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INDENTURE
DATED AS OF NOVEMBER 7, 1997
AMONG
METRIS COMPANIES INC., AS ISSUER,
THE GUARANTORS NAMED HEREIN
AND
THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE
__________________
$100,000,000
10% SENIOR NOTES DUE 2004, SERIES A
10% SENIOR NOTES DUE 2004, SERIES B
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CROSS-REFERENCE TABLE
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
--------------- ---------
Sections 310(a)(1)............................................ 7.10
(a)(2)............................................ 7.10
(a)(3)............................................ N.A.
(a)(4)............................................ N.A.
(a)(5)............................................ 7.08, 7.10.
(b)............................................... 7.08; 7.10; 11.02
(c)............................................... N.A.
Sections 311(a)............................................... 7.11
(b)............................................... 7.11
(c)............................................... N.A.
Sections 312(a)............................................... 2.05
(b)............................................... 11.03
(c)............................................... 11.03
Sections 313(a)............................................... 7.06
(b)(1)............................................ N.A.
(b)(2)............................................ 7.06
(c)............................................... 7.06; 11.02
(d)............................................... 7.06
Section 314(a)............................................... 4.09; 4.11; 11.02
(b)............................................... N.A.
(c)(1)............................................ 11.04
(c)(2)............................................ 11.04
(c)(3)............................................ N.A.
(d)............................................... N.A.
(e)............................................... 11.05
(f)............................................... N.A.
Sections 315(a)............................................... 7.01(b)
(b)............................................... 7.05; 11.02
(c)............................................... 7.01(a)
(d)............................................... 7.01(c)
(e)............................................... 6.11
Sections 316(a)(last sentence)................................ 2.09
(a)(1)(A)......................................... 6.05
(a)(1)(B)......................................... 6.04
(a)(2)............................................ N.A.
(b)............................................... 6.07
(c)............................................... 9.04
Sections 317(a)(1)............................................ 6.08
(a)(2)............................................ 6.09
(b)............................................... 2.04
Sections 318(a)............................................... 11.01
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N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
TABLE OF CONTENTS
PAGE
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.................................................. 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act............ 16
SECTION 1.03. Rules of Construction........................................ 16
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.............................................. 17
SECTION 2.02. Execution and Authentication................................. 17
SECTION 2.03. Registrar and Paying Agent................................... 18
SECTION 2.04. Paying Agent To Hold Assets in Trust......................... 19
SECTION 2.05. Holder Lists................................................. 19
SECTION 2.06. Transfer and Exchange........................................ 19
SECTION 2.07. Replacement Securities....................................... 20
SECTION 2.08. Outstanding Securities....................................... 20
SECTION 2.09. Treasury Securities.......................................... 20
SECTION 2.10. Temporary Securities......................................... 21
SECTION 2.11. Cancellation................................................. 21
SECTION 2.12. Defaulted Interest........................................... 21
SECTION 2.13. CUSIP Number................................................. 21
SECTION 2.14. Deposit of Moneys............................................ 22
SECTION 2.15. Book-Entry Provisions for Global Securities.................. 22
SECTION 2.16. Registration of Transfers and Exchanges...................... 23
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee........................................... 26
SECTION 3.02. Selection of Securities To Be Redeemed....................... 27
SECTION 3.03. Notice of Redemption......................................... 27
SECTION 3.04. Effect of Notice of Redemption............................... 28
SECTION 3.05. Deposit of Redemption Price.................................. 28
SECTION 3.06. Securities Redeemed in Part.................................. 28
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities........................................ 28
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SECTION 4.02. Maintenance of Office or Agency.............................. 29
SECTION 4.03. Limitation on Transactions with Affiliates................... 29
SECTION 4.04. Limitation on Indebtedness................................... 29
SECTION 4.05. Payments for Consents........................................ 31
SECTION 4.06. Limitation on Investment Company Status...................... 31
SECTION 4.07. Limitation on Asset Sales.................................... 31
SECTION 4.08. Limitation on Restricted Payments............................ 33
SECTION 4.09. Notice of Defaults........................................... 35
SECTION 4.10. Limitation on Liens.......................................... 35
SECTION 4.11. Reports...................................................... 35
SECTION 4.12. Limitations on Dividend and Other Payment Restrictions
Affecting Subsidiaries...................................... 35
SECTION 4.13. Additional Subsidiary Guarantees............................. 36
SECTION 4.14. Offer to Purchase upon Change of Control..................... 36
SECTION 4.15. Compliance Certificate....................................... 37
SECTION 4.16. Corporate Existence.......................................... 37
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc................................. 38
SECTION 5.02. Successor Corporation Substituted............................ 39
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default............................................ 39
SECTION 6.02. Acceleration................................................. 40
SECTION 6.03. Other Remedies............................................... 41
SECTION 6.04. Waiver of Past Default....................................... 41
SECTION 6.05. Control by Majority.......................................... 41
SECTION 6.06. Limitation on Suits.......................................... 42
SECTION 6.07. Rights of Holders To Receive Payment......................... 42
SECTION 6.08. Collection Suit by Trustee................................... 42
SECTION 6.09. Trustee May File Proofs of Claim............................. 42
SECTION 6.10. Priorities................................................... 43
SECTION 6.11. Undertaking for Costs........................................ 43
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee............................................ 44
SECTION 7.02. Rights of Trustee............................................ 45
SECTION 7.03. Individual Rights of Trustee................................. 46
SECTION 7.04. Trustee's Disclaimer......................................... 46
SECTION 7.05. Notice of Defaults........................................... 46
SECTION 7.06. Reports by Trustee to Holders................................ 46
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SECTION 7.07. Compensation and Indemnity................................... 47
SECTION 7.08. Replacement of Trustee....................................... 48
SECTION 7.09. Successor Trustee by Merger, etc............................. 48
SECTION 7.10. Eligibility; Disqualification................................ 49
SECTION 7.11. Preferential Collection of Claims Against Company............ 49
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations..................... 49
SECTION 8.02. Legal Defeasance and Covenant Defeasance..................... 50
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance........ 50
SECTION 8.04. Application of Trust Money; Trustee Acknowledgment and
Indemnity................................................... 52
SECTION 8.05. Repayment to Company......................................... 52
SECTION 8.06. Reinstatement................................................ 52
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders................................... 53
SECTION 9.02. With Consent of Holders...................................... 53
SECTION 9.03. Compliance with Trust Indenture Act.......................... 54
SECTION 9.04. Record Date for Consents and Effect of Consents.............. 55
SECTION 9.05. Notation on or Exchange of Securities........................ 55
SECTION 9.06. Trustee To Sign Amendments, etc.............................. 55
ARTICLE TEN
GUARANTEE
SECTION 10.01. Unconditional Guarantee..................................... 55
SECTION 10.02. Severability................................................ 56
SECTION 10.03. Release of a Guarantor...................................... 56
SECTION 10.04. Limitation of Guarantor's Liability......................... 57
SECTION 10.05. Contribution................................................ 57
SECTION 10.06. Execution of Security Guarantee............................. 57
SECTION 10.07. Subordination of Subrogation and Other Rights............... 57
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls................................ 58
SECTION 11.02. Notices..................................................... 58
SECTION 11.03. Communications by Holders with Other Holders................ 59
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.......... 59
SECTION 11.05. Statements Required in Certificate.......................... 60
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar................... 60
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SECTION 11.07. Governing Law............................................... 60
SECTION 11.08. No Recourse Against Others.................................. 60
SECTION 11.09. Successors.................................................. 60
SECTION 11.10. Counterpart Originals....................................... 60
SECTION 11.11. Severability................................................ 61
SECTION 11.12. No Adverse Interpretation of Other Agreements............... 61
SECTION 11.13. Legal Holidays.............................................. 61
SIGNATURES................................................................. S-1
EXHIBIT A Form of Series A Security........................................ A-1
EXHIBIT B Form of Series B Security........................................ B-1
EXHIBIT C Form of Legend for Global Securities............................. C-1
EXHIBIT D Form of Transfer Certificate..................................... D-1
EXHIBIT E Form of Transfer Certificate for Institutional Accredited
Investors....................................................... D-1
EXHIBIT F Form of Transfer Certificate for Regulation S Transfers.......... F-1
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NOTE: This Table of Contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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INDENTURE dated as of November 7, 1997, among METRIS COMPANIES INC,
a Delaware corporation (the "COMPANY"), the GUARANTORS named herein and THE
FIRST NATIONAL BANK OF CHICAGO, as trustee (the "TRUSTEE").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified
Person, including, without limitation, Indebtedness incurred in connection
with, or in contemplation of, such other Person merging with or into or
becoming a Restricted Subsidiary of such specified Person, and (ii)
Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"AFFILIATE" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
"AFFILIATE TRANSACTION" has the meaning provided in Section 4.03.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"ASSET SALE" means any direct or indirect sale, conveyance,
transfer, lease (that has the effect of a disposition) or other disposition
(including, without limitation, any merger, consolidation or sale-leaseback
transaction) to any Person other than the Company or a Wholly-Owned
Restricted Subsidiary of the Company, in one transaction or a series of
related transactions, of (i) any Equity Interest of any Restricted Subsidiary
of the Company; (ii) any material license, franchise or other authorization
of the Company or any Restricted Subsidiary of the Company; (iii) any assets
of the Company or any Restricted Subsidiary of the Company which constitute
substantially all of an operating unit or line of business of the Company or
any Restricted Subsidiary of the Company; or (iv) any other property or asset
of the Company or any Restricted Subsidiary of the Company outside of the
ordinary course of business (including the receipt of proceeds paid on
account of the loss of or damage to any property or asset and awards of
compensation for any asset taken by condemnation, eminent domain or similar
proceedings). For the purposes of this definition, the term "Asset Sale"
shall not include (a) any transaction consummated in compliance with Section
5.01 and the creation of any Lien not prohibited by Section 4.10; PROVIDED,
HOWEVER, that any transaction consummated in compliance with Section 5.01
involving a sale, conveyance, assignment, transfer, lease or other disposal
of less than all of the properties or assets of the Company shall be deemed
to be an Asset Sale with respect to the properties or assets of the Company
and the Restricted Subsidiaries of the Company that are not so sold,
conveyed, assigned, transferred,
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leased or otherwise disposed of in such transaction; (b) sales of property or
equipment that has become worn out, obsolete or damaged or otherwise
unsuitable for use in connection with the business of the Company or any
Restricted Subsidiary of the Company, as the case may be; (c) any transaction
consummated in compliance with Section 4.08; (d) a pledge, or transfer
pursuant to a pledge of assets, which pledge is a Permitted Lien; and (e)
sales of Receivables or interests in Receivables in connection with
Securitizations or otherwise in the ordinary course of business. In addition,
solely for purposes of Section 4.07, any sale, conveyance, transfer, lease or
other disposition of any property or asset, whether in one transaction or a
series of related transactions, involving assets with a Fair Market Value not
in excess of $1.0 million in any fiscal year shall be deemed not to be an
Asset Sale.
"BANKRUPTCY LAW" has the meaning provided in Section 6.01.
"BOARD OF DIRECTORS" means the Board of Directors or other
governing body charged with the ultimate management of any Person, or any
duly authorized committee thereof.
"BOARD RESOLUTION" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person or a duly
authorized committee of such Board of Directors.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York or Chicago, Illinois
are not required to be open.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means: (a) U.S. dollars; (b) securities issued
or directly and fully guaranteed or insured by the U.S. government or any
agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition; (c) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any domestic commercial bank
having capital and surplus in excess of $500 million; (d) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (b) and (c) above entered into with any
financial institution meeting the qualifications specified in clause (c)
above; (e) commercial paper rated P-1, A-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings Services,
respectively, and in each case maturing within six months after the date of
acquisition; and (f) money market funds, the portfolios of which are limited
to investments described in clauses (a) through (c) above.
"CHANGE OF CONTROL" means the occurrence of any of the following
events (whether or not approved by the Board of Directors of the Company):
(i) any Person (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act, including any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act), other than the Permitted Holders, is or becomes the
"beneficial owner" or "beneficial owners" (as defined in Rule 13d-3 and 13d-5
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under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time, upon the happening of an event or otherwise), directly or
indirectly, of more than 35% of the total voting power of the then
outstanding Voting Stock the Company; but only in the event that the
Permitted Holders "beneficially own", directly or indirectly, in the
aggregate a lesser percentage of the total voting power of the then
outstanding Voting Stock of the Company than such other Person and do not
have the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the Company;
(ii) the Company consolidates with, or merges with or into, another Person
(other than the Company or a Wholly-Owned Restricted Subsidiary of the
Company) or the Company or its Restricted Subsidiaries sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of the
assets of the Company and its Restricted Subsidiaries (determined on a
consolidated basis) to any Person (other than the Company or a Wholly-Owned
Restricted Subsidiary of the Company), other than any such transaction where
immediately after such transaction the Person or Persons that "beneficially
owned" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), immediately prior
to such transaction, directly or indirectly, the then outstanding Voting
Stock of the Company "beneficially own" (as so determined), directly or
indirectly, a majority of the total voting power of the then outstanding
Voting Stock of the surviving or transferee Person; or (iii) during any
period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company (together with any
new directors whose election by such Board of Directors or whose nomination
for election by the shareholders of the Company was approved by a vote of a
majority of the directors of the Company then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; PROVIDED,
HOWEVER, that the occurrence of any of the foregoing events in connection
with the Spin Transaction shall not constitute a "Change of Control".
"CHANGE OF CONTROL DATE" has the meaning provided in Section 4.14.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company"
shall mean such successor.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President, a Vice President or its Treasurer,
and by its Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"CONSOLIDATED INDEBTEDNESS" means, with respect to any Person as of
any date of determination, the sum, without duplication, of (i) the total
amount of Indebtedness of such Person and its Restricted Subsidiaries, plus
(ii) the total amount of Indebtedness of any other Person, to the extent that
such Indebtedness has been Guaranteed by the referent Person or one or more
of its Restricted Subsidiaries, plus (iii) the aggregate liquidation value of
all Disqualified Stock of such Person and all preferred stock of Restricted
Subsidiaries of such Person (other than, in the case of the Company,
preferred stock of a Restricted Subsidiary of the Company held by the Company
or a Guarantor), in each case, determined on a consolidated basis in
accordance with GAAP.
