Exhibit 4.1
FISCAL AND PAYING AGENCY AGREEMENT
This Fiscal and Paying Agency Agreement dated as of April 10, 2003 (this
"AGREEMENT"), is between Sterling Bank, a Texas state chartered banking
association (the "BANK") and Deutsche Bank Trust Company Americas, a banking
association organized under the laws of New York (the "FISCAL AND PAYING
Agent").
WHEREAS the Bank proposes to issue and sell its 7.375% Subordinated Notes
due 2013 (the "SUBORDINATED NOTES"), initially limited in aggregate principal
amount to $50,000,000;
WHEREAS the Bank desires to appoint the Fiscal and Paying Agent as fiscal
and paying agent of the Bank with respect to the preparation, authentication,
delivery, registration and payment of the Subordinated Notes;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
APPOINTMENT
Section 1.1 Appointment of Fiscal and Paying Agent. The Fiscal and Paying
Agent is hereby appointed as fiscal and paying agent and registrar for the
Subordinated Notes on the terms and conditions specified in this Agreement, and
the Fiscal and Paying Agent hereby accepts such appointment. Unless otherwise
specified, capitalized terms used herein shall have the meanings ascribed to
them in the Subordinated Notes.
ARTICLE II
THE SUBORDINATED NOTES
Section 2.1 Specific Global and Certificated Note Forms.
(a) Except as otherwise provided herein, Subordinated Notes offered and
sold as part of their initial offering and sale to "qualified institutional
buyers" (each a "QIB") as defined in Rule 144A of the Securities Act of 1933, as
amended, (the "SECURITIES ACT") shall be issued in the form of one or more
global certificates (each a "RULE 144A GLOBAL NOTE") in book-entry, fully
registered form without coupons, substantially in the form attached hereto as
Exhibit A. Such Rule 144A Global Notes shall be registered in the name of The
Depository Trust Company ("DTC" or the "DEPOSITORY"), as depository or its
nominee. All Rule 144A Global Notes may have such appropriate insertions,
omissions, variations or substitutions as are required or permitted by, and not
inconsistent with, this Agreement, and may also have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with any applicable laws or with any applicable rules
or regulations made pursuant thereto or with the rules or regulations of any
governmental agency or as may, consistently herewith, be determined by the
officers of the Bank executing such Rule 144A Global Notes, as evidenced by
their execution thereof. Beneficial interests in Rule 144A Global Notes will be
shown on, and the transfers thereof will be effected only through, records
maintained by DTC and its participants.
(b) Except as otherwise provided herein, Subordinated Notes offered and
sold as part of their initial offering and sale to Institutional Accredited
Investors (as defined below) who are not QIBs shall be issued in the form of
certificated notes in definitive, fully registered form without coupons,
registered in the name of the purchaser thereof, substantially in the form
attached hereto as Exhibit B (the "RESTRICTED CERTIFICATED NOTES"). As used
herein, "INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in subparagraphs (a)(1), (2), (3) or (7) of
Rule 501 under the Securities Act. All Restricted Certificated Notes may have
such appropriate insertions, omissions, variations or substitutions as are
required or permitted by, and not inconsistent with, this Agreement, and may
also have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with any
applicable laws or with any applicable rules or regulations made pursuant
thereto or with the rules or regulations of any governmental agency or as may,
consistently herewith, be determined by the officers of the Bank executing such
Restricted Certificated Notes, as evidenced by their execution thereof.
Restricted Certificated Notes may not be transferred or exchanged for interests
in a Rule 144A Global Note except as provided in Section 2.6.
Section 2.2 Certificates of Authorized Representatives of the Bank. From
time to time, the Bank shall furnish the Fiscal and Paying Agent with a
certificate of the Bank in the form attached hereto as Exhibit F certifying the
incumbency and specimen signatures of representatives of the Bank authorized to
instruct the Fiscal and Paying Agent regarding the completion, authentication
and delivery of the Subordinated Notes (each an "AUTHORIZED REPRESENTATIVE").
Until five Business Days (as hereinafter defined) after the Fiscal and Paying
Agent receives a subsequent incumbency certificate of the Bank, the Fiscal and
Paying Agent shall be entitled to rely on the last such certificate delivered to
it for purposes of determining the Authorized Representatives. The Fiscal and
Paying Agent shall have no responsibility to the Bank to determine by whom or by
what means a facsimile signature of the Bank may have been affixed on the
Subordinated Notes, or whether a signature of an Authorized Representative is
genuine, if the Fiscal and Paying Agent believes, in good faith, that such
signature is the specimen signature of such Authorized Representative on such
certificate.
Section 2.3 Completion, Authentication and Delivery.
(a) All Subordinated Notes shall be issued and delivered in accordance
with this Agreement and, in the case of Rule 144A Global Notes, the letter of
representations from the Bank and the Fiscal and Paying Agent to DTC, dated
April 10, 2003 (the "DTC LETTER OF REPRESENTATIONS"). All instructions regarding
the completion, authentication and delivery of Subordinated Notes shall be given
by an Authorized Representative by telecopy or other means acceptable to the
Fiscal and Paying Agent. Upon receipt of instructions as described in the
preceding sentence, the Fiscal and Paying Agent shall:
(i) complete a Subordinated Note or Notes representing one or more
Subordinated Notes in accordance with such instructions;
(ii) manually authenticate such Subordinated Note or Notes by any
one of the officers, employees or agents of the Fiscal and Paying Agent
duly authorized and designated by it for such purpose; and
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(iii) deliver such Subordinated Note and, in the case of a Rule 144A
Global Note, deliver such Rule 144A Global Note to DTC or pursuant to
DTC's instructions.
Notwithstanding the foregoing, the Fiscal and Paying Agent shall not be
required to perform any duties on any day that is not a Business Day.
(b) If any Subordinated Note has been authenticated by one of the Fiscal
and Paying Agent's officers who was duly authorized for such purpose but who is
not so designated at the time said Subordinated Note is to be paid, the Fiscal
and Paying Agent is authorized and will pay the Subordinated Note
notwithstanding that the authority of said officer has been terminated between
the time of execution and the time of payment.
(c) In the event a discrepancy exists between the instructions as
originally received by the Fiscal and Paying Agent and any subsequent written
confirmation thereof, such original instructions will be deemed controlling if
action has already been taken in reliance on such original instructions,
provided that the Fiscal and Paying Agent gives notice to the Bank of such
discrepancy promptly upon the receipt of such subsequent written confirmation.
(d) Should the Fiscal and Paying Agent at any time request and receive a
written opinion of its counsel (which includes, but is not limited to, in-house
counsel) concerning its duties hereunder, it shall be free to act upon the
advice contained in such opinion and shall be relieved of any liability under
this Agreement in so acting.
(e) All instructions for the completion, authentication and delivery of
the Subordinated Notes must be received by the Fiscal and Paying Agent by 12
noon, New York City time, on the second Business Day preceding the original
issue date. For purposes of this Agreement the term "BUSINESS DAY" shall mean
any day that is not a Saturday or Sunday or a day on which commercial banks in
New York, New York or Houston, Texas are not authorized or required by
applicable law or regulation to be closed.
(f) The Fiscal and Paying Agent shall incur no liability to the Bank in
acting or refraining from taking any action hereunder upon instructions
contemplated hereby which the recipient thereof believes in good faith to have
been given by an Authorized Representative.
(g) Each instruction given to the Fiscal and Paying Agent in accordance
with this Section 2.3 shall constitute a representation and warranty to the
Fiscal and Paying Agent by the Bank that the issuance and delivery of the
Subordinated Note or Subordinated Notes to which the instruction relates have
been duly and validly authorized by the Bank, that such Subordinated Note or
Subordinated Notes, when completed, countersigned, authenticated and delivered
pursuant hereto, will constitute valid and legally binding obligations of the
Bank, and that the Fiscal and Paying Agent's appointment to act for the Bank
hereunder has been duly authorized by all necessary corporate action of the
Bank.
(h) The Bank further represents and warrants to the Fiscal and Paying
Agent that the Bank is free to enter into this Agreement and to perform the
terms hereof.
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Section 2.4 Denominations. The Subordinated Notes shall be issuable in
minimum denominations of $250,000 and any amount in excess thereof which is an
integral multiple of $1,000.
Section 2.5 Proceeds of Sale of the Subordinated Notes. Funds received in
payment for Subordinated Notes issued by the Bank shall be credited to an
account of the Bank, as instructed by the Bank.
Section 2.6 Registration, Registration of Transfer and Exchange.
(a) The Fiscal and Paying Agent shall, so long as any of the Subordinated
Notes remain outstanding, maintain all records as may be customary, including
all forms of transfer for the Subordinated Notes, and shall:
(i) Keep at its corporate trust office in the City of New York, New
York a register (the "SECURITY REGISTER") in such form as the Fiscal and
Paying Agent may determine, in which, subject to such reasonable
regulations as it may prescribe, it shall provide for the registration of
the Subordinated Notes and of transfers thereof;
(ii) Maintain records showing for each outstanding Subordinated Note
the principal amount, Date of Maturity, interest rate and other terms
thereof; the date of original issue and all subsequent transfers and
consolidations or exchanges; provided that the Fiscal and Paying Agent
shall have no responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests
in a Rule 144A Global Note or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests, and it shall
be fully protected in acting or refraining from acting on any such
information provided by DTC;
(iii) Any Subordinated Note presented or surrendered for
registration of transfer or for exchange shall (if so required by the
Fiscal and Paying Agent) be duly endorsed, or accompanied by a written
instrument of transfer with such evidence of due authorization and
guarantee of signature as may reasonably be required by the Fiscal and
Paying Agent in form satisfactory to the Fiscal and Paying Agent, duly
executed by the Holder or his or her attorney duly authorized in writing,
and with such tax identification number or other information for each
person in whose name a Subordinated Note is to be issued as the Fiscal and
Paying Agent may reasonably request to comply with applicable law;
(iv) Each Subordinated Note shall bear an original issue date which
shall remain the same for all Subordinated Notes subsequently issued upon
transfer, exchange or substitution of such original Subordinated Note
regardless of the date of issuance of any such subsequently issued
Subordinated Note.
(b) No service charge (other than any cost of delivery) shall be imposed
for any exchange or registration of transfer of a Subordinated Note, but the
Bank or the Fiscal and Paying Agent may require the payment of a sum sufficient
to cover any stamp or other tax or governmental charge that may be imposed in
connection therewith (or presentation of evidence that such tax or charge has
been paid).
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(c) Each Subordinated Note will bear a legend in the form of Exhibit C
(the "LEGEND") and will be subject to the restrictions on transfer set forth
therein until the Resale Restriction Termination Date (as defined in the Legend)
for such Subordinated Note. Upon transfer, exchange or replacement of
Subordinated Notes bearing a Legend, the Fiscal and Paying Agent shall deliver
only Subordinated Notes that bear a Legend, unless (i) the Resale Restriction
Termination Date has passed or (ii) the Bank directs the Fiscal and Paying Agent
to remove the Legend because the Bank determines, on the basis of a legal
opinion, certifications or other information satisfactory to the Bank and the
Fiscal and Paying Agent that transfers and sales of the Subordinated Notes would
be exempt from the registration requirements of the Securities Act without
regard to the exemption contained in Section 3(a)(2) thereof.
(d) Certain Transfers and Exchanges. Notwithstanding any other provision
of this Agreement, transfers and exchanges of Subordinated Notes shall be made
only in accordance with this Section 2.6(d).
(i) Restricted Certificated Note to Rule 144A Global Note. If the
Subordinated Note to be transferred or exchanged consists of a Restricted
Certificated Note, the Fiscal and Paying Agent shall register the transfer
or exchange to a beneficial interest in a Rule 144A Global Note only if
such transfer or exchange is being made by a proposed transferor or
exchanger who has delivered to the Bank and the Fiscal and Paying Agent a
certificate from the transferor or exchanger substantially in the form
attached hereto as Exhibit D. Such transfer may be effected only in
accordance with the provisions of this clause (d)(i) and subject to the
rules and procedures of the Depository. Upon receipt by the Fiscal and
Paying Agent of such Restricted Certificated Note and instructions
satisfactory to the Fiscal and Paying Agent directing that a beneficial
interest in a Rule 144A Global Note in a specified principal amount not
greater than the principal amount of such Restricted Certificated Note be
credited to a specified Depository member or participant's account, the
Fiscal and Paying Agent shall cancel such Restricted Certificated Note
(and issue a new Restricted Certificated Note in respect of any
untransferred portion thereof) and increase the aggregate principal amount
of the Rule 144A Global Note by the specified principal amount.
