge any property to or with the Trustee or to surrender any right or power herein conferred upon the Company; or (3) to establish the form or terms of Securities of any series as permitted by Sections 2.1 or 3.1; or (4) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of the series specified) or to surrender any right or power herein conferred upon the Company; or (5) to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of the series specified); or (6) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall (a) become effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture that is entitled to the benefit of such provision or (b) not apply to any Outstanding Securities; or (7) to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this clause (7) shall not adversely affect the interest of the Holders of Securities of any series in any material respect or, in the case of the Securities of a series issued to an Issuer Trust and for so long as any of the corresponding series of Capital Securities issued by such Issuer Trust shall remain outstanding, the holders of such Capital Securities; or (8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or -54- change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11(b); or (9) to comply with the requirements of the Commission in order to effect or maintain qualification of this Indenture under the Trust Indenture Act. SECTION 9.2. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security of each series affected thereby, (1) change the Stated Maturity of the principal of, or any installment of interest (including any Additional Interest) on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of principal of a Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2, or change the place of payment where, or the coin or currency in which, any Security or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or (2) reduce the percentage in aggregate principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or (3) modify any of the provisions of this Section, Section 5.13 or Section 10.5, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Security affected thereby; provided, further, that, in the case of the Securities of a series issued to an Issuer Trust, so long as any of the corresponding series of Capital Securities issued by such Issuer Trust remains outstanding, (i) no such amendment shall be made that adversely affects the holders of such Capital Securities in any material respect, and no termination of this Indenture shall occur, and no waiver of any Event of Default or compliance with any covenant under this Indenture shall be effective, without the prior consent of the holders of at least a majority of the aggregate Liquidation Amount (as defined in the related Trust Agreement) of such Capital Securities then outstanding unless and until the principal of (and premium, if any, on) the Securities of such series and all accrued and (subject to Section 3.8) unpaid interest (including any Additional Interest) thereon have been paid in full, and (ii) no amendment shall be made to Section 5.8 of this Indenture that would impair the rights of the holders of Capital Securities issued by any Issuer Trust provided therein without the prior consent of the holders of each such Capital -55- Security then outstanding unless and until the principal of (and premium, if any, on) the Securities of such series and all accrued and (subject to Section 3.12) unpaid interest (including any Additional Interest) thereon have been paid in full. A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture that has expressly been included solely for the benefit of one or more particular series of Securities or any corresponding series of Capital Securities of an Issuer Trust that holds the Securities of any series, or that modifies the rights of the Holders of Securities of such series or holders of such Capital Securities of such corresponding series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series or holders of Capital Securities of any other such corresponding series. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 9.3. Execution of Supplemental Indentures. In executing or accepting the additional trusts created by any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture, and that all conditions precedent herein provided for relating to such action have been complied with. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 9.4. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. SECTION 9.5. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. SECTION 9.6. Reference in Securities to Supplemental Indentures. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Company, bear a notation in form approved by the Company as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. -56- ARTICLE X COVENANTS SECTION 10.1. Payment of Principal, Premium and Interest. The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of (and premium, if any) and interest (including any Additional Interest) on the Securities of that series in accordance with the terms of such Securities and this Indenture. SECTION 10.2. Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company initially appoints the Trustee, acting through its Corporate Trust Office, as its agent for said purposes. The Company will give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall fail to maintain such office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all of such purposes, and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation and any change in the location of any such office or agency. SECTION 10.3. Money for Security Payments to be Held in Trust. If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any, an) or interest on any of the Securities of such series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee of its failure so to act. Whenever the Company shall have one or more Paying Agents, it will, prior to 10:00 a.m., New York City time, on each due date of the principal of (or premium, if any) or interest (including any Additional Interest) on any Securities, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest (including any Additional Interest) so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal (and premium, if any) or interest (including any Additional Interest), and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its failure so to act. -57- The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest (including any Additional Interest) on the Securities of a series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee notice of any default by the Company (or any other obligor upon such Securities) in the making of any payment of principal (and premium, if any) or interest (including any Additional Interest) in respect of any Security of any Series; (3) at any time during the continuance of any default with respect to a series of Securities, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent with respect to such series; and (4) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company in trust for the payment of the principal of (and premium, if any) or interest (including any Additional Interest) on any Security and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall (unless otherwise required by mandatory provision of applicable escheat or abandoned or unclaimed property law) be paid on Company Request to the Company, or (if then held by the Company) shall (unless otherwise required by mandatory provision of applicable escheat or abandoned or unclaimed property law) be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION 10.4. Statement as to Compliance. The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate covering the preceding -58- calendar year, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance, observance or fulfillment of or compliance with any of the terms, provisions, covenants and conditions of this Indenture, and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. For the purpose of this Section 10.4, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the terms of this Indenture. SECTION 10.5. Waiver of Certain Covenants. Subject to the rights of holders of Capital Securities specified in Section 9.2, if any, the Company may omit in any particular instance to comply with any covenant or condition provided pursuant to Section 3.1, 9.1(3) or 9.1(4) with respect to the Securities of any series, if before or after the time for such compliance the Holders of at least a majority in aggregate principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company in respect of any such covenant or condition shall remain in full force and effect. SECTION 10.6. Additional Sums. In the case of the Securities of a series initially issued to an Issuer Trust, so long as no Event of Default has occurred and is continuing and except as otherwise specified as contemplated by Section 2.1 or Section 3.1, if (i) an Issuer Trust is the Holder of all of the Outstanding Securities of such series, and (ii) a Tax Event has occurred and is continuing in respect of such Issuer Trust, the Company shall pay to such Issuer Trust (and its permitted successors or assigns under the related Trust Agreement) for so long as such Issuer Trust (or its permitted successor or assignee) is the registered holder of the Outstanding Securities of such series, such additional sums as may be necessary in order that the amount of Distributions (including any Additional Amounts (as defined in such Trust Agreement)) then due and payable by such Issuer Trust on the related Capital Securities and Common Securities that at any time remain outstanding in accordance with the terms thereof shall not be reduced as a result of any Additional Taxes arising from such Tax Event (the "Additional Sums"). Whenever in this Indenture or the Securities there is a reference in any context to the payment of principal of or interest on the Securities, such mention shall be deemed to include mention of the payments of the Additional Sums provided for in this paragraph to the extent that, in such context, Additional Sums are, were or would be payable in respect thereof pursuant to the provisions of this paragraph and express mention of the payment of Additional Sums (if applicable) in any provisions hereof shall not be construed as excluding Additional Sums in those provisions hereof where such express mention is not made; provided, however, that the deferral of the payment of interest pursuant to Section 3.12 or the Securities shall not defer the payment of any Additional Sums that may be due and payable. SECTION 10.7. Additional Covenants. The Company covenants and agrees with each Holder of Securities of each series that it shall not (x) declare or pay any dividends or distributions on, or redeem purchase, acquire or make a liquidation payment with respect to, any shares of the Company's capital stock, or (y) make any payment of principal of or interest or premium, if any, on or repay, repurchase or -59- redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to the Securities of such series (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Company in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, in connection with a dividend reinvestment or stockholder stock purchase plan or in connection with the issuance of capital stock of the Company (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into prior to the applicable Extension Period, (b) as a result of an exchange or conversion of any class or series of the Company's capital stock (or any capital stock of a Subsidiary of the Company) for any class or series of the Company's capital stock or of any class or series of the Company's indebtedness for any class or series of the Company's capital stock, (c) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection with any Rights Plan, or the issuance of rights, stock or other property under any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or (e) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock) if at such time (i) there shall have occurred any event (A) of which the Company has actual knowledge that with the giving of notice or the lapse of time, or both, would constitute an Event of Default with respect to the Securities of such series, and (B) which the Company shall not have taken reasonable steps to cure, (ii) if the Securities of such series are held by an Issuer Trust, the Company shall be in default with respect to its payment of any obligations under the Guarantee Agreement relating to the Capital Securities issued by such Issuer Trust, or (iii) the Company shall have given notice of its election to begin an Extension Period with respect to the Securities of such series as provided herein and shall not have rescinded such notice, or such Extension Period, or any extension thereof, shall be continuing. The Company also covenants with each Holder of Securities of a series issued to an Issuer Trust (i) to hold, directly or indirectly, 100% of the Common Securities of such Issuer Trust, provided that any permitted successor of the Company hereunder may succeed to the Company's ownership of such Common Securities, (ii) as holder of such Common Securities, not to voluntarily terminate, wind-up or liquidate such Issuer Trust, other than (a) in connection with a distribution of the Securities of such series to the holders of the related Capital Securities in liquidation of such Issuer Trust, or (b) in connection with certain mergers, consolidations or amalgamations permitted by the related Trust Agreement, and (iii) to use its reasonable efforts, consistent with the terms and provisions of such Trust Agreement, to cause such Issuer Trust to continue not to be taxable as a corporation for United States federal income tax purposes. SECTION 10.8. Original Issue Discount. For each year during which any Securities that were issued with original issue discount are Outstanding, the Company shall furnish to each Paying Agent in a timely fashion such information as may be reasonably requested by each Paying Agent in order that each Paying Agent may prepare the information which it is required to report for such year on Internal Revenue Service Forms 1096 and 1099 pursuant to Section 6049 of the Internal Revenue Code of 1986, as amended. Such information shall include the amount of original issue discount includible in income for each $10 of principal amount at Stated Maturity of outstanding Securities during such year. -60- SECTION 10.9. Corporate Existence. Subject to the rights of the Company under Article VIII, the Company shall do or cause to be done all things necessary at all times to maintain its corporate existence. SECTION 10.10. Maintenance of Trust Existence. So long as Preferred Securities of any series remain outstanding, the Company shall (i) maintain direct or indirect ownership of all interests in the Issuer Trust which issued such Preferred Securities, other than such Preferred Securities, (ii) not voluntarily (to the extent permitted by law) dissolve, liquidate or wind up such Issuer Trust, except in connection with a distribution of the Securities to the holders of the Preferred Securities in liquidation of such Issuer Trust, (iii) remain the sole Depositor under the Trust Agreement (the "Depositor") of such Issuer Trust and timely perform in all material respects all of its duties as Depositor of such Trust, and (iv) use reasonable efforts to cause such Issuer Trust to remain a business trust and otherwise continue to be treated as a grantor trust for Federal income tax purposes, provided that any permitted successor to the Company under this Indenture may succeed to the Company's duties as Depositor of such Issuer Trust; and provided further that the Company may permit such Issuer Trust to consolidate or merge with or into another business trust or other permitted successor under the Trust Agreement pertaining to such Issuer Trust so long as the Company agrees to comply with this Section 10.10 with respect to such successor business trust or other permitted successor. SECTION 10.11. Listing on an Exchange. If Securities are to be distributed to the holders of the Capital Securities in connection with the dissolution of an Issuer Trust, the Company will, if the Securities are not already so listed, use its best efforts to list such Securities on the New York Stock Exchange, Inc. or on such other national securities exchange or other organizations as the Preferred Securities are then listed. ARTICLE XI REDEMPTION OF SECURITIES SECTION 11.1. Applicability of This Article. Redemption of Securities of any series as permitted or required by any form of Security issued pursuant to this Indenture shall be made in accordance with such form of Security and this Article; provided, however, that if any provision of any such form of Security shall conflict with any provision of this Article, the provision of such form of Security shall govern. Except as otherwise set forth in the form of Security for such series, each Security of a series shall be subject to partial redemption only in the amount of $10 or any integral multiples thereof. SECTION 11.2. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities shall be evidenced by or pursuant to a Board Resolution. In case of any redemption at the election of the Company, the Company shall, at least 45 days prior to the Redemption Date (unless a shorter notice shall be satisfactory to -61- the Trustee), notify the Trustee and, in the case of Securities of a series held by an Issuer Trust, the Property Trustee under the related Trust Agreement, of such date and of the principal amount of Securities of the applicable series to be redeemed and provide the additional information required to be included in the notice or notices contemplated by Section 11.4; provided that in the case of any series of Securities initially issued to an Issuer Trust, for so long as such Securities are held by such Issuer Trust, such notice shall be given not less than 45 nor more than 75 days prior to such Redemption Date (unless a shorter notice shall be satisfactory to the Property Trustee under the related Trust Agreement). In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities, the Company shall furnish the Trustee with an Officers' Certificate and an Opinion of Counsel evidencing compliance with such restriction. SECTION 11.3. Selection of Securities to be Redeemed. If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. The Trustee shall promptly notify the Company in writing of the Securities selected for partial redemption and the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security that has been or is to be redeemed. SECTION 11.4. Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not later than the thirtieth day, and not earlier than the sixtieth day, prior to the Redemption Date, to each Holder of Securities to be redeemed, at the address of such Holder as it appears in the Securities Register, provided that in the case of any series of Securities initially issued to an Issuer Trust, for so long as such Securities are held by such Issuer Trust, such notice shall be given not less than 45 nor more than 75 days prior to such Redemption Date (unless a shorter notice shall be satisfactory to the Property Trustee under the related Trust Agreement). With respect to Securities of each series to be redeemed, each notice of redemption shall state: (a) the Redemption Date; (b) the Redemption Price or, if the Redemption Price cannot be calculated prior to the time the notice is required to be sent, the estimate of the Redemption Price together with a statement that it is an estimate and that the actual Redemption Price will be calculated on the third Business Day prior to the Redemption Date (and if an estimate is provided, a further notice shall be sent of the actual Redemption Price on the date that such Redemption Price is calculated); -62- (c) if less than all Outstanding Securities of such particular series are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the particular Securities to be redeemed; (d) that on the Redemption Date, the Redemption Price will become due and payable upon each such Security or portion thereof, and that interest (including any Additional Interest) thereon, if any, shall cease to accrue on and after said date; (e) the place or places where such Securities are to be surrendered for payment of the Redemption Price; (f) such other provisions as may be required in respect of the terms of a particular series of Securities. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company and shall be irrevocable. The notice if mailed in the manner provided above shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, a failure to give such notice by mail or any defect in the notice to the Holder of any Security designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security. SECTION 11.5. Deposit of Redemption Price. Prior to 10:00 a.m., New York City time, on the Redemption Date specified in the notice of redemption given as provided in Section 11.4, the Company will deposit with the Trustee or with one or more Paying Agents (or if the Company is acting as its own Paying Agent, the Company will segregate and hold in trust as provided in Section 10.3) an amount of money sufficient to pay the Redemption Price of, and any accrued interest (including any Additional Interest) on, all the Securities (or portions thereof) that are to be redeemed on that date. SECTION 11.6. Payment of Securities Called for Redemption. If any notice of redemption has been given as provided in Section 11.4, the Securities or portion of Securities with respect to which such notice has been given shall become due and payable on the date and at the place or places stated in such notice at the applicable Redemption Price, together with accrued interest (including any Additional Interest) to the Redemption Date. On presentation and surrender of such Securities at a Place of Payment in said notice specified, the said Securities or the specified portions thereof shall be paid and redeemed by the Company at the applicable Redemption Price, together with accrued interest (including any Additional Interest) to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 3.1, installments of interest (including any Additional Interest) whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant record dates according to their terms and the provisions of Section 3.8. Upon presentation of any Security redeemed in part only, the Company shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Security or Securities of the same series, of authorized denominations, in aggregate principal -63- amount equal to the unredeemed portion of the Security so presented and having the same Original Issue Date, Stated Maturity and terms. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal of and premium, if any, on such Security shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. SECTION 11.7. Right of Redemption of Securities Initially Issued to an Issuer Trust. In the case of the Securities of a series initially issued to an Issuer Trust, except as otherwise specified as contemplated by Section 3.1, the Company, at its option and subject to receipt of prior approval by the Federal Reserve if such approval is then required under applicable capital guidelines or policies, may redeem such Securities (i) on or after the date specified in such Security, in whole at any time or in part from time to time, or (ii) upon the occurrence and during the continuation of a Tax Event, a Capital Treatment Event or an Investment Company Event, at any time within 90 days following the occurrence and during the continuation of such Tax Event, Capital Treatment Event or Investment Company Event, in whole (but not in part), in each case at a Redemption Price of 100% unless specified in such Security, together with accrued interest (including any Additional Interest) to the Redemption Date. If less than all the Securities of any such series are to be redeemed, the aggregate principal amount of such Securities remaining Outstanding after giving effect to such redemption shall be sufficient to satisfy any provisions of the Trust Agreement related to the Issuer Trust to which such Securities were issued, including any requirement in such Trust Agreement as to the minimum Liquidation Amount (as defined in such Trust Agreement) of Capital Securities that may be held by a holder of Capital Securities thereunder. ARTICLE XII [RESERVED] ARTICLE XIII SUBORDINATION OF SECURITIES SECTION 13.1. Securities Subordinate to Senior Debt. The Company covenants and agrees, and each Holder of a Security, by its acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article, the payment of the principal of (and premium, if any) and interest (including any Additional Interest) on each and all of the Securities of each and every series are hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Debt. SECTION 13.2. No Payment When Senior Debt in Default; Payment Over of Proceeds Upon Dissolution, Etc. If the Company shall default in the payment of any principal of (or premium, if any) or interest on any Senior Debt when the same becomes due and payable, whether at maturity or at a -64- date fixed for prepayment or by declaration of acceleration or otherwise, then, upon written notice of such default to the Company by the holders of Senior Debt or any trustee therefor, unless and until such default shall have been cured or waived or shall have ceased to exist, no direct or indirect payment (in cash, property, securities, by set-off or otherwise) shall be made or agreed to be made on account of the principal of (or premium, if any) or interest (including any Additional Interest) on any of the Securities, or in respect of any redemption, repayment, retirement, purchase or other acquisition of any of the Securities. In the event of (a) any insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other similar proceedings relating to the Company, its creditors or its property, (b) any proceeding for the liquidation, dissolution or other winding up of the Company, voluntary or involuntary, whether or not involving insolvency or bankruptcy proceedings, (c) any assignment by the Company for the benefit of creditors or (d) any other marshalling of the assets of the Company (each such event, if any, herein sometimes referred to as a "Proceeding"), all Senior Debt (including any interest thereon accruing after the commencement of any such proceedings) shall first be paid in full before any payment or distribution, whether in cash, securities or other property, shall be made to any Holder of any of the Securities on account thereof. Any payment or distribution, whether in cash, securities or other property (other than securities of the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in these subordination provisions with respect to the indebtedness evidenced by the Securities, to the payment of all Senior Debt at the time outstanding and to any securities issued in respect thereof under any such plan of reorganization or readjustment), which would otherwise (but for these subordination provisions) be payable or deliverable in respect of the Securities of any series shall be paid or delivered directly to the holders of Senior Debt in accordance with the priorities then existing among such holders until all Senior Debt (including any interest thereon accruing after the commencement of any Proceeding) shall have been paid in full. In the event of any Proceeding, after payment in full of all sums owing with respect to Senior Debt, the Holders of the Securities, together with the holders of any obligations of the Company ranking on a parity with the Securities, shall be entitled to be paid from the remaining assets of the Company the amounts at the time due and owing on account of unpaid principal of (and premium, if any) and interest on the Securities and such other obligations before any payment or other distribution, whether in cash, property or otherwise, shall be made on account of any capital stock or any obligations of the Company ranking junior to the Securities and such other obligations. If, notwithstanding the foregoing, any payment or distribution of any character or any security, whether in cash, securities or other property (other than securities of the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in these subordination provisions with respect to the indebtedness evidenced by the Securities, to the payment of all Senior Debt at the time outstanding and to any securities issued in respect thereof under any such plan of reorganization or readjustment), shall be received by the Trustee or any Holder in contravention of any of the terms hereof and before all Senior Debt shall have been paid in full, such payment or distribution or security shall be received in trust for the benefit of, and shall be paid over or delivered and transferred to, the holders of the Senior Debt at the time outstanding in accordance with the priorities then existing among such holders for application to the payment of all Senior Debt remaining unpaid, to the extent necessary to pay all such Senior Debt in full. In the event of the failure of the Trustee or any Holder to endorse or assign any such payment, distribution or -65- security, each holder of Senior Debt is hereby irrevocably authorized to endorse or assign the same. The Trustee and the Holders shall take such action (including, without limitation, the delivery of this Indenture to an agent for the holders of Senior Debt or consent to the filing of a financing statement with respect hereto) as may, in the opinion of counsel designated by the holders of a majority in principal amount of the Senior Debt at the time outstanding, be necessary or appropriate to assure the effectiveness of the subordination effected by these provisions. The provisions of this Section 13.2 shall not impair any rights, interests, remedies or powers of any secured creditor of the Company in respect of any security interest the creation of which is not prohibited by the provisions of this Indenture. The securing of any obligations of the Company, otherwise ranking on a parity with the Securities or ranking junior to the Securities, shall not be deemed to prevent such obligations from constituting, respectively, obligations ranking on a parity with the Securities or ranking junior to the Securities. SECTION 13.3. Payment Permitted If No Default. Nothing contained in this Article or elsewhere in this Indenture or in any of the Securities shall prevent (a) the Company, at any time, except during the pendency of the conditions described in the first paragraph of Section 13.2 or of any Proceeding referred to in Section 13.2, from making payments at any time of principal of (and premium, if any) or interest (including any Additional Interest) on the Securities, or (b) the application by the Trustee of any moneys deposited with it hereunder to the payment of or on account of the principal of (and premium, if any) or interest (including any Additional Interest) on the Securities or the retention of such payment by the Holders, if, at the time of such application by the Trustee, it did not have knowledge that such payment would have been prohibited by the provisions of this Article. SECTION 13.4. Subrogation to Rights of Holders of Senior Debt. Subject to the payment in full of all amounts due or to become due on all Senior Debt, or the provision for such payment in cash or cash equivalents or otherwise in a manner satisfactory to the holders of Senior Debt, the Holders of the Securities shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Debt pursuant to the provisions of this Article (equally and ratably with the holders of all indebtedness of the Company that by its express terms is subordinated to Senior Debt of the Company to substantially the same extent as the Securities are subordinated to the Senior Debt and is entitled to like rights of subrogation by reason of any payments or distributions made to holders of such Senior Debt) to the rights of the holders of such Senior Debt to receive payments and distributions of cash, property and securities applicable to the Senior Debt until the principal of (and premium, if any) and interest (including any Additional Interest) on the Securities shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of the Senior Debt of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article, and no payments over pursuant to the provisions of this Article to the holders of Senior Debt by Holders of the Securities or the Trustee, shall, as among the Company, its creditors other than holders of Senior Debt, and the Holders of the Securities, be deemed to be a payment or distribution by the Company to or on account of the Senior Debt. -66- SECTION 13.5. Provisions Solely to Define Relative Rights. The provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities on the one hand and the holders of Senior Debt on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Securities is intended to or shall (a) impair, as between the Company and the Holders of the Securities, the obligations of the Company, which are absolute and unconditional, to pay to the Holders of the Securities the principal of (and premium, if any) and interest (including any Additional Interest) on the Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against the Company of the Holders of the Securities and creditors of the Company other than their rights in relation to the holders of Senior Debt; or (c) prevent the Trustee or the Holder of any Security (or to the extent expressly provided herein, the holder of any Capital Security) from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, including filing and voting claims in any Proceeding, subject to the rights, if any, under this Article of the holders of Senior Debt to receive cash, property and securities otherwise payable or deliverable to the Trustee or such Holder. SECTION 13.6. Trustee to Effectuate Subordination. Each Holder of a Security by his or her acceptance thereof authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination provided in this Article and appoints the Trustee his or her attorney-in-fact for any and all such purposes. SECTION 13.7. No Waiver of Subordination Provisions. No right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or be otherwise charged with. Without in any way limiting the generality of the immediately preceding paragraph, the holders of Senior Debt may, at any time and from to time, without the consent of or notice to the Trustee or the Holders of the Securities of any series, without incurring responsibility to such Holders of the Securities and without impairing or releasing the subordination provided in this Article or the obligations hereunder of such Holders of the Securities to the holders of Senior Debt, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Debt, or otherwise amend or supplement in any manner Senior Debt or any instrument evidencing the same or any agreement under which Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person liable in any manner for the collection of Senior Debt; and (iv) exercise or refrain from exercising any rights against the Company and any other Person. -67- SECTION 13.8. Notice to Trustee. The Company shall give prompt written notice to the Trustee of any fact known to the Company that would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice thereof from the Company or a holder of Senior Debt or from any trustee, agent or representative therefor; provided, however, that if the Trustee shall not have received the notice provided for in this Section at least two Business Days prior to the date upon which by the terms hereof any monies may become payable for any purpose (including, the payment of the principal of (and premium, if any, on) or interest (including any Additional Interest) on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were received and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to such date. Subject to the provisions of Section 6.1, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or herself to be a holder of Senior Debt (or a trustee or attorney-in-fact therefor) to establish that such notice has been given by a holder of Senior Debt (or a trustee or attorney-in-fact therefor). 