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"CONSOLIDATED LEVERAGE RATIO" means, with respect to any Person, as
of any date of determination, the ratio of (i) the Consolidated Indebtedness
of such Person as of such date excluding, however, all Hedging Obligations
that constitute Permitted Debt to (ii) the Consolidated Net Worth of such
Person as of such date.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries (for such period, on a consolidated basis, determined in
accordance with GAAP); PROVIDED that (i) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary of such Person or that is
accounted for by the equity method of accounting shall be included only to
the extent of the amount of dividends or distributions paid in cash to the
referent Person or a Wholly-Owned Restricted Subsidiary thereof, (ii) the Net
Income of any Restricted Subsidiary of such Person shall be excluded to the
extent that the declaration or payment of dividends or similar distributions
by that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded, and (iv) the cumulative effect of a change in accounting
principles shall be excluded.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of
any date, the sum of (i) the consolidated equity of the common stockholders
of such Person and its consolidated Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such
date with respect to any series of preferred stock (other than Disqualified
Stock) that by its terms is not entitled to the payment of dividends unless
such dividends may be declared and paid only out of net earnings in respect
of the year of such declaration and payment, but only to the extent of any
cash received by such Person upon issuance of such preferred stock, less (x)
all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going concern business
made within 12 months after the acquisition of such business) subsequent to
the Issue Date in the book value of any asset owned by such Person or a
consolidated Restricted Subsidiary of such Person, (y) all investments as of
such date in unconsolidated Restricted Subsidiaries and in Persons that are
not Restricted Subsidiaries, and (z) all unamortized debt discount and
expense and unamortized deferred financing charges as of such date, all of
the foregoing determined in accordance with GAAP.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" means the principal office
of the Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of original execution of this
Indenture is located at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX
00000, Attention: Corporate Trust Administration, except that, with respect
to presentation of the Securities for payment or registration of transfers or
exchanges and the location of the register, such term means the office or
agency of the Trustee at which at any particular time its corporate agency
business shall be conducted, which at the date of original execution of this
Indenture is located at c/o First Chicago Trust Company of New York, 00 Xxxx
Xxxxxx-0xx Xxxxx-Xxxxxx 0, Xxx Xxxx, Xxx Xxxx 00000.
"CREDIT AGREEMENT" means the Revolving Credit Facility, together
with the related documents thereto (including, without limitation, any
guarantee agreements and security documents), in each case as such agreements
may be amended (including any amendment and restatement thereof),
supplemented or otherwise modified from time to time, including any agreement
extending the maturity of, refinancing, replacing or otherwise restructuring,
in whole or in part (including, without limitation, increasing the amount of
available borrowings thereunder (PROVIDED that such increase in borrowings is
permitted by Section 4.04), or
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adding Restricted Subsidiaries of the Company as additional borrowers or
guarantors thereunder to the extent permitted by this Indenture), all or any
portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders and whether in the form of a revolving credit facility or a
term loan facility or any combination thereof.
"CUSTODIAN" has the meaning provided in Section 6.01.
"DEFAULT" means any event that is or with the passage of time or
the giving of notice or both would be an Event of Default.
"DEPOSITORY" means, with respect to the Securities issued in the
form of one or more Global Securities, The Depository Trust Company or
another Person designated as Depository by the Company, which must be a
clearing agency registered under the Exchange Act.
"DISQUALIFIED STOCK" means any Capital Stock that, either (A) by
its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the Holder thereof, in whole or in
part, on or prior to the date that is 91 days after the date on which the
Securities mature or (B) is designated by the Company (in a Board Resolution
of the Company delivered to the Trustee) as Disqualified Stock.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"EVENT OF DEFAULT" has the meaning provided in Section 6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"EXCHANGE SECURITIES" means the 10% Senior Notes due 2004, Series
B, to be issued in exchange for the Initial Securities pursuant to the
Registration Rights Agreement.
"EXPIRATION DATE" has the meaning set forth in the definition of
"OFFER TO PURCHASE."
"FAIR MARKET VALUE" means, with respect to any asset, the price
(after taking into account any liabilities relating to such assets) which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of which is
under any compulsion to complete the transaction; PROVIDED, HOWEVER, that the
Fair Market Value of any such asset or assets shall be determined
conclusively by the Board of Directors of the Company acting in good faith,
and shall be evidenced by Board Resolutions of the Company delivered to the
Trustee.
"FINAL MATURITY DATE" means November 1, 2004.
"FUNDING GUARANTOR" has the meaning provided in Section 10.05.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by
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such other entity as have been approved by a significant segment of the
accounting profession, which are in effect on the Issue Date and consistently
applied.
"GLOBAL SECURITIES" means one or more 144A Global Securities,
Regulation S Global Securities or IAI Global Securities.
"GUARANTEE" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part
of any Indebtedness.
"GUARANTORS" means each of (i) Metris Direct, Inc. and (ii) any
other Restricted Subsidiary of the Company that executes a Subsidiary
Guarantee in accordance with the provisions of this Indenture, and their
respective successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate or currency swap
agreements, interest rate cap agreements and interest rate or currency collar
agreements and related agreements and (ii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates,
currencies and commodities in the ordinary course of business.
"HOLDERS" means the registered holders of the Securities.
"IAI GLOBAL SECURITY" means a permanent global security in
registered form representing the aggregate principal amount of Securities
transferred after the Issue Date to Institutional Accredited Investors.
"INCUR" has the meaning set forth in Section 4.04.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP, as well
as all indebtedness of others secured by a Lien (except Liens on Receivables
and other assets (including spread accounts relating to a Securitization)
incurred in connection with a Securitization) on any asset of such Person
(whether or not such indebtedness is assumed by such Person and the value
thereof being the lesser of the amount of such indebtedness so secured and
the Fair Market Value of such asset that has a Lien placed upon it) and, to
the extent not otherwise included, the Guarantee by such Person of any
indebtedness of any other Person. Notwithstanding the foregoing, the term
"Indebtedness" shall not include (i) obligations pursuant to representations,
warranties, covenants and indemnities or payments to owners of beneficial
interests in Receivables, in each case in connection with a Securitization,
(ii) deposit liabilities of any Restricted Subsidiary of the Company, the
deposits of which are insured by the Federal Deposit Insurance Corporation or
any successor thereto or (iii) guarantees related to the fulfillment of the
Company's obligations to bank card associations in the ordinary course of
business. The amount of any Indebtedness outstanding as of any date shall be
(i) the accreted value thereof, in the case of any Indebtedness that does not
require current payments of interest, and (ii) the principal amount thereof,
together with any interest thereon that is more than 30 days past due, in the
case of any other Indebtedness.
-7-
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"INITIAL PURCHASERS" means Chase Securities Inc., Bear, Xxxxxxx &
Co. Inc. and NationsBanc Xxxxxxxxxx Securities, Inc..
"INITIAL SECURITIES" means the 10% Senior Notes due 2004, Series A,
of the Company.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"INTEREST" means, with respect to the Securities, the sum of any
cash interest and any Liquidated Damages (as defined in the Registration
Rights Agreement) on the Securities.
"INTEREST PAYMENT DATE" means each semiannual interest payment date
on May 1 and November 1 of each year, commencing on May 1, 1998.
"INTEREST RECORD DATE" for the interest payable on any Interest
Payment Date (except a date for payment of defaulted interest) means the
April 15 or October 15 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of the Company such that, after giving effect to any
such sale or disposition, such Person is no longer a Restricted Subsidiary of
the Company, the Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the book value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.08.
"ISSUE DATE" means November 7, 1997.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"NET CASH PROCEEDS" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied
to the repayment of Indebtedness secured by a Lien on the asset or assets
that
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were the subject of such Asset Sale, a defeasance of a Securitization and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i)
any gain (but not loss), together with any related provision for taxes on
such gain (but not loss), realized in connection with (a) any Asset Sale
(including, without limitation, dispositions pursuant to sale and leaseback
transactions) or (b) the disposition of any securities by such Person or any
of its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries and (ii) any extraordinary
or nonrecurring gain (but not loss), together with any related provision for
taxes on such extraordinary or nonrecurring gain (but not loss).
"OBLIGATIONS" means any principal, interest (including, without
limitation, post-petition interest), penalties, fees, indemnifications,
reimbursement obligations, damages and other liabilities payable under the
documentation governing any Indebtedness.
"OFFER" has the meaning set forth in the definition of "OFFER TO
PURCHASE."
"OFFER TO PURCHASE" means a written offer (the "OFFER") sent by or
on behalf of the Company by first-class mail, postage prepaid, to each Holder
at his address appearing in the register for the Securities on the date of
the Offer offering to purchase up to the principal amount of Securities
specified in such Offer at the purchase price specified in such Offer (as
determined pursuant to this Indenture). Unless otherwise required by
applicable law, the Offer shall specify an expiration date (the "EXPIRATION
DATE") of the Offer to Purchase, which shall be not less than 20 Business
Days nor more than 60 days after the date of such Offer, and a settlement
date (the "PURCHASE DATE") for purchase of Securities to occur no later than
five Business Days after the Expiration Date. The Company shall notify the
Trustee at least 15 Business Days (or such shorter period as is acceptable to
the Trustee) prior to the mailing of the Offer of the Company's obligation to
make an Offer to Purchase, and the Offer shall be mailed by the Company or,
at the Company's request, by the Trustee in the name and at the expense of
the Company. The Offer shall contain all the information required by
applicable law to be included therein. The Offer shall also contain
information concerning the business of the Company and its Subsidiaries which
the Company in good faith believes will enable such Holders to make an
informed decision with respect to the Offer to Purchase (which at a minimum
will include (i) the most recent annual and quarterly financial statements
and "Management's Discussion and Analysis of Financial Condition and Results
of Operations" contained in the documents required to be filed with the
Trustee pursuant to this Indenture (which requirements may be satisfied by
delivery of such documents together with the Offer), (ii) a description of
material developments in the Company's business subsequent to the date of the
latest of such financial statements referred to in clause (i) (including a
description of the events requiring the Company to make the Offer to
Purchase), (iii) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring the Company to make
the Offer to Purchase and (iv) any other information required by applicable
law to be included therein). The Offer shall contain all instructions and
materials necessary to enable such Holders to tender Securities pursuant to
the Offer to Purchase. The Offer shall also state: (1) the Section of this
Indenture pursuant to which the Offer to Purchase is being made; (2) the
Expiration Date and the Purchase Date; (3) the aggregate principal amount of
the outstanding Securities offered to be purchased by the Company pursuant to
the Offer to Purchase (including, if less than 100%, the manner by which such
amount has been determined pursuant to this Section of this Indenture
requiring the Offer to Purchase) (the "PURCHASE AMOUNT"); (4) the purchase
price to be paid by the Company for each $1,000 aggregate principal amount of
Securities accepted for payment (as specified pursuant to this Indenture)
(the "PURCHASE PRICE"); (5) that the Holder may tender all or any portion of
the Securities registered in the
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name of such Holder and that any portion of a Security tendered must be
tendered in an integral multiple of $1,000 principal amount; (6) the place or
places where Securities are to be surrendered for tender pursuant to the
Offer to Purchase; (7) that interest on any Security not tendered or tendered
but not purchased by the Company pursuant to the Offer to Purchase will
continue to accrue; (8) that on the Purchase Date the Purchase Price will
become due and payable upon each Security being accepted for payment pursuant
to the Offer to Purchase and that interest thereon shall cease to accrue on
and after the Purchase Date; (9) that each Holder electing to tender all or
any portion of a Security pursuant to the Offer to Purchase will be required
to surrender such Security at the place or places specified in the Offer
prior to the close of business on the Expiration Date (such Security being,
if the Company or the Trustee so requires, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing); (10) that each Holder will be entitled to withdraw
all or any portion of any Securities tendered by such Holder if the Company
(or its Paying Agent) receives, not later than the close of business on the
fifth Business Day next preceding the Expiration Date, a telegram, telex,
facsimile transmission or letter setting forth the name of such Holder, the
principal amount of the Security such Holder tendered, the certificate number
of the Security such Holder tendered and a statement that such Holder is
withdrawing all or a portion of his tender; (11) that (a) if Securities in an
aggregate principal amount less than or equal to the Purchase Amount are duly
tendered and not withdrawn pursuant to the Offer to Purchase, the Company
shall purchase all such Securities and (b) if Securities in an aggregate
principal amount in excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
Securities having an aggregate principal amount equal to the Purchase Amount
on a PRO RATA basis (with such adjustments as may be deemed appropriate so
that only Securities in denominations of $1,000 principal amount or integral
multiples thereof shall be purchased); and (12) that in the case of any
Holder whose Security is purchased only in part, the Company shall execute
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in an aggregate principal amount
equal to and in exchange for the unpurchased portion of the Security so
tendered. An Offer to Purchase shall be governed by and effected in
accordance with the provisions above pertaining to any Offer.
"OFFICER" means, with respect to the Company or any Guarantor, the
Chairman, any Vice Chairman, the President, any Vice President, the Chief
Financial Officer, the Treasurer or the Secretary of the Company or such
Guarantor, as the case may be.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers
or by an Officer and an Assistant Treasurer or Assistant Secretary of the
Company complying with Sections 11.04 and 11.05.
"144A GLOBAL SECURITY" means a permanent global security in
registered form representing the aggregate principal amount of Initial
Securities sold in reliance on Rule 144A.
"OPINION OF COUNSEL" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company or the Trustee.
"PARTICIPANTS" has the meaning provided in Section 2.15.
"PAYING AGENT" has the meaning provided in Section 2.03.
"PERMITTED HOLDER" means Fingerhut Companies, Inc. and any of its
Affiliates.