Thereafter, transfers or exchanges of such beneficial interest will
continue to be represented by a Rule 144A Global Note subject to the
provisions of Section 2.6(d)(v).
(ii) Restricted Certificated Note to Restricted Certificated Note. A
Restricted Certificated Note may be transferred, in whole or in part, to a
transferee or exchangee who takes delivery in the form of another
Restricted Certificated Note subject to the provisions of Section
2.6(d)(v).
(iii) Rule 144A Global Note to Rule 144A Global Note. The transfer
or exchange of a beneficial interest in a Rule 144A Global Note to a
transferee or exchangee who takes delivery in the form of an interest in a
Rule 144A Global Note may be effected only through the book entry system
maintained by DTC.
(iv) Rule 144A Global Note to Rule 144A Certificated Note. The Rule
144A Global Notes are exchangeable for certificated notes ("RULE 144A
CERTIFICATED NOTES") only if (i) DTC notifies the Bank in writing that it
is no longer willing or able to continue
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as a depository for the Rule 144A Global Notes or if DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and a successor depository is not appointed by the Bank within
ninety days after the effective date of DTC's ceasing to act as depository
for the Rule 144A Global Notes, (ii) the Bank, at its option, notifies the
Fiscal and Paying Agent in writing that it elects to cause the issuance of
Rule 144A Certificated Notes or (iii) any event shall have happened and be
continuing which, after notice or lapse of time, or both, would constitute
an Event of Default with respect to the Rule 144A Global Notes. In the
event of such occurrences, upon surrender by the Depository or a successor
depository of the Rule 144A Global Notes, the Bank will execute and the
Fiscal and Paying Agent will, upon receipt of instructions in writing from
the Bank, authenticate and deliver Rule 144A Certificated Notes of like
tenor and terms to each person that the Depository or a successor
depository identifies as the beneficial owner of the related Rule 144A
Global Notes in an aggregate principal amount equal to the principal
amount of the Rule 144A Global Notes then outstanding in exchange for such
Rule 144A Certificated Notes.
(v) Transfers to Non-QIB Institutional Accredited Investors.
Notwithstanding anything to the contrary set forth herein, the following
provisions shall apply with respect to the registration of any proposed
transfer or exchange of Subordinated Notes to any Institutional Accredited
Investor who is not a QIB:
(A) The Fiscal and Paying Agent shall register the transfer or
exchange of any Subordinated Note to an Institutional Accredited
Investor who is not a QIB only if (x) the requested time period is
after the time period referred to in Rule 144(k) under the
Securities Act or (y) the proposed transferee or exchangee has
delivered to the Bank and the Fiscal and Paying Agent (1) a letter
substantially in the form of Exhibit E hereto and (2) an opinion of
counsel acceptable to the Bank, and such certifications and other
information as the Bank may require, confirming that such transfer
is in compliance with the Securities Act.
(B) If the proposed transfer is of a beneficial interest in
the Rule 144A Global Note, upon receipt by the Bank and the Fiscal
and Paying Agent of (x) the documents, if any, required by paragraph
(i) above and (y) instructions given in accordance with the
Depository's and the Fiscal and Paying Agent's procedures, the
Fiscal and Paying Agent shall reflect on its books and records the
date and a decrease in the principal amount of the Rule 144A Global
Note in an amount equal to the principal amount of the beneficial
interest in the Rule 144 A Global Note to be transferred, and the
Bank shall execute, and the Fiscal and Paying Agent shall
authenticate and deliver, one or more Restricted Certificated Notes
of like tenor and amount.
(vi) Limitations Relating to Principal Amount. Notwithstanding any
other provision of this Agreement, Subordinated Notes or portions thereof
may be transferred or exchanged only in principal amounts of not less than
$250,000 and integral multiples of $1,000 in excess thereof. Any transfer,
exchange or other disposition of Subordinated Notes in contravention of
this Section 2.6(d)(vi) shall be deemed to be void and of no legal effect
whatsoever, any such transferee shall be deemed not to be the Holder (as
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defined below) or owner of any beneficial interest in such Subordinated
Notes for any purpose, including but not limited to the receipt of
interest payable on such Subordinated Notes, and such transferee shall be
deemed to have no interest whatsoever in such Subordinated Notes.
Section 2.7 Persons Deemed Owners. Prior to due presentment of a
Subordinated Note for registration or transfer, the Bank, the Fiscal and Paying
Agent and any agent of the Bank or the Fiscal and Paying Agent may treat the
person in whose name such Subordinated Note is registered (the "HOLDER" and,
collectively, the "HOLDERS") as the owner of the Subordinated Note for the
purpose of receiving payments of principal and interest, if any, and for all
other purposes whatsoever, whether or not such Subordinated Note be overdue, and
neither the Bank nor the Fiscal and Paying Agent shall be affected by notice to
the contrary.
Section 2.8 Cancellation of Unissued Subordinated Notes. Promptly upon the
written request of the Bank, the Fiscal and Paying Agent shall cancel and return
to the Bank all unissued Subordinated Notes in its possession.
Section 2.9 Mutilated, Lost, Stolen or Destroyed Subordinated Notes. The
Fiscal and Paying Agent shall effect the replacement of mutilated, lost, stolen
or destroyed Subordinated Notes in accordance with the custom and usage of the
financial industry.
Section 2.10 Additional Subordinated Notes. Except as provided in Sections
2.6(d) and 2.9 above, the aggregate principal amount of Subordinated Notes
authenticated and delivered hereunder shall not exceed $50,000,000; provided,
however, the Bank may reopen the issue and issue additional principal amounts of
Subordinated Notes or, subject to Section 6.9, establish additional terms of the
Subordinated Notes from time to time by delivering to the Fiscal and Paying
Agent a resolution of the Board of Directors of the Bank, or any committee
thereof acting pursuant to authority delegated by the Board of Directors,
certified by the Secretary or an Assistant Secretary of the Bank to have been
duly adopted by the Board of Directors, or a duly authorized committee thereof,
and to be in full force and effect on the date of such certification, setting
forth the aggregate principal amount of such new issuance or such additional
terms of the Subordinated Notes. The Fiscal and Paying Agent shall maintain a
copy of each such certified resolution on file and available for inspection at
the corporate trust offices of the Fiscal and Paying Agent in the City of New
York, New York.
Section 2.11 Maintenance of Office or Agency. Until the date on which all
of the Subordinated Notes shall have been surrendered or delivered to the Fiscal
and Paying Agent for cancellation or destruction, or become due and payable and
a sum sufficient to pay the principal of and interest on all of the Subordinated
Notes shall have been made available for payment and either paid to the
registered Holders of the Subordinated Notes or returned to the Bank as provided
herein and in the Subordinated Notes, the Fiscal and Paying Agent shall at all
times maintain an office or agency in the City of New York, New York, where
Subordinated Notes may be presented or surrendered for payment or for transfer
or exchange.
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ARTICLE III
THE FISCAL AND PAYING AGENT
Section 3.1 Payment of Subordinated Notes. Payments of principal and
interest payable on the Date of Maturity or upon redemption will be made in
immediately available funds at the corporate trust office of the Fiscal and
Paying Agent in the City of New York, New York, provided that the Subordinated
Note is presented to the Fiscal and Paying Agent in time for the Fiscal and
Paying Agent to make such payments in such funds in accordance with its normal
procedures. Payments of interest (other than interest payable at stated maturity
or any interest that is not punctually paid or duly provided for on any interest
payment date ("DEFAULTED INTEREST")) will be paid by check mailed to the entity
or entities identified as the Holder or Holders of the Subordinated Notes in the
Security Register, at the address for each such Holder as it appears in the
Security Register, at the close of business on the applicable regular record
date next preceding each interest payment date or to such other address in the
United States as such Holder shall designate to the Fiscal and Paying Agent in
writing not later than the relevant regular record date. Payment of any
Defaulted Interest will be paid by check mailed to the entity or entities
identified as the Holder or Holders of the Subordinated Notes in the Security
Register, at the address for each such Holder as it appears in the Security
Register, at the close of business on a date (the "SPECIAL RECORD DATE") which
shall be fixed by the Fiscal and Paying Agent. The Special Record Date shall be
not more than ten (10) days and not less than five (5) days prior to the date
specified by the Bank for the proposed payment of Defaulted Interest.
Notwithstanding the foregoing, payments of interest to the Depository or its
nominee will be made by wire transfer in immediately available funds and if any
other Holder of Subordinated Notes owns Subordinated Notes in the aggregate
principal amount of at least $1,000,000 such Holder shall be entitled to receive
payments of interest (other than at stated maturity) by wire transfer of
immediately available funds to a bank account in the United States designated by
the Holder in a written request to the Fiscal and Paying Agent not later than 15
calendar days prior to the applicable interest payment date. The Fiscal and
Paying Agent shall have no obligation to use its own funds for any such payment
or for any other purpose pursuant to this Agreement.
Section 3.2 Information Regarding Amounts Payable. The Fiscal and Paying
Agent shall, as soon as practicable after each record date for the payment of
interest (other than interest payable at maturity) on any Subordinated Note, but
not later than five days preceding the related interest payment date, notify the
Bank of the interest to be paid on such Subordinated Note on the related
interest payment date. In addition, the Fiscal and Paying Agent shall by the
15th day prior to the maturity of the Subordinated Notes furnish to the Bank a
list showing the principal and interest payable at maturity on such Subordinated
Note.
Section 3.3 Deposit of Funds. The Bank shall deposit by 11 A.M., New York
City time, with the Fiscal and Paying Agent (i) on each interest payment date an
amount in immediately available funds sufficient to pay the interest due on such
date and (ii) on the Date of Maturity of each such Subordinated Note an amount
in immediately available funds sufficient to pay the principal of such
Subordinated Note and the interest accrued thereon to the Date of Maturity.
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Section 3.4 Money for Subordinated Note Payments to Be Held in Trust.
(a) In acting under this Agreement and in connection with the Subordinated
Notes, the Fiscal and Paying Agent is acting solely as agent of the Bank and
does not assume any relationship of agency or trust for or with any of the
Holders of the Subordinated Notes, except that, subject to the provisions of
subsection (b) of this Section 3.4, all money deposited with the Fiscal and
Paying Agent pursuant to Section 3.3 shall be held by it in trust for the
benefit of the Holders of the Subordinated Notes entitled thereto until such
money is paid to such Holders of the Subordinated Notes in accordance with the
provisions of the Subordinated Notes and this Agreement or otherwise disposed of
as provided herein but such money need not be segregated from other funds except
to the extent required by law.
(b) Any money deposited with the Fiscal and Paying Agent for the payment
of the principal of or interest on any Subordinated Note that remains unclaimed
for two years after such principal or interest has become due and payable shall
be paid to the Bank, and Holders of the Subordinated Notes shall thereafter, as
unsecured general creditors, look only to the Bank for payment thereof, and all
liability of the Fiscal and Paying Agent with respect to such money shall
thereupon cease.
Section 3.5 Additional Responsibilities. Unless the Fiscal and Paying
Agent has entered into a separate written agreement which specifically addresses
the standard of care with respect to the duties discussed by this Section, if
the Bank shall ask the Fiscal and Paying Agent to perform any duties in
connection with the Subordinated Notes not specifically set forth in this
Agreement, the Subordinated Notes or in the DTC Letter of Representations as
duties of the Fiscal and Paying Agent (the "ADDITIONAL RESPONSIBILITIES") and
the Fiscal and Paying Agent chooses to perform such Additional Responsibilities,
the Fiscal and Paying Agent shall be held to the same standard of care and shall
be entitled to all the protective provisions (including, but not limited to,
indemnification) set forth herein.