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 Debt to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. SECTION 13.9. Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 6.1, and the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt 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. SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Debt. The Trustee, in its capacity as trustee under this Indenture, shall not be deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Securities or to the Company or -68- to any other Person cash, property or securities to which any holders of Senior Debt shall be entitled by virtue of this Article or otherwise. SECTION 13.11. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article with respect to any Senior Debt that may at any time be held by it, to the same extent as any other holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. SECTION 13.12. Article Applicable to Paying Agents. If at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee. * * * * -69- This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. STERLING BANCORP By: --------------------------------- Name: Title: Attest: --------------------------- THE BANK OF NEW YORK, as Trustee By: --------------------------------- Name: Title: Attest: --------------------------- EX-4.B 5 y56473ex4-b.txt FORM OF SUBORDINATED DEBENTURE EXHIBIT 4-B STERLING BANCORP _____% Junior subordinated deferrable interest debentures, series A No. AIV-1 $22,681,000 STERLING BANCORP, a corporation organized and existing under the laws of New York (hereinafter called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to The Bank of New York, as Property Trustee for Sterling Bancorp Trust I, a statutory business trust formed under the laws of the State of Delaware (hereinafter called the "Issuer Trust"), or registered assigns, the principal sum of Twenty-Two Million Six Hundred Eighty One Thousand Dollars ($22,681,000) on ___________, 2032; provided that the Company may shorten the Stated Maturity of the principal of this Security to a date not earlier than ___________, 2007. The Company further promises to pay interest on said principal sum from ___________, 2002 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on ___________, ___________, ___________ and __________ of each year, commencing __________, 2002, at the rate of _____% per annum, together with Additional Sums, if any, as provided in Section 10.6 of the Indenture, until the principal hereof is paid or duly provided for or made available for payment; provided that any overdue principal, premium or Additional Sums and any overdue installment of interest shall bear Additional Interest at the rate of _____% per annum (to the extent that the payment of such interest shall be legally enforceable), compounded quarterly, from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. The amount of interest payable for any period less than a full interest period shall be computed on the basis of a 360-day year of twelve 30-day months and the actual days elapsed in a partial month in such period. The amount of interest payable for any full interest period shall be computed by dividing the applicable rate per annum by four. The interest so payable and punctually paid or duly provided for on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest installment which shall be the fifteenth day (whether or not a Business Day) immediately preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. So long as no Event of Default has occurred and is continuing, the Company shall have the right, at any time during the term of this Security, from time to time to defer the payment of interest on this Security for up to 20 consecutive quarterly interest payment periods with respect to each deferral period (each an "Extension Period"), at the end of which the Company shall pay all interest then accrued and unpaid, including any Additional Interest, as provided below; provided, however, that no Extension Period shall extend beyond the Stated Maturity of the principal of this Security, and no such Extension Period may end on a date other than an Interest Payment Date; and provided, further, that during any such Extension Period, the Company shall not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's capital stock, or (ii) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with, or junior in interest to, this Security (other than (A) repurchases, redemptions or other acquisitions of shares of capital stock of the Company in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, in connection with a dividend reinvestment or stockholder stock purchase plan or in connection with the issuance of capital stock of the Company (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into prior to the applicable Extension Period, (B) as a result of an exchange or conversion of any class or series of the Company's capital stock (or any capital stock of a Subsidiary of the Company) for any class or series of the Company's capital stock or of any class or series of the Company's indebtedness for any class or series of the Company's capital stock, (C) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (D) any declaration of a dividend in connection with any Rights Plan, or the issuance of rights, stock or other property under any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or (E) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock). Prior to the termination of any such Extension Period, the Company may further defer the payment of interest; provided that no Extension Period shall exceed 20 consecutive quarterly interest payment periods, extend beyond the Stated Maturity of the principal of this Security or end on a date other than an Interest Payment Date. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due on any Interest Payment Date, the Company may elect to begin a new Extension Period, subject to the above conditions. No interest shall be due and payable during an Extension Period, except at the end thereof, but each installment of interest that would otherwise have been due and payable during such Extension shall bear Additional Interest (to the extent that the payment of such interest shall be legally enforceable) at the rate of _____% per annum, compounded quarterly and calculated as set forth in the first paragraph of this Security, from the dates on which amounts would otherwise have been due and payable until paid or made available for payment. The Company shall give the Holder of this Security and the Trustee notice of its election to begin any Extension Period at least one Business Day prior to the next succeeding Interest Payment Date on which interest on this Security would be payable but for such deferral or, so long as such Securities are held by The Bank of New York, as Property Trustee for the Issuer Trust, at least one Business Day prior to the earlier of (i) the next succeeding date on which Distributions on the Capital Securities of such Issuer Trust would be payable but for such deferral, and (ii) the date on which the Property Trustee of such Issuer Trust is required to give notice to any securities exchange or other applicable self-regulatory organization or to holders of such Capital Securities of the record date or the date such Distributions are payable. -2- Payment of the principal of and interest on this Security will be made at the office or agency of the Company maintained for that purpose in New York, New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. The indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (i) agrees to and shall be bound by such provisions, (ii) authorizes and directs the Trustee on his or her behalf to take such actions as may be necessary or appropriate to effectuate the subordination so provided, and (iii) appoints the Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof by his or her acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. -3- IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. STERLING BANCORP By: ------------------------------------ Name: Title: Attest: - ------------------------ Name: Title: -4- This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: __________, 2002 THE BANK OF NEW YORK as Trustee By: ----------------------------------------- Name: Title: -5- [Reverse of Security] This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under the Junior Subordinated Indenture, dated as of ___________, 2002 (hereinafter called the "Indenture"), between the Company and The Bank of New York, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Indebtedness and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof limited in aggregate principal amount to $25,744,000. All terms used in this Security that are defined in the Indenture or in the Amended and Restated Trust Agreement, dated as of ___________, 2002 (as modified, amended or supplemented from time to time, the "Trust Agreement"), relating to the Issuer Trust, among the Company, as Depositor and the Trustees named therein, shall have the meanings assigned to them in the Indenture or the Trust Agreement, as the case may be. The Company may at any time, at its option, and subject to the terms and conditions of Article XI of the Indenture, including the receipt of prior approval of the Federal Reserve, if such approval is then required under applicable capital guidelines or policies, (i) on or after ___________, 2007, redeem this Security in whole at any time or in part from time to time, and (ii) prior to ___________, 2007, and within 90 days following the occurrence and continuation of a Tax Event, Capital Treatment Event or Investment Company Event, redeem this Security in whole (but not in part), in each case of clauses (i) and (ii) at a Redemption Price equal to the accrued and unpaid interest on this Security to the date fixed for redemption, plus 100% of the principal amount hereof. In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. The Indenture contains provisions for satisfaction and discharge of the entire indebtedness of this Security upon compliance by the Company with certain conditions set forth in the Indenture. The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee at any time to enter into a supplemental indenture or indentures for the purpose of modifying in any manner the rights and obligations of the Company and of the Holders of the Securities, with the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series to be affected by such supplemental indenture. The Indenture also contains provisions permitting Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and -6- upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. As provided in and subject to the provisions of the Indenture, if an Event of Default with respect to the Securities of this series at the time Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of this series may declare the principal amount of all the Securities of this series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), provided that, if, upon an Event of Default, the Trustee or such Holders fail to declare the principal of all the Outstanding Securities of this series to be immediately due and payable, the holders of at least 25% in aggregate Liquidation Amount of the Capital Securities then Outstanding shall have the right to make such declaration by a notice in writing to the Company and the Trustee; and upon any such declaration the principal amount of and the accrued interest (including any Additional Interest) on all the Securities of this series shall become immediately due and payable; provided that the payment of principal and interest (including any Additional Interest) on such Securities shall remain subordinated to the extent provided in Article XIII of the Indenture. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company's obligations in respect of the payment of the principal of and premium and interest, if any, on this Security shall terminate. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest (including any Additional Interest) on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Securities Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained under Section 10.2 of the Indenture for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, and thereupon one or more new Securities of this series, of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of this series are issuable only in registered form without coupons in denominations of $10 and any integral multiple of $10 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this -7- Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Company and, by its acceptance of this Security or a beneficial interest therein, the Holder of, and any Person that acquires a beneficial interest in, this Security agree that for United States Federal, state and local tax purposes it is intended that this Security constitute indebtedness. THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. -8- EX-4.D 6 y56473ex4-d.txt TRUST AGREEMENT AND CERTIFICATE OF TRUST EXHIBIT 4-d TRUST AGREEMENT OF STERLING BANCORP TRUST I This TRUST AGREEMENT, dated as of February 1, 2002, between Sterling Bancorp, a New York corporation, as "Depositor" and John C. Millman and John W. Tietjen as "Regular Trustees" and The Bank of New York (Delaware) as "Trustee" (the Trustee and the Regular Trustees together, the "Trustees"). The Depositor and the Trustees hereby agree as follows: 1. The trust created hereby shall be known as Sterling Bancorp Trust I, in which name the Trustees, or the Depositor to the extent provided herein, may conduct the business of the Trust, make and execute contracts, and sue and be sued. 2. The Depositor hereby assigns, transfers, conveys and sets over to the Trustees the sum of $10. The Trustees hereby acknowledge receipt of such amount in trust from the Depositor, which amount shall constitute the initial trust estate. The Trustees hereby declare that they will hold the trust estate in trust for the Depositor. It is the intention of the parties hereto that the Trust created hereby constitute a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801 et seq. (the "Business Trust Act"), and that this document constitutes the governing instrument of the Trust. The Trustee is hereby authorized and directed to execute and file a certificate of trust with the Delaware Secretary of State in accordance with the provisions of the Business Trust Act. 3. The Depositor and the Trustees will enter into an amended and restated Trust Agreement, satisfactory to each such party and substantially in the form to be included as an exhibit to the 1933 Act Registration Statement (as defined below), to provide for the contemplated operation of the Trust created hereby and the issuance of the Preferred Securities and Common Securities referred to therein. Prior to the execution and delivery of such amended and restated Trust Agreement, the Trustees shall not have any duty or obligation hereunder or with respect to the trust estate, except as otherwise required by applicable law or as may be necessary to obtain prior to such execution and delivery any licenses, consents or approvals required by applicable law or otherwise. 4. The Depositor, as the sponsor of the Trust, is hereby authorized (i) to file with the Securities and Exchange Commission (the "Commission") and execute, in each case on behalf of the Trust (a) the Registration Statement on Form S-3 (the "1933 Act Registration Statement"), including any pre-effective or post-effective amendments to such 1933 Act Registration Statement (including the prospectus and the exhibits contained therein), relating to the registration under the Securities Act of 1933, as amended, of the Preferred Securities of the Trust and certain other securities and any other necessary documents relating thereto and (b) a Registration Statement on Form 8-A (the "1934 Act Registration Statement") (including all pre-effective and post-effective amendments thereto) relating to the registration of the Preferred Securities of the Trust under Section 12 of the Securities Exchange Act of 1934, as amended; (ii) to file with one or more national securities exchange (each, an "Exchange") or the National Association of Securities Dealers ("NASD") and execute on behalf of the Trust a listing application or applications and all other applications, statements, certificates, agreements and other instruments as shall be necessary or desirable to cause the Preferred Securities to be listed on any such Exchange or the NASD's Nasdaq National Market ("NASDAQ"); (iii) to file and execute on behalf of the Trust such applications, reports, surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents as the Depositor, on behalf of the Trust, may deem necessary or desirable to register the Preferred Securities under the securities or "Blue Sky" laws; (iv) to execute on behalf of the Trust such Underwriting Agreements with one or more underwriters relating to the offering of the Preferred Securities as the Depositor, on behalf of the Trust, may deem necessary or desirable. In the event that any filing referred to in clauses (i), (ii) and (iii) above is required by the rules and regulations of the Commission, any Exchange, the NASD or state securities or Blue Sky laws, to be executed on behalf of the Trust by one of the Trustees, the Depositor and any of the Trustees appointed pursuant to Section 6 -2- hereof are hereby authorized to join in any such filing and to execute on behalf of the Trust any and all of the foregoing. 5. This Trust Agreement may be executed in one or more counterparts. 6. The number of Trustees initially shall be three (3) and thereafter the number of Trustees shall be such number as shall be fixed from time to time by a written instrument signed by the Depositor which may increase or decrease the number of Trustees; provided, however, that to the extent required by the Business Trust Act, one Trustee shall either be a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware and otherwise meets the requirements of applicable Delaware law. Subject to the foregoing, the Depositor is entitled to appoint or remove without cause any of the Trustees at any time. Any of the Trustees may resign upon thirty days' prior notice to the Depositor provided, however, such notice shall not be required if it is waived by the Depositor. 7. The Depositor agrees to indemnify each Trustee for, and to hold it harmless against, any loss, liability or expense (including the reasonable compensation and the expenses and disbursements of its agents and counsel) incurred without negligence or bad faith, arising out of or in connection with the acceptance or administration of this trust or the performance of each such Trustee's duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. 8. The Bank of New York (Delaware), in its capacity as Trustee, shall not have any of the powers or duties of the Regular Trustees set forth herein and shall be a Trustee of the Trust for the sole purpose of satisfying the requirements of Section 3807 of the Business Trust Act. 9. This Trust Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware (without regard to conflict of laws principles). -3- IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed as of the day and year first above written. STERLING BANCORP, as Depositor By: /S/ JOHN W. TIETJEN ------------------------ Name: John W. Tietjen Title: Executive Vice President, Treasurer and Chief Financial Officer THE BANK OF NEW YORK (DELAWARE), as Trustee By: /S/ WILLIAM T. LEWIS ------------------------------ Name: William T. Lewis Title: Senior Vice President /S/ JOHN C. MILLMAN ------------------------------ John C. Millman, as Regular Trustee /S/ JOHN W. TIETJEN ------------------------------ John W. Tietjen, as Regular Trustee -4- CERTIFICATE OF TRUST OF STERLING BANCORP TRUST I This Certificate of Trust of Sterling Bancorp Trust I (the "Trust"), dated February 1, 2002, is being duly executed and filed by the undersigned, as trustees, to form a business trust under the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.). 1. Name. The name of the business trust being formed hereby is Sterling Bancorp Trust I. 2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of business in the State of Delaware is The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711. 3. Effective Date. This Certificate of Trust shall be effective upon its filing with the Secretary of State of the State of Delaware. [Remainder of Page Intentionally Left Blank] IN WITNESS WHEREOF, the undersigned, being the initial trustees of the Trust, have executed this certificate of Trust as of the date first above written. THE BANK OF NEW YORK (DELAWARE), as Trustee By: /S/ WILLIAM T. LEWIS ------------------------------ Name: William T. Lewis Title: Senior Vice President /S/ JOHN C. MILLMAN ------------------------------------ John C. Millman, as Regular Trustee /S/ JOHN W. TIETJEN ------------------------------------ John W. Tietjen, as Regular Trustee EX-4.E 7 y56473ex4-e.txt FORM OF AMENDED AND RESTATED TRUST AGREEMENT EXHIBIT 4-e ================================================================================ AMENDED AND RESTATED TRUST AGREEMENT AMONG STERLING BANCORP, as Depositor THE BANK OF NEW YORK, as Property Trustee THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee and THE ADMINISTRATIVE TRUSTEES NAMED HEREIN and THE SEVERAL HOLDERS OF THE TRUST SECURITIES Dated as of _____________, 2002 STERLING BANCORP TRUST I ================================================================================ Sterling Bancorp Trust I Certain Sections of this Trust Agreement relating to Sections 310 through 318 of the Trust Indenture Act of 1939:
Trust Indenture Trust Agreement Act Section Section - --------------- --------------- (Section) 310 (a)(1)........................................... 8.7 (a)(2)........................................... 8.7 (a)(3)........................................... 8.9 (a)(4)........................................... 2.7(a)(ii) (b).............................................. 8.8 (Section) 311 (a).............................................. 8.13 (b).............................................. 8.13 (Section) 312 (a).............................................. 5.8 (b).............................................. 5.8 (c).............................................. 5.8 (Section) 313 (a).............................................. 8.15(a) (a)(4)........................................... 8.15(b) (b).............................................. 8.15(b) (c).............................................. 10.8 (d).............................................. 8.15(c) (Section) 314 (a).............................................. 8.16 (b).............................................. Not Applicable (c)(1)........................................... 8.17 (c)(2)........................................... 8.17 (c)(3)........................................... Not Applicable (d).............................................. Not Applicable (e).............................................. 1.1, 8.17 (Section) 315 (a).............................................. 8.1(a), 8.3(a) (b).............................................. 8.2, 10.8 (c).............................................. 8.1(a) (d).............................................. 8.1, 8.3 (e).............................................. Not Applicable (Section) 316 (a).............................................. Not ApplicAble (a)(1)(A)........................................ Not Applicable (a)(1)(B)........................................ Not Applicable (a)(2)........................................... Not Applicable (b).............................................. 5.15 (c).............................................. 6.7
Trust Indenture Trust Agreement Act Section Section - --------------- --------------- (Section) 317 (a)(1)........................................... Not Applicable (a)(2)........................................... Not Applicable (b).............................................. 5.10 (Section) 318 (a).............................................. 10.10
- ----------- Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to be a part of the Trust Agreement. TABLE OF CONTENTS ARTICLE I. Defined Terms ................................................. 1 Section 1.1. Definitions. .................................................. 1 ARTICLE II. Continuation of the Issuer Trust .............................. 11 Section 2.1. Name. ......................................................... 11 Section 2.2. Office of the Delaware Trustee; Principal Place of Business. .. 11 Section 2.3. Initial Contribution of Trust Property; Organizational Expenses. ..................................................... 11 Section 2.4. Issuance of the Preferred Securities. ......................... 11 Section 2.5. Issuance of the Common Securities; Subscription and Purchase of Debentures. ................................................ 12 Section 2.6. Continuation of Trust. ........................................ 13 Section 2.7. Authorization to Enter into Certain Transactions. ............. 13 Section 2.8. Assets of Trust. .............................................. 17 Section 2.9. Title to Trust Property. ...................................... 17 ARTICLE III. Payment Account ............................................... 18 Section 3.1. Payment Account. .............................................. 18 ARTICLE IV. Distributions; Redemption ..................................... 18 Section 4.1. Distributions. ................................................ 18 Section 4.2. Redemption. ................................................... 19 Section 4.3. Subordination of Common Securities. ........................... 21 Section 4.4. Payment Procedures. ........................................... 22 Section 4.5. Tax Returns and Reports. ...................................... 22 Section 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust. ........... 23 Section 4.7. Payments under Indenture or Pursuant to Direct Actions. ....... 23 Section 4.8. Liability of the Holder of Common Securities. ................. 23 ARTICLE V. Securities Certificates ....................................... 23 Section 5.1. Initial Ownership. ............................................ 23 Section 5.2. The Securities Certificates. .................................. 23 Section 5.3. Execution and Delivery of Securities Certificates. ............ 24 Section 5.4. Book-Entry Preferred Securities. .............................. 24 Section 5.5. Registration of Transfer and Exchange of Preferred Securities Certificates. ................................................. 26 Section 5.6. Mutilated, Destroyed, Lost or Stolen Securities Certificates. . 28 Section 5.7. Persons Deemed Holders. ....................................... 28 Section 5.8. Access to List of Holders' Names and Addresses. ............... 29
-i- Section 5.9. Maintenance of Office or Agency. .............................. 29 Section 5.10. Appointment of Paying Agents. ................................. 29 Section 5.11. Ownership of Common Securities by Depositor. .................. 30 Section 5.12. Notices to Clearing Agency. ................................... 30 Section 5.13. Rights of Holders; Waivers of Past Defaults. .................. 30 ARTICLE VI. Acts of Holders; Meetings; Voting. ............................ 33 Section 6.1. Limitations on Voting Rights. ................................. 33 Section 6.2. Notice of Meetings. ........................................... 34 Section 6.3. Meetings of Holders of the Preferred Securities. .............. 34 Section 6.4. Voting Rights. ................................................ 34 Section 6.5. Proxies, etc. ................................................. 34 Section 6.6. Holder Action by Written Consent. ............................. 35 Section 6.7. Record Date for Voting and Other Purposes. .................... 35 Section 6.8. Acts of Holders. .............................................. 35 Section 6.9. Inspection of Records. ........................................ 36 ARTICLE VII. Representations and Warranties ................................ 37 Section 7.1. Representations and Warranties of the Property Trustee and the Delaware Trustee. ............................................. 37 Section 7.2. Representations and Warranties of Depositor. .................. 38 ARTICLE VIII. The Issuer Trustees ........................................... 38 Section 8.1. Certain Duties and Responsibilities. .......................... 38 Section 8.2. Certain Notices. .............................................. 41 Section 8.3. Certain Rights of Property Trustee. ........................... 41 Section 8.4. Not Responsible for Recitals or Issuance of Securities. ....... 43 Section 8.5. May Hold Securities. .......................................... 44 Section 8.6. Compensation; Indemnity; Fees. ................................ 44 Section 8.7. Corporate Property Trustee Required; Eligibility of Issuer Trustees. ..................................................... 45 Section 8.8. Conflicting Interests. ........................................ 46 Section 8.9. Co-Trustees and Separate Trustee. ............................. 46 Section 8.10. Resignation and Removal; Appointment of Successor. ............ 47 Section 8.11. Acceptance of Appointment by Successor. ....................... 49 Section 8.12. Merger, Conversion, Consolidation or Succession to Business. .. 50 Section 8.13. Preferential Collection of Claims Against Depositor or Issuer Trust. ................................................. 50 Section 8.14. Property Trustee May File Proofs of Claim. .................... 50 Section 8.15. Reports by Property Trustee. .................................. 51 Section 8.16. Reports to the Property Trustee. .............................. 52 Section 8.17. Evidence of Compliance with Conditions Precedent. ............. 52 Section 8.18. Number of Issuer Trustees. .................................... 52 Section 8.19. Delegation of Power. .......................................... 52 Section 8.20. Appointment of Administrative Trustees. ....................... 53
-ii- ARTICLE IX. Termination, Liquidation and Merger ........................... 54 Section 9.1. Dissolution Upon Expiration Date. ............................. 54 Section 9.2. Early Termination. ............................................ 54 Section 9.3. Termination. .................................................. 54 Section 9.4. Liquidation. .................................................. 54 Section 9.5. Mergers, Consolidations, Amalgamations or Replacements of Issuer Trust. ................................................. 56 Section 9.6. Exchange of Preferred Securities for Debentures by Depositor Affiliated Holder. ............................................ 57 ARTICLE X. Miscellaneous Provisions ...................................... 58 Section 10.1. Limitation of Rights of Holders. .............................. 58 Section 10.2. Amendment. .................................................... 58 Section 10.3. Separability. ................................................. 59 Section 10.4. Governing Law. ................................................ 60 Section 10.5. Payments Due on Non-Business Day. ............................. 60 Section 10.6. Successors. ................................................... 60 Section 10.7. Headings. ..................................................... 60 Section 10.8. Reports, Notices and Demands. ................................. 60 Section 10.9. Agreement Not to Petition. .................................... 61 Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act. ....... 61 Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee Agreement and Indenture. ................................................ 62 Section 10.12. Counterparts. ................................................. 62