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"PERMITTED INVESTMENTS" means (a) any Investment in the Company or
in a Wholly-Owned Restricted Subsidiary of the Company; (b) any Investment in
Cash Equivalents; (c) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person, if as a result of such Investment (i)
such Person becomes a Wholly-Owned Restricted Subsidiary of the Company or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated
into, the Company or a Wholly-Owned Restricted Subsidiary of the Company; (d)
any Restricted Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.07; (e) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the Company;
(f) Investments by the Company or any of its Restricted Subsidiaries in the
ordinary course of business in connection with or arising out of
Securitizations; (g) Hedging Obligations of the Company and its Restricted
Subsidiaries entered into in the ordinary course of business; and (h) other
Investments by the Company or any of its Restricted Subsidiaries in any
Person (other than an Affiliate of the Company that is not also a Restricted
Subsidiary of the Company) that do not exceed $5.0 million in the aggregate
at any one time outstanding (measured as of the date made and without giving
effect to subsequent changes in value).
"PERMITTED LIENS" means (i) Liens existing on the Issue Date; (ii)
Liens to secure borrowings under the Credit Agreement, PROVIDED that such
borrowings were permitted by this Indenture to be incurred; (iii) Liens on
Receivables, related contract rights, collections on Receivables and the
proceeds of all such property incurred in connection with Securitizations or
permitted Guarantees thereof; (iv) Liens on property of a Person existing at
the time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary of the Company; PROVIDED that such Liens were in
existence prior to the contemplation of such merger or consolidation and do
not extend to any assets other than those of the Person merged into or
consolidated with the Company or such Restricted Subsidiary; (v) Liens on
property existing at the time of acquisition thereof by the Company or any
Restricted Subsidiary of the Company; PROVIDED that such Liens were in
existence prior to the contemplation of such acquisition; (vi) Liens securing
Purchase Money Indebtedness permitted to be incurred under this Indenture and
incurred in the ordinary course of business; PROVIDED, HOWEVER, that any such
Lien may not extend to any other property owned by the Company or any of its
Restricted Subsidiaries at the time the Lien is incurred, and the
Indebtedness secured by the Lien may not be incurred more than 180 days after
the latter of the acquisition or completion of construction of the property
subject to the Lien; PROVIDED, FURTHER, that the amount of Indebtedness
secured by such Liens do not exceed the Fair Market Value of the property
purchased or constructed with the proceeds of such Indebtedness; (vii) Liens
to secure any Permitted Refinancing Indebtedness incurred to refinance any
Indebtedness secured by any Lien referred to in the foregoing clauses (i)
through (vi); PROVIDED, HOWEVER, that such new Lien shall be limited to all
or part of the same property that secured the original Lien and the
Indebtedness secured by such Lien at such time is not increased to any amount
greater than the outstanding principal amount or, if greater, committed
amount of the Indebtedness described under clauses (i) through (vi), as the
case may be, at the time the original Lien became a Permitted Lien; (viii)
Liens in favor of the Company or a Guarantor; (ix) Liens incurred in the
ordinary course of business of the Company or any Restricted Subsidiary of
the Company with respect to obligations that do not exceed $10.0 million in
the aggregate at any one time outstanding; (x) Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course
of business (including, without limitation, lessor Liens on leased assets);
(xi) Liens securing Capital Lease Obligations permitted to be incurred under
this Indenture and incurred in the ordinary course of business; (xii) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded; PROVIDED that any
reserve or other appropriate provision as shall be required in conformity
with GAAP in existence at such time shall have been made therefor and (xiii)
certain Liens consisting of restrictions on the use of real property which do
not materially interfere with the property's use.
-11-
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness or
Disqualified Stock of the Company or any of its Restricted Subsidiaries
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease, redeem or refund other Indebtedness or
Disqualified Stock of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); PROVIDED THAT: (i) the principal
amount (or accreted value, if applicable) or liquidation value of such
Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable) or liquidation value, plus accrued
interest or dividends on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased, redeemed or refunded (plus the amount of reasonable
expenses incurred in connection therewith); (ii) such Permitted Refinancing
Indebtedness has a final maturity date or redemption date, as the case may
be, later than the final maturity date or redemption date, as the case may
be, of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased, redeemed or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Securities, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
Securities on terms at least as favorable to the holders of Securities as
those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness or Disqualified Stock is incurred or issued, as the case may be,
either by the Company or by the Restricted Subsidiary who is the obligor or
issuer, as the case may be, on the Indebtedness or Disqualified Stock being
extended, refinanced, renewed, replaced, defeased, redeemed or refunded.
"PERSON" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust, joint venture, or a
governmental agency or political subdivision thereof.
"PHYSICAL SECURITIES" means one or more certificated Securities in
registered form.
"PRIVATE EXCHANGE SECURITIES" has the meaning provided in the
Registration Rights Agreement.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on
the Initial Securities in the form set forth on Exhibit A hereto.
"PURCHASE AGREEMENT" means the Purchase Agreement dated as of
November 4, 1997 by and among the Company, the Guarantors and the Initial
Purchasers.
"PURCHASE AMOUNT" has the meaning set forth in the definition of
"OFFER TO PURCHASE."
"PURCHASE DATE" has the meaning set forth in the definition of
"OFFER TO PURCHASE."
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the Company and
its Restricted Subsidiaries incurred in the ordinary course of business for
the purpose of financing all or any part of the purchase price, or the cost
of installation, construction or improvement, of property or equipment.
"PURCHASE PRICE" has the meaning set forth in the definition of
"OFFER TO PURCHASE."
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the
Securities Act.
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"RECEIVABLES" means credit card, consumer or commercial loans that
are purchased or originated in the ordinary course of business by the Company
or any Subsidiary of the Company.
"REDEMPTION DATE," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"REDEMPTION PRICE," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this
Indenture as set forth in the form of Security annexed hereto as Exhibit A.
"REGISTRAR" has the meaning provided in Section 2.03.
"REGISTRATION RIGHTS AGREEMENT" means the Exchange and Registration
Rights Agreement dated as of the Issue Date by and among the Company, the
Guarantors and the Initial Purchasers.
"REGISTRATION" means a registered exchange offer for the Securities
by the Company or other registration of the Securities under the Securities
Act pursuant to and in accordance with the terms of the Registration Rights
Agreement.
"REGULATION S" means Regulation S under the Securities Act.
"REGULATION S GLOBAL SECURITY" means a permanent global security in
registered form representing the aggregate principal amount of Securities
sold in reliance on Regulation S under the Securities Act.
"RESTRICTED INVESTMENT" means any Investment other than a Permitted
Investment.
"RESTRICTED PAYMENT" has the meaning provided in Section 4.08.
"RESTRICTED SECURITY" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; PROVIDED, HOWEVER, that the Trustee shall be
entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether any Security is a Restricted Security.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
REVOLVING CREDIT FACILITY" means the Revolving Credit and Letter of
Credit Facility Agreement dated as of September 16, 1996 among the Company,
the Lenders named therein, Nationsbank of North Carolina, N.A., as Co-Agent,
Bank of America Illinois, as an Issuing Bank, First Bank National
Association, as an Issuing Bank, Norwest Bank Minnesota, N.A., as an Issuing
Bank, and The Chase Manhattan Bank, as Administrative Agent and an Issuing
Bank, as amended.
"RULE 144A" means Rule 144A under the Securities Act.
"SEC" or "COMMISSION" means the Securities and Exchange Commission.
"SECURITIES" means, collectively, the Initial Securities, the
Private Exchange Securities and the Unrestricted Securities treated as a
single class of securities, as amended or supplemented from time to time in
accordance with the terms of this Indenture.
-13-
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"SECURITY GUARANTEE" means the Form of Security Guarantee of each
Guarantor to be endorsed on each of the Securities in the form of EXHIBIT A
(in the case of an Initial Security) or Exhibit B (in the case of an Exchange
Security) hereto.
"SECURITIZATION" means any transaction or series of transactions
that have been or may be entered into by the Company or any of its
Subsidiaries in connection with or reasonably related to a transaction or
series of transactions in which the Company or any of its Subsidiaries may
sell, convey or otherwise transfer, directly or indirectly, to (i) a
Securitization Entity or (ii) any other Person, or may grant a security
interest in, any Receivables or any interests in such Receivables (whether
such Receivables are then existing or arising in the future) and any assets
related thereto including, without limitation, all security interests in any
collateral relating thereto, the proceeds of such Receivables, and other
assets which are customarily sold or in respect of which security interests
are customarily granted in connection with securitization transactions
involving such assets.
"SECURITIZATION ENTITY" means any Person (whether or not a
Subsidiary of the Company) established and maintained exclusively for one or
more of the following purposes: (i) purchasing or otherwise acquiring
Receivables (together with any assets related to such Receivables, including,
without limitation, all collateral securing such Receivables, all contracts
and all Guarantees or other obligations in respect of such Receivables,
proceeds of such Receivables and other assets which are customarily
transferred in connection with asset securitization transactions involving
Receivables) in connection with a Securitization, (ii) selling such
Receivables (and related assets) to a special purpose owner trust or other
Person in connection with a Securitization, (iii) issuing asset-backed
securities, or beneficial interests in Receivables, (iv) serving as a
corporate general partner (or managing member of a limited liability company)
of another Securitization Entity, (v) investing in and holding Investments in
Securitization Entities issuing securities backed by Receivables, or (vi)
engaging in activities that are incidental to and necessary, suitable or
convenient for the accomplishment of the purposes specified above, PROVIDED,
HOWEVER, that the obligations of such Securitization Entity are without
recourse to the Company and any Restricted Subsidiary of the Company other
than such Securitization Entity. For purposes of this definition, "without
recourse" shall mean that the Indebtedness of such Securitization Entity and
none of the other obligations (contingent or otherwise) of a Securitization
Entity (i) is guaranteed by the Company or any other Restricted Subsidiary of
the Company, (ii) obligates the Company or any other Restricted Subsidiary of
the Company in any way other than pursuant to representations, warranties,
covenants (including any covenant to deliver Receivables in a pre-funded
Securitization) and indemnities entered into in connection with a
Securitization, or (iii) subjects any property or asset of the Company or any
Restricted Subsidiary of the Company other than such Securitization Entity,
directly or indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to representations, warranties, covenants and
indemnities entered into in connection with a Securitization. For purposes of
the foregoing, a Permitted Investment in a Securitization Entity shall not be
deemed recourse. As of the Issue Date, each of the Metris Master Trust,
Metris Receivables, Inc., Metris Funding Co. and the Fingerhut Owner Trust
and Securitization Entities formed in connection with any Securitization
prior to the Issue Date shall be deemed to satisfy the requirements of this
definition.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary of the
Company that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as
such Regulation is in effect on the date hereof.
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"SPECIFIED SENIOR INDEBTEDNESS" means (i) the Indebtedness of any
Person, whether outstanding on the Issue Date or thereafter incurred, and
(ii) accrued and unpaid interest (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to such
Person to the extent post filing interest is allowed in such proceeding) in
respect of (A) Indebtedness of such Person for money borrowed and (B)
Indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable
unless, in the case of either clause (i) or (ii), in the instrument creating
or evidencing the same pursuant to which the same is outstanding, it is
provided that such obligations are subordinate in right of payment to the
Securities; PROVIDED, HOWEVER, that Specified Senior Indebtedness shall not
include (1) any obligation of such Person to any Subsidiary of such Person,
(2) any liability for Federal, state, local or other taxes owed or owing by
such Person, (3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities), (4) any obligations in respect of
Capital Stock of such Person or (5) that portion of any Indebtedness which at
the time of incurrence is incurred in violation of this Indenture.
"SPIN TRANSACTION" means the proposed transaction announced by
Fingerhut Companies, Inc. on October 9, 1997, as such transaction may be
effected in the future.
"STATED MATURITY" means with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any such interest or principal prior to the
date originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any combination
thereof).
"SUBSIDIARY GUARANTEES" means the guarantee of the Securities by
the Guarantors under Article Ten.
"SURVIVING PERSON" means the Person formed by or surviving a
transaction permitted by Section 5.01 or the Person to which a sale,
assignment, transfer, lease, or conveyance or other disposition is made in a
transaction permitted by Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb), as amended, as in effect on the date of this
Indenture (except as provided in Section 9.03) until such time as this
Indenture is qualified under the TIA, and thereafter as in effect on the date
on which this Indenture is qualified under the TIA.
"TRUST OFFICER" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice
president, assistant vice president, assistant secretary or any other officer
or assistant officer of the Trustee customarily performing functions similar
to those performed by the persons who at that time shall be such officers,
and also means, with respect to a particular corporate trust
-15-
matter, any other officer to whom such trust matter is referred because of
his knowledge of and familiarity with the particular subject.
"TRUSTEE" means the party named as such in the first paragraph of
this Indenture until a successor replaces it in accordance with the
provisions of this Indenture and thereafter means such successor.
"UNITED STATES GOVERNMENT OBLIGATIONS" means direct non-callable
obligations of the United States of America for the payment of which the full
faith and credit of the United States is pledged.
"UNRESTRICTED SECURITIES" means one or more Securities that do not
and are not required to bear the Private Placement Legend in the form set
forth in EXHIBIT A hereto, including, without limitation, the Exchange
Securities and any Securities registered under the Securities Act pursuant to
and in accordance with the Registration Rights Agreement.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of the Company
that is designated by the Board of Directors of the Company as an
Unrestricted Subsidiary pursuant to a Board Resolution, but only to the
extent that such Subsidiary: (a) has not at the time of designation, and does
not thereafter, create, incur, assume, guarantee or otherwise become directly
or indirectly liable with respect to any Indebtedness pursuant to which the
lender thereof has recourse to any of the assets of the Company or any of its
Restricted Subsidiaries; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Company; (c) is a Person with respect to which neither
the Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to
maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; and (d) has not
otherwise directly or indirectly provided credit support for any Indebtedness
of the Company or any of its Restricted Subsidiaries. Any such designation by
the Board of Directors of the Company shall be evidenced to the Trustee by
filing with the Trustee a certified copy of the Board Resolution giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions and was permitted by
Section 4.08. If, at any time, any Unrestricted Subsidiary would fail to meet
the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter
cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under Section
4.04, the Company shall be in default under Section 4.04). The Board of
Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED that such designation
shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (i)
such Indebtedness is permitted under the Consolidated Leverage Ratio test set
forth in the first paragraph of Section 4.04, and (ii) no Default or Event of
Default would be in existence following such designation.