Section 3.6 Miscellaneous. Notwithstanding anything to the contrary herein
or in the Subordinated Notes or the DTC Letter of Representations,
(a) in paying Subordinated Notes hereunder, the Fiscal and Paying Agent
shall be acting as a conduit and shall not be paying Subordinated Notes for its
own account, and in the absence of written notice from the Bank to the contrary,
the Fiscal and Paying Agent shall be entitled to assume that any Subordinated
Note presented to it, or deemed presented to it, for payment, is entitled to be
so paid;
(b) the Fiscal and Paying Agent may become a purchaser, Holder, transferee
or may otherwise own, hold or transfer any beneficial interest in any
Subordinated Notes and may commence or join in any action which a beneficial
owner of a Subordinated Note is entitled to take without any conflict with its
responsibilities pursuant to this Agreement;
(c) the Fiscal and Paying Agent shall not be required to invest any moneys
delivered to it pursuant to this Agreement;
(d) the Fiscal and Paying Agent shall have no liability for interest on
any moneys received or held by it hereunder;
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(e) the Fiscal and Paying Agent shall not be responsible for the
correctness of any recital of any party other than those of the Fiscal and
Paying Agent stated herein or in the Subordinated Notes or in any offering
materials and makes no representations as to the validity of the Subordinated
Notes and shall incur no responsibility in respect thereto;
(f) the Fiscal and Paying Agent shall be protected in acting or refraining
from acting upon any notice, order, requisition, request, consent, certificate,
order, opinion of counsel (including, but not limited to, in-house counsel),
Officers' Certificate (as hereinafter defined), affidavit, letter, telegram or
other paper or document in good faith deemed by it to be genuine and correct and
to have been signed or sent by the proper person or persons; and
(g) any action taken by the Fiscal and Paying Agent pursuant to this
Agreement, the Subordinated Notes or the DTC Letter of Representations upon the
request or authority or consent of any person who at the time of making such
request or giving such authority or consent is the Holder of any Subordinated
Note shall be conclusive and binding upon all future Holders of the same
Subordinated Note and all Subordinated Notes issued in exchange therefor or in
place thereof.
ARTICLE IV
LIABILITY AND INDEMNIFICATION
Section 4.1 Liability. The Fiscal and Paying Agent's duties are
ministerial in nature and the Fiscal and Paying Agent shall not have any
liability hereunder or under the Subordinated Notes or the DTC Letter of
Representations except in the case of its negligence, bad faith or willful
misconduct. The duties and obligations of the Fiscal and Paying Agent shall be
determined by the express provisions of this Agreement, the Subordinated Notes
and the DTC Letter of Representations and it shall not be liable except for the
performance of such duties and obligations as are specifically set forth herein
and no implied covenants shall be read into this Agreement against it. The
Fiscal and Paying Agent shall have no responsibility in the case of any default
by the Bank in the performance of the covenants contained in the Subordinated
Notes. The Fiscal and Paying Agent may refuse to perform any duty or exercise
any right or power hereunder unless it receives indemnity satisfactory to it
against any related loss, liability or expense. The Fiscal and Paying Agent
shall not be required to ascertain whether any issuance or sale of Subordinated
Notes (or any amendment or termination of this Agreement) has been duly
authorized or is in compliance with any other agreement to which the Bank is a
party (whether or not the Fiscal and Paying Agent is also a party to such other
agreements).
Section 4.2 Indemnification. The Bank agrees to indemnify and hold
harmless the Fiscal and Paying Agent and any officers, directors, employees and
agents of the Fiscal and Paying Agent from and against reasonable losses,
liabilities, obligations, claims, damages, costs and expenses of any kind or
nature whatsoever (including without limitation, reasonable legal fees and
expenses) relating to or arising out of the performance of their respective
duties under this Agreement and (to the extent applicable) the Subordinated
Notes and the DTC Letter of Representations, except to the extent they are
caused by the negligence, bad faith or willful misconduct of the Fiscal and
Paying Agent, respectively, provided that the Bank shall not be liable for any
settlement which is effected without the prior written consent of the Bank. In
the event of the resignation or removal of the Fiscal and Paying Agent, any
successor to the
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performance of the obligations of the Fiscal and Paying Agent as specified in
this Agreement shall be entitled to rely upon and be bound by the terms of this
indemnity and said successor, the Bank or DTC shall not be entitled to a
separate indemnity from the Fiscal and Paying Agent. These indemnification
obligations shall survive the termination of this Agreement, including any
termination pursuant to any applicable federal or state bankruptcy law, to the
extent enforceable under applicable law, and shall survive the resignation or
removal of the Fiscal and Paying Agent while remaining applicable to any action
taken or omitted by the Fiscal and Paying Agent while acting pursuant to this
Agreement and/or the Subordinated Notes or the DTC Letter of Representations.
Section 4.3 Officers' Certificate. Any instruction given by the Bank to
the Fiscal and Paying Agent under this Agreement shall be in the form of an
Officers' Certificate. For the purposes of this Agreement, "OFFICERS'
CERTIFICATE" means a certificate signed by an Authorized Representative and
delivered to the Fiscal and Paying Agent.
ARTICLE V
RESIGNATION OR REMOVAL OF FISCAL AND PAYING AGENT
Section 5.1 Resignation or Removal. The Fiscal and Paying Agent may at any
time resign from its duties hereunder by giving written notice of resignation to
the Bank specifying the date on which such resignation shall become effective;
provided, however, that such date shall not be less than thirty Business Days
after such notice is given to the Bank. In such event the Bank shall appoint a
successor Fiscal and Paying Agent or shall undertake to perform at the Bank the
functions of the Fiscal and Paying Agent. In the event the Fiscal and Paying
Agent gives the Bank written notice of its resignation and the Bank fails or
refuses to appoint a successor fiscal and paying agent within thirty days of
delivery of such notice, the Fiscal and Paying Agent shall be entitled to
petition any court sitting in the State of New York, willing to take
jurisdiction, for the appointment of a successor. The Bank may at any time
remove the Fiscal and Paying Agent by giving written notice of removal to the
Fiscal and Paying Agent specifying the date on which such removal shall be
effective; provided, however, that such date shall be not less than thirty
Business Days after such notice is given to the Fiscal and Paying Agent. Any
termination or resignation hereunder shall not affect the Fiscal and Paying
Agent's right to the payment of fees earned or expenses (including reasonable
counsel fees and expenses) incurred through the effective date of such
termination or resignation, as the case may be. The Bank shall notify, or cause
the Fiscal and Paying Agent to notify, the Holders of Subordinated Notes of the
removal or appointment of any Fiscal and Paying Agent or the undertaking of the
Bank to perform at the Bank the functions of the Fiscal and Paying Agent.
Section 5.2 Successor Fiscal and Paying Agent. Upon the effective date of
such resignation or removal, the Fiscal and Paying Agent shall deliver any money
then held by it pursuant to Section 3.4(a) to the successor appointed by the
Bank to serve as fiscal and paying agent for the Subordinated Notes and all
liability of the Fiscal and Paying Agent with respect to such money shall
thereupon cease. The Fiscal and Paying Agent shall also provide such successor
with a copy of its records relating to the Subordinated Notes as such successor
shall reasonably request and may retain copies of any records turned over for
archival purposes. If such successor has not been appointed by the effective
date of such resignation or removal, the Fiscal and Paying Agent shall pay such
money and deliver such records to the Bank with the
11
same effect as though such payment were made pursuant to Section 3.4(b). The
delivery, transfer and assignment of such moneys and records by the Fiscal and
Paying Agent to its successor or the Bank, as the case may be, shall be
sufficient, without the requirement of any additional act or the requirement of
any indemnity to be given by the Fiscal and Paying Agent, to relieve the Fiscal
and Paying Agent of all further responsibility for the exercise of the rights or
the performance of the obligations vested in the Fiscal and Paying Agent
pursuant to this Agreement.
Section 5.3 Successor by Merger, etc. Any corporation or association into
which the Fiscal and Paying Agent may be converted or merged, or with which it
may be consolidated, or to which it may sell or transfer substantially all of
its corporate trust and agency business, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to
which it is a party, shall be and become successor Fiscal and Paying Agent
hereunder and shall be vested with all of the rights, powers, trusts, duties and
obligations of the Fiscal and Paying Agent hereunder, without the execution or
filing of any instrument or any further act. The Fiscal and Paying Agent shall
provide notice to the Bank of any such conversion, merger, consolidation, sale
or transfer as soon as practicable after the Fiscal and Paying Agent obtains
knowledge that such event will occur or has occurred.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Compensation of the Fiscal and Paying Agent. The Bank agrees
to pay the Fiscal and Paying Agent compensation for all services rendered by the
Fiscal and Paying Agent hereunder in such amount and payable at such times as
the Bank and the Fiscal and Paying Agent may agree to and to promptly reimburse
the Fiscal and Paying Agent for all reasonable out-of-pocket expenses (including
reasonable counsel fees and expenses), disbursements and advances incurred or
made by the Fiscal and Paying Agent in the performance of its duties hereunder.
The obligation of the Bank pursuant to this Section 6.1 shall survive the
termination of this Agreement, including any termination pursuant to any federal
or state bankruptcy law, to the extent enforceable under applicable law.
Section 6.2 Reliance on Opinions of Counsel or Officers' Certificates. The
Fiscal and Paying Agent shall have no liability to the Bank in respect of any
action taken or omitted by the Fiscal and Paying Agent in good faith in reliance
on a written opinion of its counsel (including, but not limited to, in-house
counsel) or an Officers' Certificate.
Section 6.3 Subordinated Notes Held by the Fiscal and Paying Agent. The
Fiscal and Paying Agent, in its individual or other capacity, may become the
owner or pledgee of Subordinated Notes with the same rights it would have if it
were not acting as Fiscal and Paying Agent hereunder.
Section 6.4 Notices. Notices and other communications hereunder shall
(except to the extent otherwise expressly provided) be in writing or given via
electronic media and shall be addressed as follows, or to such other addresses
as the parties hereto shall specify from time to time;
12
If to the Bank: Sterling Bank
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Fiscal
and Paying Agent: Deutsche Bank Trust Company Americas
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust & Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
All notices shall be deemed given when received.
Section 6.5 Parties. Except for rights arising under Section 3.4(a), this
Agreement is solely for the benefit of the parties hereto and their successors
and assigns and nothing herein, express or implied, shall give to any other
person, including, without limitation, any beneficial owner of Subordinated
Notes, any benefits or any legal or equitable right, remedy or claim under this
Agreement.
Section 6.6 Governing Law. This Agreement and the rights and obligations
of the parties hereto shall be governed by and construed in accordance with the
laws of the State of New York.
Section 6.7 Separability. In case any provision in this Agreement 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.
Section 6.8 Effect of Headings. The article and section headings herein
are for convenience of reference only and shall not affect the construction
hereof.
Section 6.9 Amendments; Waivers; Notices of Acceleration After Events of
Default.
(a) Without the consent of any Holders of Subordinated Notes, the Bank and
the Fiscal and Paying Agent, at any time and from time to time, may enter into
one or more agreements supplemental hereto for any of the following purposes:
(i) to evidence the succession of another person to the Bank and the
assumption by any such successor of the covenants and agreements of the
Bank herein and in the Subordinated Notes; or
(ii) to evidence or provide for the acceptance of appointment
hereunder by a successor Fiscal and Paying Agent with respect to the
Subordinated Notes or to change the address of a Fiscal and Paying Agent
to another location in the City of New York, New York; or
13
(iii) to add further covenants, restrictions or conditions for the
protection of Holders of the Subordinated Notes; or
(iv) to cure ambiguities or to correct any provision herein or in
the Subordinated Notes in case of defects or inconsistencies in the
provisions hereof or thereof or to supplement with such other provisions,
so long as any such cure, correction or supplement does not adversely
affect the interest of the Holders of the Subordinated Notes in any
material respect;
provided, however, that no such supplemental agreement shall, without the
consent of the Holder of each outstanding Subordinated Note:
(v) change the Date of Maturity of any Subordinated Note, or change
the definition of interest payment date contained in such Subordinated
Notes, or reduce the principal amount of or the rate of interest on any
Subordinated Note, or change the coin and currency in which any
Subordinated Note or the interest thereon is payable, or change the place
specified in the Subordinated Notes where principal and interest is
payable to a place outside the City of New York, New York, or impair the
right of Holders of such Subordinated Notes to institute suit for the
enforcement of any payment of principal of or interest or other amounts on
such Subordinated Notes on or after the Date of Maturity or due date
therefor, or modify the subordination provisions of the Subordinated Notes
in any manner adverse to the Holders of Subordinated Notes; or
(vi) modify any of the provisions of this Section 6.9, except to
provide that certain other provisions of this Agreement or the
Subordinated Notes cannot be modified or waived without the consent of the
Holder of each outstanding Subordinated Note.
Before entering into any supplemental agreement, the Fiscal and Paying
Agent shall receive and be fully protected in relying upon an Officers'
Certificate or an opinion from counsel to the Bank that such supplemental
agreement has been duly authorized, executed and delivered by the Bank and that
all conditions precedent in connection with the execution of a supplemental
agreement have been satisfied.
It shall not be necessary under this Section 6.9 for the Holders of the
Subordinated Notes to approve the particular form of any proposed supplemental
agreement.
(b) Upon the execution of any supplemental agreement under this Section
6.9, this Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Agreement for all purposes; and
each Holder of Subordinated Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby. The Bank shall transmit or cause to
be transmitted by mail to each Holder of Subordinated Notes a notice setting
forth the general terms of any supplemental agreement executed under this
Section 6.9.
(c) At any time after the delivery to the Fiscal and Paying Agent of a
declaration of default and acceleration pursuant to an Event of Default
according to the provisions of any Subordinated Notes, the Holder of a
Subordinated Note may, by notice evidencing his ownership interests to the Bank
and the Fiscal and Paying Agent, rescind and annul such declaration and its
14
consequences with respect to any Subordinated Note held by such Holder. No such
rescission shall affect any subsequent default or impair any right consequent
thereto.
(d) The Holder of a Subordinated Note may, by notice evidencing his
ownership interests to the Bank and Fiscal and Paying Agent, waive any Event of
Default under any Subordinated Note held by such Holder and its consequences. No
such waiver shall affect any subsequent Event of Default or impair any right
consequent thereto.
(e) The Bank will promptly notify the Fiscal and Paying Agent of an Event
of Default upon the occurrence thereof, and the Fiscal and Paying Agent will
promptly mail by first-class mail, postage prepaid, copies of any such notice to
the Holders of the Subordinated Notes.
Section 6.10 Actions Due on Saturdays, Sundays and Holidays. If any date
on which a payment, notice or other action required by this Agreement, the
Subordinated Notes or the DTC Letter of Representations falls on a day other
than a Business Day, then that action or payment need not be taken or made on
such date, but may be taken or made on the next succeeding Business Day on which
the Fiscal and Paying Agent is open for business with the same force and effect
as if made on such date.
Section 6.11 Agreement to Pay Attorneys' Fees and Other Expenses. In the
event the Bank shall default under any of the provisions of this Agreement
and/or the Subordinated Notes or the DTC Letter of Representations affecting the
rights or duties of the Fiscal and Paying Agent (as determined by an order of a
court of competent jurisdiction) and the Fiscal and Paying Agent shall employ
attorneys or incur other expenses for the enforcement of performance or
observance of any such obligation or agreement, the Bank agrees that it will on
demand therefor pay to the Fiscal and Paying Agent the reasonable fees and
expenses of such attorneys and such other reasonable fees and expenses incurred
by the Fiscal and Paying Agent.
Section 6.12 Survival. The Fiscal and Paying Agent's rights to
compensation, reimbursement and indemnification shall survive the termination of
this Agreement, the Subordinated Notes or the DTC Letter of Representations,
including any termination pursuant to any federal or state bankruptcy law, to
the extent enforceable under applicable law.
Section 6.13 No Implied Waivers. The right of any party under any
provision of this Agreement shall not be affected by its prior failure to
require the performance by any other party under such provision or any other
provision of this Agreement, nor shall the waiver by any party of a breach of
any provision hereof constitute a waiver of any succeeding breach of the same or
any other provision or constitute a waiver of the provision itself or any other
provision.
Section 6.14 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but both or all of
which, when taken together, shall constitute but one instrument, and shall
become effective when copies hereof which, when taken together, bear the
signatures of each of the parties hereto, shall be delivered to each of the
parties hereto.
Section 6.15 Term. This Agreement shall remain in full force and effect
until the earlier to occur of (i) such time as the principal and interest on all
the Subordinated Notes shall
15
have been paid, and (ii) the effective date of the resignation or removal of the
Fiscal and Paying Agent.
[The remainder of this page has been intentionally left blank.]
16
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
STERLING BANK
By: /s/ ▇. ▇▇▇▇▇▇ Bridgwater
-----------------------------------------
Name: J. Downy Bridgwater
Title: President and Chief Executive Officer
DEUTSCHE BANK TRUST COMPANY AMERICAS, as
Fiscal and Paying Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
Form of Rule 144A Global Note
[See attached]
GLOBAL CERTIFICATE
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE OR OTHER APPLICABLE SECURITIES LAW,
AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (OTHER THAN THE EXEMPTION CONTAINED IN SECTION 3(A)(2) THEREOF)
AND ANY STATE OR OTHER APPLICABLE SECURITIES LAW. EACH PURCHASER OF THIS NOTE IS
HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE
DATE HEREOF AND THE LAST DATE ON WHICH STERLING BANK (THE "BANK") OR ANY
"AFFILIATE" OF THE BANK WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) ONLY: (A) TO THE BANK; (B) SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A; (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT (OTHER THAN THE EXEMPTION
CONTAINED IN SECTION 3(A)(2) THEREOF), SUBJECT TO THE RIGHT OF THE BANK PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (C) OR (D) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (II) PURSUANT TO CLAUSE (C) TO REQUIRE THAT
THE TRANSFEROR DELIVER TO THE BANK A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN
THE FORM OF ANNEX A TO THE OFFERING CIRCULAR DATED APRIL 3, 2003. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS SECURITY IS NOT A DEPOSIT- AND IS NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THIS SECURITY IS UNSECURED
AND IS INELIGIBLE TO SERVE AS COLLATERAL FOR ANY LOAN BY THE BANK, AND THE
OBLIGATIONS OF THE BANK EVIDENCED BY THIS SECURITY ARE, TO THE EXTENT AND IN THE
MANNER SET FORTH IN SECTION 5 HEREOF, SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT
TO THE BANK'S OBLIGATIONS TO ITS DEPOSITORS AND THE BANK'S OTHER OBLIGATIONS TO
ITS GENERAL CREDITORS AND TO ITS SECURED CREDITORS.
THIS SECURITY IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(THE "DEPOSITORY"), ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ OR ITS NOMINEE, AND MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY UNLESS AND UNTIL
THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE
FORM. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TO THE BANK OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE OR TO ANY PERSON IS WRONGFUL,
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
STERLING BANK
7.375% Subordinated Note due 2013
$50,000,000 April 10, 2003
No. 1
CUSIP: 85916D BH7
For value received, STERLING BANK, a Texas state chartered banking
association (together with any successor pursuant to the provisions hereof, the
"Bank"), hereby promises to pay to Cede & Co., or registered assigns at Cede &
Co.'s offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or at such other office as
Cede & Co. may from time to time designate in writing to the Bank, the principal
sum of $50,000,000 on April 15, 2013 (the "Date of Maturity"), or on such
earlier date as the principal hereof may become due in accordance with the
provisions hereof, and to pay interest on said principal sum from time to time
outstanding, from the date hereof until payment of said principal sum has been
made or duly provided for, at the rate of 7.375% per
2
annum, payable semi-annually in arrears on April 15 and October 15 of each year,
commencing on October 15, 2003 (each an "Interest Payment Date"). Payments of
principal and interest hereunder shall be made in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts and shall be made immediately available to
the Holder hereof. Interest payments on this Security shall be the amount of
interest accrued to, but excluding, the relevant Interest Payment Date or Date
of Maturity, as the case may be. Interest will be calculated on the basis of a
360-day year of twelve 30-day months.
If any Interest Payment Date or Date of Maturity of this Security would
otherwise be a day which is not a business day (as defined below), the related
payment of principal of or interest on this Security shall be postponed to the
next day which is a business day with the same force and effect as if made on
the date such payment were due, and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date or Date of
Maturity, as the case may be. The term "business day" means any day that is not
a Saturday or Sunday, and that is not a day on which commercial banks in New
York, New York or Houston, Texas are required or permitted by applicable law or
regulation to be closed. Except as provided above, interest on this Security
will accrue on holidays and on all days the Bank is not open for business.
Reference is 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 though fully set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Fiscal and Paying Agent by the manual signature of one of its authorized
signatories, this Security shall not be valid or obligatory for any purpose.
3
IN WITNESS WHEREOF, the Bank has caused this Security to be duly executed
and attested as of the date first mentioned above.
STERLING BANK
By:
-----------------------------------
Name: ▇. ▇▇▇▇▇▇ Bridgwater
Title: President and Chief Executive
Officer
Attest:
-------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President and General Counsel
This Security is one of the Subordinated Notes referred to in the Fiscal and
Paying Agency Agreement referred to herein:
DEUTSCHE BANK TRUST COMPANY AMERICAS
as Fiscal and Paying Agent
By:
-----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Dated: April 10, 2003
4
1. This Security is one of the duly authorized issue of securities of the
Bank, designated as its "7.375% Subordinated Notes due 2013" (each a "Security,"
and collectively the "Securities"), initially limited in aggregate principal
amount to $50,000,000. The Bank, for the benefit of the Holders from time to
time of the Securities, has entered into a Fiscal and Paying Agency Agreement,
dated as of April 10, 2003 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Fiscal and Paying Agency Agreement"),
between the Bank and Deutsche Bank Trust Company Americas ("Deutsche Bank"), as
Fiscal and Paying Agent. Copies of the Fiscal and Paying Agency Agreement are on
file and available for inspection at the offices of the Fiscal and Paying Agent
located at Deutsche Bank Trust Company Americas, Attn: Corporate Trust & Agency
Services, or at such other place or places as the Fiscal and Paying Agent shall
designate by notice to the person in whose name this Security is registered (the
"Holder") on the Security Register (as defined in Section 3 of this Security).
Deutsche Bank or any duly appointed successor Fiscal and Paying Agent acting in
such capacity is herein called the "Fiscal and Paying Agent."
The Bank may, in accordance with the terms of the Fiscal and Paying Agency
Agreement, reopen the issue of Securities and issue additional principal amounts
of the Securities or establish additional terms of the Securities.
Payments of principal and interest payable at maturity will be made in
immediately available funds, upon presentation and surrender of this Security,
at the corporate trust office of the Fiscal and Paying Agent in New York, New
York, or at such other place or places as the Fiscal and Paying Agent shall
designate by notice to the Holder, provided that this Security is presented to
the Fiscal and Paying Agent in time for the Fiscal and Paying Agent to make such
payments in such funds in accordance with its normal procedures and subject to
such terms and conditions as the Fiscal and Paying Agent may impose consistent
with the Fiscal and Paying Agency Agreement. Payments of interest (other than
interest payable at stated maturity or any interest that is not punctually paid
or duly provided for on any Interest Payment Date ("Defaulted Interest")) shall
be paid by check, mailed to the Holder at its address specified in the Security
Register on the Record Date (as defined below) or to such other address in the
United States as the Holder shall designate to the Fiscal and Paying Agent in
writing not later than the relevant Record Date. Notwithstanding the foregoing,
payments of interest to the Depository or its nominee shall be made by wire
transfer in immediately available funds and if any other Holder hereof owns
$1,000,000 or more in aggregate principal amount of the Securities, such Holder
may elect to receive payments of interest (other than interest payable at stated
maturity) by wire transfer of immediately available funds to a bank account in
the United States designated by the Holder in a written notice received by the
Fiscal and Paying Agent not later than 15 calendar days prior to the applicable
Interest Payment Date. Interest payable on any Interest Payment Date shall be
payable to the person in whose name this Security is registered at the close of
business 15 calendar days prior to the applicable Interest Payment Date (such
date being referred to herein as the "Regular Record Date" for such Interest
Payment Date), notwithstanding the subsequent cancellation of this Security
prior to such Interest Payment Date, except that any Defaulted Interest will be
paid to the person in whose name this Security is registered on a Special Record
Date fixed by the Fiscal and Paying Agent (a "Special Record Date"). The terms
Regular Record Date and Special Record Date are referred to hereinafter
collectively as the "Record Date." To the extent permitted by applicable law,
interest
5
shall accrue, at the rate at which interest accrues on the principal of this
Security, on any amount of principal of or interest on this Security not paid
when due.
2. Until the date on which all of the Securities shall have been
surrendered or delivered to the Fiscal and Paying Agent for cancellation or
destruction, or become due and payable and a sum sufficient to pay the principal
of and interest on all of the Securities shall have been made available for
payment and either paid to the registered Holders of the Securities or returned
to the Bank as provided herein and in the Fiscal and Paying Agency Agreement,
the Fiscal and Paying Agent shall at all times maintain an office or agency in
New York, New York, where Securities may be presented or surrendered for payment
or for transfer or exchange.
3. As provided in the Fiscal and Paying Agency Agreement and subject to
certain limitations set forth therein, this Security is transferable in whole or
in part, and may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations, by the Holder in person, or by its
attorney duly authorized in writing, at the office of the Fiscal and Paying
Agent maintained for such purpose. The Fiscal and Paying Agent shall maintain a
register providing for the registration of the Securities and any exchange or
transfer thereof (the "Security Register"). Upon surrender or presentation of
this Security for exchange or registration of transfer, and subject to certain
limitations set forth in the Fiscal and Paying Agency Agreement, the Bank shall
execute and the Fiscal and Paying Agent shall authenticate and deliver in
exchange therefor a Security or Securities, each in minimum denominations of
$250,000 or any amount in excess thereof which is an integral multiple of $1,000
which has or have an aggregate principal amount equal to the aggregate principal
amount of this Security being transferred or exchanged and is or are registered
in such name or names requested by the Holder. Any Security presented or
surrendered for registration of transfer or for exchange shall (if so required
by the Fiscal and Paying Agent) be duly endorsed, or accompanied by a written
instrument of transfer with such evidence of due authorization and guarantee of
signature as may reasonably be required by the Fiscal and Paying Agent in form
satisfactory to the Fiscal and Paying Agent, duly executed by the Holder or his
or her attorney duly authorized in writing, and with such tax identification
number or other information for each person in whose name a Security is to be
issued as the Fiscal and Paying Agent may reasonably request to comply with
applicable law. No exchange or registration of transfer of this Security shall
be made after the fifteenth calendar day immediately preceding the Date of
Maturity.
Owners of beneficial interests in this Security shall not be entitled to
receive certificated Securities in registered form and shall not be considered
holders of Securities unless (i) the Depository notifies the Bank in writing
that it is no longer willing or able to continue as a depository for the
Securities or if the Depository ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, and a successor depository is
not appointed by the Bank within ninety days after the effective date of the
Depository's ceasing to act as depository for the Securities, (ii) the Bank, at
its option, notifies the Fiscal and Paying Agent in writing that it elects to
cause the issuance of Securities in certificated form, or (iii) any event shall
have happened and be continuing which, after notice or lapse of time, or both,
would constitute an Event of Default with respect to the Securities. In the
event of such occurrences, upon the surrender of this Security by the Depository
or a successor depository of the Securities, the Bank will execute, and the
Fiscal and Paying Agent will, upon receipt of instructions in writing from the
Bank, authenticate and deliver Securities of like tenor and terms in
certificated form to each person that
6
the Depository or a successor depository identifies as the beneficial owner of
an interest in this Security in an aggregate principal amount equal to the
aggregate principal amount of this Security then outstanding, in exchange for
this Security.
This Security or portions hereof may be transferred or exchanged only in
principal amounts of not less than $250,000 and integral multiples of $1,000 in
excess thereof. Any transfer, exchange or other disposition of this Security in
a block having an aggregate principal amount of less than $250,000 shall be
deemed to be void and of no legal effect whatsoever, any such transferee shall
be deemed not to be the Holder or owner of any beneficial interest in this
Security for any purpose, including but not limited to the receipt of interest
payable on this Security, and such transferee shall be deemed to have no
interest whatsoever in this Security.
No service charge (other than any cost of delivery) shall be imposed for
any exchange or registration of transfer of this Security, but the Bank or the
Fiscal and Paying Agent may require the payment of a sum sufficient to cover any
stamp or other tax or governmental charge that may be imposed in connection
therewith (or presentation of evidence that such tax or charge has been paid).
The Bank and the Fiscal and Paying Agent may treat the person in whose
name this Security is registered in the Security Register as the absolute owner
of this Security for the purpose of receiving payments of principal of and
interest on this Security and for all other purposes whatsoever, and the Bank
and the Fiscal and Paying Agent shall not be affected by a notice to the
contrary.
4. PREPAYMENT AND NON-CONVERSION.
(a) This Security is not subject to redemption, call or prepayment
at the option of the Bank, or to repayment at the option of the Holder, prior to
the Date of Maturity.
(b) This Security is not convertible into the common stock or any
other security of the Bank.
5. SUBORDINATION; RIGHTS OF FDIC.
(a) The indebtedness of the Bank evidenced by this Security,
including the obligations of the Bank to pay the principal hereof and interest
hereunder, is unsecured and subordinate and junior in right of payment to the
Bank's obligations to its depositors, its obligations under bankers' acceptances
and letters of credit, and its obligations to its general unsecured creditors
and to its secured creditors (except for obligations that are specifically
designated as ranking on a parity with or junior to this Security) whether now
outstanding or hereafter incurred, in that in the event of any insolvency,
receivership, conservatorship, reorganization, readjustment of debt, marshalling
of assets and liabilities or similar proceedings or any liquidation or
winding-up of or relating to the Bank, whether voluntary or involuntary, all
such obligations (except obligations which rank on a parity with or are junior
to this Security) shall be entitled to be paid in full before any payment shall
be made on account of the principal of or interest on this Security. In the
event of any such proceeding, after payment in full of all sums owing with
respect to such prior obligations, the Holder of this Security, together with
the holders of any obligations of the Bank ranking on a parity with this
Security, shall be entitled to be paid
7
from the remaining assets of the Bank the unpaid principal and interest hereon
and thereon 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 Bank ranking junior to this Security. Nothing herein shall impair the
obligation of the Bank, which is absolute and unconditional, to pay the
principal of and interest on this Security in accordance with its terms.
(b) Notwithstanding any other provisions of this Security, including
Sections 5, 6 and 7 hereof, it is expressly understood and agreed that the FDIC
or any other receiver or conservator of the Bank shall have the right in the
performance of its legal duties, and as part of any transaction or plan of
reorganization or liquidation designed to protect or further the continued
existence of the Bank or the rights of any parties or agencies with an interest
in, or claim against, the Bank or its assets, to transfer or direct the transfer
of the obligations of this Security to any bank or bank holding company selected
by such official which shall expressly assume the obligation of the due and
punctual payment of the unpaid principal of and interest on this Security and
the due and punctual performance of all covenants and conditions hereof; and the
completion of such transfer and assumption shall serve to supersede and void any
default acceleration or subordination which may have occurred or which may occur
due or related to such transaction, plan, transfer or assumption, pursuant to
the provisions of this Security, and shall serve to return the Holder hereof to
the same position, other than for substitution of the obligor, it would have
occupied had no default, acceleration or subordination occurred; except that any
interest and principal previously due, other than by reason of acceleration, and
not paid shall, in the absence of a contrary agreement by the Holder, be deemed
to be immediately due and payable as of the date of such transfer and
assumption, together with interest thereon from its original due date at the
rate provided for herein.
(c) This Security and any Securities issued subsequently hereto will
rank pari passu among themselves and pari passu, in the event of a liquidation
or similar proceeding with respect to the Bank, whether voluntary or
involuntary, with all other present or future unsecured subordinated debt
obligations of the Bank other than subordinated debt obligations of the Bank
that by their express terms rank junior to this Security.
(d) This Security contains no limitation on the amount of debt,
deposits or other obligations that rank senior to this Security that may be
hereafter incurred or assumed by the Bank.
(e) Notwithstanding any other provisions of this Security, the Bank
shall not make any payment of (i) any interest on this Security while it remains
in default in the payment of any assessment due to the FDIC if and to the extent
it would be prohibited from doing so by 12 U.S.C. Section 1828(b), (ii) any
interest due or principal repayable without the prior written approval of the
Commissioner of the Texas Department of Banking, when the Bank is in a
"hazardous condition or is insolvent" (as defined in Section 31.002(a) of the
Texas Banking Act, or any successor provision) or which would cause the Bank to
be in a "hazardous condition or insolvent," as determined in all cases by the
Banking Commissioner of Texas, and (iii) any principal or interest without the
approval of the FDIC, beginning 60 days after the Bank becomes "critically
undercapitalized," as that term is defined in 12 U.S.C. Section 1831o(b)(1)(E)
and the rules and regulations promulgated thereto.
8
6. EVENTS OF DEFAULT; REMEDIES.
"Event of Default", wherever used herein, means either of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Bank shall consent to the appointment of a receiver or other
similar official (other than a conservator) in any liquidation, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Bank or of or relating to all or substantially
all of the property of the Bank; or
(ii) the Bank suffers to be entered a decree or order of a court or
agency or supervisory authority for the appointment of a receiver or other
similar official (other than a conservator) in any liquidation, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Bank, or of or relating to all or
substantially all of the property of the Bank, or for the winding up or
liquidation of the Bank, and such decree or order shall remain in force,
undischarged or unstayed for a period of 60 days.
If an Event of Default shall occur, the Holder may, at its option, by
written notice to the Bank and the Fiscal and Paying Agent, declare this
Security to be, and upon such declaration, unless, in accordance with the terms
of the Fiscal and Paying Agent Agreement, the Fiscal and Paying Agent shall have
received notice from the Bank that all Events of Default have been cured by the
Bank or waived by the Holder of this Security, the principal of and interest on
this Security shall become immediately due and payable; provided, however, that
no repayment by acceleration or otherwise of this Security, other than at the
Date of Maturity, may be made without the prior written approval of the FDIC and
the Banking Commissioner of Texas.
There is no right of acceleration in the case of a default in the payment
of principal or interest on the Securities or the performance of any other
obligation of the Bank under the Fiscal and Paying Agency Agreement or contained
herein.
The Fiscal and Paying Agency Agreement provides that the Bank will
promptly notify the Fiscal and Paying Agent of an Event of Default upon the
occurrence thereof, and the Fiscal and Paying Agent will promptly mail by
first-class mail, postage prepaid, copies of such notice to the Holders of the
Securities.
7. MERGER; CONSOLIDATION.
Nothing contained herein shall prevent any consolidation or merger of the
Bank with any other corporation, bank or other legal entity (collectively,
"corporation") or shall prevent any sale, conveyance, transfer or lease of the
property of the Bank to any other corporation; provided, however, that any such
consolidation, merger, sale or conveyance shall be upon the condition that: (i)
the newly-formed corporation, or the corporation to which such sale or
conveyance shall have been made, shall not be in default in the performance or
observance of any of the terms of the Securities to be observed or performed by
the Bank; and (ii) the surviving corporation (if other than the Bank), or the
corporation to which such sale or conveyance shall have been made, shall be a
corporation organized under the laws of the United States or any state thereof
or the District of
9
Columbia and shall expressly assume the obligation for the payment of the
principal and interest on the Securities. In case of any such consolidation,
merger, sale, conveyance, transfer or lease, and upon the assumption by the
successor corporation of the performance of all of the covenants in the
Securities to be performed or observed by the Bank, such successor corporation
shall succeed to the Bank with the same effect as if it had been named in the
Securities as the Bank and thereafter, except in the case of a lease, the
predecessor corporation shall be relieved of all obligations and covenants in
the Securities and may be liquidated and dissolved.
8. All notices to the Bank under this Security shall be in writing and
addressed to the Bank at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President and Chief Financial
Officer, or to such other address as the Bank may notify the Holder. All notices
to the Fiscal and Paying Agent shall be in writing and addressed to the Fiscal
and Paying Agent at the office of the Fiscal and Paying Agent at Deutsche Bank
Trust Company Americas, Attn: Corporate Trust and Agency Services, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. All notices to the Holder shall be in writing
and sent by first-class mail to the Holder at his, her or its address as set
forth in the Security Register.
9. In acting under the Fiscal and Paying Agency Agreement, the Fiscal and
Paying Agent is acting solely as the agent of the Bank and does not assume any
obligation or relationship of agency or trust with the Holder except as
specifically described herein or therein. Under the terms of the Fiscal and
Paying Agency Agreement, the Bank may rescind the designation of any Fiscal and
Paying Agent and appoint a new Fiscal and Paying Agent in respect of the
Securities or undertake to perform at the Bank the functions of the Fiscal and
Paying Agent or change the address of a Fiscal and Paying Agent to another
location in New York, New York. The Bank shall notify, or cause the Fiscal and
Paying Agent to notify, the Holders of Securities of the removal or appointment
of any Fiscal and Paying Agent or the undertaking of the Bank to perform at the
Bank the functions of the Fiscal and Paying Agent.
10. The Securities are issuable without interest coupons and in minimum
denominations of $250,000 or any amount in excess thereof which is an integral
multiple of $1,000.
11. In the event of the failure by the Bank to make payment of principal
of or interest on this Security (and, in the case of payment of interest, such
failure to pay shall have continued for 5 days), the Bank will, upon demand of
the Holder of this Security, pay to the Holder of this Security the whole amount
then due and payable (without acceleration) on this Security for principal and
interest with interest on the overdue principal and interest at the rate borne
by this Security, to the extent permitted by applicable law. If the Bank fails
to pay such amount upon such demand, the Holder of this Security may, among
other things, institute a judicial proceeding for the collection.
12. The Fiscal and Paying Agency Agreement provides, in certain limited
circumstances, for the modification of the rights of the holders of the
Securities by the Bank without the consent of the holders of the Securities,
except that the consent of all holders of outstanding Securities affected
thereby is required in order to change the Date of Maturity of the Securities,
to change the definition of Interest Payment Date or reduce the principal amount
of or the rate of interest on the Securities, or to change the coin or currency
in which any Security or the
10
interest thereon is payable, to change the place of payment where principal of
or interest on the Securities is payable to a place outside New York, New York,
to impair the right of the holders of the Securities to institute suit for the
enforcement of payments of principal of or interest or other amounts on the
Securities on or after the Date of Maturity or due date therefor, to modify the
subordination provisions of the Securities in any manner adverse to the holders
of Securities or to modify the provisions of the Fiscal and Paying Agency
Agreement governing the amendment thereof and of the Securities.
13. MISCELLANEOUS.
(a) This Security shall be governed by, and construed in accordance
with, the laws of the State of New York.
(b) Notwithstanding anything contained in Section 6 hereof (other
than the second and third to last paragraphs thereof) the Holder of this
Security (i) may exercise all remedies otherwise permitted by applicable law
upon an Event of Default, subject only to the rights, if any, of the Bank's
depositors and the holders of any indebtedness of the Bank which is senior to
the indebtedness of the Bank evidenced by this Security, and (ii) for the
purpose of determining (A) the persons entitled to participate in any
distribution of the Bank's assets, (B) the holders of any such senior
indebtedness or any other indebtedness due of the Bank, (C) the amounts of any
such indebtedness or payable thereon, (D) the amount or amounts to be paid or
distributed with respect to any of the foregoing, and (E) any other facts
pertinent to the same or to Section 6 hereof, may rely upon any order or decree
issued by any court of competent jurisdiction (including, without limitation,
any order or decree for any payment or distribution of the Bank's assets) before
which any proceeding is brought, or any certificate of any liquidating trustee,
agent or other person making any distribution to such holder.
(c) All captions are for convenience only and shall not affect the
meaning of the provisions to which they relate.
(d) This Security and each of its terms shall be binding upon and
inure to the benefit of the Bank, the Holders, the Depository or its nominee,
the Fiscal and Paying Agent and their respective successors and assigns.
(e) Except as otherwise expressly required herein, the Bank waives
demand, presentment for payment, notice of non-payment, notice of protest, and
all other notices.
(f) Any consent or waiver given 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.
14. No reference herein to the Fiscal and Paying Agency Agreement and no
provision of this Security shall alter or impair the obligation of the Bank,
which is absolute and unconditional, to pay the principal of and interest on
this Security at the times, place and rate, and in the coin or currency, herein
prescribed. No failure or delay on the part of the Holder in exercising any
right under this Security shall impair any such right or operate as a waiver
thereof. No waiver of any such rights shall be effective unless given in
writing.
11
15. Any depository institution, as that term is defined in section 3(c)(1)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)), to which this Security
is issued shall be deemed to have agreed by acquiring this Security that any
rights of such institution to offset all or any portion of the indebtedness
represented by this Security against any indebtedness or other obligations of
such institution to the Bank under applicable law are hereby waived by such
institution.
12
EXHIBIT B
Form of Restricted Certificated Note
[See attached]
CERTIFICATED NOTE
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE OR OTHER APPLICABLE SECURITIES LAW,
AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (OTHER THAN THE EXEMPTION CONTAINED IN SECTION 3(A)(2) THEREOF)
AND ANY STATE OR OTHER APPLICABLE SECURITIES LAW. EACH PURCHASER OF THIS NOTE IS
HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE
DATE HEREOF AND THE LAST DATE ON WHICH STERLING BANK (THE "BANK") OR ANY
"AFFILIATE" OF THE BANK WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) ONLY: (A) TO THE BANK; (B) SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A; (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT (OTHER THAN THE EXEMPTION
CONTAINED IN SECTION 3(A)(2) THEREOF), SUBJECT TO THE RIGHT OF THE BANK PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (C) OR (D) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (II) PURSUANT TO CLAUSE (C) TO REQUIRE THAT
THE TRANSFEROR DELIVER TO THE BANK A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN
THE FORM OF ANNEX A TO THE OFFERING CIRCULAR DATED APRIL 3, 2003. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS SECURITY IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THIS SECURITY IS UNSECURED
AND IS INELIGIBLE TO SERVE AS COLLATERAL FOR ANY LOAN BY THE BANK, AND THE
OBLIGATIONS OF THE BANK EVIDENCED BY THIS SECURITY ARE, TO THE EXTENT AND IN THE
MANNER SET FORTH IN SECTION 5 HEREOF, SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT
TO THE BANK'S OBLIGATIONS TO ITS DEPOSITORS AND THE BANK'S OTHER OBLIGATIONS TO
ITS GENERAL CREDITORS AND TO ITS SECURED CREDITORS.
STERLING BANK
7.375% Subordinated Note due 2013
$
No. 1
CUSIP:
For value received, STERLING BANK, a Texas state chartered banking
association (together with any successor pursuant to the provisions hereof, the
"Bank"), hereby promises to pay to or registered assigns, the principal
sum of $ on April 15, 2013 (the "Date of Maturity"), or on such earlier date
as the principal hereof may become due in accordance with the provisions hereof,
and to pay interest on said principal sum from time to time outstanding, from
the date hereof until payment of said principal sum has been made or duly
provided for, at the rate of [ ]% per annum, payable semi-annually in arrears
on April 15 and October 15 of each year, commencing on October 15, 2003 (each an
"Interest Payment Date"). Payments of principal and interest hereunder shall be
made in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts and
shall be made immediately available to the Holder hereof. Interest payments on
this Security shall be the amount of interest accrued to, but excluding, the
relevant Interest Payment Date or Date of Maturity, as the case may be. Interest
will be calculated on the basis of a 360-day year of twelve 30-day months.
If any Interest Payment Date or Date of Maturity of this Security would
otherwise be a day which is not a business day (as defined below), the related
payment of principal of or interest on this Security shall be postponed to the
next day which is a business day with the same force and effect as if made on
the date such payment were due, and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date or Date of
Maturity, as the case may be. The term "business day" means any day that is not
a Saturday or Sunday, and that is not a day on which commercial banks in New
York, New York or Houston, Texas are required or permitted by applicable law or
regulation to be closed. Except as provided above, interest on this Security
will accrue on holidays and on all days the Bank is not open for business.
2
Reference is 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 though fully set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Fiscal and Paying Agent by the manual signature of one of its authorized
signatories, this Security shall not be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Bank has caused this Security to be duly executed
and attested as of the date first mentioned above.
STERLING BANK
By:
------------------------------------
Name:
Title:
Attest:
----------------------------------------
Name:
Title:
This Security is one of the Subordinated Notes
referred to in the Fiscal and Paying Agency
Agreement referred to herein:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Fiscal and Paying Agent
By:
-------------------------------------
Name:
Title:
Dated:
3
1. This Security is one of the duly authorized issue of securities of
the Bank, designated as its "7.375% Subordinated Notes due 2013" (each a
"Security," and collectively the "Securities"), initially limited in aggregate
principal amount to $50,000,000. The Bank, for the benefit of the Holders from
time to time of the Securities, has entered into a Fiscal and Paying Agency
Agreement, dated as of April 10, 2003 (as the same may be amended, supplemented
or otherwise modified from time to time, the "Fiscal and Paying Agency
Agreement"), between the Bank and Deutsche Bank Trust Company Americas
("Deutsche Bank"), as Fiscal and Paying Agent. Copies of the Fiscal and Paying
Agency Agreement are on file and available for inspection at the offices of the
Fiscal and Paying Agent located at Deutsche Bank Trust Company Americas, Attn:
Corporate Trust and Agency Services, or at such other place or places as the
Fiscal and Paying Agent shall designate by notice to the person in whose name
this Security is registered (the "Holder") on the Security Register (as defined
in Section 3 of this Security). Deutsche Bank or any duly appointed successor
Fiscal and Paying Agent acting in such capacity is herein called the "Fiscal and
Paying Agent."
The Bank may, in accordance with the terms of the Fiscal and Paying Agency
Agreement, reopen the issue of Securities and issue additional principal amounts
of the Securities or establish additional terms of the Securities.
Payments of principal and interest payable at maturity will be made in
immediately available funds, upon presentation and surrender of this Security,
at the corporate trust office of the Fiscal and Paying Agent in New York, New
York, or at such other place or places as the Fiscal and Paying Agent shall
designate by notice to the Holder, provided that this Security is presented to
the Fiscal and Paying Agent in time for the Fiscal and Paying Agent to make such
payments in such funds in accordance with its normal procedures and subject to
such terms and conditions as the Fiscal and Paying Agent may impose consistent
with the Fiscal and Paying Agency Agreement. Payments of interest (other than
interest payable at stated maturity or any interest that is not punctually paid
or duly provided for on any Interest Payment Date ("Defaulted Interest")) shall
be paid by wire transfer or by check, mailed to the Holder at its address
specified in the Security Register on the Record Date (as defined below) or to
such other address in the United States as the Holder shall designate to the
Fiscal and Paying Agent in writing not later than the relevant Record Date.
Notwithstanding the foregoing, payments of interest to the Depository or its
nominee shall be made by wire transfer in immediately available funds and if any
other Holder hereof owns $1,000,000 or more in aggregate principal amount of the
Securities, such Holder may elect to receive payments of interest (other than
interest payable at stated maturity) by wire transfer of immediately available
funds to a bank account in the United States designated by the Holder in a
written notice received by the Fiscal and Paying Agent not later than 15
calendar days prior to the applicable Interest Payment Date. Interest payable on
any Interest Payment Date shall be payable to the person in whose name this
Security is registered at the close of business 15 calendar days prior to the
applicable Interest Payment Date (such date being referred to herein as the
"Regular Record Date" for such Interest Payment Date), notwithstanding the
subsequent cancellation of this Security prior to such Interest Payment Date,
except that any Defaulted Interest will be paid to the person in whose name this
Security is registered on a Special Record Date fixed by the Fiscal and Paying
Agent (a "Special Record Date"). The terms Regular Record Date and Special
Record Date are referred to hereinafter collectively as the "Record Date." To
the extent permitted by applicable law, interest shall
4
accrue, at the rate at which interest accrues on the principal of this Security,
on any amount of principal of or interest on this Security not paid when due.
2. Until the date on which all of the Securities shall have been
surrendered or delivered to the Fiscal and Paying Agent for cancellation or
destruction, or become due and payable and a sum sufficient to pay the principal
of and interest on all of the Securities shall have been made available for
payment and either paid to the registered Holders of the Securities or returned
to the Bank as provided herein and in the Fiscal and Paying Agency Agreement,
the Fiscal and Paying Agent shall at all times maintain an office or agency in
New York, New York, where Securities may be presented or surrendered for payment
or for transfer or exchange.
3. As provided in the Fiscal and Paying Agency Agreement and subject to
certain limitations set forth therein, this Security is transferable in whole or
in part, and may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations, by the Holder in person, or by its
attorney duly authorized in writing, at the office of the Fiscal and Paying
Agent maintained for such purpose. The Fiscal and Paying Agent shall maintain a
register providing for the registration of the Securities and any exchange or
transfer thereof (the "Security Register"). Upon surrender or presentation of
this Security for exchange or registration of transfer, and subject to certain
limitations set forth in the Fiscal and Paying Agency Agreement, the Bank shall
execute and the Fiscal and Paying Agent shall authenticate and deliver in
exchange therefor a Security or Securities, each in minimum denominations of
$250,000 or any amount in excess thereof which is an integral multiple of $1,000
which has or have an aggregate principal amount equal to the aggregate principal
amount of this Security being transferred or exchanged and is or are registered
in such name or names requested by the Holder. Any Security presented or
surrendered for registration of transfer or for exchange shall (if so required
by the Fiscal and Paying Agent) be duly endorsed, or accompanied by a written
instrument of transfer with such evidence of due authorization and guarantee of
signature as may reasonably be required by the Fiscal and Paying Agent in form
satisfactory to the Fiscal and Paying Agent, duly executed by the Holder or his
or her attorney duly authorized in writing, and with such tax identification
number or other information for each person in whose name a Security is to be
issued as the Fiscal and Paying Agent may reasonably request to comply with
applicable law. No exchange or registration of transfer of this Security shall
be made after the fifteenth calendar day immediately preceding the Date of
Maturity.
This Security or portions hereof may be transferred or exchanged only in
principal amounts of not less than $250,000 and integral multiples of $1,000 in
excess thereof. Any transfer, exchange or other disposition of this Security in
a block having an aggregate principal amount of less than $250,000 shall be
deemed to be void and of no legal effect whatsoever, any such transferee shall
be deemed not to be the Holder or owner of any beneficial interest in this
Security for any purpose, including but not limited to the receipt of interest
payable on this Security, and such transferee shall be deemed to have no
interest whatsoever in this Security.
No service charge (other than any cost of delivery) shall be imposed for
any exchange or registration of transfer of this Security, but the Bank or the
Fiscal and Paying Agent may require the payment of a sum sufficient to cover any
stamp or other tax or governmental charge that may be imposed in connection
therewith (or presentation of evidence that such tax or charge has been paid).
5
The Bank and the Fiscal and Paying Agent may treat the person in whose
name this Security is registered in the Security Register as the absolute owner
of this Security for the purpose of receiving payments of principal of and
interest on this Security and for all other purposes whatsoever, and the Bank
and the Fiscal and Paying Agent shall not be affected by a notice to the
contrary.
4. PREPAYMENT AND NON-CONVERSION.
(a) This Security is not subject to redemption, call or prepayment
at the option of the Bank, or to repayment at the option of the Holder, prior to
the Date of Maturity.
(b) This Security is not convertible into the common stock or any
other security of the Bank.
5. SUBORDINATION; RIGHTS OF FDIC.
(a) The indebtedness of the Bank evidenced by this Security,
including the obligations of the Bank to pay the principal hereof and interest
hereunder, is unsecured and subordinate and junior in right of payment to the
Bank's obligations to its depositors, its obligations under bankers' acceptances
and letters of credit, and its obligations to its general unsecured creditors
and to its secured creditors (except for obligations that are specifically
designated as ranking on a parity with or junior to this Security) whether now
outstanding or hereafter incurred, in that in the event of any insolvency,
receivership, conservatorship, reorganization, readjustment of debt, marshalling
of assets and liabilities or similar proceedings or any liquidation or
winding-up of or relating to the Bank, whether voluntary or involuntary, all
such obligations (except obligations which rank on a parity with or are junior
to this Security) shall be entitled to be paid in full before any payment shall
be made on account of the principal of or interest on this Security. In the
event of any such proceeding, after payment in full of all sums owing with
respect to such prior obligations, the Holder of this Security, together with
the holders of any obligations of the Bank ranking on a parity with this
Security, shall be entitled to be paid from the remaining assets of the Bank the
unpaid principal of and interest hereon and thereon 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 Bank ranking junior to this
Security. Nothing herein shall impair the obligation of the Bank, which is
absolute and unconditional, to pay the principal of and interest on this
Security in accordance with its terms.
(b) Notwithstanding any other provisions of this Security, including
Sections 5, 6 and 7 hereof, it is expressly understood and agreed that the FDIC
or any other receiver or conservator of the Bank shall have the right in the
performance of its legal duties, and as part of any transaction or plan of
reorganization or liquidation designed to protect or further the continued
existence of the Bank or the rights of any parties or agencies with an interest
in, or claim against, the Bank or its assets, to transfer or direct the transfer
of the obligations of this Security to any bank or bank holding company selected
by such official which shall expressly assume the obligation of the due and
punctual payment of the unpaid principal of and interest on this Security and
the due and punctual performance of all covenants and conditions hereof; and the
completion of such transfer and assumption shall serve to supersede and void any
default acceleration or subordination which may have occurred or which may occur
due or related to
6
such transaction, plan, transfer or assumption, pursuant to the provisions of
this Security, and shall serve to return the Holder hereof to the same position,
other than for substitution of the obligor, it would have occupied had no
default, acceleration or subordination occurred; except that any interest and
principal previously due, other than by reason of acceleration, and not paid
shall, in the absence of a contrary agreement by the Holder, be deemed to be
immediately due and payable as of the date of such transfer and assumption,
together with interest thereon from its original due date at the rate provided
for herein.
(c) This Security and any Securities issued subsequently hereto will
rank pari passu among themselves and pari passu, in the event of a liquidation
or similar proceeding with respect to the Bank, whether voluntary or
involuntary, with all other present or future unsecured subordinated debt
obligations of the Bank other than subordinated debt obligations of the Bank
that by their express terms rank junior to this Security.
(d) This Security contains no limitation on the amount of debt,
deposits or other obligations that rank senior to this Security that may be
hereafter incurred or assumed by the Bank.
(e) Notwithstanding any other provisions of this Security, the Bank
shall not make any payment of (i) any interest on this Security while it remains
in default in the payment of any assessment due to the FDIC if and to the extent
it would be prohibited from doing so by 12 U.S.C. Section 1828(b), (ii) any
interest due or principal repayable without the prior written approval of the
Commissioner of the Texas Department of Banking, when the Bank is in a
"hazardous condition or is insolvent" (as defined in Section 31.002(a) of the
Texas Banking Act, or any successor provision) or which would cause the Bank to
be in a "hazardous condition or insolvent," as determined in all cases by the
Banking Commissioner of Texas, and (iii) any principal or interest without the
approval of the FDIC, beginning 60 days after the Bank becomes "critically
undercapitalized," as that term is defined in 12 U.S.C. Section 1831o(b)(1)(E)
and the rules and regulations promulgated thereto.
6. EVENTS OF DEFAULT; REMEDIES.
"Event of Default", wherever used herein, means either of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Bank shall consent to the appointment of a receiver or other
similar official (other than a conservator) in any liquidation, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Bank or of or relating to all or substantially
all of the property of the Bank; or
(ii) the Bank suffers to be entered a decree or order of a court or
agency or supervisory authority for the appointment of a receiver or other
similar official (other than a conservator) in any liquidation, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Bank, or of or relating to all or
substantially
7
all of the property of the Bank, or for the winding up or liquidation of the
Bank, and such decree or order shall remain in force, undischarged or unstayed
for a period of 60 days.
If an Event of Default shall occur, the Holder may, at its option, by
written notice to the Bank and the Fiscal and Paying Agent, declare this
Security to be, and upon such declaration, unless, in accordance with the terms
of the Fiscal and Paying Agent Agreement, the Fiscal and Paying Agent shall have
received notice from the Bank that all Events of Default have been cured by the
Bank or waived by the Holder of this Security, the principal of and interest on
this Security shall become immediately due and payable; provided, however, that
no repayment by acceleration or otherwise of this Security, other than at the
Date of Maturity, may be made without the prior written approval of the FDIC and
the Banking Commissioner of Texas.
There is no right of acceleration in the case of a default in the payment
of principal or interest on the Securities or the performance of any other
obligation of the Bank under the Fiscal and Paying Agency Agreement or contained
herein.
The Fiscal and Paying Agency Agreement provides that the Bank will
promptly notify the Fiscal and Paying Agent of an Event of Default upon the
occurrence thereof, and the Fiscal and Paying Agent will promptly mail by
first-class mail, postage prepaid, copies of such notice to the Holders of the
Securities.
7. MERGER; CONSOLIDATION.
Nothing contained herein shall prevent any consolidation or merger of the
Bank with any other corporation, bank or other legal entity (collectively,
"corporation") or shall prevent any sale, conveyance, transfer or lease of the
property of the Bank to any other corporation; provided, however, that any such
consolidation, merger, sale or conveyance shall be upon the condition that: (i)
the newly-formed corporation, or the corporation to which such sale or
conveyance shall have been made, shall not be in default in the performance or
observance of any of the terms of the Securities to be observed or performed by
the Bank; and (ii) the surviving corporation (if other than the Bank), or the
corporation to which such sale or conveyance shall have been made, shall be a
corporation organized under the laws of the United States or any state thereof
or the District of Columbia and shall expressly assume the obligation for the
payment of the principal and interest on the Securities. In case of any such
consolidation, merger, sale, conveyance, transfer or lease, and upon the
assumption by the successor corporation of the performance of all of the
covenants in the Securities to be performed or observed by the Bank, such
successor corporation shall succeed to the Bank with the same effect as if it
had been named in the Securities as the Bank and thereafter, except in the case
of a lease, the predecessor corporation shall be relieved of all obligations and
covenants in the Securities and may be liquidated and dissolved.
8. All notices to the Bank under this Security shall be in writing and
addressed to the Bank at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President and Chief Financial
Officer, or to such other address as the Bank may notify the Holder. All notices
to the Fiscal and Paying Agent shall be in writing and addressed to the Fiscal
and Paying Agent at the office of the Fiscal and Paying Agent at Deutsche Bank
Trust Company Americas, Attn: Corporate Trust and Agency Services, ▇▇ ▇▇▇▇
▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. All notices to the Holder shall be in writing
and sent by first-class mail to the Holder at his, her or its address as set
forth in the Security Register.
9. In acting under the Fiscal and Paying Agency Agreement, the Fiscal and
Paying Agent is acting solely as the agent of the Bank and does not assume any
obligation or relationship of agency or trust with the Holder except as
specifically described herein or therein. Under the terms of the Fiscal and
Paying Agency Agreement, the Bank may rescind the designation of any Fiscal and
Paying Agent and appoint a new Fiscal and Paying Agent in respect of the
Securities or undertake to perform at the Bank the functions of the Fiscal and
Paying Agent or change the address of a Fiscal and Paying Agent to another
location in [New York, New York]. The Bank shall notify, or cause the Fiscal and
Paying Agent to notify, the Holders of Securities of the removal or appointment
of any Fiscal and Paying Agent or the undertaking of the Bank to perform at the
Bank the functions of the Fiscal and Paying Agent.
10. The Securities are issuable without interest coupons and in minimum
denominations of $250,000 or any amount in excess thereof which is an integral
multiple of $1,000.
11. In the event of the failure by the Bank to make payment of principal
of or interest on this Security (and, in the case of payment of interest, such
failure to pay shall have continued for 5 days), the Bank will, upon demand of
the Holder of this Security, pay to the Holder of this Security the whole amount
then due and payable (without acceleration) on this Security for principal and
interest with interest on the overdue principal and interest at the rate borne
by this Security, to the extent permitted by applicable law. If the Bank fails
to pay such amount upon such demand, the Holder of this Security may, among
other things, institute a judicial proceeding for the collection.
12. The Fiscal and Paying Agency Agreement provides, in certain limited
circumstances, for the modification of the rights of the holders of the
Securities by the Bank without the consent of the holders of the Securities,
except that the consent of all holders of outstanding Securities affected
thereby is required in order to change the Date of Maturity of the Securities,
to change the definition of Interest Payment Date or reduce the principal amount
of or the rate of interest on the Securities, or to change the coin or currency
in which any Security or the interest thereon is payable, to change the place of
payment where principal of or interest on the Securities is payable to a place
outside New York, New York, to impair the right of the holders of the Securities
to institute suit for the enforcement of payments of principal of or interest or
other amounts on the Securities on or after the Date of Maturity or due date
therefor, to modify the subordination provisions of the Securities in any manner
adverse to the holders of Securities or to modify the provisions of the Fiscal
and Paying Agency Agreement governing the amendment thereof and of the
Securities.
13. MISCELLANEOUS.
(a) This Security shall be governed by, and construed in accordance
with, the laws of the State of New York.
9
(b) Notwithstanding anything contained in Section 6 hereof (other
than the second and third to last paragraphs thereof) the Holder of this
Security (i) may exercise all remedies otherwise permitted by applicable law
upon an Event of Default, subject only to the rights, if any, of the Bank's
depositors and the holders of any indebtedness of the Bank which is senior to
the indebtedness of the Bank evidenced by this Security, and (ii) for the
purpose of determining (A) the persons entitled to participate in any
distribution of the Bank's assets, (B) the holders of any such senior
indebtedness or any other indebtedness due of the Bank, (C) the amounts of any
such indebtedness or payable thereon, (D) the amount or amounts to be paid or
distributed with respect to any of the foregoing, and (E) any other facts
pertinent to the same or to Section 6 hereof, may rely upon any order or decree
issued by any court of competent jurisdiction (including, without limitation,
any order or decree for any payment or distribution of the Bank's assets) before
which any proceeding is brought, or any certificate of any liquidating trustee,
agent or other person making any distribution to such holder.
(c) All captions are for convenience only and shall not affect the
meaning of the provisions to which they relate.
(d) This Security and each of its terms shall be binding upon and
inure to the benefit of the Bank, the Holders, the Depository or its nominee,
the Fiscal and Paying Agent and their respective successors and assigns.
(e) Except as otherwise expressly required herein, the Bank waives
demand, presentment for payment, notice of non-payment, notice of protest, and
all other notices.
(f) Any consent or waiver given 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.
14. No reference herein to the Fiscal and Paying Agency Agreement and no
provision of this Security shall alter or impair the obligation of the Bank,
which is absolute and unconditional, to pay the principal of and interest on
this Security at the times, place and rate, and in the coin or currency, herein
prescribed. No failure or delay on the part of the Holder in exercising any
right under this Security shall impair any such right or operate as a waiver
thereof. No waiver of any such rights shall be effective unless given in
writing.
15. Any depository institution, as that term is defined in section 3(c)(1)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)), to which this Security
is issued shall be deemed to have agreed by acquiring this Security that any
rights of such institution to offset all or any portion of the indebtedness
represented by this Security against any indebtedness or other obligations of
such institution to the Bank under applicable law are hereby waived by such
institution.
10
EXHIBIT C
Form of Legend
THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE OR OTHER APPLICABLE
SECURITIES LAW, AND THIS SUBORDINATED NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (OTHER THAN THE EXEMPTION CONTAINED IN
SECTION 3(A)(2) THEREOF) AND ANY STATE OR OTHER APPLICABLE SECURITIES LAW. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SUBORDINATED NOTE, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH STERLING BANK (THE
"BANK") OR ANY "AFFILIATE" OF THE BANK WAS THE OWNER OF THIS SUBORDINATED NOTE
(OR ANY PREDECESSOR OF THIS SUBORDINATED NOTE) ONLY: (A) TO THE BANK; (B) SO
LONG AS THIS SUBORDINATED NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A; (C) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN MEANING OF SUBPARAGRAPH (A)(1), (2),
(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SUBORDINATED NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR
FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT (OTHER THAN THE EXEMPTION
CONTAINED IN SECTION 3(A)(2) THEREOF), SUBJECT TO THE RIGHT OF THE BANK PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (C) OR (D) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (II) PURSUANT TO CLAUSE (C) TO REQUIRE THAT
THE TRANSFEROR DELIVER TO THE BANK A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN
THE FORM OF ANNEX A TO THE OFFERING CIRCULAR DATED APRIL 3, 2003. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SUBORDINATED
NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
EXHIBIT D
FORM OF TRANSFER/EXCHANGE CERTIFICATE
FOR TRANSFER/EXCHANGE FROM RESTRICTED CERTIFICATED
NOTE TO BENEFICIAL INTERESTS IN A RULE 144A GLOBAL NOTE
(TRANSFERS AND EXCHANGES PURSUANT TO SECTION 2.6(D)(I) OF THE FISCAL AND PAYING
AGENCY AGREEMENT)
Deutsche Bank Trust Company Americas
Corporate Trust & Agency Services
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: 7.375% Subordinated Notes due 2013
of Sterling Bank (the "Notes")
Reference is hereby made to the Fiscal and Paying Agency Agreement, dated as of
April 10, 2003, between Sterling Bank (the "Bank") and Deutsche Bank Trust
Company Americas, as fiscal and paying agent (the "Fiscal and Paying Agent").
Capitalized terms used but not defined herein shall have the meanings given to
them in the Fiscal and Paying Agency Agreement.
This letter relates to US$_________ principal amount of Restricted Certificated
Notes presented or surrendered on the date hereof (the "Surrendered Notes")
which are registered in the name of [insert name of transferor/exchanger] (the
"Transferor"). The Transferor has requested a transfer or exchange of such
Surrendered Notes to a person that will take delivery thereof in the form of
beneficial interests in one or more Rule 144A Global Notes (CUSIP [ISIN] No.
85916D BH 7).
In connection with such request and in respect of such Surrendered Notes, the
Transferor does hereby certify that such transfer or exchange is being effected
pursuant to and in accordance with Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, the Transferor does hereby
further certify that the Surrendered Notes are being transferred to a person
that the Transferor reasonably believes is purchasing the Surrendered Notes for
its own account, or for one or more accounts with respect to which such person
exercises sole investment discretion, and such person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A to whom notice
has been given that the transfer is being made in reliance on Rule 144A, in each
case in a transaction meeting the requirements of Rule 144A, and in accordance
with any applicable securities laws of any state of the United States or any
other jurisdiction.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Bank and the initial purchasers, if any, of the initial
offering of such Notes being transferred or exchanged.
[Insert Name of Transferor]
By:
---------------------------
Name:
Title:
Dated:
---------------------------
cc: STERLING BANK
EXHIBIT E
FORM OF LETTER TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
As initial purchasers
Sterling Bank
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs or Mesdames:
We are delivering this letter in connection with an offering of 7.375%
subordinated notes due 2013 (the "subordinated notes") of Sterling Bank (the
"Bank"), all as described in the offering circular (the "offering circular")
relating to the offering.
We hereby confirm that:
(a) we are an institutional "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended (the "Securities Act") (an "institutional accredited
investor") able to bear the economic risk of an investment in the
subordinated notes for an indefinite period of time;
(b) any purchase of the subordinated notes by us will be for our own
account (or for the account of one or more other institutional
accredited investors for which we exercise sole investment
discretion) for investment purposes;
(c) in the event that we purchase any of the subordinated notes, we will
acquire subordinated notes having a minimum purchase price of not
less than $250,000, in each case for our own account or for any
separate account for which we are acting;
(d) we invest in or purchase securities similar to the subordinated
notes during the normal course of our business and have such
knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of purchasing the
subordinated notes;
(e) we are not acquiring the subordinated notes with a view to, or for
offer or sale in connection with, any distribution in violation of
the Securities Act;
(f) we have received a copy of the offering circular (upon which we are
relying in making our investment decision with respect to the
subordinated notes) and acknowledge (i) that we have had access to
such financial and other information, and have been afforded the
opportunity to ask such questions of the Bank and the initial
purchasers and receive answers thereto, as we deem necessary in
connection with our decision to purchase the subordinated notes and
(ii) that neither the Bank nor the
initial purchasers, nor any person representing the Bank or the
initial purchasers, has made any representation to us with respect
to the Bank or the offering or sale of any subordinated notes; and
(g) neither the Bank nor any person acting on its behalf has offered to
sell the subordinated notes by, and we have not been made aware of
the offering of the subordinated notes by, any form of general
solicitation or general advertising, including, but not limited to,
any advertisement, article, notice or other communication published
in any newspaper, magazine or similar media or broadcast over
television or radio.
We understand that the subordinated notes are being offered in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the subordinated notes have not been
registered under the Securities Act or any other applicable securities law, and
we agree, on our own behalf and on behalf of each account for which we acquire
any subordinated notes, that if in the future we decide to offer, resell, pledge
or otherwise transfer such subordinated notes, such subordinated notes shall be
offered, resold, pledged or otherwise transferred only (a) to the Bank, (b) to a
person whom we reasonably believe is a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act), (c) to a person whom we
reasonably believe is an institutional accredited investor in a transaction in
which the institutional accredited investor, prior to the transfer, furnishes to
the Bank a signed letter substantially in the form of this letter or (d)
pursuant to any other available exemption from the registration requirements of
the Securities Act (other than the exemption contained in Section 3(a)(2)
thereof), in each of cases (a) through (d), in accordance with any applicable
securities laws of any state of the United States or any other applicable
jurisdiction. We understand that, prior to any transfer referred to in clause
(c) of the preceding sentence, we must furnish to the Bank such certifications,
legal opinions and other information as the Bank may reasonably require to
confirm that such transfer is being made pursuant to an exemption (other than
the exemption contained in Section 3(a)(2) of the Securities Act) from, or in a
transaction not subject to, the registration requirements of the Securities Act
and any state or other applicable securities laws.
We understand and acknowledge that the subordinated notes will delivered
to us only in certificated form and that the certificates delivered to us in
respect of the subordinated notes will contain a legend substantially to the
following effect:
THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE OR OTHER APPLICABLE
SECURITIES LAW, AND THIS SUBORDINATED NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (OTHER THAN THE EXEMPTION
CONTAINED IN SECTION 3(A)(2) THEREOF) AND ANY STATE OR OTHER APPLICABLE
SECURITIES LAW. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SUBORDINATED NOTE, PRIOR TO THE
DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH
STERLING BANK (THE "BANK") OR ANY "AFFILIATE" OF THE BANK WAS THE OWNER OF
THIS SUBORDINATED NOTE (OR ANY PREDECESSOR OF THIS SUBORDINATED NOTE)
ONLY: (A) TO THE BANK; (B) SO LONG AS THIS SUBORDINATED NOTE IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"),
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A; (C) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR
(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SUBORDINATED NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (D) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT
(OTHER THAN THE EXEMPTION CONTAINED IN SECTION 3(A)(2) THEREOF), SUBJECT
TO THE RIGHT OF THE BANK PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I)
PURSUANT TO CLAUSE (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (II) PURSUANT TO CLAUSE (C) TO REQUIRE THAT THE TRANSFEROR
DELIVER TO THE BANK A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM
OF ANNEX A TO THE OFFERING CIRCULAR DATED APRIL 3, 2003. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SUBORDINATED NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
We acknowledge that you, the Bank and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
Name of Purchaser
Date:
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By:
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Name:
Title:
Address:
EXHIBIT F
Certificate Evidencing Incumbency
and Specimen Signatures
[See attached]
STERLING BANK
INCUMBENCY CERTIFICATE
The undersigned, [ ], Corporate Secretary of Sterling Bank
(the "Bank"), does hereby certify that the persons listed on Exhibit A attached
hereto are now and have been at all times on and since [ ] duly elected,
qualified and acting officers of the Bank, holding the offices set forth
opposite their names and that the signature set forth opposite each officer's
name is the genuine signature of such person. This certificate may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, I have signed this Incumbency Certificate
as of the 10th day of April, 2003.
STERLING BANK
By:
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Name:
Title:
The undersigned, [ ], [TITLE] of the Bank, hereby certifies
that [ ] is the duly elected Corporate Secretary of the Bank and is duly
authorized to execute the foregoing Incumbency Certificate, and that the
signature set forth on the foregoing Incumbency Certificate above her name is
[his/her] genuine signature.
By:
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Name:
Title:
EXHIBIT A
Name Title Signature
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