Exhibit A Certificate of Trust Exhibit B Form of Common Securities Certificate Exhibit C Form of Expense Agreement Exhibit D Form of Preferred Securities Certificate -iii- AMENDED AND RESTATED TRUST AGREEMENT, dated as of ___________, 2002, among (i) Sterling Bancorp, a New York corporation (including any successors or assigns, the "Depositor"), (ii) The Bank of New York, a national banking association, as property trustee (in such capacity, the "Property Trustee" and, in its separate corporate capacity and not in its capacity as Property Trustee, the "Bank"), (iii) The Bank of New York (Delaware), a Delaware banking corporation, as Delaware trustee (in such capacity, the "Delaware Trustee"), (iv) John W. Tietjen, an individual, and John C. Millman, an individual, each of whose address is c/o Sterling Bancorp, 650 Fifth Avenue, New York, New York 10019-6108 (each an "Administrative Trustee" and collectively the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and the Administrative Trustees being referred to collectively as the "Issuer Trustees"), and (v) the several Holders, as hereinafter defined. WITNESSETH WHEREAS, the Depositor and certain Regular Trustees have heretofore duly declared and established a business trust pursuant to the Delaware Business Trust Act by entering into a Trust Agreement, dated as of ____________, 2002 (the "Original Trust Agreement"), and by the filing with the Secretary of State of the State of Delaware of the Certificate of Trust, filed on _________, 2002, attached as Exhibit A; WHEREAS, the Regular Trustees under the Original Trust Agreement are from here on called "Administrative Trustees"; and WHEREAS, the parties hereto desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the issuance of the Common Securities by the Issuer Trust to the Depositor, (ii) the issuance and sale of the Preferred Securities by the Issuer Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Issuer Trust from the Depositor of all of the right, title and interest in the Debentures, and (iv) the appointment of the Issuer Trustees; NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each party, for the benefit of the other parties and for the benefit of the Holders, hereby amends and restates the Original Trust Agreement in its entirety and agrees as follows: ARTICLE I. DEFINED TERMS Section 1.1. Definitions. For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) The terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; (b) All other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation"; (d) All accounting terms used but not defined herein have the meanings assigned to them in accordance with United States generally accepted accounting principles; (e) Unless the context otherwise requires, any reference to an "Article", a "Section" or an "Exhibit" refers to an Article, a Section or an Exhibit, as the case may be, of or to this Trust Agreement; and (f) The words "hereby", "herein", "hereof" and "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision. "Act" has the meaning specified in Section 6.8. "Additional Amount" means, with respect to Trust Securities of a given Liquidation Amount and/or a given period, the amount of Additional Interest (as defined in the Indenture) paid by the Depositor on a Like Amount of Debentures for such period. "Additional Sums" has the meaning specified in Section 10.6 of the Indenture. "Administrative Trustee" means each Person appointed in accordance with Section 8.20 solely in such Person's capacity as Administrative Trustee of the Issuer Trust and not in such Person's individual capacity, or any successor trustee appointed as herein provided. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Applicable Procedures" means, with respect to any transfer or transaction involving a Book-Entry Preferred Security, the rules and procedures of the Clearing Agency for such Book-Entry Preferred Security, in each case to the extent applicable to such transaction and as in effect from time to time. -2- "Bank" has the meaning specified in the preamble to this Trust Agreement. "Bankruptcy Event" means, with respect to any Person: (a) the entry of a decree or order by a court having jurisdiction in the premises judging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such Person under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Person or of any substantial part of its property or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or (b) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or similar official) of such Person or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt, or the taking of corporate action by such Person in furtherance of any such action. "Bankruptcy Laws" has the meaning specified in Section 10.9. "Board of Directors" means the board of directors of the Depositor or the Executive Committee of the board of directors of the Depositor (or any other committee of the board of directors of the Depositor performing similar functions) or a committee designated by the board of directors of the Depositor (or any such committee), comprised of two or more members of the board of directors of the Depositor or officers of the Depositor, or both. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Depositor to have been duly adopted by the Depositor's Board of Directors, or officers of the Depositor to which authority to act on behalf of the Board of Directors has been delegated and to be in full force and effect on the date of such certification, and delivered to the Issuer Trustees. "Book-Entry Preferred Securities Certificate" means a Preferred Securities Certificate evidencing ownership of Book-Entry Preferred Securities issued in global, fully registered form to the Clearing Agency or its nominee in accordance with Section 5.4. -3- Exhibit 4-e "Book-Entry Preferred Security" means a Preferred Security, the ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 5.4. "Business Day" means a day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed, or (c) a day on which the Property Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture Trustee is closed for business. "Certificate Depository Agreement" means the agreement among the Issuer Trust, the Depositor and DTC, as the same may be amended and supplemented from time to time. "Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. DTC will be the initial Clearing Agency. "Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Date" means the Time of Delivery, which date is also the date of execution and delivery of this Trust Agreement. "Code" means the Internal Revenue Code of 1986, as amended. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the execution of this instrument such Securities and Exchange Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Common Securities Certificate" means a certificate evidencing ownership of Common Securities, substantially in the form attached as Exhibit B. "Common Security" means an undivided beneficial interest in the assets of the Issuer Trust, having a Liquidation Amount of $10 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution to the extent provided herein. "Corporate Trust Office" means (i) when used with respect to the Property Trustee, the principal office of the Property Trustee located in New York, New York, and (ii) when used with respect to the Debenture Trustee, the principal office of the Debenture Trustee located in New York, New York. -4- "Debenture Event of Default" means any "Event of Default" specified in Section 5.1 of the Indenture. "Debenture Redemption Date" means, with respect to any Debentures to be redeemed under the Indenture, the date fixed for redemption of such Debentures under the Indenture. "Debenture Tax Event" means a "Tax Event" as defined in the Indenture. "Debenture Trustee" means the Person identified as the "Trustee" in the Indenture, solely in its capacity as Trustee pursuant to the Indenture and not in its individual capacity, or its successor in interest in such capacity, or any successor Trustee appointed as provided in the Indenture. "Debentures" means the Depositor's ___% Junior Subordinated Deferrable Interest Debentures, Series A, issued pursuant to the Indenture. "Definitive Preferred Securities Certificates" means Preferred Securities Certificates issued in certificated, fully registered form as provided in Section 5.2, 5.4 or 5.5. "Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., or any successor statute thereto, in each case as amended from time to time. "Delaware Trustee" means the Person identified as such in the preamble to this Trust Agreement, solely in its capacity as Delaware Trustee of the Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor Delaware trustee appointed as herein provided. "Depositor" has the meaning specified in the preamble to this Trust Agreement. "Depositor Affiliated Holder" has the meaning specified in Section 9.6 hereof. "Distribution Date" has the meaning specified in Section 4.1(a). "Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.1. "DTC" means The Depository Trust Company. "Early Termination Event" has the meaning specified in Section 9.2. "Event of Default" means any one of the following events (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): -5- (a) the occurrence of a Debenture Event of Default; or (b) default by the Issuer Trust in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or (c) default by the Issuer Trust in the payment of any Redemption Price of any Trust Security when it becomes due and payable; or (d) default in the performance, or breach, in any material respect, of any covenant or warranty of the Issuer Trustees in this Trust Agreement (other than those specified in clause (b) or (c) above) and continuation of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Issuer Trustees and to the Depositor by the Holders of at least 25% in aggregate Liquidation Amount of the Outstanding Preferred Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (e) the occurrence of a Bankruptcy Event with respect to the Property Trustee if a successor Property Trustee has not been appointed within 90 days thereof. "Exchange Act" means the Securities Exchange Act of 1934, and any successor statute thereto, in each case as amended from time to time. "Expense Agreement" means the Agreement as to Expenses and Liabilities, dated as of the Closing Date, between the Depositor, in its capacity as holder of the Common Securities, and the Issuer Trust, substantially in the form attached as Exhibit C, as amended from time to time. "Expiration Date" has the meaning specified in Section 9.1. "Guarantee Agreement" means the Guarantee Agreement, dated as of the date hereof, executed and delivered by the Depositor and The Bank of New York, as guarantee trustee, contemporaneously with the execution and delivery of this Trust Agreement, for the benefit of the holders of the Preferred Securities, as amended from time to time. "Holder" means a Person in whose name a Trust Security or Trust Securities are registered in the Securities Register; any such Person shall be a beneficial owner within the meaning of the Delaware Business Trust Act. "Indenture" means the Junior Subordinated Indenture, dated as of __________, 2002, between the Depositor and the Debenture Trustee, as trustee, as amended or supplemented from time to time. -6- "Investment Company Act" means the Investment Company Act of 1940, or any successor statute thereto, in each case as amended from time to time. "Issuer Trust" means the Delaware business trust known as "Sterling Bancorp Trust I" which was formed on February 1, 2002 under the Delaware Business Trust Act pursuant to the Original Trust Agreement and the filing of the Certificate of Trust, and continued pursuant to this Trust Agreement. "Issuer Trustees" has the meaning specified in the preamble to this Trust Agreement. "Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. "Like Amount" means (a) with respect to a redemption of any Trust Securities, Trust Securities having a Liquidation Amount equal to the principal amount of Debentures to be contemporaneously repaid or redeemed in accordance with the Indenture, the proceeds of which will be used to pay the Redemption Price of such Trust Securities, (b) with respect to a distribution of Debentures to Holders of Trust Securities in connection with a dissolution or liquidation of the Issuer Trust, Debentures having a principal amount equal to the Liquidation Amount of the Trust Securities of the Holder to whom such Debentures are distributed, and (c) with respect to any distribution of Additional Amounts to Holders of Trust Securities, Debentures having a principal amount equal to the Liquidation Amount of the Trust Securities in respect of which such distribution is made. "Liquidation Amount" means the stated amount of $10 per Trust Security. "Liquidation Date" means the date of the dissolution, winding-up or termination of the Issuer Trust pursuant to Section 9.4. "Liquidation Distribution" has the meaning specified in Section 9.4(d). "Majority in Liquidation Amount of the Preferred Securities" or "Majority in Liquidation Amount of the Common Securities" means, except as provided by the Trust Indenture Act, Preferred Securities or Common Securities, as the case may be, representing more than 50% of the aggregate Liquidation Amount of all then Outstanding Preferred Securities or Common Securities, as the case may be. "Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Depositor, and delivered to the Issuer Trustees. Any Officers' Certificate delivered with respect to -7- compliance with a condition or covenant provided for in this Trust Agreement shall include: (a) a statement by each officer signing the Officers' Certificate that such officer has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by such officer in rendering the Officers' Certificate; (c) a statement that such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of such officer, such condition or covenant has been complied with. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for or an employee of the Depositor or any Affiliate of the Depositor. "Option Closing Date" has the meaning specified in Section 5(b) of the Underwriting Agreement. "Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement. "Outstanding", when used with respect to Trust Securities, means, as of the date of determination, all Trust Securities theretofore executed and delivered under this Trust Agreement, except: (a) Trust Securities theretofore canceled by the Property Trustee or delivered to the Property Trustee for cancellation; (b) Trust Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent; provided that, if such Trust Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement; and (c) Trust Securities that have been paid or in exchange for or in lieu of which other Trust Securities have been executed and delivered pursuant to Sections 5.4, 5.5, 5.6 and 5.11; provided, however, that in determining whether the Holders of the requisite Liquidation Amount of the Outstanding Preferred Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Preferred Securities owned by the Depositor, any Issuer Trustee or any Affiliate of the Depositor or of any Issuer -8- Trustee shall be disregarded and deemed not to be Outstanding, except that (a) in determining whether any Issuer Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Preferred Securities that such Issuer Trustee knows to be so owned shall be so disregarded, and (b) the foregoing clause (a) shall not apply at any time when all of the Outstanding Preferred Securities are owned by the Depositor, one or more of the Issuer Trustees and/or any such Affiliate. Preferred Securities so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustees the pledgee's right so to act with respect to such Preferred Securities and that the pledgee is not the Depositor or any Affiliate of the Depositor. "Owner" means each Person who is the beneficial owner of Book-Entry Preferred Securities as reflected in the records of the Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as reflected in the records of a Person maintaining an account with such Clearing Agency (directly or indirectly, in accordance with the rules of such Clearing Agency). "Paying Agent" means any paying agent or co-paying agent appointed pursuant to Section 5.10 and shall initially be The Bank of New York. "Payment Account" means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee in its trust department for the benefit of the Holders in which all amounts paid in respect of the Debentures will be held and from which the Property Trustee, through a Paying Agent, shall make payments to the Holders in accordance with Sections 4.1 and 4.2. "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. "Preferred Security" means an undivided beneficial interest in the assets of the Issuer Trust, having a Liquidation Amount of $10 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution to the extent provided herein. "Preferred Securities Certificate" means a certificate evidencing ownership of Trust Securities, substantially in the form attached as Exhibit D. "Property Trustee" means the Person identified as the "Property Trustee" in the preamble to this Trust Agreement, solely in its capacity as Property Trustee of the Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor property trustee appointed as herein provided. "Redemption Date" means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement; provided that each -9- Debenture Redemption Date and the Maturity (as defined in the Indenture) of the Debentures shall be a Redemption Date for a Like Amount of Trust Securities. "Redemption Price" means, with respect to any Trust Security, the Liquidation Amount of such Trust Security, plus accumulated and unpaid Distributions to the Redemption Date. "Relevant Trustee" has the meaning specified in Section 8.10. "Securities Act" means the Securities Act of 1933 and any successor statute thereto, in each case as amended from time to time. "Securities Certificate" means any one of the Common Securities Certificates or the Preferred Securities Certificates. "Securities Register" and "Securities Registrar" have the respective meanings specified in Section 5.5. "Successor Preferred Securities" of any particular Preferred Securities Certificate means every Preferred Securities Certificate issued after, and evidencing all or a portion of the same beneficial interest in the Issuer Trust as that evidenced by, such particular Preferred Securities Certificate; and, for the purposes of this definition, any Preferred Securities Certificate executed and delivered under Section 5.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Preferred Securities Certificate shall be deemed to evidence the same beneficial interest in the Issuer Trust as the mutilated, destroyed, lost or stolen Preferred Securities Certificate. "Time of Delivery" has the meaning specified in the Underwriting Agreement. "Trust Agreement" means this Amended and Restated Trust Agreement, as the same may be modified, amended or supplemented in accordance with the applicable provisions hereof, including (i) all exhibits, and (ii) for all purposes of this Trust Agreement and any such modification, amendment or supplement, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Trust Agreement and any such modification, amendment or supplement, respectively. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that if the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trust Property" means (a) the Debentures, (b) any cash on deposit in, or owing to, the Payment Account, and (c) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to the trusts of this Trust Agreement. -10- "Trust Security" means any one of the Common Securities or the Preferred Securities. "Underwriting Agreement" means the Underwriting Agreement, dated as of ......, 2002, among the Issuer Trust, the Depositor and the representatives of the several underwriters named therein. "Vice President," when used with respect to the Depositor, means any duly appointed vice president, whether or not designated by a number or a word or words added before or after the title "vice president." ARTICLE II. CONTINUATION OF THE ISSUER TRUST Section 2.1. Name. The trust continued hereby shall be known as "Sterling Bancorp Trust I", as such name may be modified from time to time by the Administrative Trustees following written notice to the Holders of Trust Securities and the other Issuer Trustees, in which name the Issuer Trustees may conduct the business of the Issuer Trust, make and execute contracts and other instruments on behalf of the Issuer Trust and sue and be sued. Section 2.2. Office of the Delaware Trustee; Principal Place of Business. The address of the Delaware Trustee in the State of Delaware is The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711, Attention: Kristine Gullo, or such other address in the State of Delaware as the Delaware Trustee may designate by written notice to the Depositor, the Property Trustee and the Administrative Trustees. The principal executive office of the Issuer Trust is c/o Sterling Bancorp, 650 Fifth Avenue, New York, New York 10019-6108, Attention: Secretary. Section 2.3. Initial Contribution of Trust Property; Organizational Expenses. The Issuer Trustees acknowledge receipt from the Depositor in connection with the Original Trust Agreement of the sum of $10, which constituted the initial Trust Property. The Depositor shall pay organizational expenses of the Issuer Trust as they arise or shall, upon request of any Issuer Trustee, promptly reimburse such Issuer Trustee for any such expenses paid by such Issuer Trustee. The Depositor shall make no claim upon the Trust Property for the payment of such expenses. Section 2.4. Issuance of the Preferred Securities. The Depositor, both on its own behalf and on behalf of the Issuer Trust pursuant to the Original Trust Agreement, executed and delivered the Underwriting Agreement. Contemporaneously with the execution and delivery of this Trust Agreement, an -11- Administrative Trustee, on behalf of the Issuer Trust, shall manually execute in accordance with Sections 5.2 and 5.3 and the Property Trustee shall deliver to the underwriters pursuant to the Underwriting Agreement, Book-Entry Preferred Securities Certificates, registered in the name of the nominee of the initial Clearing Agency, evidencing an aggregate of 2,200,000 Preferred Securities having an aggregate Liquidation Amount of $22,000,000, against receipt by the Property Trustee of the aggregate purchase price of such Preferred Securities of $22,000,000. If and to the extent that the underwriters exercise their option under the Underwriting Agreement to purchase up to 300,000 additional Preferred Securities having an aggregate Liquidation Amount of up to $3,000,000, then an Administrative Trustee, on behalf of the Issuer Trust, shall manually execute in accordance with Sections 5.2 and 5.3 and the Property Trustee shall deliver to the underwriters pursuant to the Underwriting Agreement, Book-Entry Preferred Securities Certificates, registered in the name of the nominee of the initial Clearing Agency, evidencing the aggregate number of Preferred Securities being purchased pursuant to such option, against receipt by the Property Trustee of the aggregate purchase price of such Preferred Securities equal to the aggregate Liquidation Amount of such Preferred Securities plus any accumulated distributions thereon from ____________, 2002 to the date of such delivery and payment. Section 2.5. Issuance of the Common Securities; Subscription and Purchase of Debentures. (a) Contemporaneously with the execution and delivery of this Trust Agreement, an Administrative Trustee, on behalf of the Issuer Trust, shall manually execute in accordance with Sections 5.2 and 5.3 and the Property Trustee shall deliver to the Depositor, Common Securities Certificates, registered in the name of the Depositor, evidencing an aggregate of 77,400 Common Securities having an aggregate Liquidation Amount of $774,000, against receipt by the Property Trustee of the aggregate purchase price of such Common Securities of $774,000. Contemporaneously therewith, an Administrative Trustee, on behalf of the Issuer Trust, shall subscribe for and purchase from the Depositor Debentures, registered in the name of the Property Trustee on behalf of the Issuer Trust and having an aggregate principal amount equal to $25,774,000, and, in satisfaction of the purchase price for such Debentures, the Property Trustee, on behalf of the Issuer Trust, shall deliver to the Depositor the sum of $25,774,000 (being the sum of the amounts received by the Property Trustee pursuant to the second sentence of Section 2.4 and the first sentence of this Section 2.5(a)). (b) If and to the extent that the underwriters exercise their option under the Underwriting Agreement to purchase up to 300,000 additional Preferred Securities, then contemporaneously with the delivery of the Book-Entry Preferred Securities Certificates evidencing such Preferred Securities pursuant to the last sentence of Section 2.4, an Administrative Trustee, on behalf of the Issuer Trust, shall manually execute in accordance with Sections 5.2 and 5.3 and the Property Trustee shall deliver to the Depositor, Common Securities Certificates, registered in the name of the Depositor, evidencing an aggregate number of Common Securities equal to the smallest number of -12- Common Securities having an aggregate Liquidation Amount that (i) is an integral multiple of $1,000 and (ii) when added to the aggregate Liquidation Amount of the Common Securities issued pursuant to Section 2.5(a), is equal to or greater than 3% of the aggregate Liquidation Amount of all Trust Securities issued pursuant to Section 2.4, Section 2.5(a) and this Section 2.5(b), against receipt by the Property Trustee of the aggregate purchase price of the Common Securities issued pursuant to this Section 2.5(b) equal to the aggregate Liquidation Amount of such Common Securities plus any accumulated distributions thereon from _____________, 2002 to the date of such delivery and payment. Contemporaneously therewith, an Administrative Trustee, on behalf of the Issuer Trust, shall subscribe for and purchase from the Depositor Debentures, registered in the name of the Property Trustee on behalf of the Issuer Trust and having an aggregate principal amount equal to the aggregate Liquidation Amount of all Trust Securities issued pursuant to the last sentence of Section 2.4 and the first sentence of this Section 2.5(b), and in satisfaction of the purchase price for such Debentures, the Property Trustee, on behalf of the Issuer Trust, shall deliver to the Depositor the sum of the amounts received by the Property Trustee pursuant to the last sentence of Section 2.4 and the first sentence of this Section 2.5(b). Section 2.6. Continuation of Trust. The exclusive purposes and functions of the Issuer Trust are (a) to issue and sell Trust Securities and use the proceeds from such sale to acquire the Debentures, and (b) to engage in only those activities necessary or incidental thereto. The Depositor hereby reaffirms the appointment of the Property Trustee and the Delaware Trustee and appoints the Administrative Trustees as trustees of the Issuer Trust, to have all the rights, powers and duties to the extent set forth herein, and the respective Issuer Trustees hereby accept such appointment. The Property Trustee hereby declares that it will hold the Trust Property upon and subject to the conditions set forth herein for the benefit of the Issuer Trust and the Holders. The Administrative Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with respect to accomplishing the purposes of the Issuer Trust. The Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the Issuer Trustees specified in this Trust Agreement, except as mandated by the Delaware Business Trust Act. The Delaware Trustee shall be one of the trustees of the Issuer Trust for the sole and limited purpose of fulfilling the requirements of Section 3807(a) of the Delaware Business Trust Act and for taking such actions as are required to be taken by a Delaware trustee under the Delaware Business Trust Act. Section 2.7. Authorization to Enter into Certain Transactions. (a) The Issuer Trustees shall conduct the affairs of the Issuer Trust in accordance with the terms of this Trust Agreement. Subject to the limitations set forth in paragraph (b) of this Section 2.7, and in accordance with the following provisions (i) and (ii), the Issuer Trustees shall have the authority to enter into all transactions and agreements determined by the Issuer Trustees to be appropriate in exercising the authority, express or -13- implied, otherwise granted to the Issuer Trustees under this Trust Agreement, and to perform all acts in furtherance thereof, including, without limitation, the following: (i) Each Administrative Trustee shall have the power and authority to act on behalf of the Issuer Trust with respect to the following matters: (A) the issuance and sale of the Trust Securities; (B) to cause the Issuer Trust to enter into, and to execute, deliver and perform on behalf of the Issuer Trust, the Expense Agreement and the Certificate Depository Agreement and such other agreements as may be necessary or desirable in connection with the purposes and function of the Issuer Trust; (C) assisting in the registration of the Preferred Securities under the Securities Act, and under applicable state securities or blue sky laws and the qualification of this Trust Agreement as a trust indenture under the Trust Indenture Act; (D) assisting in obtaining the listing of the Preferred Securities upon such securities exchange or exchanges as shall be determined by the Depositor, with the registration of the Preferred Securities under the Exchange Act and with the preparation and filing of all periodic and other reports and other documents pursuant to the foregoing; (E) assisting in the sending of notices (other than notices of default) and other information regarding the Trust Securities and the Debentures to the Holders in accordance with this Trust Agreement; (F) the consent to the appointment or removal of a Paying Agent, authenticating agent and Securities Registrar in accordance with this Trust Agreement (which consent shall not be unreasonably withheld); (G) execution of the Trust Securities on behalf of the Issuer Trust in accordance with this Trust Agreement; (H) execution and delivery of closing certificates, if any, pursuant to the Underwriting Agreement and application for a taxpayer identification number for the Issuer Trust; (I) unless otherwise required by the Delaware Business Trust Act or the Trust Indenture Act, to execute on behalf of the Issuer Trust (either acting alone or together with any or all of the Administrative Trustees) any documents that the Administrative Trustees have the power to execute pursuant to this Trust Agreement; -14- (J) the establishment of a record date for any of the purposes contemplated by Section 6.7 hereof; (K) duly prepare and file all applicable tax return and tax information reports that are required to be filed with respect to the Issuer Trust on behalf of the Issuer Trust; and (L) the taking of any action incidental to the foregoing as the Issuer Trustees may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement. (ii) The Property Trustee shall have the power, duty and authority to act on behalf of the Issuer Trust with respect to the following matters: (A) the establishment of the Payment Account; (B) the receipt of the Debentures; (C) the collection of interest, principal and any other payments made in respect of the Debentures and the holding of such amounts in the Payment Account; (D) the distribution through any Paying Agent of amounts distributable to the Holders in respect of the Trust Securities; (E) the exercise of all of the rights, powers and privileges of a holder of the Debentures; (F) the sending of notices of default and other information regarding the Trust Securities and the Debentures to the Holders in accordance with this Trust Agreement; (G) the distribution of the Trust Property in accordance with the terms of this Trust Agreement; (H) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Issuer Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of the State of Delaware; (I) after an Event of Default (other than under paragraph (b), (c), (d) or (e) of the definition of such term if such Event of Default is by or with respect to the Property Trustee) the taking of any action incidental to the foregoing as the Property Trustee may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement and protect and conserve the Trust Property for the benefit of the Holders -15- (without consideration of the effect of any such action on any particular Holder). (b) So long as this Trust Agreement remains in effect, the Issuer Trust (or the Issuer Trustees acting on behalf of the Issuer Trust) shall not undertake any business, activities or transaction except as expressly provided herein or contemplated hereby. In particular, the Issuer Trustees (acting on behalf of the Issuer Trust) shall not (i) acquire any investments or engage in any activities not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Holders, except as expressly provided herein, (iii) take any action that would reasonably be expected to cause the Issuer Trust to become taxable as a corporation or classified as other than a grantor trust for United States Federal income tax purposes, (iv) incur any indebtedness for borrowed money or issue any other debt, or (v) take or consent to any action that would result in the placement of a Lien on any of the Trust Property. The Administrative Trustees shall defend all claims and demands of all Persons at any time claiming any Lien on any of the Trust Property adverse to the interest of the Issuer Trust or the Holders in their capacity as Holders. (c) In connection with the issue and sale of the Preferred Securities, the Depositor shall have the right and responsibility to assist the Issuer Trust with respect to, or effect on behalf of the Issuer Trust, the following (and any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects): (i) the preparation and filing by the Issuer Trust with the Commission and the execution on behalf of the Issuer Trust of a registration statement on the appropriate form in relation to the Preferred Securities, including any amendments thereto and the taking of any action necessary or desirable to sell the Preferred Securities in a transaction or a series of transactions pursuant thereto; (ii) the determination of the States or other jurisdictions, if any, in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and the determination of any and all such acts, other than actions that must be taken by or on behalf of the Issuer Trust, and the advice to the Issuer Trust of actions they must take on behalf of the Issuer Trust, and the preparation for execution and filing of any documents to be executed and filed by the Issuer Trust or on behalf of the Issuer Trust, as the Depositor deems necessary or advisable in order to comply with the applicable laws of any such States in connection with the sale of the Preferred Securities; (iii) the preparation for filing by the Issuer Trust and execution on behalf of the Issuer Trust of an application to the New York Stock Exchange or any other national stock exchange or the Nasdaq National Market for listing upon notice of issuance of any Preferred Securities; -16- (iv) the preparation for filing by the Issuer Trust with the Commission and the execution on behalf of the Issuer Trust of a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, including any amendments thereto; (v) the negotiation of the terms of, and the execution and delivery of, the Underwriting Agreement providing for the sale of the Preferred Securities; and (vi) the taking of any other actions necessary or desirable to carry out any of the foregoing activities. (d) Notwithstanding anything herein to the contrary, the Issuer Trustees are authorized and directed to conduct the affairs of the Issuer Trust and to operate the Issuer Trust so that the Issuer Trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act, and will not be taxable as a corporation or classified as other than a grantor trust for United States Federal income tax purposes and so that the Debentures will be treated as indebtedness of the Depositor for United States Federal income tax purposes. In this connection, each Administrative Trustee, the Property Trustee and the Holders of at least a Majority in Liquidation Amount of the Common Securities each are authorized to take any action, not inconsistent with applicable law, the Certificate of Trust or this Trust Agreement, that any such Administrative Trustee, the Property Trustee or Holders of Common Securities determines in its discretion to be necessary or desirable for such purposes, as long as such action does not adversely affect in any material respect the interests of the Holders of the Outstanding Preferred Securities. In no event shall the Issuer Trustees be liable to the Issuer Trust or the Holders for any failure to comply with this section that results from a change in law or regulation or in the interpretation thereof. Section 2.8. Assets of Trust. The assets of the Issuer Trust shall consist of the Trust Property. Section 2.9. Title to Trust Property. Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its capacity as such) and shall be held and administered by the Property Trustee in trust for the benefit of the Issuer Trust and the Holders in accordance with this Trust Agreement. -17- ARTICLE III. PAYMENT ACCOUNT Section 3.1. Payment Account. (a) On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The Property Trustee and its agents shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Holders and for distribution as herein provided, including (and subject to) any priority of payments provided for herein. (b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal of or interest on, and any other payments or proceeds with respect to, the Debentures. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof. ARTICLE IV. DISTRIBUTIONS; REDEMPTION Section 4.1. Distributions. (a) The Trust Securities represent undivided beneficial interests in the Trust Property, and Distributions (including any Additional Amounts) will be made on the Trust Securities at the rate and on the dates that payments of interest (including any Additional Interest, as defined in the Indenture) are made on the Debentures. Accordingly: (i) Distributions on the Trust Securities shall be cumulative, and shall accumulate whether or not there are funds of the Issuer Trust available for the payment of Distributions. Distributions shall accumulate from , 2002, and, except in the event (and to the extent) that the Depositor exercises its right to defer the payment of interest on the Debentures pursuant to the Indenture, shall be payable quarterly in arrears on , , and of each year, commencing on , 2002. If any date on which a Distribution is otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date on which such payment was originally payable (each date on which distributions are payable in accordance with this Section 4.1(a), a "Distribution Date"). -18- (ii) Distributions shall accumulate in respect of the Preferred Securities at a rate of % per annum of the Liquidation Amount of the Trust Securities. The amount of Distributions payable for any period less than a full Distribution period shall be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in a partial month in a period. Distributions payable for each full Distribution period will be computed by dividing the rate per annum by four. The amount of Distributions payable for any period shall include any Additional Amounts in respect of such period. (iii) Distributions on the Trust Securities shall be made by the Property Trustee from the Payment Account and shall be payable on each Distribution Date only to the extent that the Issuer Trust has funds then on hand and available in the Payment Account for the payment of such Distributions. (b) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the Holders thereof as they appear on the Securities Register for the Trust Securities at the close of business on the relevant record date, which shall be at the close of business on the fifteenth day (whether or not a Business Day) immediately preceding the relevant Distribution Date. Section 4.2. Redemption. (a) On each Debenture Redemption Date and on the Maturity (as defined in the Indenture) of the Debentures, the Issuer Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price. (b) Notice of redemption shall be given by the Property Trustee by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Trust Securities to be redeemed, at such Holder's address appearing in the Security Register. All notices of redemption shall state: (i) the Redemption Date; (ii) the Redemption Price or if the Redemption Price cannot be calculated prior to the time the notice is required to be sent, the estimate of the Redemption Price provided pursuant to (and as defined in the Indenture) together with a statement that it is an estimate and that the actual Redemption Price will be calculated on the third Business Day prior to the Redemption Date (and if an estimate is provided, a further notice shall be sent of the actual Redemption Price on the date that such Redemption Price is calculated); (iii) the CUSIP number or CUSIP numbers of the Preferred Securities affected; -19- (iv) if less than all the Outstanding Trust Securities are to be redeemed, the identification and the aggregate Liquidation Amount of the particular Trust Securities to be redeemed; (v) that on the Redemption Date the Redemption Price will become due and payable upon each such Trust Security to be redeemed and that Distributions thereon will cease to accumulate on and after said date, except as provided in Section 4.2(d) below; and (vi) the place or places where the Trust Securities are to be surrendered for the payment of the Redemption Price. The Issuer Trust in issuing the Trust Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Property Trustee shall indicate the "CUSIP" numbers of the Trust Securities in notices of redemption and related materials as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Trust Securities or as contained in any notice of redemption and related materials. (c) The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption of Debentures. Redemptions of the Trust Securities shall be made and the Redemption Price shall be payable on each Redemption Date only to the extent that the Issuer Trust has funds then on hand and available in the Payment Account for the payment of such Redemption Price. (d) If the Property Trustee gives a notice of redemption in respect of any Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption Date, subject to Section 4.2(c), the Property Trustee will, with respect to Book-Entry Preferred Securities, irrevocably deposit with the Clearing Agency for such Book-Entry Preferred Securities, to the extent available therefor, funds sufficient to pay the applicable Redemption Price and will give such Clearing Agency irrevocable instructions and authority to pay the Redemption Price to the Holders of the Preferred Securities. With respect to Preferred Securities that are not Book-Entry Preferred Securities, the Property Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying Agent or Paying Agents, to the extent available therefor, funds sufficient to pay the applicable Redemption Price and will give the Paying Agent or Paying Agents irrevocable instructions and authority to pay the Redemption Price to the Holders of the Preferred Securities upon surrender of their Preferred Securities Certificates. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any Trust Securities called for redemption shall be payable to the Holders of such Trust Securities as they appear on the Securities Register on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of Holders holding Trust Securities so called for redemption will cease, except the right of such Holders to receive the -20- Redemption Price and any Distribution payable in respect of the Trust Securities on or prior to the Redemption Date, but without interest, and such Securities will cease to be Outstanding. In the event that any date on which any Redemption Price is payable is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (without any interest or other payment in respect of any such delay), except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date. In the event that payment of the Redemption Price in respect of any Trust Securities called for redemption is improperly withheld or refused and not paid either by the Issuer Trust or by the Depositor pursuant to the Guarantee Agreement, Distributions on such Trust Securities will continue to accumulate, as set forth in Section 4.1, from the Redemption Date originally established by the Issuer Trust for such Trust Securities to the date such Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the Redemption Price. (e) Subject to Section 4.3(a), if less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated pro rata to the Common Securities and the Preferred Securities based upon the relative Liquidation Amounts of such classes. The particular Preferred Securities to be redeemed shall be selected on a pro rata basis based upon their respective Liquidation Amounts not more than 60 days prior to the Redemption Date by the Property Trustee from the Outstanding Preferred Securities not previously called for redemption; provided that so long as the Preferred Securities are represented by one or more Book-Entry Preferred Securities Certificates, such selection shall be made in accordance with the customary procedures for the Clearing Agency for the Book-Entry Preferred Securities. The Property Trustee shall promptly notify the Securities Registrar in writing of the Preferred Securities selected for redemption and, in the case of any Preferred Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Preferred Securities shall relate, in the case of any Preferred Securities redeemed or to be redeemed only in part, to the portion of the aggregate Liquidation Amount of Preferred Securities that has been or is to be redeemed. Section 4.3. Subordination of Common Securities. (a) Payment of Distributions (including any Additional Amounts) on, the Redemption Price of, and the Liquidation Distribution in respect of the Trust Securities, as applicable, shall be made, subject to Section 4.2(e), pro rata among the Common Securities and the Preferred Securities based on the Liquidation Amount of the Trust Securities; provided, however, that if on any Distribution Date, Redemption Date or Liquidation Date any Event of Default resulting from a Debenture Event of Default shall have occurred and be continuing, no payment of any Distribution (including any Additional Amounts) on, Redemption Price of, or Liquidation Distribution in respect of -21- any Common Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions (including any Additional Amounts) on all Outstanding Preferred Securities for all Distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all Outstanding Preferred Securities then called for redemption, or in the case of payment of the Liquidation Distribution the full amount of such Liquidation Distribution on all Outstanding Preferred Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions (including any Additional Amounts) on, or the Redemption Price of, the Preferred Securities then due and payable. (b) In the case of the occurrence of any Event of Default resulting from any Debenture Event of Default, the Holders of the Common Securities shall have no right to act with respect to any such Event of Default under this Trust Agreement until the effect of all such Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until all such Events of Default under this Trust Agreement with respect to the Preferred Securities have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the Holders of the Preferred Securities and not on behalf of the Holder of all the Common Securities, and only the Holders of the Preferred Securities will have the right to direct the Property Trustee to act on their behalf. Section 4.4. Payment Procedures. Payments of Distributions (including any Additional Amounts) or of the Redemption Price, Liquidation Amount or any other amounts in respect of the Preferred Securities shall be made at the corporate trust office or at the offices of any Paying Agent appointed by the Administrative Trustees; provided that such payments may, at the option of the Administrative Trustees, be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Securities Register or by wire transfer or, if the Preferred Securities are held by a Clearing Agency, such Distributions shall be made to the Clearing Agency in immediately available funds pursuant to the Applicable Procedures. Payments in respect of the Common Securities shall be made in such manner as shall be mutually agreed between the Property Trustee and the Holder of all the Common Securities. Section 4.5. Tax Returns and Reports. The Administrative Trustees shall prepare (or cause to be prepared), at the Depositor's expense, and file all United States Federal, state and local tax and information returns and reports required to be filed by or in respect of the Issuer Trust. In this regard, the Administrative Trustees shall (a) prepare and file (or cause to be prepared and filed) all Internal Revenue Service forms required to be filed in respect of the Issuer Trust in each taxable year of the Issuer Trust, and (b) prepare and furnish (or cause to be -22- prepared and furnished) to each Holder all Internal Revenue Service forms required to be provided by the Issuer Trust. The Administrative Trustees shall provide the Depositor and the Property Trustee with a copy of all such returns and reports promptly after such filing or furnishing. The Issuer Trustees shall comply with United States Federal withholding and backup withholding tax laws and information reporting requirements with respect to any payments to Holders under the Trust Securities. Section 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust. Upon receipt under the Debentures of Additional Sums, the Property Trustee shall promptly pay any taxes, duties or governmental charges of whatsoever nature (other than withholding taxes) imposed on the Issuer Trust by the United States or any other taxing authority. Section 4.7. Payments under Indenture or Pursuant to Direct Actions. Any amount payable hereunder to any Holder of Preferred Securities (or any Owner with respect thereto) shall be reduced by the amount of any corresponding payment such Holder (or Owner) has directly received pursuant to Section 5.8 of the Indenture or Section 5.13 of this Trust Agreement. Section 4.8. Liability of the Holder of Common Securities. Any Holder of the Common Securities shall be liable for the debts and obligations of the Issuer Trust in the manner and to the extent set forth with respect to the Common Securityholder (as defined in the Expense Agreement) and agrees that it shall be subject to all liabilities to which the Common Securityholder may be subject, and shall make all payments that the Common Securityholder is required to make, under the terms of the Expense Agreement. ARTICLE V. SECURITIES CERTIFICATES Section 5.1. Initial Ownership. Upon the formation of the Issuer Trust and the contribution by the Depositor referred to in Section 2.3 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are Outstanding, the Depositor shall be the sole beneficial owner of the Issuer Trust. Section 5.2. The Securities Certificates. (a) The Preferred Securities Certificates shall be issued in minimum denominations of $10 Liquidation Amount and integral multiples of $10 in excess thereof, and the Common Securities Certificates shall be issued in denominations of $10 -23- Liquidation Amount and integral multiples thereof. The Securities Certificates shall be executed on behalf of the Issuer Trust by manual signature of at least one Administrative Trustee. Securities Certificates bearing the manual signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Issuer Trust, shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the delivery of such Securities Certificates or did not hold such offices at the date of delivery of such Securities Certificates. A transferee of a Securities Certificate shall become a Holder, and shall be entitled to the rights and subject to the obligations of a Holder hereunder, upon due registration of such Securities Certificate in such transferee's name pursuant to Section 5.5. (b) Upon their original issuance, Preferred Securities Certificates shall be issued in the form of one or more Book-Entry Preferred Securities Certificates registered in the name of DTC, as Clearing Agency, or its nominee and deposited with DTC or a custodian for DTC for credit by DTC to the respective accounts of the Owners thereof (or such other accounts as they may direct). (c) A single Common Securities Certificate representing the Common Securities shall be issued to the Depositor in the form of a definitive Common Securities Certificate. Section 5.3. Execution and Delivery of Securities Certificates. At the Time of Delivery, and at the Option Closing Date, if any, an Administrative Trustee shall cause Securities Certificates, in an aggregate Liquidation Amount as provided in Sections 2.4 and 2.5, to be executed on behalf of the Issuer Trust and delivered to or upon the written order of the Depositor, executed by an authorized officer thereof, without further corporate action by the Depositor, in authorized denominations in accordance with Sections 2.4 and 2.5. Section 5.4. Book-Entry Preferred Securities. (a) Each Book-Entry Preferred Securities Certificate issued under this Agreement shall be registered in the name of the Clearing Agency or a nominee thereof and delivered to such Clearing Agency or a nominee thereof or custodian therefor, and each such Book-Entry Preferred Securities Certificate shall constitute a single Preferred Securities Certificate for all purposes of this Agreement. (b) Notwithstanding any other provision in this Trust Agreement, no Book-Entry Preferred Securities Certificate may be exchanged in whole or in part for Preferred Securities Certificates registered, and no transfer of a Book-Entry Preferred Securities Certificate in whole or in part may be registered, in the name of any Person other than the Clearing Agency for such Book-Entry Preferred Securities Certificates or a nominee thereof unless (i) the Clearing Agency advises the Property Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Book-Entry Preferred Securities Certificates, and the Property Trustee -24- is unable to locate a qualified successor, (ii) the Issuer Trust at its option advises the Clearing Agency in writing that it elects to terminate the book-entry system through the Clearing Agency, or (iii) a Debenture Event of Default has occurred and is continuing. Upon the occurrence of any event specified in clause (i), (ii) or (iii) above, the Administrative Trustees shall notify the Clearing Agency and instruct the Clearing Agency to notify all Owners of Book-Entry Preferred Securities and the Delaware Trustee of the occurrence of such event and of the availability of the Definitive Preferred Securities Certificates to Owners of the Preferred Securities requesting the same. (c) If any Book-Entry Preferred Securities Certificate is to be exchanged for other Preferred Securities Certificates or canceled in part, or if any other Preferred Securities Certificate is to be exchanged in whole or in part for Book-Entry Preferred Securities represented by a Book-Entry Preferred Securities Certificate, then either (i) such Book-Entry Preferred Securities Certificate shall be so surrendered for exchange or cancellation as provided in this Article Five or (ii) the aggregate Liquidation Amount represented by such Book-Entry Preferred Securities Certificate shall be reduced, subject to Section 5.2, or increased by an amount equal to the Liquidation Amount represented by that portion of the Book-Entry Preferred Securities Certificate to be so exchanged or canceled, or equal to the Liquidation Amount represented by such other Preferred Securities Certificates to be so exchanged for Book-Entry Preferred Securities represented thereby, as the case may be, by means of an appropriate adjustment made on the records of the Securities Registrar, whereupon the Property Trustee, in accordance with the Applicable Procedures, shall instruct the Clearing Agency or its authorized representative to make a corresponding adjustment to its records. Upon surrender to the Administrative Trustees or the Securities Registrar of the Book-Entry Preferred Securities Certificate or Certificates by the Clearing Agency, accompanied by registration instructions, the Administrative Trustees, or any one of them, shall execute the Definitive Preferred Securities Certificates in accordance with the instructions of the Clearing Agency. None of the Securities Registrar, the Issuer Trustees or the Administrative Trustees shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Preferred Securities Certificates, the Issuer Trustees shall recognize the Holders of the Definitive Preferred Securities Certificates as Holders. The Definitive Preferred Securities Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by the execution thereof by the Administrative Trustees or any one of them. (d) Every Preferred Securities Certificate executed and delivered upon registration of transfer of, or in exchange for or in lieu of, a Book-Entry Preferred Securities Certificate or any portion thereof, whether pursuant to this Article V or Article IV or otherwise, shall be executed and delivered in the form of, and shall be, a Book-Entry Preferred Securities Certificate, unless such Preferred Securities Certificate is registered in the name of a Person other than the Clearing Agency for such Book-Entry Preferred Securities Certificate or a nominee thereof. -25- (e) The Clearing Agency or its nominee, as registered owner of a Book-Entry Preferred Securities Certificate, shall be the Holder of such Book-Entry Preferred Securities Certificate for all purposes under this Agreement and the Book-Entry Preferred Securities Certificate, and Owners with respect to a Book-Entry Preferred Securities Certificate shall hold such interests pursuant to the Applicable Procedures. The Securities Registrar, the Administrative Trustees and the Issuer Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Trust Agreement relating to the Book-Entry Preferred Securities Certificates (including the payment of the Liquidation Amount of and Distributions on the Book-Entry Preferred Securities represented thereby and the giving of instructions or directions by Owners of Book-Entry Preferred Securities represented thereby) as the sole Holder of the Book-Entry Preferred Securities represented thereby and shall have no obligations to the Owners thereof. None of the Property Trustee, the Administrative Trustees nor the Securities Registrar shall have any liability in respect of any transfers effected by the Clearing Agency. The rights of the Owners of the Book-Entry Preferred Securities shall be exercised only through the Clearing Agency and shall be limited to those established by law, the Applicable Procedures and agreements between such Owners and the Clearing Agency and/or the Clearing Agency Participants; provided that, solely for the purpose of determining whether the Holders of the requisite amount of Preferred Securities have voted on any matter provided for in this Trust Agreement, so long as Definitive Preferred Security Certificates have not been issued, the Issuer Trustees may conclusively rely on, and shall be protected in relying on, any written instrument (including a proxy) delivered to the Issuer Trustees by the Clearing Agency setting forth the Owners' votes or assigning the right to vote on any matter to any other Persons either in whole or in part. Pursuant to the Certificate Depository Agreement, unless and until Definitive Preferred Securities Certificates are issued pursuant to Section 5.4(b), the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments on the Preferred Securities to such Clearing Agency Participants, and none of the Depositor, the Administrative Trustees or the Issuer Trustees shall have any responsibility or obligation with respect thereto. Section 5.5. Registration of Transfer and Exchange of Preferred Securities Certificates. (a) The Property Trustee shall keep or cause to be kept, at the office or agency maintained pursuant to Section 5.9, a register or registers (the "Securities Register") in which the registrar and transfer agent with respect to the Trust Securities (the "Securities Registrar"), subject to such reasonable regulations as it may prescribe, shall provide for the registration of Preferred Securities Certificates and Common Securities Certificates (subject to Section 5.11 in the case of the Common Securities Certificates) and registration of transfers and exchanges of Preferred Securities Certificates as herein provided. The Property Trustee is hereby appointed Securities Registrar for the purpose of registering Preferred Securities Certificates and (subject to Section 5.11) Common Securities Certificates and transfers and exchanges thereof as provided herein. -26- Upon surrender for registration of transfer of any Preferred Securities Certificate at the office or agency maintained pursuant to Section 5.9, the Administrative Trustees or any one of them shall execute and deliver to the Property Trustee, and the Property Trustee shall deliver, in the name of the designated transferee or transferees, one or more new Preferred Securities Certificates in authorized denominations of a like aggregate Liquidation Amount as may be required by this Trust Agreement, dated the date of execution by such Administrative Trustee or Trustees. The Securities Registrar shall not be required, (i) to issue, register the transfer of or exchange any Preferred Security during a period beginning at the opening of business 15 days before the day of selection for redemption of such Preferred Securities pursuant to Article IV and ending at the close of business on the day of mailing of the notice of redemption, or (ii) to register the transfer of or exchange any Preferred Security so selected for redemption in whole or in part, except, in the case of any such Preferred Security to be redeemed in part, any portion thereof not to be redeemed. Every Preferred Securities Certificate presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to an Administrative Trustee and the Securities Registrar duly executed by the Holder or such Holder's attorney duly authorized in writing. Each Preferred Securities Certificate surrendered for registration of transfer or exchange shall be canceled and subsequently disposed of by the Property Trustee in accordance with such Person's customary practice. No service charge shall be made for any registration of transfer or exchange of Preferred Securities Certificates, but the Issuer Trust may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred Securities Certificates. (b) Notwithstanding any other provision of this Agreement, transfers and exchanges of Preferred Securities Certificates and beneficial interests in a Book-Entry Preferred Securities Certificate of the kinds specified in this Section 5.5(b) shall be made only in accordance with this Section 5.5(b). (i) Definitive Preferred Securities Certificate to Book-Entry Preferred Securities Certificate. If the Holder of a Preferred Securities Certificate wishes at any time to transfer all or any portion of such Preferred Securities Certificate to a Person who wishes to take delivery thereof in the form of a beneficial interest in a Book-Entry Preferred Securities Certificate, such transfer may be effected only in accordance with the provisions of this clause (b)(i) and subject to the Applicable Procedures. Upon receipt by the Securities Registrar of (A) such Preferred Securities Certificate as provided in Section 5.5(a) and instructions satisfactory to the Securities Registrar directing that a beneficial interest in the Book-Entry Preferred Securities Certificate of a specified number of Preferred Securities not greater than the number of Preferred Securities represented by such Preferred -27- Securities Certificate be credited to a specified Clearing Agency Participant's account, then the Securities Registrar shall cancel such Preferred Securities Certificate (and issue a new Definitive Preferred Securities Certificate in respect of any untransferred portion thereof) as provided in Section 5.5(a) and increase the aggregate Liquidation Amount of the Book-Entry Preferred Securities Certificate by the Liquidation Amount represented by such Preferred Securities so transferred as provided in Section 5.4(c). (ii) Definitive Preferred Securities Certificate to Definitive Preferred Securities Certificate. A Definitive Preferred Securities Certificate may be transferred, in whole or in part, to a Person who takes delivery in the form of another Definitive Preferred Securities Certificate as provided in Section 5.5(a). (iii) Exchanges between Book-Entry Preferred Securities Certificate and Definitive Preferred Securities Certificate. A beneficial interest in a Book-Entry Preferred Securities Certificate may be exchanged for a Definitive Preferred Securities Certificate as provided in Section 5.4. Section 5.6. Mutilated, Destroyed, Lost or Stolen Securities Certificates. If (a) any mutilated Securities Certificate shall be surrendered to the Securities Registrar, or if the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Securities Certificate, and (b) there shall be delivered to the Securities Registrar and the Administrative Trustees such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Securities Certificate shall have been acquired by a protected purchaser, the Administrative Trustees, or any one of them, on behalf of the Issuer Trust shall execute and make available for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Securities Certificate, a new Securities Certificate of like class, tenor and denomination. In connection with the issuance of any new Securities Certificate under this Section 5.6, the Administrative Trustees or the Securities Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Securities Certificate issued pursuant to this Section 5.6 shall constitute conclusive evidence of an undivided beneficial interest in the assets of the Issuer Trust corresponding to that evidenced by the lost, stolen or destroyed Securities Certificate, as if originally issued, whether or not the lost, stolen or destroyed Securities Certificate shall be found at any time. Section 5.7. Persons Deemed Holders. The Issuer Trustees and the Securities Registrar shall each treat the Person in whose name any Securities Certificate shall be registered in the Securities Register as the owner of such Securities Certificate for the purpose of receiving Distributions and for all other purposes whatsoever, and none of the Issuer Trustees and the Securities Registrar shall be bound by any notice to the contrary. -28- Section 5.8. Access to List of Holders' Names and Addresses. Each Holder and each Owner shall be deemed to have agreed not to hold the Depositor, the Property Trustee, the Delaware Trustee or the Administrative Trustees accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived. Section 5.9. Maintenance of Office or Agency. The Administrative Trustees shall maintain an office or offices or agency or agencies where Preferred Securities Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuer Trustees in respect of the Securities Certificates may be served. The Administrative Trustees initially designate The Bank of New York, 5 Penn Plaza, 13th Floor, New York, New York 10001-1810, Attention: Marie E. Trimboli, as its office and agency for such purposes. The Property Trustee shall give prompt written notice to the Depositor, the Administrative Trustees and to the Holders of any change in the location of the Securities Register or any such office or agency. Section 5.10. Appointment of Paying Agents. The Paying Agent or Agents shall make Distributions to Holders from the Payment Account and shall report the amounts of such Distributions to the Property Trustee and the Administrative Trustees. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account solely for the purpose of making the Distributions referred to above. The Administrative Trustees may revoke such power and remove the Paying Agent in their sole discretion. The Paying Agent shall initially be the Property Trustee. Any Person acting as Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Administrative Trustees and the Property Trustee. If Sterling Bancorp shall no longer be the Paying Agent or a successor Paying Agent shall resign or its authority to act be revoked, the Administrative Trustees shall appoint a successor (which shall be a bank or trust company) that is reasonably acceptable to the Depositor to act as Paying Agent. Such successor Paying Agent or any additional Paying Agent appointed by the Administrative Trustees shall execute and deliver to the Issuer Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Issuer Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Holders in trust for the benefit of the Holders entitled thereto until such sums shall be paid to such Holders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall apply to the Property Trustee also in its role as Paying Agent, for so long as The Bank of New York shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this -29- Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. Section 5.11. Ownership of Common Securities by Depositor. At the Time of Delivery, and at the Option Closing Date, if any, the Depositor shall acquire, and thereafter shall retain, beneficial and record ownership of the Common Securities. Neither the Depositor nor any successor Holder of the Common Securities may transfer less than all the Common Securities, and the Depositor or any such successor Holder may transfer the Common Securities only (i) in connection with a consolidation or merger of the Depositor into another Person, or any conveyance, transfer or lease by the Depositor of its properties and assets substantially as an entirety to any Person, pursuant to Section 8.1 of the Indenture, or (ii) to the Depositor or an Affiliate of the Depositor in compliance with applicable law (including the Securities Act and applicable state securities and blue sky laws), and in either case only upon an effective assignment and delegation by the Holder of all the Common Securities to its transferee of all of its rights and obligations under the Expense Agreement. To the fullest extent permitted by law, any attempted transfer of the Common Securities other than as set forth in the next preceding sentence shall be void. The Administrative Trustees shall cause each Common Securities Certificate issued to the Depositor to contain a legend stating substantially "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT (AS DEFINED BELOW) AND ONLY IN CONNECTION WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT OF THE EXPENSE AGREEMENT REFERRED TO THEREIN." Section 5.12. Notices to Clearing Agency. To the extent that a notice or other communication to the Holders is required under this Trust Agreement, for so long as Preferred Securities are represented by a Book-Entry Preferred Securities Certificate, the Issuer Trustees shall give all such notices and communications specified herein to be given to the Clearing Agency, and shall have no obligations to the Owners. Section 5.13. Rights of Holders; Waivers of Past Defaults. (a) The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 2.9, and the Holders shall not have any right or title therein other than the undivided beneficial interest in the assets of the Issuer Trust conferred by their Trust Securities and they shall have no right to call for any partition or division of property, profits or rights of the Issuer Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive or similar rights and when issued and delivered to Holders against payment of the purchase price therefor will be fully paid and nonassessable by the Issuer -30- Trust. Subject to the provisions of Section 4.8, the Holders of the Trust Securities, in their capacities as such, shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. (b) For so long as any Preferred Securities remain Outstanding, if, upon a Debenture Event of Default, the Debenture Trustee fails or the holders of not less than 25% in principal amount of the outstanding Debentures fail to declare the principal of all of the Debentures to be immediately due and payable, the Holders of at least 25% in Liquidation Amount of the Preferred Securities then Outstanding shall have the right to make such declaration by a notice in writing to the Property Trustee, the Depositor and the Debenture Trustee. At any time after a declaration of acceleration with respect to the Debentures has been made and before a judgment or decree for payment of the money due has been obtained by the Debenture Trustee as provided in the Indenture, if the Property Trustee fails to annul any such declaration and waive such default, the Holders of at least a Majority in Liquidation Amount of the Preferred Securities, by written notice to the Property Trustee, the Depositor and the Debenture Trustee, may rescind and annul such declaration and its consequences if: (i) the Depositor has paid or deposited with the Debenture Trustee a sum sufficient to pay (A) all overdue installments of interest on all of the Debentures, (B) any accrued Additional Interest on all of the Debentures, (C) the principal of any Debentures that have become due otherwise than by such declaration of acceleration and interest and Additional Interest thereon at the rate borne by the Debentures, and (D) all sums paid or advanced by the Debenture Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Debenture Trustee and the Property Trustee, their agents and counsel; and (ii) all Events of Default with respect to the Debentures, other than the non-payment of the principal of the Debentures that has become due solely by such acceleration, have been cured or waived as provided in Section 5.13 of the Indenture. The Holders of at least a Majority in Liquidation Amount of the Preferred Securities may, on behalf of the Holders of all the Preferred Securities, waive any past default or Event of Default under the Indenture, except a default or Event of Default in the payment of principal or interest (unless such default or Event of Default has been -31- cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Debenture Trustee) or a default or Event of Default in respect of a covenant or provision that under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Debenture. No such rescission shall affect any subsequent default or impair any right consequent thereon. Upon receipt by the Property Trustee of written notice declaring such an acceleration, or rescission and annulment thereof, by Holders of any part of the Preferred Securities a record date shall be established for determining Holders of Outstanding Preferred Securities entitled to join in such notice, which record date shall be at the close of business on the day the Property Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day that is 90 days after such record date, such notice of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new written notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is identical to a written notice that has been canceled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 5.13(b). (c) For so long as any Preferred Securities remain Outstanding, to the fullest extent permitted by law and subject to the terms of this Trust Agreement and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1) or 5.1(2) of the Indenture, any Holder of Preferred Securities shall have the right to institute a proceeding directly against the Depositor, pursuant to Section 5.8 of the Indenture, for enforcement of payment to such Holder of any amounts payable in respect of Debentures having an aggregate principal amount equal to the aggregate Liquidation Amount of the Preferred Securities of such Holder (a "Direct Action"). Except as set forth in Section 5.13(b) and this Section 5.13(c), the Holders of Preferred Securities shall have no right to exercise directly any right or remedy available to the holders of, or in respect of, the Debentures. (d) Except as otherwise provided in paragraphs (a), (b) and (c) of this Section 5.13, the Holders of at least a Majority in Liquidation Amount of the Preferred Securities may, on behalf of the Holders of all the Preferred Securities, waive any past default or Event of Default and its consequences. Upon such waiver, any such default or Event of Default shall cease to exist, and any default or Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Trust Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. -32- ARTICLE VI. ACTS OF HOLDERS; MEETINGS; VOTING Section 6.1. Limitations on Voting Rights. (a) Except as expressly provided in this Trust Agreement and in the Indenture and as otherwise required by law, no Holder of Preferred Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Issuer Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Securities Certificates, be construed so as to constitute the Holders from time to time as partners or members of an association. (b) So long as any Debentures are held by the Property Trustee on behalf of the Issuer Trust, the Property Trustee shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee, or execute any trust or power conferred on the Property Trustee with respect to the Debentures, (ii) waive any past default that may be waived under Section 5.13 of the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Debentures shall be due and payable, or (iv) consent to any amendment, modification or termination of the Indenture or the Debentures, where such consent shall be required, without, in each case, obtaining the prior approval of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities; provided, however, that where a consent under the Indenture would require the consent of each Holder of Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of each Holder of Preferred Securities. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the Holders of the Preferred Securities, except by a subsequent vote of the Holders of the Preferred Securities. The Property Trustee shall notify all Holders of the Preferred Securities of any notice of default received with respect to the Debentures. In addition to obtaining the foregoing approvals of the Holders of the Preferred Securities, prior to taking any of the foregoing actions, the Issuer Trustees shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that such action shall not cause the Issuer Trust to be taxable as a corporation or classified as other than a grantor trust for United States Federal income tax purposes. (c) If any proposed amendment to the Trust Agreement provides for, or the Issuer Trustees otherwise propose to effect, (i) any action that would adversely affect in any material respect the powers, preferences or special rights of the Preferred Securities, whether by way of amendment to the Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination of the Issuer Trust, other than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Preferred Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities. Notwithstanding any other -33- provision of this Trust Agreement, no amendment to this Trust Agreement may be made if, as a result of such amendment, it would cause the Issuer Trust to be taxable as a corporation or classified as other than a grantor trust for United States Federal income tax purposes. Section 6.2. Notice of Meetings. Notice of all meetings of the Holders of the Preferred Securities, stating the time, place and purpose of the meeting, shall be given by the Property Trustee pursuant to Section 10.8 to each Holder of Preferred Securities, at such Holder's registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice. Section 6.3. Meetings of Holders of the Preferred Securities. No annual meeting of Holders is required to be held. The Administrative Trustees, however, shall call a meeting of the Holders of the Preferred Securities to vote on any matter upon the written request of the Holders of at least 25% in aggregate Liquidation Amount of the Outstanding Preferred Securities and the Administrative Trustees or the Property Trustee may, at any time in their discretion, call a meeting of the Holders of the Preferred Securities to vote on any matters as to which such Holders are entitled to vote. The Holders of at least a Majority in Liquidation Amount of the Preferred Securities, present in person or by proxy, shall constitute a quorum at any meeting of the Holders of the Preferred Securities. If a quorum is present at a meeting, an affirmative vote by the Holders present, in person or by proxy, holding Preferred Securities representing at least a majority of the aggregate Liquidation Amount of the Preferred Securities held by the Holders present, either in person or by proxy, at such meeting shall constitute the action of the Holders of the Preferred Securities, unless this Trust Agreement requires a greater number of affirmative votes. Section 6.4. Voting Rights. Holders shall be entitled to one vote for each $10 of Liquidation Amount represented by their Outstanding Trust Securities in respect of any matter as to which such Holders are entitled to vote. Section 6.5. Proxies, etc. At any meeting of Holders, any Holder entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Issuer -34- Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Holders of record shall be entitled to vote. When Trust Securities are held jointly by several persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Holder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three years after its date of execution. Section 6.6. Holder Action by Written Consent. Any action that may be taken by Holders at a meeting may be taken without a meeting and without prior notice if Holders holding at least a Majority in Liquidation Amount of all Preferred Securities entitled to vote in respect of such action (or such larger proportion thereof as shall be required by any other provision of this Trust Agreement) shall consent to the action in writing. Any action that may be taken by the Holder of all the Common Securities may be taken if such Holders shall consent to the action in writing. Section 6.7. Record Date for Voting and Other Purposes. For the purposes of determining the Holders who are entitled to notice of and to vote at any meeting or by written consent, or to participate in any distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may from time to time fix a date, not more than 90 days prior to the date of any meeting of Holders or the payment of a distribution or other action, as the case may be, as a record date for the determination of the identity of the Holders of record for such purposes. Section 6.8. Acts of Holders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as otherwise expressly provided herein, such action shall become effective when such instrument or instruments are delivered to an Administrative Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to -35- Section 8.1) conclusive in favor of the Issuer Trustees, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than such signer's individual capacity, such certificate or affidavit shall also constitute sufficient proof of such signer's authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that any Issuer Trustee receiving the same deems sufficient. The ownership of Trust Securities shall be proved by the Securities Register. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Trust Security shall bind every future Holder of the same Trust Security and the Holder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Issuer Trustees, the Depositor or the Issuer Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security. Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount. If any dispute shall arise among the Holders or the Issuer Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, consent, waiver or other Act of such Holder or Issuer Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter. Section 6.9. Inspection of Records. Upon reasonable notice to the Administrative Trustees and the Property Trustee, the records of the Issuer Trust shall be open to inspection by Holders during normal business hours for any purpose reasonably related to such Holder's interest as a Holder. -36- ARTICLE VII. REPRESENTATIONS AND WARRANTIES Section 7.1. Representations and Warranties of the Property Trustee and the Delaware Trustee. The Property Trustee and the Delaware Trustee, each severally on behalf of and as to itself, hereby represents and warrants for the benefit of the Depositor and the Holders that: (a) the Property Trustee is a New York banking corporation, duly organized, validly existing and in good standing under the laws of the United States; (b) the Property Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (c) the Delaware Trustee is a Delaware banking corporation; (d) the Delaware Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (e) this Trust Agreement has been duly authorized, executed and delivered by the Property Trustee and the Delaware Trustee and constitutes the valid and legally binding agreement of each of the Property Trustee and the Delaware Trustee enforceable against each of them in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (f) the execution, delivery and performance of this Trust Agreement have been duly authorized by all necessary corporate or other action on the part of the Property Trustee and the Delaware Trustee and do not require any approval of stockholders of the Property Trustee and the Delaware Trustee and such execution, delivery and performance will not (i) violate the Charter or By-laws of the Property Trustee or the Delaware Trustee, (ii) violate any provision of, or constitute, with or without notice or lapse of time, a default under, or result in the creation or imposition of, any Lien on any properties included in the Trust Property pursuant to the provisions of, any indenture, mortgage, credit agreement, license or other agreement or instrument to which the Property Trustee or the Delaware Trustee is a party or by which it is bound, or (iii) violate any law, governmental rule or regulation of the United States, the State of New York or the State of Delaware, as the case may be, governing the banking, trust or general powers of the -37- Property Trustee or the Delaware Trustee (as appropriate in context) or any order, judgment or decree applicable to the Property Trustee or the Delaware Trustee; (g) neither the authorization, execution or delivery by the Property Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of any of the transactions by the Property Trustee or the Delaware Trustee (as appropriate in context) contemplated herein requires the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any governmental authority or agency under any existing law of the United States or the State of Delaware governing the banking, trust or general powers of the Property Trustee or the Delaware Trustee, as the case may be; and (h) there are no proceedings pending or, to the best of each of the Property Trustee's and the Delaware Trustee's knowledge, threatened against or affecting the Property Trustee or the Delaware Trustee in any court or before any governmental authority, agency or arbitration board or tribunal that, individually or in the aggregate, would materially and adversely affect the Issuer Trust or would question the right, power and authority of the Property Trustee or the Delaware Trustee, as the case may be, to enter into or perform its obligations as one of the Issuer Trustees under this Trust Agreement. Section 7.2. Representations and Warranties of Depositor. The Depositor hereby represents and warrants for the benefit of the Holders that: (a) the Securities Certificates issued at the Time of Delivery, and at the Option Closing Date, if any, on behalf of the Issuer Trust have been duly authorized and will have been duly and validly executed, issued and delivered by the Issuer Trustees pursuant to the terms and provisions of, and in accordance with the requirements of, this Trust Agreement and the Holders will be, as of each such date, entitled to the benefits of this Trust Agreement; and (b) there are no taxes, fees or other governmental charges payable by the Issuer Trust (or the Issuer Trustees on behalf of the Issuer Trust) under the laws of the State of Delaware or any political subdivision thereof in connection with the execution, delivery and performance by either Issuer Trustee of this Trust Agreement. ARTICLE VIII. THE ISSUER TRUSTEES Section 8.1. Certain Duties and Responsibilities. (a) The duties and responsibilities of the Issuer Trustees shall be as provided by this Trust Agreement and, in the case of the Property Trustee, subject to the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Trust Agreement shall -38- require any of the Issuer Trustees to expend or risk its or their own funds or otherwise incur any financial liability in the performance of any of its or their duties hereunder, or in the exercise of any of its or their rights or powers, if it or they shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it or them. Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Issuer Trustees shall be subject to the provisions of this Section 8.1. Nothing in this Trust Agreement shall be construed to release an Administrative Trustee from liability for such Administrative Trustee's own grossly negligent action, such Administrative Trustee's gross negligent failure to act, or such Administrative Trustee's own willful misconduct. To the extent that, at law or in equity, an Issuer Trustee has duties and liabilities relating to the Issuer Trust or to the Holders, such Issuer Trustee shall not be liable to the Issuer Trust or to any Holder for such Issuer Trustee's good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of the Issuer Trustees otherwise existing at law or in equity, are agreed by the Depositor and the Holders to replace such other duties and liabilities of the Issuer Trustees. (b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the revenue and proceeds from the Trust Property and only to the extent that there shall be sufficient revenue or proceeds from the Trust Property to enable the Property Trustee or a Paying Agent to make payments in accordance with the terms hereof. Each Holder, by its acceptance of a Trust Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent legally available for distribution to it as herein provided and that the Issuer Trustees are not personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.1(b) does not limit the liability of the Issuer Trustees expressly set forth elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act. (c) The Property Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Trust Agreement (including pursuant to Section 10.10), and no implied covenants shall be read into this Trust Agreement against the Property Trustee. If an Event of Default has occurred (that has not been cured or waived pursuant to Section 5.13, the Property Trustee shall exercise such of the rights and powers vested in it by this Trust Agreement), and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (d) No provision of this Trust Agreement shall be construed to relieve the Property Trustee or the Delaware Trustee from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that: -39- (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Property Trustee shall be determined solely by the express provisions of this Trust Agreement (including pursuant to Section 10.10), and the Property Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Trust Agreement (including pursuant to Section 10.10); and (B) in the absence of bad faith on the part of the Property Trustee, the Property Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Property Trustee and conforming to the requirements of this Trust Agreement; but in the case of any such certificates or opinions that by any provision hereof or of the Trust Indenture Act are specifically required to be furnished to the Property Trustee, the Property Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Trust Agreement. (ii) the Property Trustee shall not be liable for any error of judgment made in good faith by an authorized officer of the Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts; (iii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement; (iv) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation of the Debentures and the Payment Account shall be to deal with such Property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Trust Agreement and the Trust Indenture Act; (v) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree with the Depositor; and money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account maintained by the Property Trustee pursuant to Section 3.1 and except to the extent otherwise required by law; -40- (vi) the Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for the default or misconduct of any other Issuer Trustee or the Depositor; and (vii) no provision of this Trust Agreement shall require the Property Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Property Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Trust Agreement or adequate indemnity against such risk or liability is not reasonably assured to it. (e) The Administrative Trustees shall not be responsible for monitoring the compliance by the other Issuer Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall either Administrative Trustee be liable for the default or misconduct of any other Administrative Trustee, the other Issuer Trustees or the Depositor. (f) If an Event of Default has occurred and is continuing, the Property Trustee shall enforce this Trust Agreement for the benefit of the Holders. Section 8.2. Certain Notices. Within five Business Days after the occurrence of any Event of Default actually known to the Property Trustee, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.8, notice of such Event of Default to the Holder, the Administrative Trustees, and the Depositor unless such Event of Default shall have been cured or waived. Within five Business Days after the receipt of notice of the Depositor's exercise of its right to defer the payment of interest on the Debentures pursuant to the Indenture, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.8, notice of such exercise to the Holders and the Administrative Trustees, unless such exercise shall have been revoked. The Property Trustee shall not be deemed to have knowledge of any Event of Default unless the Property Trustee shall have received written notice or a Responsible Officer of the Property Trustee charged with the administration of this Trust Agreement shall have obtained actual knowledge of such Event of Default. Section 8.3. Certain Rights of Property Trustee. Subject to the provisions of Section 8.1: -41- (a) the Property Trustee may rely and shall be protected in acting or refraining from acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) if (i) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses of action, (ii) in construing any of the provisions of this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein, or (iii) the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter as to which the Holders of the Preferred Securities are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting the Depositor's opinion as to the course of action to be taken and the Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor; provided, however, that, if the Property Trustee does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall not be less than two Business Days), it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Holders, in which event the Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct; (c) any direction or act of the Depositor contemplated by this Trust Agreement shall be sufficiently evidenced by an Officers' Certificate; (d) any direction or act of an Administrative Trustee contemplated by this Trust Agreement shall be sufficiently evidenced by a certificate executed by such Administrative Trustee and setting forth such direction or act; (e) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) or any rerecording, refiling or re-registration thereof; (f) the Property Trustee may consult with counsel (which counsel may be counsel to the Depositor or any of its Affiliates, and may include any of its employees) and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice; the Property Trustee shall have the right at any time to seek instructions concerning the administration of this Trust Agreement from any court of competent jurisdiction; (g) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the -42- Holders pursuant to this Trust Agreement, unless such Holders shall have offered to the Property Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction; provided that, nothing contained in this Section 8.3(g) shall be taken to relieve the Property Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Trust Agreement; (h) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, unless requested in writing to do so by one or more Holders, but the Property Trustee may make such further inquiry or investigation into such facts or matters as it may see fit; (i) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys; provided that the Property Trustee shall be responsible for its own negligence, bad faith or willful misconduct with respect to selection of any agent or attorney appointed by it hereunder; (j) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Property Trustee (i) may request instructions from the Holders (which instructions may only be given by the Holders of the same proportion in Liquidation Amount of the Trust Securities as would be entitled to direct the Property Trustee under the terms of the Trust Securities in respect of such remedy, right or action), (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in acting in accordance with such instructions; and (k) except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Trust Agreement. No provision of this Trust Agreement shall be deemed to impose any duty or obligation on any Issuer Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which such Person shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to any Issuer Trustee shall be construed to be a duty. Section 8.4. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities Certificates shall be taken as the statements of the Depositor, and the Issuer Trustees do not assume any responsibility -43- for their correctness. The Issuer Trustees shall not be accountable for the use or application by the Depositor of the proceeds of the Debentures. Section 8.5. May Hold Securities. Any Issuer Trustee or any other agent of any Issuer Trustee or the Issuer Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and, subject to Sections 8.8 and 8.13, and except as provided in the definition of the term "Outstanding" in Article I, may otherwise deal with the Issuer Trust with the same rights it would have if it were not an Issuer Trustee or such other agent. Section 8.6. Compensation; Indemnity; Fees. The Depositor agrees: (a) to pay to each Issuer Trustee and Paying Agent from time to time such reasonable compensation for all services rendered by them hereunder as may be agreed by the Depositor and such Issuer Trustee or Paying Agent, as the case may be, from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse each Issuer Trustee and Paying Agent upon request for all reasonable expenses, disbursements and advances incurred or made by each Issuer Trustee and Paying Agent in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of their agents and counsel), except any such expense, disbursement or advance as may be attributable to their negligence, bad faith or willful misconduct; and (c) to the fullest extent permitted by applicable law, to indemnify and hold harmless (i) each Issuer Trustee, (ii) each Paying Agent, (iii) any Affiliate of any Issuer Trustee, (iv) any officer, director, shareholder, employee, representative or agent of any Issuer Trustee, and (v) any employee or agent of the Issuer Trust (referred to herein as an "Indemnified Person") from and against any loss, damage, liability, tax, penalty, expense or claim of any kind or nature whatsoever incurred by such Indemnified Person by reason of the creation, operation or termination of the Issuer Trust or any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Issuer Trust and in a manner such Indemnified Person reasonably believed to be within the scope of authority conferred on such Indemnified Person by this Trust Agreement, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of negligence (or in the case of the Administrative Trustees, gross negligence), bad faith or willful misconduct with respect to such acts or omissions. The provisions of this Section 8.6 shall survive the termination of this Trust Agreement and the removal or resignation of any Issuer Trustee. -44- No Issuer Trustee or Paying Agent may claim any Lien on any Trust Property as a result of any amount due pursuant to this Section 8.6. The Depositor, any Issuer Trustee (subject to Section 8.8) and any Paying Agent may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Issuer Trust, and the Issuer Trust and the Holders of Trust Securities shall have no rights by virtue of this Trust Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Issuer Trust, shall not be deemed wrongful or improper. Neither the Depositor, any Paying Agent nor any Issuer Trustee shall be obligated to present any particular investment or other opportunity to the Issuer Trust even if such opportunity is of a character that, if presented to the Issuer Trust, could be taken by the Issuer Trust, and the Depositor, any Issuer Trustee or any Paying Agent shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Issuer Trustee or Paying Agent may engage or be interested in any financial or other transaction with the Depositor or any Affiliate of the Depositor, or may act as depository for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Depositor or its Affiliates. Section 8.7. Corporate Property Trustee Required; Eligibility of Issuer Trustees. (a) There shall at all times be a Property Trustee hereunder. The Property Trustee shall be a Person that is a national or state chartered bank and eligible pursuant to the Trust Indenture Act to act as such, and that has at the time of such appointment a combined capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section 8.7 and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee with respect to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section 8.7, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. At the time of appointment, the Property Trustee must have securities rated in one of the three highest rating categories by a nationally recognized statistical rating organization. (b) There shall at all times be one or more Administrative Trustees hereunder. Each Administrative Trustee shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more persons authorized to bind that entity. -45- (c) There shall at all times be a Delaware Trustee. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware, or (ii) a legal entity with its principal place of business in the State of Delaware and that otherwise meets the requirements of applicable Delaware law and that shall act through one or more persons authorized to bind such entity. Section 8.8. Conflicting Interests. (a) If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust Agreement. (b) The Guarantee Agreement and the Indenture shall be deemed to be specifically described in this Trust Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. Section 8.9. Co-Trustees and Separate Trustee. Unless an Event of Default shall have occurred and be continuing, at any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property may at the time be located, the Depositor and the Administrative Trustees, by agreed action of the majority of such Trustees, shall have power to appoint, and upon the written request of the Administrative Trustees, the Depositor shall for such purpose join with the Administrative Trustees in the execution, delivery, and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to the extent required by law to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section 8.9. Any co-trustee or separate trustee appointed pursuant to this Section 8.9 shall either be (i) a natural person who is at least 21 years of age and a resident of the United States, or (ii) a legal entity with its principal place of business in the United States that shall act through one or more persons authorized to bind such entity. If an Event of Default under the Indenture shall have occurred and be continuing, the Property Trustee alone shall have the power to make such appointment. Should any written instrument from the Depositor be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Depositor. Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely: -46- (a) The Trust Securities shall be executed by one or more Administrative Trustees, and the Trust Securities shall be delivered by the Property Trustee in accordance with Sections 2.4 and 2.5, and all rights, powers, duties, and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Property Trustee specified hereunder shall be exercised solely by the Property Trustee and not by such co-trustee or separate trustee. (b) The rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Property Trustee or by the Property Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee. (c) The Property Trustee at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section 8.9, and, in case a Debenture Event of Default has occurred and is continuing, the Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the Depositor shall join with the Property Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigning or removed may be appointed in the manner provided in this Section 8.9. (d) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Property Trustee or any other trustee hereunder. (e) The Property Trustee shall not be liable by reason of any act of a co-trustee or separate trustee. (f) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. Section 8.10. Resignation and Removal; Appointment of Successor. No resignation or removal of any Issuer Trustee (the "Relevant Trustee") and no appointment of a successor Issuer Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Issuer Trustee in accordance with the applicable requirements of Section 8.11. -47- Subject to the immediately preceding paragraph, the Relevant Trustee may resign at any time by giving written notice thereof to the Depositor. If the instrument of acceptance by the successor Issuer Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee within 60 days after the giving of such notice of resignation, the Relevant Trustee may petition, at the expense of the Depositor, any court of competent jurisdiction for the appointment of a successor Relevant Trustee. Unless a Debenture Event of Default shall have occurred and be continuing, any Issuer Trustee may be removed at any time by Act of the Holder of all the Common Securities. If a Debenture Event of Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee, or both of them, may be removed at such time by Act of the Holders of a Majority in Liquidation Amount of the Preferred Securities, delivered to the Relevant Trustee (in its individual capacity and, in the case of the Property Trustee, on behalf of the Issuer Trust). An Administrative Trustee may be removed by the Holders of Common Securities at any time. If any Issuer Trustee shall resign, be removed or become incapable of acting as Issuer Trustee, or if a vacancy shall occur in the office of any Issuer Trustee for any cause, at a time when no Debenture Event of Default shall have occurred and be continuing, the Holder of all the Common Securities, by Act delivered to the retiring Issuer Trustee, shall promptly appoint a successor Issuer Trustee or Issuer Trustees, and such successor Issuer Trustee shall comply with the applicable requirements of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign, be removed or become incapable of continuing to act as the Property Trustee or the Delaware Trustee, as the case may be, at a time when a Debenture Event of Default shall have occurred and be continuing, the Holders of Preferred Securities, by Act of the Holders of a Majority in Liquidation Amount of the Preferred Securities then Outstanding delivered to the retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and such successor Issuer Trustee shall comply with the applicable requirements of Section 8.11. If an Administrative Trustee shall resign, be removed or become incapable of acting as Administrative Trustee, at a time when a Debenture Event of Default shall have occurred and be continuing, the Holder of all the Common Securities by Act delivered to the Administrative Trustee shall promptly appoint a successor Administrative Trustee or Administrative Trustees and such successor Administrative Trustee or Trustees shall comply with the applicable requirements of Section 8.11. If no successor Relevant Trustee shall have been so appointed by the Holder of all the Common Securities or the Holders of a Majority in Liquidation Amount of the Preferred Securities, as the case may be, and accepted appointment in the manner required by Section 8.11, any Holder who has been a Holder of Trust Securities for at least six months, on behalf of such Holder and all others similarly situated, or any other Issuer Trustee, may petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee. The Property Trustee shall give notice of each resignation and each removal of an Issuer Trustee and each appointment of a successor Issuer Trustee to all Holders in the manner provided in Section 10.8 and shall give notice to the Depositor. Each notice shall -48- include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Property Trustee. Notwithstanding the foregoing or any other provision of this Trust Agreement, if any Administrative Trustee or a Delaware Trustee who is a natural person dies or becomes, in the opinion of the Depositor, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by (a) the unanimous act of the remaining Administrative Trustees if there are at least two of them or (b) otherwise by the Depositor (with the successor in either case being a Person who satisfies the eligibility requirement for Administrative Trustees or Delaware Trustee, as the case may be, set forth in Section 8.7). Section 8.11. Acceptance of Appointment by Successor. In case of the appointment hereunder of a successor Issuer Trustee such successor Issuer Trustee so appointed shall execute, acknowledge and deliver to the Issuer Trust and to the retiring Issuer Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Issuer Trustee shall become effective and such successor Issuer Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Issuer Trustee; but, on the request of the Depositor or the successor Issuer Trustee, such retiring Issuer Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Issuer Trustee all the rights, powers and trusts of the retiring Issuer Trustee and if the Property Trustee is the resigning Issuer Trustee shall duly assign, transfer and deliver to the successor Issuer Trustee all property and money held by such retiring Property Trustee hereunder. In case of the appointment hereunder of a successor Relevant Trustee, the retiring Relevant Trustee (if requested by the Depositor) and each successor Relevant Trustee with respect to the Trust Securities shall execute and deliver an amendment hereto wherein each successor Relevant Trustee shall accept such appointment and which (a) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and the Issuer Trust, and (b) shall add to or change any of the provisions of this Trust Agreement as shall be necessary to provide for or facilitate the administration of the Issuer Trust by more than one Relevant Trustee, it being understood that nothing herein or in such amendment shall constitute such Relevant Trustees co-trustees and upon the execution and delivery of such amendment the resignation or removal of the retiring Relevant Trustee shall become effective to the extent provided therein and each such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee; but, on request of the Issuer Trust or any successor Relevant Trustee such retiring Relevant Trustee shall duly assign, transfer and deliver to such successor Relevant Trustee all Trust Property, all proceeds -49- thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust Securities and the Issuer Trust. Upon request of any Issuer Trustee or any such successor Relevant Trustee, the retiring Relevant Trustee or the Issuer Trust, as the case may be, shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be. No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible under this Article. Section 8.12. Merger, Conversion, Consolidation or Succession to Business. Any Person into which the Property Trustee or the Delaware Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Relevant Trustee shall be a party, or any Person, succeeding to all or substantially all the corporate trust business of such Relevant Trustee, shall be the successor of such Relevant Trustee hereunder; provided that such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. Section 8.13. Preferential Collection of Claims Against Depositor or Issuer Trust. If and when the Property Trustee shall be or become a creditor of the Depositor or the Issuer Trust (or any other obligor upon the Preferred Securities), the Property Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Depositor or the Issuer Trust (or any such other obligor). Section 8.14. Property Trustee May File Proofs of Claim. In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other similar judicial proceeding relative to the Issuer Trust or any other obligor upon the Trust Securities or the property of the Issuer Trust or of such other obligor or their creditors, the Property Trustee (irrespective of whether any Distributions on the Trust Securities shall then be due and payable and irrespective of whether the Property Trustee shall have made any demand on the Issuer Trust for the payment of any past due Distributions) shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of the Trust Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Property Trustee (including any claim for the reasonable compensation, expenses, disbursements and -50- advances of the Property Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Property Trustee and, in the event the Property Trustee shall consent to the making of such payments directly to the Holders, to pay to the Property Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts due the Property Trustee. Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement adjustment or compensation affecting the Trust Securities or the rights of any Holder thereof or to authorize the Property Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 8.15. Reports by Property Trustee. (a) Not later than 60 days after May 15 of each year commencing with May 15, 1999, the Property Trustee shall transmit to all Holders in accordance with Section 10.8, and to the Depositor, a brief report, dated as of May 15 of such year, with respect to: (i) its eligibility under Section 8.7 or, in lieu thereof, if to the best of its knowledge it has continued to be eligible under said Section, a written statement to such effect; (ii) a statement that the Property Trustee has complied with all of its obligations under this Trust Agreement during the twelve-month period (or, in the case of the initial report, the period since the Closing Date) ending with such December 31 or, if the Property Trustee has not complied in any material respect with such obligations, a description of such noncompliance; and (iii) any change in the property and funds in its possession as Property Trustee since the date of its last report and any action taken by the Property Trustee in the performance of its duties hereunder which it has not previously reported and which in its opinion materially affects the Trust Securities. (b) In addition the Property Trustee shall transmit to Holders such reports concerning the Property Trustee and its actions under this Trust Agreement as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. -51- (c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Property Trustee with each national stock exchange, the Nasdaq National Market or such other interdealer quotation system or self-regulatory organization upon which the Trust Securities are listed or traded, with the Commission and with the Depositor. Section 8.16. Reports to the Property Trustee. Each of the Depositor and the Administrative Trustees on behalf of the Issuer Trust shall provide to the Property Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act (if any) and the compliance certificate required by Section 314(a) of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. The Depositor and the Administrative Trustees on behalf of the Issuer Trust shall annually file with the Property Trustee a certificate specifying whether such Person is in compliance with all of the terms and covenants applicable to such Person hereunder. Section 8.17. Evidence of Compliance with Conditions Precedent. Each of the Depositor and the Administrative Trustees on behalf of the Issuer Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an Officers' Certificate. Section 8.18. Number of Issuer Trustees. (a) The number of Issuer Trustees shall be four, provided that the Property Trustee and the Delaware Trustee may be the same Person if the Property Trustee meets the applicable requirements. (b) If an Issuer Trustee ceases to hold office for any reason, a vacancy shall occur. The vacancy shall be filled with an Issuer Trustee appointed in accordance with Section 8.10. (c) The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of an Issuer Trustee shall not operate to annul, dissolve or terminate the Issuer Trust. Section 8.19. Delegation of Power. (a) Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 such Administrative Trustee's power for the purpose of executing any documents -52- contemplated in Section 2.7(a), including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; and (b) The Administrative Trustees shall have power to delegate from time to time to such of their number or to the Depositor the doing of such things and the execution of such instruments either in the name of the Issuer Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of this Trust Agreement. Section 8.20. Appointment of Administrative Trustees. (a) The Administrative Trustees shall initially be John W. Tietjen, an individual, and John C. Millman, an individual, and their successors shall be appointed by the Holder of a Majority in Liquidation Amount of the Common Securities, and may resign or be removed by the Holders of a Majority in Liquidation Amount of the Common Securities at any time. Upon any resignation or removal, the Depositor shall appoint a successor Administrative Trustee. If at any time there is no Administrative Trustee, the Property Trustee or any Holder who has been a Holder of Trust Securities for at least six months may petition any court of competent jurisdiction for the appointment of one or more Administrative Trustees. (b) Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with this Section 8.20, the Administrative Trustees in office, regardless of their number (and notwithstanding any other provision of this Agreement), shall have all the powers granted to the Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Trust Agreement. (c) Notwithstanding the foregoing or any other provision of this Trust Agreement, if any Administrative Trustee who is a natural person dies or becomes, in the opinion of the Holder of a Majority in Liquidation Amount the Common Securities, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by the unanimous act of the remaining Administrative Trustees, if there were at least two of them prior to such vacancy, and by the Depositor, if there were not two such Administrative Trustees immediately prior to such vacancy (with the successor being a Person who satisfies the eligibility requirement for Administrative Trustees set forth in Section 8.7). -53- ARTICLE IX. TERMINATION, LIQUIDATION AND MERGER Section 9.1. Dissolution Upon Expiration Date. Unless earlier dissolved pursuant to Section 9.2, the Issuer Trust shall automatically dissolve, and its affairs be wound up, on _____________, 2032 (the "Expiration Date"). Section 9.2. Early Termination. The first to occur of any of the following events is an "Early Termination Event", upon the occurrence of which the Trust shall dissolve: (a) the occurrence of a Bankruptcy Event in respect of, or the dissolution or liquidation of, the Depositor; (b) the written direction to the Property Trustee from the Holder of all the Common Securities at any time to dissolve the Issuer Trust and, after satisfaction of liabilities to creditors of the Issuer Trust, to distribute the Debentures to Holders in exchange for the Preferred Securities (which direction is optional and wholly within the discretion of the Holder of all the Common Securities); (c) the redemption of all of the Preferred Securities in connection with the payment at Maturity (as defined in the Indenture) or the redemption of all the Debentures; and (d) the entry of an order for dissolution of the Issuer Trust by a court of competent jurisdiction. Section 9.3. Termination. The respective obligations and responsibilities of the Issuer Trustees and the Issuer Trust created and continued hereby shall terminate upon the latest to occur of the following: (a) the distribution by the Property Trustee to Holders of all amounts required to be distributed hereunder upon the liquidation of the Issuer Trust pursuant to Section 9.4, or upon the redemption of all of the Trust Securities pursuant to Section 4.2; (b) the payment of any expenses owed by the Issuer Trust; and (c) the discharge of all administrative duties of the Administrative Trustees, including the performance of any tax reporting obligations with respect to the Issuer Trust or the Holders. Section 9.4. Liquidation. (a) If an Early Termination Event specified in clause (a), (b) or (d) of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall be liquidated by the Issuer -54- Trustees as expeditiously as the Issuer Trustees determine to be possible by distributing, after satisfaction of liabilities to creditors of the Issuer Trust as provided by applicable law, to each Holder a Like Amount of Debentures, subject to Section 9.4(d). Notice of liquidation shall be given by the Property Trustee by first-class mail, postage prepaid mailed not less than 30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust Securities at such Holder's address appearing in the Securities Register. All such notices of liquidation shall: (i) state the Liquidation Date; (ii) state that from and after the Liquidation Date, the Trust Securities will no longer be deemed to be Outstanding and any Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Debentures; and (iii) provide such information with respect to the mechanics by which Holders may exchange Securities Certificates for Debentures, or if Section 9.4(d) applies receive a Liquidation Distribution, as the Property Trustee or Administrative Trustees shall deem appropriate. (b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the liquidation of the Issuer Trust and distribution of the Debentures to Holders, the Property Trustee, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish a record date for such distribution (which shall be not more than 45 days prior to the Liquidation Date) and, establish such procedures as it shall deem appropriate to effect the distribution of Debentures in exchange for the Outstanding Securities Certificates. (c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Debentures will be issued to Holders of Securities Certificates, upon surrender of such Securities Certificates to the exchange agent for exchange, (iii) the Depositor shall use its best efforts to have the Debentures listed on the New York Stock Exchange or on such other exchange, interdealer quotation system or self-regulatory organization on which the Preferred Securities are then listed, (iv) any Securities Certificates not so surrendered for exchange will be deemed to represent a Like Amount of Debentures bearing accrued and unpaid interest in an amount equal to the accumulated and unpaid Distributions on such Securities Certificates until such certificates are so surrendered (and until such certificates are so surrendered, no payments of interest or principal will be made to Holders of Securities Certificates with respect to such Debentures) and (v) all rights of Holders holding Trust Securities will cease, except the right of such Holders to receive Debentures upon surrender of Securities Certificates. (d) If, notwithstanding the other provisions of this Section 9.4, whether because of an order for dissolution entered by a court of competent jurisdiction or otherwise, distribution of the Debentures in the manner provided herein is determined by the -55- Property Trustee not to be practical, or if an Early Termination Event specified in clause (c) of Section 9.2 occurs, the Trust Property shall be liquidated, and the Issuer Trust shall be wound-up by the Property Trustee in such manner as the Property Trustee determines. In such event, Holders will be entitled to receive out of the assets of the Issuer Trust available for distribution to Holders, after satisfaction of liabilities to creditors of the Issuer Trust as provided by applicable law, an amount equal to the Liquidation Amount per Trust Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If, upon any such winding up, the Liquidation Distribution can be paid only in part because the Issuer Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable by the Issuer Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder of all the Common Securities will be entitled to receive Liquidation Distributions upon any such dissolution, winding-up or termination pro rata (determined as aforesaid) with Holders of Preferred Securities, except that, if a Debenture Event of Default specified in Section 5.1(1) or 5.1(2) of the Indenture has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities as provided in Section 4.3. Section 9.5. Mergers, Consolidations, Amalgamations or Replacements of Issuer Trust. The Issuer Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any Person, except pursuant to this Article IX. At the request of the Holders of the Common Securities, with the consent of the Administrative Trustees, but without the consent of the Holders of the Outstanding Preferred Securities, the Property Trustee or the Delaware Trustee, the Issuer Trust may merge with or into, consolidate, amalgamate, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to a trust organized as such under the laws of any State; provided that (i) such successor entity either (A) expressly assumes all of the obligations of the Issuer Trust with respect to the Preferred Securities or (B) substitutes for the Preferred Securities other securities having substantially the same terms as the Preferred Securities (the "Successor Securities") so long as the Successor Securities have the same priority as the Preferred Securities with respect to distributions and payments upon liquidation, redemption and otherwise, (ii) a trustee of such successor entity possessing the same powers and duties as the Property Trustee is appointed to hold the Debentures, (iii) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization that then assigns a rating to the Preferred Securities, (iv) the Successor Securities are listed, or any Successor Securities will be listed upon notice of issuance, on any national securities exchange or interdealer quotation system on which the Preferred Securities are then listed, if any, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Preferred -56- Securities (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose substantially identical to that of the Issuer Trust, (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Depositor has received an Opinion of Counsel to the effect that (A) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Preferred Securities (including any Successor Securities) in any material respect, and (B) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Issuer Trust nor such successor entity will be required to register as an "investment company" under the Investment Company Act, and (viii) the Depositor or its permitted transferee owns all of the Common Securities of such successor entity and guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Guarantee Agreement. Notwithstanding the foregoing, the Issuer Trust shall not, except with the consent of holders of all of the Preferred Securities, consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Issuer Trust or the successor entity to be taxable as a corporation or classified as other than a grantor trust for United States Federal income tax purposes. Section 9.6. Exchange of Preferred Securities for Debentures by Depositor Affiliated Holder. (a) If at any time the Depositor or any of its Affiliates (in either case, a "Depositor Affiliated Holder") is the Holder of any Preferred Securities, such Depositor Affiliated Holder shall have the right to deliver to the Property Trustee all or such portion of its Preferred Securities as it elects and receive, in exchange therefor, a Like Amount of Debentures. Such election (i) shall be exercisable effective on any Distribution Date by such Depositor Affiliated Holder delivering to the Property Trustee a written notice of such election specifying the aggregate Liquidation Amount of Preferred Securities with respect to which such election is being made and the Distribution Date on which such exchange shall occur, which Distribution Date shall be not less than ten Business Days after the date of receipt by the Property Trustee of such election notice and (ii) shall be conditioned upon such Depositor Affiliated Holder having delivered or caused to be delivered to the Property Trustee or its designee the Preferred Securities which are the subject of such election by 10:00 A.M. New York time, on the Distribution Date on which such exchange is to occur. After the exchange, such Preferred Securities will be canceled and will no longer be deemed to be Outstanding and all rights of the Depositor or its Affiliate(s) with respect to such Preferred Securities will cease. (b) In the case of an exchange described in Section 9.6(a), the Issuer Trust will, on the date of such exchange, exchange Debentures for a Like Amount of Common Securities, based on the ratio of the aggregate Liquidation Amount of the Preferred Securities exchanged pursuant to Section 9.6(a) divided by the aggregate Liquidation -57- Amount of the Preferred Securities outstanding immediately prior to such exchange, for such Like Amount of Common Securities held by the Depositor (which contemporaneously shall be canceled and no longer be deemed to be outstanding); provided, that the Depositor delivers or caused to be delivered to the Property Trustee or its designee the required amount of Common Securities to be exchanged by 10:00 A.M. New York time, on the Distribution Date on which such exchange is to occur. ARTICLE X. MISCELLANEOUS PROVISIONS Section 10.1. Limitation of Rights of Holders. Except as set forth in Section 9.2, the death, bankruptcy, dissolution, termination, or incapacity of any Person having an interest, beneficial or otherwise, in Trust Securities shall not operate to terminate this Trust Agreement, nor dissolve, terminate or annul the Trust, nor entitle the legal representatives, successors or heirs of such Person or any Holder for such Person, to claim an accounting, take any action or bring any proceeding in any court for a partition or winding up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. Section 10.2. Amendment. (a) This Trust Agreement may be amended from time to time by the Depositor, the Administrative Trustees and Holder of all the Common Securities, without the consent of any Holder of the Preferred Securities and without the consent of the Delaware Trustee and the Property Trustee, except as set forth in clauses (e) and (g) of this Section 10.2, (i) to cure any ambiguity, correct or supplement any provision herein that may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Trust Agreement, which shall not be inconsistent with the other provisions of this Trust Agreement or (ii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Issuer Trust will not be taxable as a corporation or will be classified as a grantor trust for United States Federal income tax purposes at all times that any Trust Securities are Outstanding or to ensure that the Issuer Trust will not be required to register as an "investment company" under the Investment Company Act; provided, however, that in the case of either clauses (i) or (ii) such action shall not adversely affect in any material respect the interests of any Holder. (b) Except as provided in Section 10.2(c) hereof, any provision of this Trust Agreement may be amended by the Depositor, the Administrative Trustees and the Holder of all the Common Securities and without the consent of the Delaware Trustee and the Property Trustee, except as set forth in clauses (e) and (g) of this Section 10.2, and with (i) the consent of Holders of at least a Majority in Liquidation Amount of the -58- Preferred Securities, and (ii) receipt by the Issuer Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Issuer Trustees in accordance with such amendment will not cause the Issuer Trust to be taxable as a corporation or classified as other than a grantor trust for United States Federal income tax purposes or affect the Issuer Trust's exemption from status as an "investment company" under the Investment Company Act. (c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Holder, this Trust Agreement may not be amended to (i) change the amount or timing of any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Trust Securities as of a specified date, or (ii) restrict the right of a Holder to institute suit for the enforcement of any such payment on or after such date; and notwithstanding any other provision herein, without the unanimous consent of the Holders, this paragraph (c) of this Section 10.2 may not be amended. (d) Notwithstanding any other provisions of this Trust Agreement, no Issuer Trustee shall enter into or consent to any amendment to this Trust Agreement that would cause the Issuer Trust to fail or cease to qualify for the exemption from status as an "investment company" under the Investment Company Act or to be taxable as a corporation or to be classified as other than a grantor trust for United States Federal income tax purposes. (e) Notwithstanding anything in this Trust Agreement to the contrary, without the consent of the Depositor and the relevant Issuer Trustee(s), this Trust Agreement may not be amended in a manner that imposes any additional obligation on the Depositor or the relevant Issuer Trustee(s). (f) If any amendment to this Trust Agreement is made, the Administrative Trustees or the Property Trustee shall promptly provide to the Depositor a copy of such amendment. (g) No amendment to this Trust Agreement that affects the Property Trustee's or the Delaware Trustee's own rights, duties or immunities under this Trust Agreement shall be effective without the consent of the Property Trustee or the Delaware trustee, as the case may be. The Property Trustee shall be entitled to receive an Opinion of Counsel and an Officers' Certificate stating that any amendment to this Trust Agreement is in compliance with this Trust Agreement. Section 10.3. Separability. If any provision in this Trust Agreement or in the Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. -59- Section 10.4. Governing Law. THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE HOLDERS, THE ISSUER TRUST, THE DEPOSITOR AND THE ISSUER TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS. THE PROVISIONS OF SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THIS TRUST. Section 10.5. Payments Due on Non-Business Day. If the date fixed for any payment on any Trust Security shall be a day that is not a Business Day, then such payment need not be made on such date but may be made on the next succeeding day that is a Business Day (except as otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as though made on the date fixed for such payment, and no Distributions shall accumulate on such unpaid amount for the period after such date. Section 10.6. Successors. This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Depositor, the Issuer Trust and any Issuer Trustee, including any successor by operation of law. Except in connection with a consolidation, merger or sale involving the Depositor that is permitted under Article VIII of the Indenture and pursuant to which the assignee agrees in writing to perform the Depositor's obligations hereunder, the Depositor shall not assign its obligations hereunder. Section 10.7. Headings. The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement. Section 10.8. Reports, Notices and Demands. Any report, notice, demand or other communication that by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Holder or the Depositor may be given or served in writing by deposit thereof, first-class postage prepaid, in the United States mail, hand delivery or facsimile transmission, in each case, addressed, (a) in the case of a Holder of Preferred Securities, to such Holder as such Holder's name and address may appear on the Securities Register; and (b) in the case of the Holder of all the Common Securities or the Depositor, to Sterling Bancorp, 650 Fifth Avenue, New York, New York 10019-6108, Attention: Treasurer and Chief Financial Officer, Facsimile no.: (212) 757-8287, or to such other address as may be specified in a written notice by the Holder of all the Common Securities or the Depositor, as the case -60- may be, to the Property Trustee. Such notice, demand or other communication to or upon a Holder shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or transmission. Such notice, demand or other communication to or upon the Depositor shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Depositor. Any notice, demand or other communication that by any provision of this Trust Agreement is required or permitted to be given or served to or upon the Issuer Trust or any Issuer Trustee shall be given in writing by deposit thereof, first-class postage prepaid, in the U.S. mail, hand delivery or facsimile transmission, addressed to such Person as follows: (a) with respect to the Property Trustee to The Bank of New York, Corporate Trust Division, 5 Penn Plaza, 13th Floor, New York, New York 10001-1810, Attention: Marie E. Trimboli; (b) with respect to the Delaware Trustee, to The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711, Attention: Kristine Gullo; (c) with respect to the Administrative Trustees, to them at the address above for notices to the Depositor, marked "Attention: Administrative Trustees of Sterling Bancorp Trust I"; and (d) with respect to the Issuer Trust, to its principal office specified in Section 2.1, with a copy to the Property Trustee. Such notice, demand or other communication to or upon the Issuer Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Issuer Trust, the Property Trustee, the Delaware Trustee or such Administrative Trustee, as the case may be. Section 10.9. Agreement Not to Petition. Each of the Issuer Trustees and the Depositor agree for the benefit of the Holders that, until at least one year and one day after the Issuer Trust has been terminated in accordance with Article IX, they shall not file, or join in the filing of, a petition against the Issuer Trust under any bankruptcy, insolvency, reorganization or other similar law (including the United States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of any proceeding against the Issuer Trust under any Bankruptcy Law. If the Depositor takes action in violation of this Section 10.9, the Property Trustee agrees, for the benefit of Holders, that at the expense of the Depositor, it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by the Depositor against the Issuer Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as counsel for the Issuer Trustee or the Issuer Trust may assert. Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act. (a) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions. -61- (b) The Property Trustee shall be the only Issuer Trustee that is a trustee for the purposes of the Trust Indenture Act. (c) If any provision hereof limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act through operation of Section 318(c) thereof, such imposed duties shall control. If any provision of this Trust Agreement modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Trust Agreement as so modified or excluded, as the case may be. (d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Trust Securities as equity securities representing undivided beneficial interests in the assets of the Issuer Trust. Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee Agreement and Indenture. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE AGREEMENT AND THE INDENTURE, AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AGREEMENT AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE ISSUER TRUST AND SUCH HOLDER AND SUCH OTHERS. Section 10.12. Counterparts. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. -62- IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Trust Agreement. STERLING BANCORP, as Depositor By: ------------------------ Name: Title: THE BANK OF NEW YORK, as Property Trustee By: ------------------------ Name: Title: THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee By: ------------------------ Name: Title: --------------------------- as Administrative Trustee --------------------------- as Administrative Trustee -63- Exhibit A CERTIFICATE OF TRUST OF STERLING BANCORP TRUST I This Certificate of Trust of Sterling Bancorp Trust I (the "Trust"), dated , 2002, is being duly executed and filed by the undersigned, as trustees, to form a business trust under the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.) 