"UNUTILIZED NET CASH PROCEEDS" has the meaning provided in Section
4.07.
"VOTING STOCK" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of
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each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment, by (ii) the then outstanding principal amount of such Indebtedness.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly-Owned
Restricted Subsidiaries of such Person.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITY HOLDER" means a Holder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" means the Company or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles in effect
from time to time, and any other reference in this Indenture to "generally
accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
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(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. FORM AND DATING.
The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of EXHIBIT A
hereto, which is hereby incorporated in and expressly made a part of this
Indenture. The Exchange Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of EXHIBIT B
hereto, which is hereby incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage. The Company shall approve the
form of the Securities and any notation, legend or endorsement on them. Each
Security shall be dated the date of its issuance and shall show the date of
its authentication. Each Security shall have an executed Subsidiary
Guarantee from each of the Guarantors endorsed thereon substantially in the
form set forth in EXHIBITS A and B hereto.
The terms and provisions contained in the Securities annexed hereto
as EXHIBITS A and B shall constitute, and are hereby expressly made, a part
of this Indenture and, to the extent applicable, the Company, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A and Securities
offered and sold in reliance on Regulation S shall be issued initially in the
form of one or more Global Securities, substantially in the form set forth in
EXHIBIT A hereto, deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legend set forth in EXHIBIT C hereto.
The aggregate principal amount of the Global Securities may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depository, as hereinafter provided.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign, or one Officer shall sign and one Officer
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) of the Company or a Guarantor, as the case may be, shall
attest to, the Securities for the Company, and the Subsidiary Guarantees for
the Guarantors, by manual or facsimile signature.
If an Officer whose signature is on a Security or a Subsidiary
Guarantee, as the case may be, was an Officer at the time of such execution
but no longer holds that office at the time the Trustee authenticates the
Security or Subsidiary Guarantee, as the case may be, the Security or
Subsidiary Guarantee, as the case may be, shall be valid nevertheless.
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A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Securities for original
issue in an aggregate principal amount not to exceed $100,000,000, (ii)
Private Exchange Securities from time to time only in exchange for a like
principal amount of Initial Securities and (iii) Unrestricted Securities from
time to time only in exchange for (A) a like principal amount of Initial
Securities or (B) a like principal amount of Private Exchange Securities, in
each case upon a written order of the Company in the form of an Officers'
Certificate. Each such written order shall specify the amount of Securities
to be authenticated and the date on which the Securities are to be
authenticated, whether the Securities are to be Initial Securities, Private
Exchange Securities or Unrestricted Securities and whether the Securities are
to be issued as Physical Securities or Global Securities and such other
information as the Trustee may reasonably request. The aggregate principal
amount of Securities outstanding at any time may not exceed $100,000,000,
except as provided in Sections 2.07 and 2.08.
Notwithstanding the foregoing, all Securities issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise
provided in the appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture
to authentication by the Trustee includes authentication by such agent. An
authenticating agent shall have the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency, which may be in the
Borough of Manhattan, The City of New York, where (a) Securities may be
presented or surrendered for registration of transfer or for exchange (the
"REGISTRAR"), (b) Securities may be presented or surrendered for payment (the
"PAYING AGENT") and (c) notices and demands in respect of the Securities and
this Indenture may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company, upon notice to
the Trustee, may appoint one or more co-Registrars and one or more additional
Paying Agents. The term "PAYING AGENT" includes any additional Paying Agent.
Except as provided herein, the Company may act as Paying Agent, Registrar or
co-Registrar.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the
provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of
the name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such and shall be entitled to appropriate compensation in
accordance with Section 7.07.
The Company initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed.
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SECTION 2.04. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Securities, and shall notify the
Trustee of any Default by the Company in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held
by it to the Trustee and account for any assets disbursed and the Trustee may
at any time during the continuance of any payment Default, upon written
request to a Paying Agent, require such Paying Agent to distribute all assets
held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by
the Company to the Paying Agent (if other than the Company), the Paying Agent
shall have no further liability for such assets. If the Company or any of
their Affiliates acts as Paying Agent, it shall, on or before each due date
of the principal of or interest on the Securities, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Holders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee before each Interest Record Date and at such other times as
the Trustee may request in writing a list as of such date and in such form as
the Trustee may reasonably require of the names and addresses of Holders,
which list may be conclusively relied upon by the Trustee.
SECTION 2.06. TRANSFER AND EXCHANGE.
Subject to the provisions of Sections 2.15 and 2.16, when
Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Securities or to exchange such Securities for
an equal principal amount of Securities of other authorized denominations of
the same series, the Registrar or co-Registrar shall register the transfer or
make the exchange as requested if its requirements for such transaction are
met; PROVIDED, HOWEVER, that the Securities surrendered for transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Securities at
the Registrar's or co-Registrar's written request. No service charge shall
be made for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or other governmental charge payable upon exchanges or
transfers pursuant to Section 2.02, 2.10, 3.06, 4.07, 4.14, or 9.05). The
Registrar or co-Registrar shall not be required to register the transfer or
exchange of any Security (i) during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of Securities
and ending at the close of business on the day of such mailing and (ii)
selected for redemption in whole or in part pursuant to Article Three hereof,
except the unredeemed portion of any Security being redeemed in part.
Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee and any Agent of the Company shall treat the
person in whose name the Security is registered as the owner thereof for all
purposes whether or not the Security shall be overdue, and none of the
Company, the Trustee or any such Agent shall be affected by notice to the
contrary. Any consent, waiver or actions of a
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Holder shall be binding upon any subsequent Holders of such Security or a
Security received upon transfer. Any Holder of a beneficial interest in a
Global Security shall, by acceptance of such beneficial interest in a Global
Security, agree that transfers of beneficial interests in such Global
Security may be effected only through a book-entry system maintained by the
Depository (or its agent), and that ownership of a beneficial interest in a
Global Security shall be required to be reflected in a book entry.
SECTION 2.07. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate
a replacement Security if the Trustee's requirements for replacement of
Securities are met. Unless waived by the Company, such Holder must provide
an indemnity bond or other indemnity, sufficient in the judgment of the
Company and the Trustee, to protect the Company, the Trustee and any Agent
from any loss which any of them may suffer if a Security is replaced. The
Company may charge such Holder for their reasonable out-of-pocket expenses in
replacing a Security, including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those canceled by it, those
delivered to it for cancellation and those described in this Section 2.08 as
not outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any Affiliates of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced
Security is held by a BONA FIDE purchaser. A mutilated Security ceases to be
outstanding upon surrender of such Security and replacement thereof pursuant
to Section 2.07.
If on a Redemption Date, Purchase Date or the Final Maturity Date
the Paying Agent holds money sufficient to pay all of the principal and
interest due on the Securities payable on that date, and is not prohibited
from paying such money to the Holders pursuant to the terms of this
Indenture, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities
owned by the Company, the Guarantors or any of their respective Affiliates
shall be disregarded, except that, for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or
consent, only Securities that a Trust Officer of the Trustee actually knows
are so owned shall be disregarded.
The Company shall notify the Trustee, in writing, when the Company,
any Guarantor, or any of their respective Affiliates repurchases or otherwise
acquires Securities, of the aggregate principal amount of such Securities so
repurchased or otherwise acquired.
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SECTION 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate upon receipt of a written order of the
Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of the Company,
dispose of and deliver evidence of such disposal of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Securities to replace Securities that they have paid
or delivered to the Trustee for cancellation. If the Company shall acquire any
of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and
until the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
SECTION 2.12. DEFAULTED INTEREST.
The Company shall pay interest on overdue principal from time to time
on demand at the rate of interest then borne by the Securities. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Securities.
If the Company default in a payment of interest on the Securities,
they shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day preceding
the date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and
interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to
the expiration of the 30-day period set forth in Section 6.01(b) shall be paid
to Holders as of the Interest Record Date for the Interest Payment Date for
which interest has not been paid.
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Securities will use a "CUSIP" number and
the Trustee shall use the CUSIP number in notices of redemption or exchange as
a convenience to Holders; PROVIDED, HOWEVER, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
num-
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ber printed in the notice or on the Securities, and that reliance may be
placed only on the other identification numbers printed on the Securities.
The Company shall promptly notify the Trustee of any changes in CUSIP numbers
known to it.
SECTION 2.14. DEPOSIT OF MONEYS.
Prior to 1:00 p.m. New York City time on each Interest Payment Date,
Redemption Date, Purchase Date and the Final Maturity Date, the Company shall
deposit with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date, Redemption
Date, Purchase Date or Final Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date, Redemption Date, Purchase Date or Final Maturity Date,
as the case may be.
SECTION 2.15. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set
forth in EXHIBIT C.
Members of, or participants in, the Depository ("PARTICIPANTS") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and Participants, the operation of customary practices governing the exercise
of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16; PROVIDED,
HOWEVER, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Securities, an equal aggregate principal amount of Physical
Securities of authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to
paragraph (c) of this Section 2.15 shall, except as otherwise provided by
Section 2.16, bear the Private Placement Legend.
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(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may
hold interests through Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities and the Trustee is
entitled to rely upon any electronic instructions from beneficial owners to the
Holder of any Global Security.
SECTION 2.16. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF PHYSICAL SECURITIES. When Physical
Securities are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal
principal amount of Physical Securities of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the
exchange as requested if the requirements under this Indenture as set forth
in this Section 2.16 for such transactions are met; PROVIDED, HOWEVER, that
the Physical Securities presented or surrendered for registration of transfer
or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing;
and
(II) in the case of Physical Securities the offer and sale of which
have not been registered under the Securities Act, such Physical
Securities shall be accompanied, in the sole discretion of the Company, by
the following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the Registrar
or co-Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (substantially in the form of EXHIBIT D hereto); or
(B) if such Physical Security is being transferred to a QIB in
accordance with Rule 144A, a certification to that effect
(substantially in the form of EXHIBIT D hereto); or
(C) if such Physical Security is being transferred to an Institutional
Accredited Investor, delivery of a certification to that effect
(substantially in the form of EXHIBIT D hereto) and a transferee
letter of representation (substantially in the form of EXHIBIT E
hereto) and, at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(D) if such Physical Security is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of EXHIBIT D hereto) and a transferor
certificate for Regulation S transfers substantially in the form
of EXHIBIT F hereto and an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
(E) if such Physical Security is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification to
that effect (substantially in the form of
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EXHIBIT D hereto) and, at the option of the Company, an Opinion
of Counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act; or
(F) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially in
the form of EXHIBIT D hereto) and, at the option of the Company,
an Opinion of Counsel reasonably acceptable to the Company to
the effect that such transfer is in compliance with the Securities
Act.
(b) RESTRICTIONS ON TRANSFER OF A PHYSICAL SECURITY FOR A BENEFICIAL
INTEREST IN A GLOBAL SECURITY. A Physical Security the offer and sale of which
has not been registered under the Securities Act may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of
a Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) certification, substantially in the form of EXHIBIT D hereto,
that such Physical Security is being transferred (I) to a QIB,
(II) to an Accredited Investor or (III) in an offshore
transaction in reliance on Regulation S and, with respect to (II)
or (III), at the option of the Company, an Opinion of Counsel
reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act; and
(B) written instructions directing the Registrar or co-Registrar to
make, or to direct the Depository to make, an endorsement on the
applicable Global Security to reflect an increase in the aggregate
amount of the Securities represented by the Global Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar
or co-Registrar, the principal amount of Securities represented by the
applicable Global Security to be increased accordingly. If no 144A Global
Security, IAI Global Security or Regulation S Global Security, as the case may
be, is then outstanding, the Company shall, unless either of the events in the
proviso to Section 2.15(b) have occurred and are continuing, issue and the
Trustee shall, upon written instructions from the Company in accordance with
Section 2.02, authenticate such a Global Security in the appropriate principal
amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or Co-Registrar of written
instructions, or such other instruction as is customary for the Depository,
from the Depository or its nominee, requesting the registration of transfer of
an interest in a 144A Global Security, an IAI Global Security or a Regulation S
Global Security, as the case may be, to another type of Global Security,
together with the applicable Global Securities (or, if the applicable type of
Global Security required to represent the interest as requested to be obtained
is not then outstanding, only the Global Security representing the interest
being transferred), the Registrar or Co-Registrar shall reflect on its books
and records (and the applicable Global Security) the applicable increase and
decrease of the principal
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amount of Securities represented by such types of Global Securities, giving
effect to such transfer. If the applicable type of Global Security required
to represent the interest as requested to be obtained is not outstanding at
the time of such request, the Company shall issue and the Trustee shall, upon
written instructions from the Company in accordance with Section 2.02,
authenticate a new Global Security of such type in principal amount equal to
the principal amount of the interest requested to be transferred.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
PHYSICAL SECURITY.
(i) If the Depository is at any time unwilling or unable to continue
as a depositary for the Global Securities and a successor depositary is not
appointed by the Company within 90 days or if the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of Notes
in definitive form, Physical Securities will be issued in exchange for the
Global Securities. Upon receipt by the Registrar or co-Registrar of written
instructions, or such other form of instructions as is customary for the
Depository, from the Depository or its nominee on behalf of any Person having a
beneficial interest in a Global Security and upon receipt by the Trustee of a
written order or such other form of instructions as is customary for the
Depository or the Person designated by the Depository as having such a
beneficial interest containing registration instructions and, in the case of
any such transfer or exchange of a beneficial interest in Securities the offer
and sale of which have not been registered under the Securities Act, the
following additional information and documents:
(A) if such beneficial interest is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification to
that effect (substantially in the form of EXHIBIT D hereto) and,
at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
(B) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially in
the form of EXHIBIT D hereto) and, at the option of the Company,
an Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the Securities
Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository and
the Registrar or co-Registrar, the aggregate principal amount of the
applicable Global Security to be reduced and, following such reduction,
the Company will execute and, upon receipt of an authentication order in
the form of an Officers' Certificate in accordance with Section 2.02, the
Trustee will authenticate and deliver to the transferee a Physical
Security in the appropriate principal amount.
(ii) Securities issued in exchange for a beneficial interest in a
Global Security pursuant to this Section 2.16(d) shall be registered in such
names and in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Registrar or co-Registrar in writing. The Registrar or co-
Registrar shall deliver such Physical Securities to the Persons in whose names
such Physical Securities are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the
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Depository or by the Depository or any such nominee to a successor Depository
or a nominee of such successor Depository.
(f) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless, and the
Trustee is hereby authorized to deliver Securities without the Private
Placement Legend if, (i) there is delivered to the Trustee an Opinion of
Counsel reasonably satisfactory to the Company and the Trustee to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act;(ii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act (including pursuant to a Registration); or (iii) the
date of such transfer, exchange or replacement is two years after the later of
(x) the Issue Date and (y) the last date that the Company or any affiliate (as
defined in Rule 144 under the Securities Act) of the Company was the owner of
such Securities (or any predecessor thereto).
(g) GENERAL. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Participants or
beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar
ARTICLE THREE
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company wants to redeem Securities pursuant to paragraph 5 of
the Securities at the applicable redemption price set forth thereon, it shall
notify the Trustee in writing of the Redemption Date and the principal amount
of Securities to be redeemed. The Company shall give such notice to the
Trustee at least 45 days before the Redemption Date (unless a shorter notice
shall be agreed to by the Trustee in writing), together with an Officers'
Certificate stating that such redemption will comply with the conditions
contained herein.
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SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed pursuant to
paragraph 5 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not then listed on a national securities exchange, on a PRO RATA basis, by lot
or in such other manner as the Trustee shall deem fair and appropriate.
Selection of the Securities to be redeemed pursuant to paragraph 6 of the
Securities shall be made by the Trustee only on a PRO RATA basis or on as
nearly a PRO RATA basis as is practicable (subject to the procedures of the
Depository) based on the aggregate principal amount of Securities held by each
Holder. The Trustee shall make the selection from the Securities then
outstanding, subject to redemption and not previously called for redemption.
The Trustee may select for redemption pursuant to paragraph 5 or 6 of
the Securities portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail to each
Holder whose Securities are to be redeemed at such Holder's registered address;
PROVIDED, HOWEVER, that notice of a redemption pursuant to paragraph 6 of the
Securities shall be mailed to each Holder whose Securities are to be redeemed
no later than 60 days after the date of the Closing of the relevant Public
Equity Offering of the Company.
Each notice of redemption shall identify the Securities to be
redeemed (including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the Securities are
to be surrendered for redemption;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in making the redemption payment,
interest on Securities called for redemption ceases to accrue on and after the
Redemption Date and the only remaining right of the Holders is to receive
payment of the redemption price upon surrender to the Paying Agent; and
(6) in the case of any redemption pursuant to paragraph 5 or 6 of the
Securities, if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the Redemption
Date, upon surrender of such Security, a new Security or Securities in
principal amount equal to the unredeemed portion thereof will be issued.
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At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price, plus accrued interest thereon, if any, to the Redemption
Date, but interest installments whose maturity is on or prior to such
Redemption Date shall be payable to the Holders of record at the close of
business on the relevant Interest Record Date.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
At least one Business Day before the Redemption Date, the Company
shall deposit with the Paying Agent (or if the Company is its own Paying Agent,
it shall, on or before the Redemption Date, segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest, if any, on all
Securities to be redeemed on that date other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Company to the Trustee for cancellation.
If any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid on the Redemption Date due to the failure
of the Company to deposit with the Paying Agent money sufficient to pay the
redemption price thereof, the principal and accrued and unpaid interest, if
any, thereon shall, until paid or duly provided for, bear interest as provided
in Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest on the Securities
in the manner provided in the Securities and the Registration Rights Agreement.
An installment of principal or interest shall be considered paid on the date
due if the Trustee or Paying Agent (other than the Company or any Affiliates of
the Company) holds on that date money designated for and sufficient to pay the
installment in full and is not prohibited from paying such money to the Holders
of the Securities pursuant to the terms of this Indenture.
The Company shall pay cash interest on overdue principal at the same
rate per annum borne by the Securities. The Company shall pay cash interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful, as provided in Section 2.12.
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SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of any office or agency required by
Section 2.03. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee set forth in Section 11.02.
SECTION 4.03. LIMITATIONS ON TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or Guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "AFFILIATE TRANSACTION"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the
Trustee (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$5.0 million, a Board Resolution of the Company that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors of the Company and (b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $10.0 million, an opinion as to the fairness to the Holders of such
Affiliate Transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing; PROVIDED that with
respect to any contracts or agreements, such dollar amounts shall be with
respect to annual consideration under such contracts or agreements. The
foregoing provisions shall not apply to (i) any agreement in effect on the
Issue Date and any amendments thereto; PROVIDED that any such amendment shall
be no more disadvantageous to the Holders in any material respect than the
original agreement, (ii) any compensation arrangements entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business and consistent with the past practice of the Company or such
Restricted Subsidiary, (iii) transactions between or among the Company and/or
its Restricted Subsidiaries, (iv) any transaction in connection with a
Securitization and (v) Restricted Payments that are permitted by Section 4.08.
SECTION 4.04. LIMITATION ON INDEBTEDNESS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "INCUR") any Indebtedness (including
Acquired Debt), and the Company and the Guarantors will not issue any
Disqualified Stock, and the Company will not permit any of its Restricted
Subsidiaries (that are not Guarantors) to issue any shares of preferred stock;
PROVIDED, HOWEVER, that the Company and the Guarantors may incur Indebtedness
(including Acquired Debt) or issue shares of Disqualified Stock or the
Company's Restricted Subsidiaries (that are not Guarantors) may issue shares of
preferred stock if the Consolidated Leverage Ratio of the Company, calculated
on a pro forma basis after giving effect to the incurrence of the additional
Indebtedness to be incurred or the Disqualified Stock or preferred stock to be
issued and the application of the proceeds therefrom, would have been less than
2.0 to 1.
Notwithstanding the preceding paragraph, the Company and its
Restricted Subsidiaries may incur the following Indebtedness (collectively,
"PERMITTED DEBT"):
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(i) Indebtedness of the Company under the Credit Agreement
and Guarantees thereof by the Guarantors in an aggregate amount not to exceed
$300.0 million at any time outstanding;
(ii) the Indebtedness of the Company and its Restricted
Subsidiaries existing on the Issue Date;
(iii) Indebtedness of any Restricted Subsidiary of the
Company represented by a Subsidiary Guarantee;
(iv) Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance, defease, renew or
replace, any Indebtedness (other than intercompany Indebtedness) that was
permitted to be incurred under this Section 4.04 or that was outstanding on
the Issue Date;
(v) intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that (i) if the
Company or any Guarantor is the obligor on such Indebtedness to a Restricted
Subsidiary of the Company that is not a Wholly-Owned Restricted Subsidiary of
the Company, such Indebtedness is expressly subordinated to the prior payment
in full in cash of all Obligations with respect to the Securities or the
Subsidiary Guarantee, as the case may be, and (ii)(A) any subsequent issuance
or transfer of Equity Interests that results in any such Indebtedness being
held by a Person other than the Company or a Restricted Subsidiary of the
Company and (B) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Restricted Subsidiary of the
Company shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case may
be, that was not permitted by this clause (v);
(vi) the issuance by a Restricted Subsidiary of the Company
of preferred stock to the Company or to any of the Guarantors; PROVIDED,
HOWEVER, that any subsequent event or issuance or transfer of any Capital
Stock that results in the owner of such preferred stock, in the case of a
Guarantor, ceasing to be a Restricted Subsidiary of the Company or any
subsequent transfer of such preferred stock to a Person other than the
Company or any of the Guarantors shall be deemed to be an issuance of
preferred stock by such Restricted Subsidiary that was not permitted by this
clause (vi);
(vii) Hedging Obligations that are incurred in the ordinary
course of business;
(viii) Capital Lease Obligations and/or Purchase Money
Indebtedness of the Company or a Restricted Subsidiary of the Company
incurred in the ordinary course of business not to exceed $30.0 million at
any time outstanding;
(ix) the Guarantee by the Company or any of the Guarantors
of Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by another provision of this Section 4.04; and
(x) additional Indebtedness of the Company and the
Guarantors in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any other Indebtedness
incurred pursuant to this clause (x), not to exceed $10.0 million at any time
outstanding.
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Notwithstanding anything in this Indenture to the contrary,
consummation of a Securitization shall not be deemed to be the incurrence of
Indebtedness or the issuance of Disqualified Stock or preferred stock by the
Company or a Restricted Subsidiary of the Company.
The Company will not, and will not permit any Restricted Subsidiary
of the Company to, incur any Indebtedness that is contractually subordinated to
any Indebtedness of the Company or any such Restricted Subsidiary unless such
Indebtedness is also contractually subordinated to the Securities, or the
Subsidiary Guarantee of such Restricted Subsidiary (as applicable), on
substantially identical terms; PROVIDED, HOWEVER, that no Indebtedness shall be
deemed to be contractually subordinated to any other Indebtedness solely by
virtue of being unsecured or not guaranteed by any Restricted Subsidiary of the
Company.
For purposes of determining compliance with this Section 4.04, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (x) above or is
entitled to be incurred pursuant to the first paragraph of this Section 4.04,
the Company shall, in its sole discretion, classify such item of Indebtedness
in any manner that complies with this Section 4.04 and such item of
Indebtedness will be treated as having been incurred pursuant to only one of
such clauses or pursuant to the first paragraph hereof.
SECTION 4.05. PAYMENTS FOR CONSENTS.
Neither the Company nor any of its Subsidiaries will, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid or is paid to all Holders of the Securities that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
SECTION 4.06. LIMITATION ON INVESTMENT COMPANY STATUS.
The Company and its Subsidiaries shall not take any action, or
otherwise permit to exist any circumstance, that would require the Company to
register as an "investment company" under the Investment Company Act of 1940,
as amended.
SECTION 4.07. LIMITATION ON ASSET SALES.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, make any Asset Sale, unless
(i) the Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets sold or otherwise disposed of and (ii) at least 85% of such
consideration consists of (A) cash or Cash Equivalents, (B) properties and
assets to be used in the business of the Company and its Restricted
Subsidiaries and/or (C) Equity Interests in any Person which thereby becomes a
Wholly-Owned Restricted Subsidiary of the Company. The amount of any
(i) Indebtedness (other than any subordinated Indebtedness) of the Company or
any Restricted Subsidiary of the Company that is actually assumed by the
transferee in such Asset Sale and from which the Company and the Restricted
Subsidiaries of the Company are fully released shall be deemed to be cash for
purposes of determining the percentage of cash consideration received by the
Company or any of its Restricted Subsidiaries and (ii) notes or other similar
obligations received by the Company or any of its Restricted Subsidiaries from
such transferee that are immediately converted, sold or exchanged (or are
converted, sold or exchanged within thirty days of the related Asset Sale) by
the Company or any of its Restricted
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Subsidiaries into cash shall be deemed to be cash, in an amount equal to the
net cash proceeds realized upon such conversion, sale or exchange, for
purposes of determining the percentage of cash consideration received by the
Company or any of its Restricted Subsidiaries.
In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Article Five and as a
result thereof the Company is no longer an obligor on the Securities, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and its Restricted Subsidiaries not so transferred for purposes of
this Section 4.07, and shall comply with the provisions of this Section 4.07
with respect to such deemed sale as if it were an Asset Sale. In addition, the
Fair Market Value of such properties and assets of the Company or its
Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash
Proceeds for purposes of this Section 4.07.
The Company or such Restricted Subsidiary, as the case may be, may
(i) apply the Net Cash Proceeds of any Asset Sale within 365 days of receipt
thereof to repay Specified Senior Indebtedness of the Company or such
Restricted Subsidiary and permanently reduce any related commitment, or
(ii) commit in writing to acquire, construct or improve, or acquire, construct
or improve, properties and assets to be used in the business of the Company and
its Restricted Subsidiaries and so apply such Net Cash Proceeds within 365 days
after the receipt thereof.
To the extent all or part of the Net Cash Proceeds of any Asset Sale
are not applied within 365 days of such Asset Sale as described in clause
(i) or (ii) of the immediately preceding paragraph (such Net Cash Proceeds, the
"UNUTILIZED NET CASH PROCEEDS"), the Company shall, within 20 days after such
365th day, make an Offer to Purchase all outstanding Securities up to a maximum
principal amount (expressed as a multiple of $1,000) of Securities equal to
such Unutilized Net Cash Proceeds, at a purchase price in cash equal to 100% of
the principal amount thereof, plus accrued and unpaid interest thereon, if any,
to the Purchase Date; PROVIDED, HOWEVER, that the Offer to Purchase may be
deferred until there are aggregate Unutilized Net Cash Proceeds equal to or in
excess of $10.0 million, at which time the entire amount of such Unutilized Net
Cash Proceeds, and not just the amount in excess of $10.0 million, shall be
applied as required pursuant to this paragraph.
With respect to any Offer to Purchase effected pursuant to this
Section 4.07, among the Securities, to the extent the aggregate principal
amount of Securities tendered pursuant to such Offer to Purchase exceeds the
Unutilized Net Cash Proceeds to be applied to the repurchase thereof, such
Securities shall be purchased PRO RATA based on the aggregate principal amount
of such Securities tendered by each Holder. To the extent the Unutilized Net
Cash Proceeds exceed the aggregate amount of Securities tendered by the Holders
of the Securities pursuant to such Offer to Purchase, the Company may retain
and utilize any portion of the Unutilized Net Cash Proceeds not applied to
repurchase the Securities for any purpose consistent with the other terms of
this Indenture.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and
Rule 14e-1 under, the Exchange Act, and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed a Default or an Event of Default.
Each Holder shall be entitled to tender all or any portion of the
Securities owned by such Holder pursuant to the Offer to Purchase, subject to
the requirement that any portion of a Security tendered
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must be tendered in an integral multiple of $1,000 principal amount and
subject to any proration among tendering Holders as described above.
SECTION 4.08. LIMITATION ON RESTRICTED PAYMENTS.
The Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company) or to the direct or indirect holders of the Company's or any
of its Restricted Subsidiaries' Equity Interests in their capacity as
such (other than (A) dividends, payments or distributions payable
solely in Equity Interests (other than Disqualified Stock) of the
Company and (B) dividends, payments or distributions payable solely
to the Company or its Wholly-Owned Restricted Subsidiaries);
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the
Company or any direct or indirect parent of the Company or other
Affiliate of the Company (other than any such Equity Interests owned
by the Company or any Wholly-Owned Restricted Subsidiary of the
Company); or
(iii) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iii)
above being collectively referred to as "RESTRICTED PAYMENTS"), unless, at the
time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Leverage Ratio test set forth in the first paragraph of
Section 4.04; and
(c) such Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the Issue Date (excluding Restricted
Payments permitted by clause (ii) of the next succeeding paragraph),
is less than the sum of (i) 25% of the aggregate cumulative
Consolidated Net Income of the Company for the period (taken as one
accounting period) from and after October 1, 1997 to the end of the
Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus (ii) 100% of the aggregate
net cash proceeds received by the Company from the issue or sale
since the Issue Date of Equity Interests of the Company (other than
Disqualified Stock) or of Disqualified Stock or debt securities of
the Company that have been converted into such Equity Interests
(other than Equity Interests (or Disqualified Stock or convertible
debt securities) sold to a Subsidiary of the Company and other than
Disqualified Stock or convertible debt securities that have been
converted into Disqualified Stock), plus (iii) to the extent that any
Restricted Investment that was made after the Issue Date is sold
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for cash or otherwise liquidated or repaid for cash, the lesser of
(A) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (B) the initial
amount of such Restricted Investment.
The foregoing provisions do not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Subsidiary of
the Company) of, other Equity Interests of the Company (other than Disqualified
Stock); PROVIDED that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement or other acquisition
shall be excluded from clause (c) (ii) of the preceding paragraph; (iii) the
payment of any dividend by a Restricted Subsidiary of the Company to the
holders of its common Equity Interests on a PRO RATA basis; (iv) the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Restricted Subsidiary of the Company
held by any member of the Company's (or any of its Restricted Subsidiaries')
management in connection with compensation or severance arrangements; PROVIDED
that the aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $1.0 million in any twelve-month
period and no Default or Event of Default shall have occurred and be continuing
immediately after such transaction; (v) payments of withholding taxes due or
payments of exercise prices in connection with exercises of options for common
stock of the Company by any employee or former employee of the Company (or any
Affiliate of the Company) by the tender of common stock owned by such employee
or the withholding of shares of common stock of the Company in connection with
such option exercise as consideration therefor in connection with compensation
arrangements; (vi) any purchase, redemption or other acquisition or retirement
for a nominal amount of Equity Interests issued pursuant to any shareholder
rights plan of the Company, as the same may be adopted or amended from time to
time; (vii) payment of cash in lieu of fractional shares of common stock that
otherwise would be issuable; and (viii) if no Default or Event of Default shall
have occurred and be continuing, the payment of dividends on the Common Stock
not in excess of $0.02 per share (as adjusted for stock splits, stock
dividends, reclassifications and the like) per fiscal quarter.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the
extent repaid in cash) in the Subsidiary so designated will be deemed to be
Restricted Payments at the time of such designation and will reduce the amount
available for Restricted Payments under the first paragraph of this Section
4.08. All such outstanding Investments will be deemed to constitute Investments
in an amount equal to the greater of (y) the net book value of such Investments
at the time of such designation or (z) the Fair Market Value of such
Investments at the time of such designation. Such designation will only be
permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
The amount of all non-cash Restricted Payments shall be the Fair
Market Value on the date of the Restricted Payment of the assets or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair
Market Value of any non-cash Restricted Payment shall be determined by the
Board of Directors of the Company, whose resolution with respect thereto shall
be delivered to the Trustee, such determination to be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing if such Fair Market Value exceeds $10.0 million. Not later
than 50 days after the end of any fiscal quarter (100 days in the case of the
last fiscal quarter of the fiscal year) during which any Restricted Payment is
made, the Company
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shall deliver to the Trustee an Officers' Certificate stating that all
Restricted Payments made during such fiscal quarter were permitted and
setting forth the basis upon which the calculations required by this Section
4.08 were computed, together with a copy of any opinion or appraisal required
by this paragraph.
SECTION 4.09. NOTICE OF DEFAULTS.
(a) In the event that any Indebtedness of the Company or any of its
Subsidiaries is declared due and payable before its maturity because of the
occurrence of any default (or any event which, with notice or lapse of time, or
both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(b) Upon becoming aware of any Default or Event of Default, the
Company shall promptly deliver an Officers' Certificate to the Trustee
specifying the Default or Event of Default.
SECTION 4.10. LIMITATION ON LIENS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under this Indenture and the Securities and, in the case of a Guarantor,
its Subsidiary Guarantee are secured on an equal and ratable basis (or on a
senior basis in the case of subordinated Indebtedness) with the obligations so
secured until such time as such obligations are no longer secured by a Lien.
SECTION 4.11. REPORTS.
Whether or not required by the rules and regulations of the SEC, so
long as any Securities are outstanding, the Company will furnish to the Trustee
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" that describes the financial
condition and results of operations of the Company and its consolidated
Subsidiaries (showing in reasonable detail, either on the face of the financial
statements or in the footnotes thereto and in Management's Discussion and
Analysis of Financial Condition and Results of Operations, the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separately from the financial condition and results of operations
of the Unrestricted Subsidiaries of the Company) and, with respect to the
annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the SEC on Form 8-K if the Company were required to file such
reports. In addition, whether or not required by the rules and regulations of
the SEC, the Company will file a copy of all such information and reports with
the SEC for public availability (unless the SEC will not accept such a filing)
and make such information available to securities analysts and prospective
investors upon request.
SECTION 4.12. LIMITATIONS ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other
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interest or participation in, or measured by, its profits, or (b) pay any
Indebtedness owed to the Company or any of its Restricted Subsidiaries, (ii)
make loans or advances to the Company or any of its Restricted Subsidiaries
or (iii) transfer any of its properties or assets to the Company or any of
its Restricted Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (a) this Indenture, (b) applicable law, (c)
any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Company or any of its Restricted Subsidiaries as in effect at the time
of such acquisition (except to the extent such Indebtedness was incurred in
connection with or in contemplation of such acquisition), which encumbrance
or restriction is not applicable to any Person, or the properties or assets
of any Person, other than the Person, or the property or assets of the
Person, so acquired, PROVIDED that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be incurred, (d)
by reason of customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices, (e)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (iii)
above on the property so acquired, (f) Permitted Refinancing Indebtedness,
PROVIDED that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive than those
contained in the agreements governing the Indebtedness being refinanced, (g)
the provisions of any Securitization that are exclusively applicable to any
Securitization Entity, or (h) in the case of clause (iii) above, restrictions
contained in security agreements securing Indebtedness of Guarantors relating
to the properties or assets of Guarantors subject to the Liens created
thereby, PROVIDED that such Liens were otherwise permitted to be incurred
under Section 4.10.
SECTION 4.13. ADDITIONAL SUBSIDIARY GUARANTEES.
The Company will cause each Restricted Subsidiary which Guarantees
any Indebtedness of the Company to execute and deliver to the Trustee a
Subsidiary Guarantee pursuant to which such Restricted Subsidiary will
Guarantee the Company's payment obligations under the Securities on a senior
unsecured basis, jointly and severally, with any other Guarantors; PROVIDED,
that the foregoing shall not apply to Subsidiaries that (i) have properly been
designated as Unrestricted Subsidiaries in accordance with this Indenture for
so long as they continue to constitute Unrestricted Subsidiaries or
(ii) qualify as Securitization Entities for so long as they continue to
constitute Securitization Entities.
SECTION 4.14. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
(a) Following the occurrence of a Change of Control (the date of
such occurrence being the "CHANGE OF CONTROL DATE"), the Company shall notify
the Holders of the Securities of such occurrence in the manner prescribed by
this Indenture and shall, within 30 days after the Change of Control Date, make
an Offer to Purchase all Securities then outstanding at a purchase price in
cash equal to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the Purchase Date (subject to the right of
Holders of record on the relevant Interest Record Date to receive interest due
on the relevant Interest Payment Date). Each Holder shall be entitled to
tender all or any portion of the Securities owned by such Holder pursuant to
the Offer to Purchase, subject to the requirement that any portion of a
Security tendered must be tendered in an integral multiple of $1,000 principal
amount.
(b) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04, money sufficient to pay the Purchase
Price of all Securities or portions thereof so accepted and (iii) deliver or
cause to be delivered to the Trustee for cancellation all Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof accepted for payment by the Company. The
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Paying Agent (or the Company, if so acting) shall promptly mail or deliver to
Holders of Securities so accepted, payment in an amount equal to the Purchase
Price for such Securities, and the Trustee shall promptly authenticate and
mail or deliver to each Holder of Securities a new Security or Securities
equal in principal amount to any unpurchased portion of the Security
surrendered as requested by the Holder. Any Security not accepted for
payment shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Offer on or
as soon as practicable after the Purchase Date.
(c) If the Company makes an Offer to Purchase, the Company will
comply with all applicable tender offer laws and regulations, including, to the
extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Securities
pursuant of a Change of Control Offer. To the extent that the provisions of
any securities laws or regulations conflict with the provisions of this Section
4.14, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.14.
SECTION 4.15. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee within 120 days after the
close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officer with a view to determining whether a Default
or Event of Default has occurred and whether or not the signers know of any
Default or Event of Default by the Company that occurred during such fiscal
year. If they do know of such a Default or Event of Default, their status and
the action the Company is taking or proposes to take with respect thereto. The
first certificate to be delivered by the Company pursuant to this Section 4.15
shall be for the fiscal year ending December 31, 1998.
SECTION 4.16. CORPORATE EXISTENCE.
Subject to Article Five, the Company shall do or shall cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
Restricted Subsidiary in accordance with the respective organizational
documents of each such Restricted Subsidiary and the rights (charter and
statutory) and material franchises of the Company and the Restricted
Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any such right or franchise, or the corporate existence of any
Restricted Subsidiary, if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and the Restricted Subsidiaries, taken as a whole;
PROVIDED, FURTHER, HOWEVER, that a determination of the Board of Directors of
the Company shall not be required in the event of a merger of one or more
Wholly-Owned Restricted Subsidiaries of the Company with or into another Wholly-
Owned Restricted Subsidiary of the Company or another Person, if the surviving
Person is a Wholly-Owned Restricted Subsidiary of the Company organized under
the laws of the United States or a State thereof or of the District of
Columbia. This Section 4.16 shall not prohibit the Company from taking any
other action otherwise permitted by, and made in accordance with, the
provisions of this Indenture.
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ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. MERGERS, SALE OF ASSETS, ETC.
(a) The Company may not consolidate or merge with or into (whether
or not the Company is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia; (ii) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Securities and this Indenture pursuant to
a supplemental indenture in a form reasonably satisfactory to the Trustee;
(iii) immediately before and after such transaction, no Default or Event of
Default exists; and (iv) the Company or the entity or Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) would, at the time of such
transaction and after giving pro forma effect thereto, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Consolidated Leverage
Ratio test set forth in the first paragraph of Section 4.04.
(b) Notwithstanding paragraph (a) above or paragraph (d) below, any
Wholly-Owned Restricted Subsidiary of the Company may consolidate with or merge
into the Company or any Guarantor; PROVIDED that the Company or the Guarantor,
as the case may be, is the surviving corporation, and any Guarantor may
consolidate with or merge into the Company. Notwithstanding anything in this
Indenture to the contrary, consummation of one or more Securitizations shall
not constitute the sale of all or substantially all of the properties or assets
of the Company.
(c) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all the properties and assets of one or
more Restricted Subsidiaries the Equity Interest of which constitutes all or
substantially all the properties and assets of the Company shall be deemed to
be the transfer of all or substantially all the properties and assets of the
Company.
(d) No Guarantor may consolidate with or merge with or into (whether
or not such Guarantor is the surviving Person), another corporation, Person or
entity whether or not affiliated with such Guarantor unless, subject to the
provisions of Section 10.03, (i) the Person formed by or surviving any such
consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor under its Subsidiary Guarantee pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Securities and this Indenture; (ii) immediately after giving
effect to such transaction, no Default or Event of Default exists; (iii) such
Guarantor, or any Person formed by or surviving any such consolidation or
merger, would have Consolidated Net Worth (immediately after giving effect to
such transaction), equal to or greater than the Consolidated Net Worth of such
Guarantor immediately preceding the transaction; and (iv) immediately after
giving effect to such transaction, the Company would have been able to in-
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cur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Leverage Ratio test set forth in the first paragraph of Section 4.04.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in Section 5.01 in which the Company or a
Guarantor, as the case may be, is not the Surviving Person and the Surviving
Person is to assume all the Obligations of the Company under the Securities,
this Indenture and the Registration Rights Agreement or of such Guarantor under
its Subsidiary Guarantee, this Indenture and the Registration Rights Agreement,
as the case may be, pursuant to a supplemental indenture, such Surviving Person
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company or such Guarantor, as the case may be, and the Company,
as the case may be, shall be discharged from its Obligations under this
Indenture and the Securities or such Guarantor shall be discharged from its
Obligations under this Indenture and its Subsidiary Guarantee, as the case may
be.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following shall be an "Event of Default" for purposes of
this Indenture:
(a) failure to pay principal of (or premium, if any, on) any
Security when due;
(b) failure to pay any interest on any Security when due, which
failure continues for 30 days or more;
(c) failure by the Company or any of its Restricted Subsidiaries to
comply with its obligations under Section 4.04, Section 4.07, Section 4.12
or Section 4.14;
(d) failure by the Company or any of its Restricted Subsidiaries for
30 days after notice from the Trustee or the Holders of at least 25% in
aggregate principal amount of the Securities then outstanding to comply
with any of the other covenants or agreements in this Indenture;
(e) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries) whether such Indebtedness now exists, or
is created after the Issue Date, which default (a) is caused by a failure
to pay principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness
on the date of such default (a "PAYMENT DEFAULT") or (b) results in the
acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so accelerated,
aggregates $5.0 million or more;
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(f) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of $5.0 million, which judgments
are not paid, discharged or stayed for a period of 60 days;
(g) the Company or any of its Significant Subsidiaries (or one or
more Restricted Subsidiaries that, taken together would constitute a
Significant Subsidiary) pursuant to or within the meaning of any
Bankruptcy Law: (i) admits in writing its inability to pay its debts
generally as they become due; (ii) commences a voluntary case or
proceeding; (iii) consents to the entry of an order for relief against it
in an involuntary case or proceeding; (iv) consents or acquiesces in the
institution of a bankruptcy or insolvency proceeding against it;
(v) consents to the appointment of a Custodian of it or for all or
substantially all of its property; or (vi) makes a general assignment for
the benefit of its creditors, or any of them takes any action to authorize
or effect any of the foregoing;
(h) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Company or
any Significant Subsidiary (or one or more Restricted Subsidiaries that,
taken together would constitute a Significant Subsidiary) of the Company
in an involuntary case or proceeding; (ii) appoints a Custodian of the
Company or any Significant Subsidiary (or one or more Restricted
Subsidiaries that, taken together would constitute a Significant
Subsidiary) of the Company for all or substantially all of its property;
or (iii) orders the liquidation of the Company or any Significant
Subsidiary (or one or more Restricted Subsidiaries that, taken together
would constitute a Significant Subsidiary) of the Company; and in each
case the order or decree remains unstayed and in effect for 60 days;
PROVIDED, HOWEVER, that if the entry of such order or decree is appealed
and dismissed on appeal, then the Event of Default hereunder by reason of
the entry of such order or decree shall be deemed to have been cured; or
(i) except as permitted by this Indenture, any Subsidiary Guarantee
shall be held in a judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors. The term "CUSTODIAN"
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
SECTION 6.02. ACCELERATION.
If an Event of Default with respect to the Securities (other than an
Event of Default specified in clauses (g) or (h) of Section 6.01) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the outstanding Securities, by notice in writing to the Company (and
to the Trustee if given by the Holders) may declare the unpaid principal of
(and premium, if any) and accrued interest to the date of acceleration on all
outstanding Securities to be due and payable immediately and, upon any such
declaration, such principal amount (and premium, if any) and accrued interest,
notwithstanding anything contained in this Indenture or the Securities to the
contrary, shall become immediately due and payable.
If an Event of Default specified in clauses (g) or (h) of Section
6.01 occurs, all unpaid principal of and accrued interest on all outstanding
Securities shall IPSO FACTO become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
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Any such declaration with respect to the Securities may be rescinded
and annulled by the Holders of a majority in aggregate principal amount of the
outstanding Securities by written notice to the Trustee if all existing Events
of Default (other than the nonpayment of principal of and interest on the
Securities which has become due solely by virtue of such acceleration) have
been cured or waived and if the rescission would not conflict with any judgment
or decree. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULT.
Subject to Sections 2.09, 6.07 and 9.02, prior to the declaration of
acceleration of the Securities, the Holders of not less than a majority in
aggregate principal amount of the outstanding Securities by written notice to
the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on
any Security as specified in clauses (a), (b) and (c) of Section 6.01 or a
Default in respect of any term or provision of this Indenture that may not be
amended or modified without the consent of each Holder affected as provided in
Section 9.02. The Company shall deliver to the Trustee an Officers'
Certificate stating that the requisite percentage of Holders have consented to
such waiver and attaching copies of such consents. In case of any such waiver,
the Company, the Trustee and the Holders shall be restored to their former
positions and rights hereunder and under the Securities, respectively. This
paragraph of this Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the
TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from
this Indenture and the Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Securities, but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Subject to Section 2.09, the Holders of a majority in principal
amount of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of another Holder, it being
understood that the Trustee shall have no duty (subject to Section 7.01) to
ascertain whether or not such actions or forebearances are unduly prejudicial
to such holders, or that may involve the Trustee in personal liability;
PROVIDED, HOWEVER, that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction. In the event the
Trustee takes any action
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or follows any direction pursuant to this Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
any loss or expense caused by taking such action or following such direction.
This Section 6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and
such Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may not pursue any remedy with respect to this Indenture or
the Securities unless:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of the
outstanding Securities make a written request to the Trustee to pursue a
remedy;
(iii) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(v) during such 60-day period the Holders of a majority in principal
amount of the outstanding Securities do not give the Trustee a direction which,
in the opinion of the Trustee, is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of or interest on a Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of the Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal or interest specified
in Section 6.01(a), (b) or (c) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with interest overdue
on principal and to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate PER
ANNUM borne by the Securities and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or
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deliverable on any such claims and to distribute the same, and any Custodian
in any such judicial proceedings is hereby authorized by each Holder to make
such payments to the Trustee and, in the event that the Trustee shall consent
to the making of such payments directly to the Holders, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agent and counsel, and any other amounts due
the Trustee under Section 7.07. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding; PROVIDED, HOWEVER, that the Trustee may, on behalf of the
Holders, vote for the election of a trustee in bankruptcy or similar official
and may be a member of the creditors' committee.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to the Holders pursuant to this
Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 6.11 shall not apply to a suit by the Trustee, a
suit by a Holder or group of Holders of more than 10% in aggregate principal
amount of the outstanding Securities, or to any suit instituted by any Holder
for the enforcement or the payment of the principal or interest on any
Securities on or after the respective due dates expressed in the Security.
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If a Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the performance of such
duties as are specifically set forth herein; and
(2) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions conforming to the requirements
of this Indenture; however, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of
such funds is not assured to it or it does not receive from such Holders an
indemnity satisfactory to it in its sole discretion against such risk,
liability, loss, fee or expense which might be incurred by it in compliance
with such request or direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and/or an Opinion of Counsel, which shall conform
to the provisions of Section 11.05. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence of
any agent or attorney (other than an agent who is an employee of the
Trustee) appointed with due care and appointed with the consent of the
Company.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) Before the Trustee acts or refrains from acting, it may consult
with counsel and the advice or opinion of such counsel as to matters of
law shall be full and complete authorization and protection from liability
in respect of any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) Any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction.
(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney.
(i) The Trustee shall not be deemed to have notice of any Event of
Default unless a Trust Officer of the Trustee has actual knowledge thereof
or unless the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee, and such notice references the
Securities and this Indenture.
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(j) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(k) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and the Trustee shall not
be answerable for other than its gross negligence or willful misconduct.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or their
Affiliates with the same rights it would have if it were not Trustee, subject
to Section 7.10 hereof. Any Agent may do the same with like rights. However,
the Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall
not be accountable for the Company's use of the proceeds from the Securities,
and it shall not be responsible for any statement of the Company in this
Indenture or any document issued in connection with the sale of Securities or
any statement in the Securities other than the Trustee's certificate of
authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or an Event of Default occurs and is continuing and the
Trustee has actual knowledge of such Defaults or Events of Default, the Trustee
shall mail to each Holder notice of the Default or Event of Default within 30
days after the occurrence thereof. Except in the case of a Default or an Event
of Default in payment of principal of or interest on any Security or a Default
or Event of Default in complying with Section 5.01, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of Holders. This
Section 7.05 shall be in lieu of the proviso to Section 315(b) of the TIA and
such proviso to Section 315(b) of the TIA is hereby expressly excluded from
this Indenture and the Securities, as permitted by the TIA.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
If required by TIA Section 313(a), as amended, within 60 days after
each October 1 beginning with October 1, 1998, the Trustee shall mail to each
Holder a report dated as of such October 1 that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Section 313(b), (c) and
(d).
A copy of each such report at the time of its mailing to Holders
shall be filed with the SEC and each stock exchange, if any, on which the
Securities are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
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SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time, and the
Trustee shall be entitled to, such compensation as the Company and the Trustee
shall from time to time agree in writing for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances, including all costs and
expenses of collection (including reasonable fees, disbursements and expenses
of its agents and outside counsel) incurred or made by it in addition to the
compensation for its services except any such disbursements, expenses and
advances as may be attributable to the Trustee's negligence or willful
misconduct. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents, accountants, experts and
outside counsel and any taxes or other expenses incurred by a trust created
pursuant to Section 8.01 hereof.
The Company shall indemnify the Trustee for, and hold it harmless
against any and all loss, damage, claims, liability or expense, including taxes
(other than franchise taxes imposed on the Trustee and taxes based upon,
measured by or determined by the income of the Trustee), arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent that
such loss, damage, claim, liability or expense is due to its own negligence or
willful misconduct. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. However, the
failure by the Trustee to so notify the Company shall not relieve the Company
of its obligations hereunder unless the Company has been prejudiced thereby.
The Company shall defend the claim and the Trustee shall cooperate in the
defense at the Company's expense, PROVIDED that the Company shall not be liable
in any action or for which it has assumed the defense for the expenses of
separate counsel to the Trustee unless (1) the employment of separate counsel
has been authorized by the Company, (2) the Trustee has reasonably concluded
(based upon advice of counsel to the Trustee) that there may be legal defenses
available to the Trustee that are different from or in addition to those
available to the Company or (3) a conflict or potential conflict exists (based
upon advice of counsel to the Trustee) between the Trustee and the Company, and
PROVIDED, FURTHER, that in any such event the Company's reimbursement
obligation with respect to separate counsel of the Trustee will be limited to
the reasonable fees and expenses of such counsel.
The Company need not pay for any settlement made without their
written consent, which consent shall not be unreasonably withheld. The Company
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee as a result of its own negligence or willful
misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Securities against all money or property
held or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of or interest on particular Securities
or the Purchase Price or redemption price of any Securities to be purchased
pursuant to an Offer to Purchase or redeemed.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(g) or (h) occurs, the expenses (including
the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute
expenses of administration under any Bankruptcy Law. The Company's under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
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removal of any Trustee, the discharge of the Company's obligations pursuant to
Article Eight and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company
in writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties
of the Trustee under this Indenture. A successor Trustee shall mail notice of
its succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the outstanding Securities
may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or trans-
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feree corporation or banking corporation without any further act shall be the
successor Trustee; PROVIDED, HOWEVER, that such corporation shall be otherwise
qualified and eligible under this Article Seven.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee which shall be eligible to
act as Trustee under TIA SectionSection 310(a)(1) and 310(a)(2). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. If the Trustee has or
shall acquire any "conflicting interest" within the meaning of TIA
Section 310(b), the Trustee and the Company shall comply with the provisions of
TIA Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 7.10, the Trustee shall resign immediately in the manner and with the
effect hereinbefore specified in this Article Seven. The provisions of TIA
Section 310 shall apply to the Company and any other obligor of the Securities.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. TERMINATION OF THE COMPANY'S OBLIGATIONS.
The Company may terminate its obligations under the Securities and
this Indenture as well as the obligations of the Guarantors under their
respective Subsidiary Guarantees, except those obligations referred to in the
penultimate paragraph of this Section 8.01, if :
(i) either (a) all the Securities theretofore authenticated and
delivered (except lost, stolen or destroyed Securities which have been replaced
or paid and Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust) have been delivered to the
Trustee for cancellation or (b) all Securities not theretofore delivered to the
Trustee for cancellation have become due and payable or have been called for
redemption and the Company has irrevocably deposited or caused to be deposited
with the Trustee funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Securities not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on the Securities
to the date of deposit together with irrevocable instructions from the Company
directing the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;
(ii) the Company has paid all other sums payable under this Indenture
by the Company; and
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(iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that all conditions precedent
under this Indenture relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the first paragraph of this Section 8.01, the
Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 7.07, 8.05 and 8.06
shall survive until the Securities are no longer outstanding pursuant to the
last paragraph of Section 2.08. After the Securities are no longer
outstanding, the Company's obligations in Sections 7.07, 8.05 and 8.06 shall
survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's and Guarantors'
obligations under the Securities, the Subsidiary Guarantees and this Indenture
except for those surviving obligations specified above.
SECTION 8.02. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
(a) The Company may terminate its obligations in respect of the
Securities by delivering all outstanding Securities to the Trustee for
cancellation and paying all sums payable by it on account of principal of and
interest on all Securities or otherwise. In addition to the foregoing, the
Company may, at its option, at any time elect to have either paragraph (b) or
(c) below be applied to all outstanding Securities, subject in either case to
compliance with the conditions set forth in Section 8.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.03, be deemed to have
paid and discharged the entire indebtedness represented by the outstanding
Securities, except for (i) the rights of Holders to receive payments in respect
of the principal of, premium, if any, and interest on the Securities when such
payments are due, (ii) the Company's obligations with respect to the Securities
under Sections 2.02 through 2.07, inclusive, 2.10, 2.13, 4.02 and 4.16, (iii)
the rights, powers, trust, duties and immunities of the Trustee under this
Indenture and the Company's obligations in connection therewith and (iv)
Article Eight of this Indenture (hereinafter, "LEGAL DEFEASANCE"). Subject to
compliance with this Article Eight, the Company may exercise its option under
this paragraph (b) notwithstanding the prior exercise of its option under
paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.03, be released from its
obligations under the covenants contained in Sections 4.03 through 4.15,
inclusive, and Article Five with respect to the outstanding Securities
(hereinafter, "COVENANT DEFEASANCE") and thereafter any omission to comply with
such obligations shall not constitute a Default or an Event of Default with
respect to the Securities. In addition, upon the Company's exercise under
paragraph (a) hereof of the option applicable to this paragraph (c), subject to
the satisfaction of the conditions set forth in Section 8.03, any failure or
omission to comply with such obligations shall not constitute a Default or
Event of Default with respect to the Securities.
SECTION 8.03. CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
In order to exercise either Legal Defeasance pursuant to Section
8.02(b) or Covenant Defeasance pursuant to Section 8.02(c):
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in U.S. dollars or United States
Government Obligations, or a combination thereof, in
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such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal of
premium, if any, and interest on the Securities on the stated date for
payment thereof or on the applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.02(b), the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the Securities will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.02(c), the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of
the Securities will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Sections 6.01(g) and 6.01(h) are concerned, at any
time in the period ending on the 91st day after the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of or constitute a Default under this Indenture or
any other material agreement or instrument to which the Company or any of
its Restricted Subsidiaries is a party or by which the Company or any of
its Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that assuming no intervening bankruptcy or
insolvency of the Company between the date of deposit and the 91st day
following the deposit and that no Holder is an insider of the Company,
after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditors' rights generally.
Notwithstanding the foregoing, the opinion of counsel required by
clause (b) above need not be delivered if all Securities not theretofore
delivered to the Trustee for cancellation (x) have become due and
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payable, (y) will become due and payable on the Final Maturity Date within
one year or (z) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
SECTION 8.04. APPLICATION OF TRUST MONEY; TRUSTEE ACKNOWLEDGMENT AND INDEMNITY.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 8.03, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of and
interest on the Securities.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to Section 8.03 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of outstanding Securities.
SECTION 8.05. REPAYMENT TO COMPANY.
Subject to Sections 7.07 and 8.04, the Trustee shall promptly pay to
the Company upon written request any excess money held by it at any time. The
Trustee shall pay to the Company upon written request any money held by it for
the payment of principal or interest that remains unclaimed for two years;
PROVIDED, HOWEVER, that the Trustee before being required to make any payment
may at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that, after a date
specified therein which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining
shall be repaid to the Company. After payment to the Company, Holders entitled
to money must look solely to the Company for payment as general creditors
unless an applicable abandoned property law designates another person and all
liability of the Trustee or Paying Agent with respect to such money shall
thereupon cease.
SECTION 8.06. REINSTATEMENT.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 8.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.02 until
such time as the Trustee is permitted to apply all such money or United States
Government Obligations in accordance with Section 8.02; PROVIDED, HOWEVER, that
if the Company has made any payment of interest on or principal of any
Securities because of the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money or United States Government Obligations held by the
Trustee.
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Guarantors, when authorized by a resolution of
the Board of Directors, and the Trustee may amend or supplement this Indenture
or the Securities without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency; PROVIDED,
HOWEVER, that such amendment or supplement does not adversely affect the
rights of any Holder;
(b) to effect the assumption by a successor Person of all
obligations of the Company under the Securities and this Indenture in
connection with any transaction complying with Article Five of this
Indenture;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional benefit or
rights to the Holders;
(f) to make any other change that does not adversely affect the
rights of any Holder under this Indenture;
(g) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company;
(h) to add a Guarantor in accordance with Section 4.13 or otherwise;
or
(i) to secure the Securities pursuant to the requirements of Section
4.10 or otherwise;
PROVIDED, HOWEVER, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.01.
SECTION 9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07, the Company and the Guarantors, when
authorized by a Board Resolution, and the Trustee may modify, amend or
supplement, or waive compliance by the Company with any provision of, this
Indenture or the Securities with the written consent of the Holders of at least
a majority in principal amount of the outstanding Securities. However, without
the consent of each Holder affected, no such modification, amendment,
supplement or waiver, including a waiver pursuant to Section 6.04, may:
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(a) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the Stated Maturity of any
Security or alter the provisions with respect to the repurchase or
redemption of the Securities (other than provisions relating to Section
4.07 or 4.14);
(c) reduce the rate of or change the time for payment of interest on
any Security,;
(d) make any Security payable in money other than that stated in the
Securities;
(e) make any change in the provisions of this Indenture relating to
the rights of holders of Securities to receive payments of principal of or
premium, if any, or interest on the Securities;
(f) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07 or
this Section 9.02 (other than to add sections of this Indenture or the
Securities which may not be modified, amended, supplemented or waived
without the consent of each Holder affected);
(g) reduce the percentage of the principal amount of outstanding
Securities necessary for amendment to or waiver of compliance with any
provision of this Indenture or the Securities or for waiver of any Default
in respect thereof;
(h) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Securities (except a rescission
of acceleration of the Securities by the Holders thereof as provided in
Section 6.02 and a waiver of the payment default that resulted from such
acceleration);
(i) waive a repurchase or redemption payment with respect to any
Security (other than a payment required by Section 4.07 or 4.14); or
(j) modify the ranking or priority of any Security or the Subsidiary
Guarantee in respect thereof of any Guarantor in any manner adverse to the
Holders of the Securities.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
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SECTION 9.04. RECORD DATE FOR CONSENTS AND EFFECT OF CONSENTS.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Securities entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then those persons
who were Holders of Securities at such record date (or their duly designated
proxies), and only those persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after
such record date. No such consent shall be valid or effective for more than 90
days after such record date. The Trustee is entitled to rely upon any
electronic instruction from beneficial owners to the Holders of any Global
Security.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (a)
through (i) of Section 9.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determine, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment, supplement
or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture and that such amendment, supplement
or waiver constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions).
The Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
ARTICLE TEN
GUARANTEE
SECTION 10.01. UNCONDITIONAL GUARANTEE.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (each, a "SUBSIDIARY GUARANTEE") to each Holder of a Security
authenticated by the Trustee and to the Trustee and its successors and assigns
that: the principal of and interest on the Securities will be promptly paid in
full when due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise, and interest on
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the overdue principal and interest on any overdue interest on the Securities,
to the extent lawful, and all other obligations of the Company to the Holders
or the Trustee hereunder or under the Securities will be promptly paid in
full or performed, all in accordance with the terms hereof and thereof. Each
Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Securities or this Indenture, the absence of any action to enforce the
same, any waiver or consent by any Holder of the Securities with respect to
any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against
the Company, protest, notice and all demands whatsoever and covenants that
the Subsidiary Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture
and this Subsidiary Guarantee. If any Holder or the Trustee is required by
any court or otherwise to return to the Company, any Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation
to the Company or any Guarantor, any amount paid by the Company or any
Guarantor to the Trustee or such Holder, this Subsidiary Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between each Guarantor, on the one
hand, and the Holders and the Trustee, on the other hand, (x) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Article
Six for the purpose of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any acceleration
of such obligations as provided in Article Six, such obligations (whether or
not due and payable) shall forth become due and payable by each Guarantor for
the purpose of this Subsidiary Guarantee.
SECTION 10.02. SEVERABILITY.
In case any provision of this Subsidiary Guarantee 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 10.03. RELEASE OF A GUARANTOR.
If the Securities are defeased in accordance with the terms of this
Indenture, or if Section 5.01(b) is complied with, or if, subject to the
requirements of Section 5.01(a), all or substantially all of the assets of any
Guarantor or all of the Equity Interests of any Guarantor are sold (including
by issuance or otherwise) by the Company in a transaction constituting an Asset
Sale and (x) the Net Cash Proceeds from such Asset Sale are used in accordance
with Section 4.07 or (y) the Company delivers to the Trustee an Officers'
Certificate to the effect that the Net Cash Proceeds from such Asset Sale shall
be used in accordance with Section 4.07 and within the time limits specified by
Section 4.07, then each Guarantor (in the case of defeasance) or such Guarantor
(in the case of compliance with Section 5.01(b) or in the event of a sale or
other disposition of all of the Equity Interests of such Guarantor) or the
corporation acquiring such assets (in the event of a sale or other disposition
of all or substantially all of the assets of such Guarantor) shall be released
and discharged from all obligations under this Article Ten without any further
action required on the part of the Trustee or any Holder.
The Trustee shall, at the sole cost and expense of the Company and
upon receipt at the reasonable request of the Trustee of an Opinion of Counsel
that the provisions of this Section 10.03 have been complied with, deliver an
appropriate instrument evidencing such release upon receipt of a request by the
Company accompanied by an Officers' Certificate certifying as to the compliance
with this Section 10.03.
-57-
Any Guarantor not so released remains liable for the full amount of principal
of and interest on the Securities and the other obligations of the Company
hereunder as provided in this Article Ten.
SECTION 10.04. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Subsidiary Guarantee not constitute
a fraudulent transfer or conveyance for purposes of title 11 of the United
States Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar U.S. Federal or state or other
applicable law. To effectuate the foregoing intention, the Holders and each
Guarantor hereby irrevocably agree that the obligations of each Guarantor under
its Subsidiary Guarantee shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Guarantor
and after giving effect to any collections from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Subsidiary Guarantee or pursuant to Section 10.05, result
in the obligations of such Guarantor under its Subsidiary Guarantee not
constituting such a fraudulent transfer or conveyance under Federal or State
law.
SECTION 10.05. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, INTER SE, that in the event any payment or
distribution is made by any Guarantor (a "FUNDING GUARANTOR") under the
Subsidiary Guarantee, such Funding Guarantor shall be entitled to a
contribution from all other Guarantors in a PRO RATA amount, based on the net
assets of each Guarantor (including the Funding Guarantor), determined in
accordance with GAAP, subject to Section 10.04, for all payments, damages and
expenses incurred by such Funding Guarantor in discharging the Company's
obligations with respect to the Securities or any other Guarantor's obligations
with respect to the Subsidiary Guarantee.
SECTION 10.06. EXECUTION OF SECURITY GUARANTEE.
To further evidence their Subsidiary Guarantee to the Holders, each
of the Guarantors hereby agrees to execute a Security Guarantee to be endorsed
on each Security ordered to be authenticated and delivered by the Trustee.
Each Security Guarantee shall be substantially in the form set forth in
EXHIBITS A AND B hereto. Each Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 10.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a Security Guarantee.
Each such Security Guarantee shall be signed on behalf of each Guarantor by two
Officers prior to the authentication of the Security on which it is endorsed,
and the delivery of such Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of such Security Guarantee on
behalf of such Guarantor. Such signature upon the Security Guarantee may be
manual or facsimile signature of such officer and may be imprinted or otherwise
reproduced on the Security Guarantee, and in case such officer who shall have
signed the Security Guarantee shall cease to be such officer before the
Security on which such Security Guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Security nevertheless may be authenticated and delivered or disposed of as
though the Person who signed the Security Guarantee had not ceased to be such
officer of such Guarantor.
SECTION 10.07. SUBORDINATION OF SUBROGATION AND OTHER RIGHTS.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under its Subsidiary Guarantee or this In-
-58-
denture, including, without limitation, any right of subrogation, shall be
subject and subordinate to, and no payment with respect to any such claim of
such Guarantor shall be made before, the payment in full in cash of all
outstanding Securities in accordance with the provisions provided therefor in
this Indenture.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable,
be governed by such provisions. If any provision of this Indenture modifies
any TIA provision that may be so modified, such TIA provision shall be deemed
to apply to this Indenture as so modified. If any provision of this Indenture
excludes any TIA provision that may be so excluded, such TIA provision shall be
excluded from this Indenture.
The provisions of TIA SectionSection 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.02. NOTICES.
Any notice or communication shall be sufficiently given if in writing
and delivered in person, by facsimile and confirmed by overnight courier, or
mailed by first-class mail addressed as follows:
if to the Company:
Metris Companies Inc.
000 Xxxxx Xxxxxxx 000
Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xx, Xxxxx Xxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
-59-
if to the Trustee:
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid, to
a Holder including any notice delivered in connection with TIA Section 310(b),
TIA Section 313(c), TIA Section 314(a) and TIA Section 315(b), shall be mailed
to him at his address as set forth on the Security Register and shall be
sufficiently given to him if so mailed within the time prescribed. To the
extent required by the TIA, any notice or communication shall also be mailed to
any Person described in TIA Section 313(c).
Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. Except
for a notice to the Trustee, which is deemed given only when received, if a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 11.03. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have
been complied with; and
(2) an Opinion of Counsel in form and substance satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with; PROVIDED, HOWEVER, that with respect to
matters of fact an Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.
-60-
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE.
Each certificate with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate has read such
covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements contained in such certificate are
based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
SECTION 11.06. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 11.07. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE, THE
SECURITIES AND THE SUBSIDIARY GUARANTEES WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 11.08. NO RECOURSE AGAINST OTHERS.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Securities or the Subsidiary
Guarantees, as the case may be, or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities and
the Subsidiary Guarantees.
SECTION 11.09. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of each Guarantor in this Indenture
shall bind its successor. All agreements of the Trustee in this Indenture
shall bind its successor.
SECTION 11.10. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
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SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture, in the Securities or in
the Subsidiary Guarantees 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, and a Holder shall have no claim
therefor against any party hereto.
SECTION 11.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.13. LEGAL HOLIDAYS.
If a payment date is not a Business Day at a place of payment,
payment may be made at that place on the next succeeding Business Day.
[Signature Pages Follow]
S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
METRIS COMPANIES INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
METRIS DIRECT, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
THE FIRST NATIONAL BANK OF CHICAGO, as
Trustee
By: /s/ X. Xxxxxx
------------------------------------
Name: X. Xxxxxx
Title: Vice President
EXHIBIT A
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE 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 (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE ISSUERS' AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM AND, IN THE CASE OF THE FOREGOING CLAUSE (D), A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE ISSUERS AND THE TRUSTEE. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
A-1
METRIS COMPANIES INC.
10% Senior Note due 2004, Series A
CUSIP No.:[ ]
No. [ ] $[ ]
METRIS COMPANIES INC., a Delaware corporation (the "COMPANY", which
term includes any successor corporation), for value received, promise to pay
to [ ] or registered assigns the principal sum of [ ] