Second Supplemental Indenture - Bear Stearns Companies Inc. and Chase Manhattan Bank
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SECOND SUPPLEMENTAL INDENTURE
between
THE BEAR STEARNS COMPANIES INC.
and
THE CHASE MANHATTAN BANK
Dated as of May 10, 2001
7.80% JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURES
DUE MAY 15, 2031
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definition of Terms...........................................2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
Section 2.01 Designation and Principal Amount..............................4
Section 2.02 Stated Maturity...............................................4
Section 2.03 Form and Payment; Minimum Transfer Restriction................4
Section 2.04 Exchange and Registration of Transfer of Debentures;
Depositary...................................................5
Section 2.05 Interest......................................................6
ARTICLE III
REDEMPTION AND PREPAYMENT OF THE DEBENTURES
Section 3.01 Optional Redemption by Company................................7
Section 3.02 Special Event Prepayment......................................7
Section 3.03 Notice of Prepayment..........................................7
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.01 Extension of Interest Payment Period..........................8
Section 4.02 Notice of Extension...........................................8
ARTICLE V
EXPENSES
Section 5.01 Payment of Expenses...........................................9
Section 5.02 Payment upon Resignation or Removal...........................9
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ARTICLE VI
FORM OF DEBENTURE
Section 6.01 Form of Debenture............................................10
ARTICLE VII
ISSUE OF DEBENTURES
Section 7.01 Issue of Debentures..........................................10
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Ratification of Base Indenture; Supplemental Indenture
Controls....................................................10
Section 8.02 Trustee Not Responsible for Recitals.........................10
Section 8.03 Governing Law................................................10
Section 8.04 Separability.................................................10
Section 8.05 Counterparts.................................................11
EXHIBIT A
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SECOND SUPPLEMENTAL INDENTURE, dated as of May 10, 2001 (the
"Supplemental Indenture"), between The Bear Stearns Companies Inc., a Delaware
corporation (the "Company"), and The Chase Manhattan Bank, as trustee (the
"Trustee") under the Indenture, dated as of December 16, 1998, between the
Company and the Trustee (the "Base Indenture" and together with all supplements
thereto, the "Indenture").
WHEREAS, the Company executed and delivered the Base Indenture to
the Trustee to provide for the future issuance of the Company's unsecured
subordinated debentures to be issued from time to time in one or more series as
might be determined by the Company under the Indenture, in an unlimited
aggregate principal amount which may be authenticated and delivered as provided
in the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its unsecured
subordinated debentures to be known as its 7.80% Junior Subordinated Deferrable
Interest Debentures due May 15, 2031 (the "Debentures"), the form and substance
of such Debentures and the terms, provisions and conditions thereof to be set
forth as provided in the Base Indenture and this Supplemental Indenture;
WHEREAS, Bear Stearns Capital Trust III, a Delaware statutory
business trust (the "Trust"), has offered to the underwriters (the
"Underwriters") named in Schedule I to the Underwriting Agreement, dated May 3,
2001 (the "Underwriting Agreement"), among the Underwriters, the Trust and the
Company, 10,500,000 shares ($262,500,000 aggregate liquidation amount) of its
7.80% Trust Issued Preferred Securities (the "Preferred Securities"),
representing undivided beneficial interests in the assets of the Trust and
proposes to invest the proceeds from such offering in $270,618,575 aggregate
principal amount of the Debentures;
WHEREAS, the Company has requested that the Trustee execute and
deliver this Supplemental Indenture; all requirements necessary to make this
Supplemental Indenture a valid instrument in accordance with its terms, and to
make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company, have been
performed; and the execution and delivery of this Supplemental Indenture has
been duly authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance of
the Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Base Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
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ARTICLE I
DEFINITIONS
Section 1.01 Definition of Terms. For all purposes of this
Supplemental Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(a) the terms which are defined in the Base Indenture have the same
meanings when used in this Supplemental Indenture;
(b) the terms defined in this Article have the meaning assigned to
them in this Article and include the plural as well as the singular;
(c) all other terms used herein which are defined in the Trust
Indenture Act, whether directly or by reference therein, have the meanings
assigned to them therein;
(d) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States of America
at the date of such computation;
(e) a reference to a Section or Article is to a Section or Article
of this Supplemental Indenture;
(f) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Supplemental Indenture as a whole and not to any
particular Article, Section or other subdivision;
(g) headings are for convenience of reference only and do not affect
interpretation; and
(h) the following terms have the meanings given to them in the Trust
Agreement: (i) Administrators; (ii) Affiliate; (iii) Business Day; (iv) Clearing
Agency; (v) Closing Date; (vi) Common Securities; (vii) Delaware Trustee; (viii)
Distribution; (ix) Exchange Act; (x) Guarantee; (xi) Like Amount; (xii) Opinion
of Counsel; (xiii) Preferred Securities; (xiv) Preferred Securities Certificate;
(xv) Property Trustee; and (xvi) Trust Securities.
(i) References herein to the prepayment of the Debentures shall be
deemed to be references to the redemption of the Debentures for the purposes of
Article III of the Base Indenture.
"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 outstanding Preferred Securities and Common Securities shall 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 Special Event.
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"Compounded Interest" shall have the meaning specified in Section
4.01.
"Coupon Rate" has the meaning specified in Section 2.05.
"Deferred Interest" has the meaning specified in Section 4.01.
"Extension Period" has the meaning specified in Section 4.01.
"Global Debenture" has the meaning specified in Section 2.04.
"Investment Company Event" means the receipt by the Trust of an
Opinion of Counsel to the effect that, as a result of the occurrence of a change
in law or regulation or a change (including any announced proposed change) in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the 1940 Act, which change or
proposed change becomes effective or would become effective, as the case may be,
on or after the date of the issuance of the Preferred Securities of the Trust.
"Liquidation Amount" means the stated amount of $25 per Preferred
Security.
"Optional Redemption Price" has the meaning specified in Section
3.01.
"Prepayment Date" has the meaning specified in Section 3.01.
"Special Event" means an Investment Company Event or a Tax Event.
"Special Event Prepayment" means the prepayment of the Debentures
upon the occurrence and continuation of a Special Event.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel
to the effect that, as a result of any 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 Closing Date, there is more than an insubstantial risk that (i) the Trust
is, or will be within 90 days of the date of such opinion, subject to United
States federal income tax with respect to income received or accrued on the
Debentures, (ii) interest payable by the Company on the Debentures is not, or
within 90 days of the date of such opinion, will not be, deductible by the
Company, in whole or in part, for United States federal income tax purposes, or
(iii) the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of taxes, duties or other governmental
charges.
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"Trust Agreement" means the Amended and Restated Trust Agreement of
the Trust, dated as of May 10, 2001.
"Underwriters" has the meaning specified in the third recital to
this Supplemental Indenture.
"Underwriting Agreement" has the meaning specified in the third
recital to this Supplemental Indenture.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
Section 2.01 Designation and Principal Amount. The aggregate
principal amount of Debentures outstanding at any time shall not exceed
$270,618,575 (except as set forth in Section 2.01(2) of the Base Indenture).
Upon receipt of a written order of the Company (executed as required by Section
2.01 of the Base Indenture) for the authentication and delivery of a series of
Debentures and satisfaction of the requirements of the fifth paragraph of
Section 2.01 of the Base Indenture, the Trustee shall authenticate Debentures
for original issuance in an aggregate principal amount not to exceed
$270,618,575 (except as set forth in Section 2.01(2) of the Base Indenture).
Section 2.02 Stated Maturity. The Stated Maturity of the Debentures
is May 15, 2031 and shall not be subject to extension.
Section 2.03 Form and Payment; Minimum Transfer Restriction. (a)
Except as provided in Section 2.04, the Debentures shall be issued to the Trust
and held by the Property Trustee in fully registered certificated form without
coupons in minimum denominations of $25 and integral multiples of $25 in excess
thereof. Principal and interest on the Debentures issued in certificated form
will be payable, the transfer of such Debentures will be registrable and such
Debentures will be exchangeable for Debentures bearing identical terms and
provisions at the principal office of the Trustee; provided, however, that
payment of interest may be made at the option of the Company (i) by check mailed
to the registered holder at such address as shall appear in the Register or (ii)
by transfer to an account maintained by such Person as specified in such
Register, provided that proper transfer instructions have been received by the
preceding record date. Notwithstanding the foregoing, so long as the registered
holder of any Debentures is the Property Trustee, the payment of the principal
of and interest (including Additional Sums, Additional Interest and Compounded
Interest, if any) on such Debentures held by the Property Trustee will be made
at such place and to such account as may be designated by the Property Trustee.
(b) The Debentures may be transferred or exchanged only in minimum
denominations of $25 and integral multiples of $25 in excess thereof; and any
attempted transfer, sale or other disposition of Debentures in a denomination of
less than $25 shall be deemed to be void and of no legal effect whatsoever (the
foregoing restriction being the "Minimum Transfer Restriction").
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Section 2.04 Exchange and Registration of Transfer of Debentures;
Depositary. If an early dissolution of the Trust occurs as described in the
Trust Agreement and Debentures are to be distributed to the holders of the
Preferred Securities, a Like Amount of the Debentures will be issued to holders
of the Trust Securities in the same form as the Trust Securities that such
Debentures replace in accordance with the following procedures:
(a) So long as Debentures are eligible for book-entry settlement
with the Depositary, or unless otherwise required by law, all Debentures that
are so eligible may be represented by one or more Debentures in global form
registered in the name of Cede & Co. the nominee of the Depositary, except as
otherwise specified below. The transfer and exchange of beneficial interests in
any such Debenture in global form shall be shown on, and transfers thereof will
be effected only through, records maintained by participants in the Depositary.
Debentures that are distributed in replacement of Preferred
Securities represented by a global Preferred Security will be represented by a
global Debenture (the "Global Debenture").