1. Name. The name of the business trust being formed hereby is [Name of Trust]. 2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of business in the State of Delaware is The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711. 3. Effective Date. This Certificate of Trust shall be effective upon its filing with the Secretary of State of the State of Delaware. IN WITNESS WHEREOF, the undersigned, being the initial trustees of the Trust, has executed this Certificate of Trust as of the date first above written. THE BANK OF NEW YORK (DELAWARE) By: ---------------------------- Name: Title: ---------------------------------- as Regular Trustee ---------------------------------- as Regular Trustee A-1 Exhibit B [FORM OF COMMON SECURITIES CERTIFICATE] THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT (AS DEFINED BELOW) AND ONLY IN CONNECTION WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT OF THE EXPENSE AGREEMENT REFERRED TO THEREIN Certificate Number Number of Common Securities CI- Certificate Evidencing Series A Common Securities of Sterling Bancorp Trust I -- % Common Securities, Series A (Liquidation Amount $10 per Common Security) Sterling Bancorp Trust I, a statutory business trust created under the laws of the State of Delaware (the "Issuer Trust"), hereby certifies that Sterling Bancorp (the "Holder") is the registered owner of common securities of the Issuer Trust representing undivided common beneficial interests in the assets of the Issuer Trust and designated the Sterling Bancorp Trust I Common Securities, Series A (Liquidation Amount $10 per Common Security) (the "Series A Common Securities"). Except in accordance with Section 5.11 of the Trust Agreement (as defined below) the Series A Common Securities are not transferable and, to the fullest extent permitted by law, any attempted transfer hereof other than in accordance therewith shall be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Series A Common Securities are set forth in, and this certificate and the Series A Common Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Issuer Trust, dated as of , 2002, as the same may be amended from time to time (the "Trust Agreement"), among Sterling Bancorp, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the several Holders, including the designation of the terms of the Series A Common Securities as set forth therein. The Issuer Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the Issuer Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. B-1 This Common Securities Certificate shall be governed by and construed in accordance with the laws of the State of Delaware. Terms used but not defined herein have the meanings set forth in the Trust Agreement. IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer Trust has executed this certificate this ____ day of , 2002. Sterling Bancorp Trust I By: ----------------------------- Name: Administrative Trustee B-2 Exhibit C [FORM OF EXPENSE AGREEMENT] AGREEMENT AS TO EXPENSES AND LIABILITIES AGREEMENT AS TO EXPENSES AND LIABILITIES, dated as of , 2002, between Sterling Bancorp, a New York corporation, as Depositor (the "Depositor"), and Sterling Bancorp Trust I, a Delaware business trust (the "Issuer Trust"). WHEREAS, the Issuer Trust intends to issue its % Common Securities, Series A (the "Series A Common Securities") to and acquire Debentures from the Depositor, and to issue and sell % Trust Preferred Securities, Series A (the "Series A Trust Preferred Securities") with such powers, preferences and special rights and restrictions as are set forth in the Amended and Restated Trust Agreement, dated as of , 2002, among Sterling Bancorp, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the several Holders, as the same may be amended from time to time (the "Trust Agreement"); WHEREAS, the Depositor will own all of the Series A Common Securities of the Trust; WHEREAS, capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I Section 1.1 Guarantee by the Depositor. Subject to the terms and conditions hereof, the Depositor hereby irrevocably and unconditionally guarantees to each person or entity to whom the Issuer Trust is now or hereafter becomes indebted or liable (the "Beneficiaries") the full payment, when and as due, of any and all Obligations (as hereinafter defined) to such Beneficiaries. As used herein, "Obligations" means any costs, expenses or liabilities of the Issuer Trust, other than obligations of the Issuer Trust to pay to holders of any Trust Securities the amounts due such holders pursuant to the terms of the Trust Securities. This Agreement is intended to be for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have received notice hereof. Section 1.2. Subordination of Guarantee. The guarantee and other liabilities and obligations of the Depositor under this Agreement shall constitute unsecured obligations of the Depositor and shall rank subordinate and junior in right of payment to all Senior Debt (as defined in the Indenture) of the Depositor to the extent and in the C-1 manner set forth in the Indenture with respect to the Debentures, and the provisions of Article XIII of the Indenture will apply, mutatis mutandis, to the obligations of the Depositor hereunder. The obligations of the Depositor hereunder do not constitute Senior Debt (as defined in the Indenture) of the Depositor. Section 1.3. Term of Agreement. This Agreement shall terminate and be of no further force and effect upon the dissolution of the Issuer Trust; provided, however, that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any holder of Series A Trust Preferred Securities or any Beneficiary must restore payment of any sums paid under the Series A Trust Preferred Securities, under any Obligation, under the Guarantee Agreement dated the date hereof by the Depositor and The Bank of New York, as guarantee trustee, or under this Agreement for any reason whatsoever. This Agreement is continuing, irrevocable, unconditional and absolute. Section 1.4. Waiver of Notice. The Depositor hereby waives notice of acceptance of this Agreement and of any Obligation to which it applies or may apply, and the Depositor hereby waives presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. Section 1.5. No Impairment. The obligations, covenants, agreements and duties of the Depositor under this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the extension of time for the payment by the Issuer Trust of all or any portion of the Obligations or for the performance of any other obligation under, arising out of, or in connection with, the Obligations; (b) any failure, omission, delay or lack of diligence on the part of the Beneficiaries to enforce, assert or exercise any right, privilege, power or remedy conferred on the Beneficiaries with respect to the Obligations or any action on the part of the Issuer Trust granting indulgence or extension of any kind; or (c) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer Trust or any of the assets of the Issuer Trust (other than the dissolution of the Issuer Trust in accordance with the terms thereof). There shall be no obligation of the Beneficiaries to give notice to, or obtain the consent of, the Depositor with respect to the happening of any of the foregoing. Section 1.6. Enforcement. A Beneficiary may enforce this Agreement directly against the Depositor and the Depositor waives any right or remedy to require that any action be brought against the Issuer Trust or any other person or entity before proceeding against the Depositor. C-2 Section 1.7. Subrogation. The Depositor shall be subrogated to all rights (if any) of any Beneficiary against the Issuer Trust in respect of any amounts paid to the Beneficiaries by the Depositor under this Agreement; provided, however, that the Depositor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Agreement. ARTICLE II Section 2.1. Assignment. This Agreement may not be assigned by either party hereto without the consent of the other, and any purported assignment without such consent shall be void; provided, however, that, upon any transfer of the Series A Common Securities, this Agreement shall be assigned and delegated by the Depositor to its successor with such transfer without any action by either party hereto. Section 2.2. Binding Effect. All guarantees and agreements contained in this Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Depositor and shall inure to the benefit of the Beneficiaries. Section 2.3. Amendment. So long as there remains any Beneficiary or any Series A Trust Preferred Securities are outstanding, this Agreement shall not be modified or amended in any manner adverse to such Beneficiary or to the holders of the Series A Trust Preferred Securities without the consent of such Beneficiary or the holders of the Series A Trust Preferred Securities, as the case may be. Section 2.4. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering the same against receipt therefor by facsimile transmission (confirmed by mail), telex or by registered or certified mail, addressed as follows (and if so given, shall be deemed given when mailed or upon receipt of an answer-back, if sent by telex): Sterling Bancorp Trust I c/o The Bank of New York Corporate Trust Division 5 Penn Plaza, 13th Floor New York, New York 10001-1810 Facsimile No.: (212) 896-7294, -7297, -7298 or -2799 Attention: Marie E. Trimboli C-3 With a copy to: Sterling Bancorp 650 Fifth Avenue New York, New York 10019-6108 Facsimile No.: (212) 757-3300 Attention: Treasurer and Chief Financial Officer Section 2.5. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. C-4 This Agreement is executed as of the day and year first above written. STERLING BANCORP By: ----------------------------- Name: Title: STERLING BANCORP TRUST I By: ---------------------------- Name: Administrative Trustee Exhibit D [FORM OF PREFERRED SECURITIES CERTIFICATE] [If the Preferred Securities Certificate is to be Evidenced By a Book-Entry Preferred Securities Certificate, insert This Preferred Securities Certificate is a Book-Entry Preferred Securities Certificate within the meaning of the Trust Agreement hereinafter referred to and is registered in the name of a Clearing Agency or a nominee of a Clearing Agency. This Preferred Securities Certificate is exchangeable for Preferred Securities Certificates registered in the name of a person other than the Clearing Agency or its nominee only in the limited circumstances described in the Trust Agreement and may not be transferred except as a whole by the Clearing Agency to a nominee of the Clearing Agency or by a nominee of the Clearing Agency to the Clearing Agency or another nominee of the Clearing Agency, except in the limited circumstances described in the Trust Agreement. Unless this Preferred Security Certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation ("DTC"), to Sterling Bancorp Trust I or its agent for registration of transfer, exchange or payment, and any Preferred Security Certificate issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.] D-1 CERTIFICATE NUMBER NUMBER OF PREFERRED SECURITIES CAI- CUSIP NO. CERTIFICATE EVIDENCING PREFERRED SECURITIES OF STERLING BANCORP TRUST I ___ % TRUST PREFERRED SECURITIES, SERIES A (LIQUIDATION AMOUNT $10 PER TRUST PREFERRED SECURITY) Sterling Bancorp Trust I, a statutory business trust created under the laws of the State of Delaware (the "Issuer Trust"), hereby certifies that (the "Holder") is the registered owner of ( ) Preferred Securities of the Issuer Trust representing an undivided preferred beneficial interest in the assets of the Issuer Trust and designated the Sterling Bancorp Trust I % Trust Preferred Securities, Series A (Liquidation Amount $10 per Preferred Security) (the "Series A Trust Preferred Securities"). The Series A Trust Preferred Securities are transferable on the books and records of the Issuer Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.5 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities are set forth in, and this certificate and the Preferred Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Issuer Trust, dated as of , 2002, as the same may be amended from time to time (the "Trust Agreement"), among Sterling Bancorp, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the several Holders, including the designation of the terms of the Preferred Securities as set forth therein. The Holder is entitled to the benefits of the Guarantee Agreement entered into by Sterling Bancorp, a New York corporation, and The Bank of New York, as Guarantee Trustee, dated as of , 2002, as the same may be amended from time to time (the "Guarantee Agreement"), to the extent provided therein. The Property Trustee will furnish a copy of the Trust Agreement and the Guarantee Agreement to the Holder without charge upon written request to the Issuer Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. D-2 This Preferred Securities Certificate shall be governed by and construed in accordance with the laws of the State of Delaware. All capitalized terms used but not defined in this Preferred Securities Certificate are used with the meanings specified in the Trust Agreement, including the Exhibits thereto. D-3 IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer Trust has executed this certificate this ____ day of , 2002. STERLING BANCORP TRUST I By: ------------------------------ Name: Administrative Trustee D-4 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security to: - -------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert address and zip code of assignee) and irrevocably appoints ------------------------------------------------------- - -------------------------------------------------------------------------------- agent to transfer this Preferred Securities Certificate on the books of the Issuer Trust. The agent may substitute another to act for him or her. Date: --------------------- Signature: ------------------------------------------------------ (Sign exactly as your name appears on the other side of this Capital Security Certificate) The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15. D-5 EX-4.F 8 y56473ex4-f.txt FORM OF GUARANTEE AGREEMENT EXHIBIT 4-f ================================================================================ GUARANTEE AGREEMENT BY AND BETWEEN STERLING BANCORP, as Guarantor and THE BANK OF NEW YORK, as Guarantee Trustee relating to STERLING BANCORP TRUST I Dated as of _____________, 2002 ================================================================================ CROSS-REFERENCE TABLE*
Section of Trust Indenture Act Section of of 1939, as amended Guarantee Agreement - ------------------- ------------------- 310(a)................................................... 4.1(a) 310(b)................................................... 4.1(c), 2.8 310(c)................................................... Inapplicable 311(a)................................................... 2.2(b) 311(b)................................................... 2.2(b) 311(c)................................................... Inapplicable 312(a)................................................... 2.2(a) 312(b)................................................... 2.2(b) 313...................................................... 2.3 314(a)................................................... 2.4 314(b)................................................... Inapplicable 314(c)................................................... 2.5 314(d)................................................... Inapplicable 314(e)................................................... 1.1, 2.5, 3.2 314(f)................................................... 2.1, 3.2 315(a)................................................... 3.1(d) 315(b)................................................... 2.7 315(c)................................................... 3.1 315(d)................................................... 3.1(d) 316(a)................................................... 1.1, 2.6, 5.4 316(b)................................................... 5.3 316(c)................................................... 8.2 317(a)................................................... Inapplicable 317(b)................................................... Inapplicable 318(a)................................................... 2.1 318(b)................................................... 2.1 318(c)................................................... 2.1
- ------------------ * This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. TABLE OF CONTENTS
Page ARTICLE I DEFINITIONS SECTION 1.1. Definitions................................................. 2 ARTICLE II TRUST INDENTURE ACT SECTION 2.1. Trust Indenture Act; Application............................ 5 SECTION 2.2. List of Holders............................................. 5 SECTION 2.3. Reports by the Guarantee Trustee............................ 6 SECTION 2.4. Periodic Reports to the Guarantee Trustee................... 6 SECTION 2.5. Evidence of Compliance with Conditions Precedent............ 6 SECTION 2.6. Events of Default; Waiver................................... 6 SECTION 2.7. Event of Default; Notice.................................... 6 SECTION 2.8. Conflicting Interests....................................... 7 ARTICLE III POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE SECTION 3.1. Powers and Duties of the Guarantee Trustee.................. 7 SECTION 3.2. Certain Rights of Guarantee Trustee......................... 9 SECTION 3.3. Compensation; Indemnity; Fees............................... 10 ARTICLE IV GUARANTEE TRUSTEE SECTION 4.1. Guarantee Trustee; Eligibility.............................. 11 SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee................................................. 12
-i- ARTICLE V GUARANTEE SECTION 5.1. Guarantee................................................... 12 SECTION 5.2. Waiver of Notice and Demand................................. 13 SECTION 5.3. Obligations Not Affected.................................... 13 SECTION 5.4. Rights of Holders........................................... 14 SECTION 5.5. Guarantee of Payment........................................ 14 SECTION 5.6. Subrogation................................................. 14 SECTION 5.7. Independent Obligations..................................... 15 ARTICLE VI COVENANTS AND SUBORDINATION SECTION 6.1. Subordination............................................... 15 SECTION 6.2. Pari Passu Guarantees....................................... 15 ARTICLE VII TERMINATION SECTION 7.1. Termination................................................. 16 ARTICLE VIII MISCELLANEOUS SECTION 8.1. Successors and Assigns...................................... 16 SECTION 8.2. Amendments.................................................. 16 SECTION 8.3. Notices..................................................... 17 SECTION 8.4. Benefit..................................................... 18 SECTION 8.5. Governing Law............................................... 18 SECTION 8.6. Counterparts................................................ 18
-ii- GUARANTEE AGREEMENT, dated as of , 2002, between STERLING BANCORP, a New York corporation (the "Guarantor"), having its principal office at 650 Fifth Avenue, New York, New York 10019-6108, and The Bank of New York, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Series A Trust Preferred Securities (as defined herein) of Sterling Bancorp Trust I, a Delaware statutory business trust (the "Issuer Trust"). RECITALS OF THE GUARANTOR WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of , 2002 (the "Trust Agreement"), among Sterling Bancorp, as Depositor, the Property Trustee, the Delaware Trustee, the Administrative Trustees named therein and the several Holders, the Issuer Trust is issuing $22,000,000 aggregate Liquidation Amount (as defined in the Trust Agreement) of its % Trust Preferred Securities, Series A (Liquidation Amount $10 per Trust Preferred Security) (and may issue up to an additional $3,000,000 aggregate Liquidation Amount of such securities) (collectively, the "Series A Trust Preferred Securities"), representing preferred undivided beneficial interests in the assets of the Issuer Trust and having the terms set forth in the Trust Agreement; and WHEREAS, the Series A Trust Preferred Securities will be issued by the Issuer Trust and the proceeds thereof, together with the proceeds from the issuance of the Issuer Trust's Common Securities (as defined herein), will be used to purchase the Debentures (as defined in the Trust Agreement) of the Guarantor, which Debentures will be deposited with The Bank of New York, as Property Trustee under the Trust Agreement, as trust assets; and WHEREAS, as an incentive for the Holders to purchase the Series A Trust Preferred Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth herein, to pay to the Holders of the Series A Trust Preferred Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the purchase of the Series A Trust Preferred Securities by each Holder, which purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the benefit of the Holders from time to time. ARTICLE I DEFINITIONS SECTION 1.1. Definitions. For all purposes of this Guarantee Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) The terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; (b) All other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation"; (d) All accounting terms used but not defined herein have the meanings assigned to them in accordance with United States generally accepted accounting principles; (e) Unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Guarantee Agreement; and (f) The words "hereby", "herein", "hereof" and "hereunder" and other words of similar import refer to this Guarantee Agreement as a whole and not to any particular Article, Section or other subdivision. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control", when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Board of Directors" means the board of directors of the Guarantor or the Executive Committee of the board of directors of the Guarantor (or any other committee of the board of directors of the Guarantor performing similar functions) or a committee designated by the board of directors of the Guarantor (or such committee), comprised of two or more members of the board of directors of the Guarantor or officers of the Guarantor, or both. "Common Securities" means the securities representing common undivided beneficial interests in the assets of the Issuer Trust. -2- "Event of Default" means (i) a default by the Guarantor in any of its payment obligations under this Guarantee Agreement or (ii) a default by the Guarantor in any other obligation hereunder that remains unremedied for 30 days. "Guarantee Agreement" means this Guarantee Agreement, as modified, amended or supplemented from time to time. "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Series A Trust Preferred Securities, to the extent not paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid Distributions (as defined in the Trust Agreement) required to be paid on the Series A Trust Preferred Securities, to the extent the Issuer Trust shall have funds on hand available therefor at such time; (ii) the Redemption Price (as defined in the Trust Agreement) with respect to any Series A Trust Preferred Securities called for redemption by the Issuer Trust, to the extent the Issuer Trust shall have funds on hand available therefor at such time; and (iii) upon a voluntary or involuntary termination, winding-up or liquidation of the Issuer Trust, unless Debentures are distributed to the Holders, the lesser of (a) the Liquidation Distribution (as defined in the Trust Agreement) with respect to the Series A Trust Preferred Securities, to the extent that the Issuer Trust shall have funds on hand available therefor at such time, and (b) the amount of assets of the Issuer Trust remaining available for distribution to Holders on liquidation of the Issuer. "Guarantee Trustee" means The Bank of New York, solely in its capacity as Guarantee Trustee and not in its individual capacity, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement, and thereafter means each such Successor Guarantee Trustee. "Guarantor" has the meaning specified in the first paragraph of this Guarantee Agreement. "Holder" means any Holder (as defined in the Trust Agreement) of any Series A Trust Preferred Securities; provided, however, that in determining whether the holders of the requisite percentage of Series A Trust Preferred Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the Guarantee Trustee. "Indenture" means the Junior Subordinated Indenture, dated as of ___________, 2002, between Sterling Bancorp and The Bank of New York, as trustee, as the same may be modified, amended or supplemented from time to time. "Issuer Trust" has the meaning specified in the first paragraph of this Guarantee Agreement. "List of Holders" has the meaning specified in Section 2.2(a). -3- "Majority in Liquidation Amount of the Series A Trust Preferred Securities" means, except as provided by the Trust Indenture Act, Series A Trust Preferred Securities representing more than 50% of the aggregate Liquidation Amount (as defined in the Trust Agreement) of all Series A Trust Preferred Securities then Outstanding (as defined in the Trust Agreement). "Officers' Certificate" means, with respect to any Person, a certificate signed by the Chairman or a Vice Chairman of the Board of Directors of such Person or the President or a Vice President of such Person, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Guarantor, and delivered to the Guarantee Trustee. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Guarantee Agreement shall include: (a) a statement by each officer signing the Officers' Certificate that such officer has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by such officer in rendering the Officers' Certificate; (c) a statement that such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of such officer, such condition or covenant has been complied with. "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, company, limited liability company, trust, business trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. "Responsible Officer" means, with respect to the Guarantee Trustee, any Senior Vice President, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or Assistant Trust Officer or any other officer of the Corporate Trust Department of the Guarantee Trustee and also means, with respect to a particular matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Successor Guarantee Trustee" means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 4.1. "Trust Agreement" means the Amended and Restated Trust Agreement of the Issuer Trust referred to in the recitals to this Guarantee Agreement, as modified, amended or supplemented from time to time. -4- "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this Guarantee Agreement was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Series A Trust Preferred Securities" has the meaning specified in the recitals to this Guarantee Agreement. "Vice President," when used with respect to the Corporation, means any duly appointed vice president, whether or not designated by a number or a word or words added before or after the title "vice president." ARTICLE II TRUST INDENTURE ACT SECTION 2.1. Trust Indenture Act; Application. (a) This Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Guarantee Agreement and shall, to the extent applicable, be governed by such provisions. (b) If and to the extent that any provision of this Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Section 310 and 317, inclusive, of the Trust Indenture Act through operation of Section 318(c) thereof, such imposed duties shall control. If any provision of this Guarantee Agreement modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Guarantee Agreement as so modified or to be excluded, as the case may be. SECTION 2.2. List of Holders. (a) The Guarantor shall furnish or cause to be furnished to the Guarantee Trustee (a) semiannually, on or before June 30 and December 31 of each year, a list, in such form as the Guarantee Trustee may reasonably require, of the names and addresses of the Holders (a "List of Holders") as of a date not more than 15 days prior to the delivery thereof, and (b) at such other times as the Guarantee Trustee may request in writing, within 30 days after the receipt by the Guarantor of any such request, a List of Holders as of a date not more than 15 days prior to the time such list is furnished, in each case to the extent such information is in the possession or control of the Guarantor and has not otherwise been received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. -5- (b) The Guarantee Trustee shall comply with the requirements of Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act. SECTION 2.3. Reports by the Guarantee Trustee. Not later than 60 days after May 15 of each year, commencing with May 15, 2002, the Guarantee Trustee shall provide to the Holders such reports as are required by Section 313 of the Trust Indenture Act, if any, dated as of May 15 of such year and in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. SECTION 2.4. Periodic Reports to the Guarantee Trustee. The Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange Commission and the Holders such documents, reports and information, if any, as required by Section 314 of the Trust Indenture Act and the compliance certificate required by Section 314 of the Trust Indenture Act, in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. SECTION 2.5. Evidence of Compliance with Conditions Precedent. The Guarantor shall provide to the Guarantee Trustee such evidence of compliance with such conditions precedent, if any, provided for in this Guarantee Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer of the Guarantor pursuant to Section 314(c)(1) may be given in the form of an Officers' Certificate. SECTION 2.6. Events of Default; Waiver. The Holders of at least a Majority in Liquidation Amount of the Series A Trust Preferred Securities may, by vote, on behalf of the Holders of all the Series A Trust Preferred Securities, waive any past default or Event of Default and its consequences. Upon such waiver, any such default or Event of Default shall cease to exist, and any default or Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. SECTION 2.7. Event of Default; Notice. (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default known to the Guarantee Trustee, transmit by mail, first class postage prepaid, to the Holders, notice of any such Event of Default, unless such Event of Default has been cured before the giving of such notice; provided that, except in the case of a default in the payment of a Guarantee Payment, the Guarantee Trustee shall be protected in -6- withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. (b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless the Guarantee Trustee shall have received written notice, or a Responsible Officer charged with the administration of this Guarantee Agreement shall have obtained actual knowledge, of such Event of Default. SECTION 2.8. Conflicting Interests. The Trust Agreement and the Indenture shall be deemed to be specifically described in this Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. ARTICLE III POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE SECTION 3.1. Powers and Duties of the Guarantee Trustee. (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of the Holders, and the Guarantee Trustee shall not transfer this Guarantee Agreement to any Person except to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Guarantee Trustee hereunder. The right, title and interest of the Guarantee Trustee, as such, hereunder shall automatically vest in any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment hereunder, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee. (b) If an Event of Default has occurred and is continuing, the Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the Holders. (c) The Guarantee Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into this Guarantee Agreement against the Guarantee Trustee. The Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. -7- (d) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act or its own wilful misconduct, except that: (i) Prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee Agreement (including pursuant to Section 2.1), and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee Agreement; and (B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any such certificates or opinions that by any provision hereof or of the Trust Indenture Act are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee Agreement. (ii) The Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made. (iii) The Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in Liquidation Amount of the Series A Trust Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement. (iv) No provision of this Guarantee Agreement shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Guarantee Agreement or adequate indemnity against such risk or liability is not reasonably assured to it. -8- SECTION 3.2. Certain Rights of Guarantee Trustee. (a) Subject to the provisions of Section 3.1: (i) The Guarantee Trustee may rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties. (ii) Any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate unless otherwise prescribed herein. (iii) Whenever, in the administration of this Guarantee Agreement, the Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting to take any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request from the Guarantee Trustee, shall be promptly delivered by the Guarantor. (iv) The Guarantee Trustee may consult with legal counsel, and the written advice or opinion of such legal counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or opinion. Such legal counsel may be legal counsel to the Guarantor or any of its Affiliates and may be one of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee Agreement from any court of competent jurisdiction. (v) The Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee Agreement at the request or direction of any Holder unless such Holder shall have provided to the Guarantee Trustee such adequate security and indemnity as would satisfy a reasonable person in the position of the Guarantee Trustee against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided that nothing contained in this Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee Agreement. -9- (vi) The Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit. (vii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed by it with due care hereunder. (viii)Whenever in the administration of this Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders, (B) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (C) shall be protected in acting in accordance with such instructions. (b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Guarantee Trustee shall be construed to be a duty to act in accordance with such power and authority. SECTION 3.3. Compensation; Indemnity; Fees. The Guarantor agrees: (a) to pay to the Guarantee Trustee from time to time such reasonable compensation for all services rendered by it hereunder as may be agreed by the Guarantor and the Guarantee Trustee from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Guarantee Trustee upon request for all reasonable expenses, disbursements and advances incurred or made by the Guarantee Trustee in accordance with any provision of this Guarantee Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such -10- expense, disbursement or advance as may be attributable to its negligence or bad faith; and (c) to indemnify the Guarantee Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence, wilful misconduct or bad faith on the part of the Guarantee Trustee, arising out of or in connection with the acceptance or administration of this Guarantee Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Guarantee Trustee will not claim or exact any lien or charge on any Guarantee Payments as a result of any amount due to it under this Guarantee Agreement. The provisions of this Section 3.3 shall survive the termination of this Guarantee Agreement or the resignation or removal of the Guarantee Trustee. ARTICLE IV GUARANTEE TRUSTEE SECTION 4.1. Guarantee Trustee; Eligibility. (a) There shall at all times be a Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000, and shall be a corporation meeting the requirements of Section 310(a) of the Trust Indenture Act. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then, for the purposes of this Section 4.1 and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.2. (c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. -11- SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee. (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. (b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. (c) The Guarantee Trustee appointed hereunder shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. ARTICLE V GUARANTEE SECTION 5.1. Guarantee. The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Issuer Trust), as and when due, regardless of any defense, right of set-off or counterclaim that the Issuer Trust may have or assert, except the defense of payment. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer Trust to pay such amounts to the Holders. SECTION 5.2. Waiver of Notice and Demand. The Guarantor hereby waives notice of acceptance of this Guarantee Agreement and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Guarantee Trustee, the Issuer Trust or -12- any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. SECTION 5.3. Obligations Not Affected. The obligations, covenants, agreements and duties of the Guarantor under this Guarantee Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer Trust of any express or implied agreement, covenant, term or condition relating to the Series A Trust Preferred Securities to be performed or observed by the Issuer Trust; (b) the extension of time for the payment by the Issuer Trust of all or any portion of the Distributions (other than an extension of time for payment of Distributions that results from the extension of any interest payment period on the Debentures as provided in the Indenture), Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Series A Trust Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Series A Trust Preferred Securities; (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Series A Trust Preferred Securities, or any action on the part of the Issuer Trust granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer Trust or any of the assets of the Issuer Trust; (e) any invalidity of, or defect or deficiency in, the Series A Trust Preferred Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment of the underlying obligation), it being the intent of this Section 5.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. -13- There shall be no obligation of the Holders to give notice to, or obtain the consent of, the Guarantor with respect to the happening of any of the foregoing. SECTION 5.4. Rights of Holders. The Guarantor expressly acknowledges that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in Liquidation Amount of the Series A Trust Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) any Holder may institute a legal proceeding directly against the Guarantor to enforce its rights under this Guarantee Agreement without first instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust or any other Person. SECTION 5.5. Guarantee of Payment. This Guarantee Agreement creates a guarantee of payment and not of collection. This Guarantee Agreement will not be discharged except by payment of the Guarantee Payments in full (without duplication of amounts theretofore paid by the Issuer Trust) or upon the distribution of Debentures to Holders as provided in the Trust Agreement. SECTION 5.6. Subrogation. The Guarantor shall be subrogated to all rights (if any) of the Holders against the Issuer Trust in respect of any amounts paid to the Holders by the Guarantor under this Guarantee Agreement; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Guarantee Agreement. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. SECTION 5.7. Independent Obligations. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer Trust with respect to the Series A Trust Preferred Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof. -14- ARTICLE VI COVENANTS AND SUBORDINATION SECTION 6.1. Subordination. The obligations of the Guarantor under this Guarantee Agreement will constitute unsecured obligations of the Guarantor and will rank subordinate and junior in right of payment to all Senior Debt (as defined in the Indenture) of the Guarantor to the extent and in the manner set forth in the Indenture with respect to the Debentures, and the provisions of Article XIII of the Indenture will apply, mutatis mutandis, to the obligations of the Guarantor hereunder. The obligations of the Guarantor hereunder do not constitute Senior Debt (as defined in the Indenture) of the Guarantor. SECTION 6.2. Pari Passu Guarantees. The obligations of the Guarantor under this Guarantee Agreement shall rank pari passu with the obligations of the Guarantor under (i) any similar guarantee agreements issued by the Guarantor on behalf of the holders of preferred or capital securities issued by any Issuer Trust (as defined in the Indenture), (ii) the Indenture and the Securities (as defined therein) issued thereunder, (iii) the Expense Agreement (as defined in the Trust Agreement) and any similar expense agreements entered into by the Guarantor in connection with the offering of Series A Trust Preferred Securities (as defined in the Indenture) by any Issuer Trust (as defined in the Indenture), and (iv) any other security, guarantee or other agreement or obligation that is expressly stated to rank pari passu with the obligations of the Guarantor under this Guarantee Agreement or with any obligation that ranks pari passu with the obligations of the Guarantor under this Guarantee Agreement. ARTICLE VII TERMINATION SECTION 7.1. Termination. This Guarantee Agreement shall terminate and be of no further force and effect upon (i) full payment of the Redemption Price (as defined in the Trust Agreement) of all Series A Trust Preferred Securities, (ii) the distribution of Debentures to the Holders in exchange for all of the Series A Trust Preferred Securities or (iii) full payment of the amounts payable in accordance with Article IX of the Trust Agreement upon liquidation of the Issuer Trust. Notwithstanding the foregoing, this Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time any Holder is required to repay any sums paid with respect to the Series A Trust Preferred Securities or this Guarantee Agreement. -15- ARTICLE VIII MISCELLANEOUS SECTION 8.1. Successors and Assigns. All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Series A Trust Preferred Securities then outstanding. Except in connection with a consolidation, merger or sale involving the Guarantor that is permitted under Article VIII of the Indenture and pursuant to which the successor or assignee agrees in writing to perform the Guarantor's obligations hereunder, the Guarantor shall not assign its obligations hereunder, and any purported assignment other than in accordance with this provision shall be void. SECTION 8.2. Amendments. Except with respect to any changes that do not adversely affect the rights of the Holders in any material respect (in which case no consent of the Holders will be required), this Guarantee Agreement may only be amended with the prior approval of the Holders of not less than a Majority in Liquidation Amount of the Series A Trust Preferred Securities. The provisions of Article VI of the Trust Agreement concerning meetings of the Holders shall apply to the giving of such approval. SECTION 8.3. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be in writing, duly signed by the party giving such notice, and delivered, telecopied or mailed by first class mail as follows: (a) if given to the Guarantor, to the address or telecopy number set forth below or such other address or telecopy number as the Guarantor may give notice to the Guarantee Trustee and the Holders: Sterling Bancorp 650 Fifth Avenue New York, New York 10019-6108 Attention: Treasurer and Chief Financial Officer Facsimile: (212) 757-8287 (b) if given to the Guarantee Trustee, at the address or telecopy number set forth below or such other address or telecopy number as the Guarantee Trustee may give notice to the Guarantor and Holders: -16- The Bank of New York Corporate Trust Division 5 Penn Plaza, 13th Floor New York, New York 10001-1810 Attention: Marie E. Trimboli Facsimile: (212) 896-7294, -7297, -7298, or -2799 with a copy to: Sterling Bancorp Trust I c/o Sterling Bancorp 650 Fifth Avenue New York, New York 10019-6108 Attention: Treasurer and Chief Financial Officer Telecopy: (212) 757-8287 (c) if given to any Holder, at the address set forth on the books and records of the Issuer Trust. All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 8.4. Benefit. This Guarantee Agreement is solely for the benefit of the Holders and is not separately transferable from the Series A Trust Preferred Securities. SECTION 8.5. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 8.6. Counterparts. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. -17- IN WITNESS WHEREOF, the parties hereto have executed this Guarantee Agreement as of the day and year first above written. STERLING BANCORP By:_________________________ Name: Title: THE BANK OF NEW YORK, as Guarantee Trustee By:_________________________ Name: Title: -18- EX-5.A 9 y56473ex5-a.txt OPINION OF SULLIVAN & CROMWELL EXHIBIT 5-a [Letterhead of Sullivan & Cromwell] February 6, 2002 Sterling Bancorp, 650 Fifth Avenue, New York, New York 10019-6108. Ladies and Gentlemen: In connection with the registration under the Securities Act of 1933 (the "Act") of $25,000,000 principal amount of Junior Subordinated Deferrable Interest Debentures, Series A (the "Debt Securities") of Sterling Bancorp, a New York corporation (the "Company"), $25,000,000 aggregate liquidation amount of Cumulative Trust Preferred Securities (the "Preferred Securities") of Sterling Bancorp Trust I, a Delaware statutory business trust (the "Trust"), and the Guarantee with respect to the Preferred Securities (the "Guarantee") to be executed and delivered by the Company for the benefit of the holders from time to time of the Preferred Securities, we, as your special counsel, have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion. Upon the basis of such examination, we advise you that, in our opinion, when (i) the Registration Statement relating to the Debt Securities, the Preferred Securities and the Guarantee (the "Registration Statement") has become effective under the Act, (ii) the Indenture relating to the Sterling Bancorp -2- Debt Securities (the "Indenture") and the Guarantee Agreement relating to the Guarantee have been duly executed and delivered, (iii) the Amended and Restated Trust Agreement of the Trust (the "Trust Agreement") has been duly executed and delivered, (iv) the terms of the Debt Securities and of their issuance and sale have been duly established in conformity with the Indenture so as not to violate any applicable law or result in a default under, or breach of, any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, (v) the terms of the Preferred Securities and of their issuance and sale have been duly established in conformity with the Trust Agreement so as not to violate any applicable law or result in a default under, or breach of, any agreement or instrument binding upon the Trust and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Trust, (vi) the Debt Securities have been duly executed and authenticated in accordance with the Indenture and issued and sold as contemplated in the Registration Statement, and (vii) the Preferred Securities have been duly executed and authenticated in accordance with the Trust Agreement and issued and sold as contemplated in the Registration Statement, the Debt Securities and the Guarantee will constitute valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. The foregoing opinion is limited to the Federal laws of the United States and the laws of the State of New York, and we are expressing no opinion as to the effect of the laws of any other jurisdiction. Also, we have relied as to certain matters on information obtained from public officials, officers of the Company and other sources believed by us to be responsible. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to us under the heading "Validity of Securities" in the Prospectus. In giving such consent, we do not Sterling Bancorp -3- thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, /s/ Sullivan & Cromwell EX-5.B 10 y56473ex5-b.txt OPINION OF RICHARDS, LAYTON & FINGER, P.A. EXHIBIT 5-b [Letterhead of Richards, Layton & Finger, P.A.] February 6, 2002 Sterling Bancorp Trust I c/o Sterling Bancorp 650 Fifth Avenue New York, New York 10019-6108 Re: Sterling Bancorp Trust I Ladies and Gentlemen: We have acted as special Delaware counsel for Sterling Bancorp, a New York corporation (the "Company"), and Sterling Bancorp Trust I, a Delaware business trust (the "Trust"), in connection with the matters set forth herein. At your request, this opinion is being furnished to you. For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following: (a) The Certificate of Trust of the Trust, dated as of February 1, 2002 (the "Certificate"), as filed in the office of the Secretary of State of the State of Delaware (the "Secretary of State") on February 1, 2002; (b) The Trust Agreement of the Trust, dated as of February 1, 2002, among the Company, as depositor, and the trustees of the Trust named therein; (c) A form of Amended and Restated Trust Agreement of the Trust (including Exhibits A, B and D thereto) (the "Trust Agreement"), to be entered into among the Company, as depositor, the trustees of the Trust named therein, and the holders, from time to time, of undivided beneficial interests in the assets of the Trust, attached as an exhibit to the Registration Statement (as defined below); Sterling Bancorp Trust I February 6, 2002 Page 2 (d) The Registration Statement on Form S-3, as proposed to be filed by the Company and the Trust with the Securities and Exchange Commission (the "SEC") on February 6, 2002 (the "Registration Statement"), including a prospectus (the "Prospectus"), relating to the __ % Cumulative Trust Preferred Securities of the Trust representing undivided beneficial interests in the assets of the Trust (each, a "Preferred Security" and collectively, the "Preferred Securities"); and (e) A Certificate of Good Standing for the Trust, dated February 5, 2002, obtained from the Secretary of State. Capitalized terms used herein and not otherwise defined are used as defined in the Trust Agreement. For purposes of this opinion, we have not reviewed any documents other than the documents listed in paragraphs (a) through (e) above. In particular, we have not reviewed any document (other than the documents listed in paragraphs (a) through (e) above) that is referred to in or incorporated by reference into the documents reviewed by us. We have assumed that there exists no provision in any document that we have not reviewed that is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects. With respect to all documents examined by us, we have assumed (i) the authenticity of all documents submitted to us as authentic originals, (ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures. For purposes of this opinion, we have assumed (i) that the Trust Agreement and the Certificate are in full force and effect and have not been amended, (ii) except to the extent provided in paragraph 1 below, that each of the parties to the documents examined by us has been duly created, organized or formed, as the case may be, and is validly existing in good standing under the laws of the jurisdiction governing its creation, organization or formation, (iii) the legal capacity of natural persons who are parties to the documents examined by us, (iv) that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (v) that each of the parties to the documents examined by us has duly authorized, executed and delivered such documents, (vi) the receipt by each Person to whom a Preferred Security is to be issued by the Trust (collectively, the "Preferred Security Holders") of a Preferred Securities Certificate for such Preferred Security and the payment for the Preferred Security acquired by it, in accordance with the Trust Agreement and the Registration Statement, and (vii) that the Preferred Securities are issued Sterling Bancorp Trust I February 6, 2002 Page 3 and sold to the Preferred Security Holders in accordance with the Trust Agreement and the Registration Statement. We have not participated in the preparation of the Registration Statement and assume no responsibility for its contents. This opinion is limited to the laws of the State of Delaware (excluding the securities laws of the State of Delaware), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws and rules and regulations relating thereto. Our opinions are rendered only with respect to Delaware laws and rules, regulations and orders thereunder that are currently in effect. Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that: 1. The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Business Trust Act. 2. The Preferred Securities will represent valid and, subject to the qualifications set forth in paragraph 3 below, fully paid and nonassessable undivided beneficial interests in the assets of the Trust. 3. The Preferred Security Holders, as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. We note that the Preferred Security Holders may be obligated to make payments as set forth in the Trust Agreement. We consent to the filing of this opinion with the SEC as an exhibit to the Registration Statement. In addition, we hereby consent to the use of our name under the heading "Validity of Securities" in the Prospectus. In giving the foregoing consents, we do not thereby admit that we come within the category of Persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the SEC thereunder. Except as stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other Person for any purpose. Very truly yours, /s/ Richards, Layton & Finger, P.A. BJK/tld EX-8 11 y56473ex8.txt OPINION OF SULLIVAN & CROMWELL RE: TAX MATTERS EXHIBIT 8 [Letterhead of Sullivan & Cromwell] February 6, 2002 Sterling Bancorp 650 Fifth Avenue New York, NY 10019-6108 Ladies and Gentlemen: As special tax counsel to Sterling Bancorp Trust I (the "Trust") and Sterling Bancorp in connection with the issuance of up to $25,000,000 aggregate liquidation amount of the Cumulative Trust Preferred Securities of the Trust (the "Securities"), we hereby confirm to you our opinion as set forth under the heading "United States Federal Income Tax Consequences" in the Registration Statement, subject to the limitations set forth therein. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the heading "United States Federal Income Tax Consequences" in the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933. Very truly yours, /s/ Sullivan & Cromwell EX-12 12 y56473ex12.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12 STERLING BANCORP and Subsidiaries
For the Years Ending December 31, ---------------------------------------------------------------------- FIXED CHARGES 2001 2000 1999 1998 1997 ------ ------ ------ ------ ------ Preferred dividends (tax effected) 59 50 39 32 28 Interest on borrowings 7,786 11,546 9,077 8,235 7,080 Estimated interest in rent 1,023 867 695 655 599 ------ ------ ------ ------ ------ Total, excluding interest on deposits 8,867 12,462 9,812 8,922 7,706 Interest on deposits 19,030 22,697 16,706 16,106 14,944 ------ ------ ------ ------ ------ Total 27,897 35,159 26,518 25,029 22,650 ====== ====== ====== ====== ====== EARNINGS Pretax income 32,077 28,413 24,240 22,200 19,762 Fixed charges 27,897 35,159 26,518 25,029 22,650 ------ ------ ------ ------ ------ Total 59,975 63,572 50,758 47,228 42,413 ====== ====== ====== ====== ====== EARNINGS TO FIXED CHARGES Excluding interest on deposits 4.62x 3.28x 3.47x 3.49x 3.56x Including interest on deposits 2.15x 1.81x 1.91x 1.89x 1.87x
EX-23.A 13 y56473ex23-a.txt CONSENT OF KPMG, INDEPENDENT AUDITORS EXHIBIT 23-a Independent Auditors' Consent The Board of Directors Sterling Bancorp: We consent to incorporation by reference in the Registration Statement on Form S-3 of Sterling Bancorp of our report dated January 22, 2001, relating to the consolidated balance sheets of Sterling Bancorp as of December 31, 2000 and 1999, and the related consolidated statements of income, comprehensive income, changes in shareholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2000, and the consolidated statements of condition of Sterling National Bank as of December 31, 2000 and 1999, which report appears in the December 31, 2000 Annual Report on Form 10-K of Sterling Bancorp, and to the references to our Firm under the headings "Selected Consolidated Financial Data" and "Experts" in the Prospectus. /s/ KPMG LLP New York, New York February 4, 2002 EX-25.A 14 y56473ex25-a.txt FORM T-1 STATEMENT OF ELIGIBILITY Exhibit 25a = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| --------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------------- 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.) 650 Fifth Avenue New York, New York 10019 (Address of principal executive offices) (Zip code) --------------------------- Junior Subordinated Deferrable Interest Debentures (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - --------------------------------------------------------------------------- Name Address - --------------------------------------------------------------------------- Superintendent of Banks of the 2 Rector Street, New York, N.Y. State of New York 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Washington, D.C. 20429 Corporation New York Clearing House New York, New York 10005 Association (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -2- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 1st day of February, 2002. THE BANK OF NEW YORK By: /S/ MARY LAGUMINA ------------------------------- Name: MARY LAGUMINA Title: VICE PRESIDENT -3- EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 2001, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts In Thousands ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ................................... $ 3,238,092 Interest-bearing balances ............................ 5,255,952 Securities: Held-to-maturity securities .......................... 127,193 Available-for-sale securities ........................ 12,143,488 Federal funds sold and Securities purchased under agreements to resell ................. 281,677 Loans and lease financing receivables: Loans and leases held for sale ....................... 786 Loans and leases, net of unearned income...............46,206,726 LESS: Allowance for loan and lease losses............607,115 Loans and leases, net of unearned income and allowance ................................ 45,599,611 Trading Assets ......................................... 9,074,924 Premises and fixed assets (including capitalized leases) .................................. 783,165 Other real estate owned ................................ 935 Investments in unconsolidated subsidiaries and associated companies ............................................ 200,944 Customers' liability to this bank on acceptances outstanding .............................. 311,521 Intangible assets Goodwill ............................................ 1,546,125 Other intangible assets ............................. 8,497 Other assets ........................................... 8,761,129 -----------
Total assets $87,334,039 =========== LIABILITIES Deposits: In domestic offices .................................. $28,254,986 Noninterest-bearing.......10,843,829 Interest-bearing..........17,411,157 In foreign offices, Edge and Agreement subsidiaries, and IBFs .................... 31,999,406 Noninterest-bearing........1,006,193 Interest-bearing..........30,993,213 Federal funds purchased and securities sold under agreements to repurchase ........................................... 6,004,678 Trading liabilities .................................... 2,286,940 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases) .............................................. 1,845,865 Bank's liability on acceptances executed and outstanding ............................. 440,362 Subordinated notes and debentures ...................... 2,196,000 Other liabilities ...................................... 7,606,565 ----------- Total liabilities ...................................... $80,634,802 =========== EQUITY CAPITAL Common stock ........................................... 1,135,284 Surplus ................................................ 1,050,729 Retained earnings ...................................... 4,436,230 Accumulated other comprehensive income ................. 76,292 Other equity capital components ........................ 0 Total equity capital ................................... 6,698,535 ----------- Total liabilities and equity capital ................... $87,334,039 ===========
I, Thomas J. Mastro, Senior Vice President and 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. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi : Gerald L. Hassell : Directors Alan R. Griffith : EX-25.B 15 y56473ex25-b.txt FORM T-1 STATEMENT OF ELIGIBILITY Exhibit 25b = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| --------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------------- Sterling Bancorp Trust I (Exact name of obligor as specified in its charter) New York Applied For (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) c/o Sterling Bancorp 650 Fifth Avenue New York, New York 10019 (Address of principal executive offices) (Zip code) --------------------------- Preferred Securities (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the 2 Rector Street, New York, N.Y. State of New York 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Washington, D.C. 20429 Corporation New York Clearing House New York, New York 10005 Association (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -2- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 1st day of February, 2002. THE BANK OF NEW YORK By: /S/ MARY LAGUMINA ------------------------------- Name: MARY LAGUMINA Title: VICE PRESIDENT -3- EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 2001, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts In Thousands ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ................................... $ 3,238,092 Interest-bearing balances ............................ 5,255,952 Securities: Held-to-maturity securities .......................... 127,193 Available-for-sale securities ........................ 12,143,488 Federal funds sold and Securities purchased under agreements to resell ................. 281,677 Loans and lease financing receivables: Loans and leases held for sale ....................... 786 Loans and leases, net of unearned income...............46,206,726 LESS: Allowance for loan and lease losses............607,115 Loans and leases, net of unearned income and allowance ................................ 45,599,611 Trading Assets ......................................... 9,074,924 Premises and fixed assets (including capitalized leases) .................................. 783,165 Other real estate owned ................................ 935 Investments in unconsolidated subsidiaries and associated companies ............................................ 200,944 Customers' liability to this bank on acceptances outstanding .............................. 311,521 Intangible assets Goodwill ............................................ 1,546,125 Other intangible assets ............................. 8,497 Other assets ........................................... 8,761,129 -----------
Total assets $87,334,039 =========== LIABILITIES Deposits: In domestic offices .................................. $28,254,986 Noninterest-bearing.......10,843,829 Interest-bearing..........17,411,157 In foreign offices, Edge and Agreement subsidiaries, and IBFs .................... 31,999,406 Noninterest-bearing........1,006,193 Interest-bearing..........30,993,213 Federal funds purchased and securities sold under agreements to repurchase ........................................... 6,004,678 Trading liabilities .................................... 2,286,940 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases) .............................................. 1,845,865 Bank's liability on acceptances executed and outstanding ............................. 440,362 Subordinated notes and debentures ...................... 2,196,000 Other liabilities ...................................... 7,606,565 ----------- Total liabilities ...................................... $80,634,802 =========== EQUITY CAPITAL Common stock ........................................... 1,135,284 Surplus ................................................ 1,050,729 Retained earnings ...................................... 4,436,230 Accumulated other comprehensive income ................. 76,292 Other equity capital components ........................ 0 Total equity capital ................................... 6,698,535 ----------- Total liabilities and equity capital ................... $87,334,039 ===========
I, Thomas J. Mastro, Senior Vice President and 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. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi : Gerald L. Hassell : Directors Alan R. Griffith : EX-25.C 16 y56473ex25-c.txt FORM T-1 STATEMENT OF ELIGIBILITY Exhibit 25c = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| --------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------------- 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.) 650 Fifth Avenue New York, New York 10019 (Address of principal executive offices) (Zip code) --------------------------- Guarantee of Preferred Securities of Sterling Bancorp Trust I (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the 2 Rector Street, New York, N.Y. State of New York 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Washington, D.C. 20429 Corporation New York Clearing House New York, New York 10005 Association (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -2- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 1st day of February, 2002. THE BANK OF NEW YORK By: /S/ MARY LAGUMINA ------------------------------- Name: MARY LAGUMINA Title: VICE PRESIDENT -3- EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 2001, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts In Thousands ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ................................... $ 3,238,092 Interest-bearing balances ............................ 5,255,952 Securities: Held-to-maturity securities .......................... 127,193 Available-for-sale securities ........................ 12,143,488 Federal funds sold and Securities purchased under agreements to resell ................. 281,677 Loans and lease financing receivables: Loans and leases held for sale ....................... 786 Loans and leases, net of unearned income...............46,206,726 LESS: Allowance for loan and lease losses............607,115 Loans and leases, net of unearned income and allowance ................................ 45,599,611 Trading Assets ......................................... 9,074,924 Premises and fixed assets (including capitalized leases) .................................. 783,165 Other real estate owned ................................ 935 Investments in unconsolidated subsidiaries and associated companies ............................................ 200,944 Customers' liability to this bank on acceptances outstanding .............................. 311,521 Intangible assets Goodwill ............................................ 1,546,125 Other intangible assets ............................. 8,497 Other assets ........................................... 8,761,129 -----------
Total assets $87,334,039 =========== LIABILITIES Deposits: In domestic offices .................................. $28,254,986 Noninterest-bearing.......10,843,829 Interest-bearing..........17,411,157 In foreign offices, Edge and Agreement subsidiaries, and IBFs .................... 31,999,406 Noninterest-bearing........1,006,193 Interest-bearing..........30,993,213 Federal funds purchased and securities sold under agreements to repurchase ........................................... 6,004,678 Trading liabilities .................................... 2,286,940 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases) .............................................. 1,845,865 Bank's liability on acceptances executed and outstanding ............................. 440,362 Subordinated notes and debentures ...................... 2,196,000 Other liabilities ...................................... 7,606,565 ----------- Total liabilities ...................................... $80,634,802 =========== EQUITY CAPITAL Common stock ........................................... 1,135,284 Surplus ................................................ 1,050,729 Retained earnings ...................................... 4,436,230 Accumulated other comprehensive income ................. 76,292 Other equity capital components ........................ 0 Total equity capital ................................... 6,698,535 ----------- Total liabilities and equity capital ................... $87,334,039 ===========
I, Thomas J. Mastro, Senior Vice President and 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. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi : Gerald L. Hassell : Directors Alan R. Griffith : -----END PRIVACY-ENHANCED MESSAGE-----