Except as provided below, beneficial owners of a Debenture in global
form shall not be entitled to have certificates registered in their names, will
not receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered registered holders of such Debentures
in global form.
(b) Trust Securities held in certificated form, except for
certificates representing Preferred Securities held by Cede & Co. as nominee of
the Depositary (or any successor Clearing Agency or its nominee), shall upon
presentation to the Trustee by the Property Trustee or by the holder thereof or
by the Property Trustee on behalf of such holders be exchanged for a Like Amount
of Debentures in fully registered certificated form.
(c) Any Global Debenture may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of the Indenture as may be required by the Depositary or required
to comply with the rules and regulations of any exchange, interdealer quotation
system or self-regulatory organization upon which the Debentures may be listed
or traded or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Debentures are
subject.
(d) Notwithstanding any other provisions of the Indenture (other
than the provisions set forth in this Section 2.04(d)), a Debenture in global
form may not be exchanged in whole or in part for Debentures registered, and no
transfer of a Debenture in global form may be registered, in the name of any
person other than Cede & Co. unless (i) the Depositary (A) has notified the
Company that it is unwilling or unable to continue as Depositary for such Global
Debenture or (B) has ceased to be a clearing agency registered as such under the
Exchange Act, (ii) there shall have occurred and be continuing an Event of
Default, or any event which after notice or lapse of time or both would be an
Event of Default under the Indenture, with respect to such Global Debenture, or
(iii) the Company in its sole discretion instructs the Trustee to exchange such
Global Debenture for a Debenture that is not a Global Debenture (in which case
such exchange shall be effected by the Trustee).
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The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to act
as Depositary with respect to the Debentures in global form. Initially, the
Global Debentures shall be issued to the Depositary, registered in the name of
Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as
custodian for Cede & Co.
If at any time the Depositary for the Global Debentures notifies the
Company that it is unwilling or unable to continue as Depositary for such
Debentures or has ceased to be a Clearing Agency registered as such under the
Exchange Act, the Company may appoint a successor Depositary with respect to
such Debentures. If a successor Depositary for the Debentures is not appointed
by the Company within 90 days after the Company receives such notice or becomes
aware of such ineligibility, the Company will execute, and the Trustee, upon
receipt of an Officers' Certificate for authentication and delivery of
Debentures, will authenticate and deliver, Debentures in definitive form, in an
aggregate principal amount equal to the principal amount of the Global
Debentures, in exchange for the such Global Debentures.
Definitive Debentures issued in exchange for all or a part of a
Global Debenture pursuant to this Section 2.04(d) shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such definitive Debentures to the person in whose names such definitive
Debentures are so registered.
At such time as all interests in a Global Debenture have been
redeemed, exchanged, repurchased or canceled, such Global Debenture shall be,
upon receipt thereof, canceled by the Trustee in accordance with standing
procedures and instructions of the Depositary. At any time prior to such
cancellation, if any interest in a Global Debenture is exchanged for definitive
Debentures, redeemed, exchanged, or canceled, or transferred for part of a
Global Debenture, the principal amount of such Global Debenture shall, in
accordance with the standing procedures and instructions of the Depositary be
reduced, and an endorsement shall be made on such Global Debenture by, or at the
direction of, the Trustee to reflect such reduction.
Section 2.05 Interest. (a) Each Debenture will bear interest at the
rate (the "Coupon Rate") of 7.80% per annum, until the principal thereof becomes
due and payable, and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the Coupon Rate, compounded quarterly, payable (subject to the
provisions of Article 4) quarterly in arrears on the 15th day of May, August,
November and February of each year (each, an "Interest Payment Date"),
commencing on August 15, 2001 to the Person in whose name such Debenture is
registered, subject to certain exceptions, at the close of business on the
Business Day next preceding such Interest Payment Date. If the Debentures are
issued in certificated form (other than to the Property Trustee), the record
dates for payment of interest will be the 1st day of the month in which the
relevant Interest Payment Date occurs. Until liquidation, if any, of the Trust,
each Debenture will be held in the name of the Property Trustee in trust for the
benefit of the holders of the Trust Securities.
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(b) The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on the Debentures is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which is a Business Day with the same force and effect as if made on the date
such payment was originally payable, without any interest or other payment with
respect to any such delay.
ARTICLE III
REDEMPTION AND PREPAYMENT OF THE DEBENTURES
Section 3.01 Optional Redemption by Company. Subject to the
provisions of Article III of the Base Indenture, except as otherwise may be
specified in Section 3.02 or elsewhere in this Supplemental Indenture, the
Company shall have the right to prepay the Debentures, in whole or in part, from
time to time, on or after May 15, 2006, at a prepayment price (the "Optional
Redemption Price") equal to the outstanding principal amount of the Debentures
plus, in each case, accrued and unpaid interest, including Additional Sums,
Additional Interest and Compounded Interest thereon to the date of prepayment
(the "Prepayment Date").
If the Debentures are only partially prepaid pursuant to this
Section 3.01, the Debentures will be selected for prepayment by any method
utilized by the Trustee. The Optional Redemption Price, together with any
required interest payment, shall be paid prior to 12:00 Noon, New York City
time, on the Prepayment Date or at such earlier time as the Company determines
provided that the Company shall deposit with the Trustee an amount sufficient to
pay the Optional Redemption Price, together with any required interest payment,
by 10:00 a.m., New York City time, on the date such amounts are to be paid.
Section 3.02 Special Event Prepayment. If a Special Event shall
occur and be continuing, the Company may, at its option, prepay the Debentures
in whole (but not in part) at any time within 90 days of the occurrence of such
Special Event, at a prepayment price (the "Special Event Prepayment Price")
equal to 100% of the principal amount of such Debentures plus accrued and unpaid
interest including Additional Sums, Additional Interest and Compounded Interest
thereon to but excluding the Prepayment Date.
Section 3.03 Notice of Prepayment. Subject to Article III of the
Base Indenture, notice of any prepayment will be mailed at least 30 days but not
more than 60 days before the redemption date to each holder of Debentures to be
prepaid at its registered address. Unless the Company defaults in payment of the
Prepayment Price, on and after the Prepayment Date interest ceases to accrue on
such Debentures called for prepayment.
If the Trust is required to pay any additional taxes, duties or
other governmental charges as a result of a Special Event, the Company will also
pay any Additional Sums on the Debentures.
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ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.01 Extension of Interest Payment Period. So long as an
Event of Default under Section 6.01 of the Base Indenture shall not have
occurred and be continuing, the Company shall have the right, subject to the
provisions of Section 2.10 of the Base Indenture, at any time and from time to
time during the term of the Debentures, to defer payments of interest by
extending the interest payment period of such Debentures for a period not
exceeding 20 consecutive quarterly periods (the "Extension Period"), during
which Extension Period no interest shall be due and payable; provided that no
Extension Period shall end on a date other than an Interest Payment Date or
extend beyond the Stated Maturity or any earlier redemption date. To the extent
permitted by applicable law, interest, the payment of which has been deferred
because of the extension of the interest payment period pursuant to this Section
4.01, will bear interest thereon at the Coupon Rate compounded semiannually
("Compounded Interest"). At the end of the Extension Period, the Company shall
pay all interest accrued and unpaid on the Debentures, including any Additional
Sums, Additional Interest and Compounded Interest (together, "Deferred
Interest") to the holders of the Debentures in whose names the Debentures are
registered in the Register on the first record date preceding the end of the
Extension Period. Before the termination of any Extension Period, the Company
may further extend such period, provided that such period together with all such
further extensions thereof shall not exceed 20 consecutive quarterly periods, or
extend beyond the Stated Maturity or any earlier redemption date. Upon the
termination of any Extension Period and upon the payment of all Deferred
Interest then due, the Company may commence a new Extension Period, subject to
the foregoing requirements. No interest shall be due and payable during an
Extension Period, except at the end thereof, but the Company may prepay at any
time all or any portion of the interest accrued during an Extension Period.
Section 4.02 Notice of Extension. (a) If the Property Trustee is the
only registered holder of the Debentures at the time the Company selects (or
extends) an Extension Period, the Company shall give written notice to the
Administrators, the Property Trustee and the Trustee of its selection (or
extension) of such Extension Period at least five Business Days before the
earlier of (i) the next succeeding date on which Distributions on the Preferred
Securities issued by the Trust are payable, or (ii) the date the Trust is
required to give notice of the record date, or the date such Distributions are
payable, to any applicable exchange, interdealer quotation system or
self-regulatory organization or to holders of the Preferred Securities issued by
the Trust, but in any event not less than five Business Days before such record
date. The Property Trustee shall give notice of the Company's election to begin
or extend a new Extension Period to the holders of the Preferred Securities.
(b) If the Property Trustee is not the only holder of the Debentures
at the time the Company selects (or extends) an Extension Period, the Company
shall give the holders of the Debentures and the Trustee written notice of its
selection (or extension) of such Extension Period at least 10 Business Days
before the earlier of (i) the next succeeding Interest Payment Date or (ii) the
date the Company is required to give notice of the record or payment date of
such interest payment to any applicable self-regulatory organization or to
holders of the Debentures.
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(c) The quarterly period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.02 shall be counted as one of the 20
consecutive quarterly periods permitted in the maximum Extension Period
permitted under Section 4.01.
ARTICLE V
EXPENSES
Section 5.01 Payment of Expenses. In connection with the offering,
sale and issuance of the Debentures to the Property Trustee and in connection
with the sale of the Preferred Securities by the Trust, the Company, in its
capacity as borrower with respect to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the Underwriters payable
pursuant to the Underwriting Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 7.06 of the Base
Indenture;
(b) pay all costs and expenses of the Trust (including, without
limitation, costs and expenses relating to the organization of the Trust, the
fees and expenses of the Property Trustee and the Delaware Trustee, the costs
and expenses relating to the operation of the Trust, including, without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets);
(c) pay all costs and expenses related to the enforcement by the
Property Trustee of the rights of the registered holders of the Preferred
Securities;
(d) be primarily liable for any indemnification obligations arising
with respect to the Trust Agreement or the Underwriting Agreement; and
(e) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
Section 5.02 Payment upon Resignation or Removal. Upon termination
of this Supplemental Indenture or the Base Indenture or the removal or
resignation of the Trustee pursuant to Section 7.10 of the Base Indenture, the
Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation. Upon termination of the Trust Agreement or
the removal or resignation of the Delaware Trustee or the Property Trustee, as
the case may be, pursuant to Section 8.10 of the Trust Agreement, the Company
shall pay to the Delaware Trustee or the Property Trustee, and their respective
counsel, as the case may be, all amounts accrued to the date of such
termination, removal or resignation.
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ARTICLE VI
FORM OF DEBENTURE
Section 6.01 Form of Debenture. The Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be substantially in
the form attached hereto as Exhibit A.
ARTICLE VII
ISSUE OF DEBENTURES
Section 7.01 Issue of Debentures. Debentures in the aggregate principal amount
of up to $270,618,575 may, upon the execution of this Supplemental Indenture, be
executed by the Company and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and make available for delivery said
Debentures to or upon the written order of the Company, signed by its Chairman
of the Board, any Vice Chairman of the Board, the President, any Vice Chairman,
any Executive Vice President, the Chief Operating Officer or the Chief Financial
Officer and by its Treasurer or Assistant Treasurer, Controller or the Secretary
or an Assistant Secretary without any further action by the Company, except as
otherwise provided in Section 2.01 of the Base Indenture.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Ratification of Base Indenture; Supplemental Indenture
Controls. The Base Indenture, as supplemented by this Supplemental Indenture, is
in all respects ratified and confirmed, and this Supplemental Indenture shall be
deemed part of the Base Indenture in the manner and to the extent herein and
therein provided. The provisions of this Supplemental Indenture shall supersede
the provisions of the Base Indenture to the extent the Indenture is inconsistent
herewith.
Section 8.02 Trustee Not Responsible for Recitals. The recitals
herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
Section 8.03 Governing Law. THIS SUPPLEMENTAL INDENTURE AND EACH
DEBENTURE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE INTERNAL LAWS OF THE
STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THEREOF.
Section 8.04 Separability. In case any one or more of the provisions
contained in this Supplemental Indenture or in the Debentures shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
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of this Supplemental Indenture or of the Debentures, but this Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
Section 8.05 Counterparts. This Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
THE BEAR STEARNS COMPANIES INC.
By: /s/ Samuel L. Molinaro Jr.
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Name: Samuel L. Molinaro Jr.
Title: Senior Vice President-Finance
and Chief Financial Officer
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ Natalia Rodriguez
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Name: Natalia Rodriguez
Title: Assistant Vice President
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EXHIBIT A
7.80% JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURE
DUE MAY 15, 2031
Registered No. __________
Dated: ____________ CUSIP 073902BY3
Registered Holder: [The Chase Manhattan Bank, as Property Trustee of Bear
Stearns Capital Trust III]*
The Bear Stearns Companies Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to the
Registered Holder named above, the principal sum [of __________ Dollars
($_____)]** [specified in the Schedule annexed hereto]***, on May 15, 2031 in
such coin or currency of the United States of America as at the time of payment
is legal tender for the payment of public and private debt. The Company further
promises to pay to the registered holder hereof as hereinafter provided (a)
interest on said principal sum (subject to deferral as set forth herein) at the
rate of 7.80% per annum (the "Coupon Rate"), in like coin or currency, quarterly
in arrears on the 15th day of May, August, November and February (each an
"Interest Payment Date") commencing August 15, 2001 from the date next preceding
the date hereof to which interest has been paid or duly provided for (unless (i)
no interest has yet been paid or duly provided for on this debenture (the
"Debenture"), in which case from the date of original issuance, or (ii) the date
hereof is before an Interest Payment Date but after the related Record Date (as
defined below), in which case from such following Interest Payment Date or next
succeeding Business Day to which interest shall have been paid; provided,
however, that if the Company shall default in payment of the interest due on
such following Interest Payment Date or Business Day, then from the next
preceding date to which interest has been paid or duly provided for), until the
principal hereof shall become due and payable, plus (b) interest on overdue
principal and, to the extent permitted by applicable law, on any interest
payment that is not made when due at the Coupon Rate, compounded quarterly. The
interest so payable will, subject to certain exceptions provided in the
Indenture hereinafter referred to, be paid to the person in whose name this
Debenture is registered at the close of business on the Record Date next
preceding such Interest Payment Date. The Record Date shall be the Business Day
next preceding the Interest Payment Date, unless this Certificate is registered
to a holder other than the Property Trustee or a nominee of The Depository Trust
Company, in which case the Record Date will be the 1st day of the month in which
the relevant Interest Payment Date occurs. This Debenture may be presented for
payment of principal and interest at the offices of The Chase Manhattan Bank, as
paying agent for the Company, maintained for that purpose in the Borough of
Manhattan, The City of New York, State of New York; provided, however, that
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payment of interest may be made at the option of the Company (i) by check mailed
to such address of the person entitled thereto as the address shall appear on
the Register of the Debentures or (ii) by transfer to an account maintained by
the Person entitled thereto as specified in the Register, provided that proper
transfer instructions have been received by the Record Date. Interest on the
Debenture will be computed on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day with the same
force and effect as if made on the date such payment was originally payable,
without any interest or other payment with respect to any such delay.
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 Debenture to
defer payment of interest on this Debenture, at any time or from time to time,
for up to 20 consecutive quarterly interest payment periods with respect to each
deferral period (each an "Extension Period"), during which Extension Periods the
Company shall have the right to make partial payments of interest on any
Interest Payment Date; provided, however, that no Extension Period shall end on
a date other than an Interest Payment Date or extend beyond May 15, 2031 or any
earlier redemption date. At the end of each Extension Period, the Company must
pay all interest then accrued and unpaid (together with Additional Sums,
Additional Interest and Compounded Interest thereon, if any, to the extent
permitted by applicable law). During any such Extension Period, the Company
shall not, and shall not permit any Subsidiary of the Company to, (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any shares of the Company's capital stock
(which includes common and preferred 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 with or junior in
interest to this Debenture or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any Subsidiary of the Company
that by its terms ranks pari passu with or junior in interest to this Debenture
(other than (a) dividends or distributions in capital stock of the Company; (b)
any declaration of a dividend in connection with the implementation of a Rights
Plan, or the issuance of capital stock of the Company under any Rights Plan, or
the redemption or repurchase of any rights distributed pursuant to a Rights
Plan; (c) payments under any Bear Stearns Guarantee (as defined in the Indenture
and the Existing Indenture); and (d) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans for
its directors, officers or employees. Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period,
provided that no Extension Period shall exceed 20 consecutive quarterly periods
or extend beyond May 15, 2031 or any earlier redemption date. At any time
following the termination of any Extension Period and the payment of all accrued
and unpaid interest (including Additional Sums, Additional Interest and
Compounded Interest, if any) then due, the Company may elect to begin a new
Extension Period, subject to the above requirements. No interest shall be due
and payable during an Extension Period, except at the end thereof. The Company
shall give the Trustee and the Property Trustee notice of its election to begin
or extend any Extension Period at least five Business Days prior to the earlier
of (i) the next succeeding date on which Distributions on the Preferred
Securities issued by Bear Stearns Capital Trust III would be payable but for
such election to begin or extend a new Extension Period, or (ii) the date the
Property Trustee is required to give notice to any applicable self-regulatory
organization or to holders of such Preferred Securities of the record date or
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the date such Distributions are payable, but in any event not less than five
Business Days prior to such record date.
This Debenture is issued pursuant to an Indenture, dated as of
December 16, 1998 between the Company, as issuer, and The Chase Manhattan Bank,
a banking corporation duly organized and existing under the laws of the State of
New York, as trustee, as supplemented (as further supplemented or amended from
time to time, the "Indenture"). Reference is made to the Indenture for a
description of the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the Holders (the word
"Holder" or "Holders" meaning the registered holder or registered holders) of
the Debentures. Terms used herein which are defined in the Indenture shall have
the respective meanings assigned thereto in the Indenture. By acceptance of this
Debenture, the Holder hereof agrees to be bound by the provisions of the
Indenture.
The Debentures are limited to the aggregate principal amount of Two
Hundred Seventy Million, Six Hundred Eighteen Thousand, Five Hundred Seventy
Five Dollars ($270,618,575).
The Debentures evidenced by this Certificate may be transferred or
exchanged only in minimum denominations of $25 and integral multiples of $25 in
excess thereof, and any attempted transfer, sale or other disposition of
Debentures in a denomination of less than $25 shall be deemed to be void and of
no legal effect whatsoever.
The indebtedness of the Company evidenced by the Debentures,
including the principal thereof and interest thereon, is, to the extent and in
the manner set forth in the Indenture, subordinate and junior in right of
payment to its obligations to Holders of Senior Indebtedness of the Company and
each Holder of a Debenture, by acceptance thereof, agrees to and shall be bound
by such provisions of the Indenture and all other provisions of the Indenture.
This Debenture shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
or on behalf of the Trustee under the Indenture.
---------------
* Insert in Debenture held by Property Trustee only.
** Insert in definitive Debenture only.
*** Insert in global Debenture only.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Chairman of the Board, any Vice
Chairman of the Board, the President, any Vice Chairman, any Executive Vice
President, the Chief Operating Officer or the Chief Financial Officer and by its
Treasurer or Assistant Treasurer, Controller or the Secretary or an Assistant
Secretary and a facsimile of its corporate seal to be affixed hereunto.
THE BEAR STEARNS COMPANIES INC.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
[SEAL]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities, of the series designated therein,
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
---------------------------------
Authorized Officer
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<PAGE>
[REVERSE OF DEBENTURE]
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to the payment of principal or interest on the
Debentures or with respect to compliance with certain covenants occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
25% in principal amount of the then outstanding Debentures may declare the
principal amount of all the Debentures, together with any accrued interest
(including Additional Sums, Additional Interest and Compounded Interest), to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee, if such notice is given by Holders). If the Debentures have been issued
to a Bear Stearns Trust, upon such an Event of Default, if the Trustee or the
Holders of not less than 25% in principal amount of the outstanding Debentures
fails to declare the principal of all the Debentures to be immediately due and
payable, the holders of at least 25% in aggregate Liquidation Amount of the
corresponding Preferred Securities of such Bear Stearns Trust then outstanding
shall have such right by a notice in writing to the Company and the Trustee, and
upon such declaration the principal amount of and the accrued interest
(including any Additional Sums, Additional Interest and Compounded Interest) on
all the Debentures shall become immediately due and payable, provided that the
payment of principal and interest on such Debentures shall remain subordinated
to the extent provided in the Indenture.
If an Event of Default with respect to certain covenants applicable
to all series of securities issued under the Indenture (collectively, the
"Securities"), or with respect to events of bankruptcy, insolvency or
reorganization of the Company occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in principal amount of all
Securities outstanding under the Indenture (voting as a single class) may
declare the principal amount of all such Securities to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if such
notice is given by Holders), provided that, in the case of Securities of a
series issued under the Indenture to a Bear Stearns Trust, if upon such an Event
of Default the Trustee and the Holders of not less than 25% in principal amount
of all outstanding Securities of that series fail to declare the principal of
all the Securities of that series to be immediately due and payable, the holders
of at least 25% in aggregate Liquidation Amount of the corresponding Preferred
Securities of such Bear Stearns Trust then outstanding shall have such right 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 Sums, Additional Interest and Compounded Interest) on all the
Securities of that series shall become immediately due and payable, provided
that the payment of principal and interest shall remain subordinated to the
extent provided in the Indenture.
The Indenture provides that in certain events such declaration that
principal and accrued interest are due and payable, and the consequences of such
declaration, may be rescinded and annulled by the holders of a majority in
principal amount of the Securities then outstanding under the Indenture as to
which such an acceleration of the payment of principal has occurred, voting as
one class. In the case of Securities of a series issued under the Indenture to a
Bear Stearns Trust, should the Holders of Securities of that series fail to
rescind and annul such declaration and its consequences, the Holders of a
majority in aggregate Liquidation Amount of the corresponding Preferred
Securities of such Bear Stearns Trust shall have such right. The Indenture also
provides that the Holders of a majority in principal amount of all of the
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Securities of all series then outstanding as to which an Event of Default has
occurred may, on behalf of all Holders of such Securities, waive any past
default under the Indenture other than (a) a default in the payment of the
principal of or interest on any of the Securities or (b) a default in respect of
a covenant or provision of the Indenture which under the terms of the Indenture
cannot be modified or amended without the consent of each Holder of Securities
so affected. In the case of Securities of one or more series issued to one or
more Bear Stearns Trusts, the Indenture provides that the Holders of a majority
in aggregate Liquidation Amount of the corresponding Preferred Securities or
Preferred Securities issued by such Bear Stearns Trusts shall also have the
right to waive such defaults.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
principal amount of the outstanding Securities of all affected series (voting as
one class), to modify the Indenture in a manner affecting the rights of the
holders of the Securities of each such series; provided, however, that no such
modification shall (i) change the fixed maturity of any Securities, or reduce
the rate or extend the time of payment of interest thereon or reduce the
principal amount thereof, or change the provisions pursuant to which the rate of
interest on the Securities is determined if such change could reduce the rate of
interest thereon, or reduce the minimum rate of interest thereon, or reduce any
amount payable upon any redemption thereof, or adversely affect any right to
convert the Securities in accordance with the Indenture, or reduce the amount to
be paid at maturity or upon redemption or make the principal thereof or any
interest thereon or on any overdue principal amount payable in any coin or
currency other than that provided in the Securities without the consent of the
holder of each Security so affected, (ii) reduce the aforesaid percentage of
Securities, the holders of which are required to consent to any supplemental
indenture, without the consent of the holders of all Securities then
Outstanding, or (iii) modify any of the provisions of Section 4.07, Section 6.06
or Section 10.02 of the Indenture, except to increase any such percentage or to
provide that certain other provisions of the Indenture cannot be modified or
waived without the consent of the holder of each Security affected thereby or
(iv) modify the provisions of Article XIV of the Indenture with respect to the
subordination of outstanding Securities of any series in a manner adverse to the
holders thereof, without the consent of the holder of each Security so affected;
provided, further, that, in the case of the Securities of a series issued to a
Bear Stearns Trust, so long as any of the corresponding series of Preferred
Securities issued by such Bear Stearns Trust remains outstanding, (i) no such
amendment shall be made that adversely affects the holders of such Preferred
Securities in any material respect (including any amendment which would result
in a Bear Stearns Trust being classified as other than a grantor trust for
United States federal income tax purposes), and no termination of the Indenture
shall occur, and no waiver of any Event of Default with respect to such series
or compliance with any covenant with respect to such series under the Indenture
shall be effective, without the prior consent of the holders of at least a
majority of the aggregate Liquidation Amount of such Preferred Securities then
outstanding, unless and until the principal (and premium, if any) of the
Securities of such series and all accrued and unpaid interest (including any
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Additional Sums, Additional Interest and Compounded Interest) thereon shall have
been paid in full and (ii) no amendment shall be made to Section 6.05 of the
Indenture (regarding the right of holders of Preferred Securities to institute a
suit directly against the Company) that would impair the rights of the holders
of Preferred Securities provided therein without the prior consent of all
holders of Preferred Securities then outstanding, unless and until the principal
(and premium, if any) of the Securities of such series and all accrued and
unpaid interest (including any Additional Sums, Additional Interest and
Compounded Interest) thereon have been paid in full.
The Debenture will be prepayable, in whole or in part, at the option
of the Company at any time on or after May 15, 2006, at a prepayment price (the
"Optional Redemption Price") equal to the outstanding principal amount of the
Debenture plus accrued interest thereon to the date of prepayment.
Upon the occurrence and during the continuation of a Special Event,
in respect of the Trust, the Company may, at its option, at any time within 90
days of the occurrence of such Special Event redeem this Debenture, in whole but
not in part, at a prepayment price (the "Special Event Prepayment Price") equal
to 100% of the principal amount hereof plus accrued and unpaid interest to but
excluding the date of prepayment.
Any consent or waiver by the Holder of this Debenture given as
provided in the Indenture (unless effectively revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders of this Debenture and of any Debenture issued in exchange, registration
of transfer, or otherwise in lieu hereof irrespective of whether any notation of
such consent or waiver is made upon this Debenture or such other Debentures. No
reference herein to the Indenture and no provision of this Debenture or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on this Debenture, at
the places, at the respective times, at the 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 Debenture may be registered on the
Register of the Debentures upon surrender of this Debenture for registration of
transfer at the offices maintained by the Company or its agent for such purpose,
duly endorsed by the Holder hereof or his attorney duly authorized in writing,
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 his
attorney duly authorized in writing, but without payment of any charge other
than a sum sufficient to reimburse the Company for any tax or other governmental
charge incident thereto. Upon any such registration of transfer, a new Debenture
or Debentures of authorized denomination or denominations for the same aggregate
principal amount will be issued to the transferee in exchange herefor.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, and any agent of the Company or the Trustee
may deem and treat the person in whose name this Debenture shall be registered
upon the Register of the Debentures of this series as the absolute owner of this
Debenture (whether or not this Debenture shall be overdue and notwithstanding
any notation of ownership or other writing hereon) for the purpose of receiving
payment of or on account of the principal hereof and, subject to the provisions
on the face hereof, interest due hereon and for all other purposes; and neither
the Company nor the Trustee nor any such agent shall be affected by any notice
to the contrary.
No recourse shall be had for the payment of the principal of or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, or based on or in respect of the Indenture or any indenture
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<PAGE>
supplemental thereto, against any stockholder, officer, director or employee, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as a part of
the consideration for the issue hereof, expressly waived and released.
The Company, and by acceptance of this Debenture, the Holder hereof,
and any Person that acquires a beneficial interest herein, agree that for United
States federal, state and local tax purposes it is intended that this Debenture
constitute indebtedness.
THIS DEBENTURE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS
OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF SAID STATE, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THEREOF.
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers the within _____% Junior Subordinated Deferrable Interest Debenture
(the "Debenture") and all rights thereunder, unto
----------------------------------------
Please insert Social Security
or other identifying number of assignee:
------------------------------------------------------------
(Name and Address of Assignee, including Zip Code,
must be printed or typewritten)
and hereby irrevocably constitutes and appoints
________________________________________________________________________________
Attorney to transfer said Debenture on the Register of the Debentures, with full
power of substitution in the premises.
Date:
------------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange.
NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within ____% Junior Subordinated
Deferrable Interest Debenture in every particular, without
alteration or enlargement or any change whatever.
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FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL DEBENTURE
TO REFLECT CHANGES IN PRINCIPAL AMOUNT
The initial principal amount evidenced by this Global Debenture is $___________.
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PRINCIPAL AMOUNT BY
WHICH THIS GLOBAL REMAINING
DEBENTURE IS TO BE PRINCIPAL AMOUNT
REDUCED AND REASON OF THIS GLOBAL
DATE FOR REDUCTION DEBENTURE NOTATION MADE BY
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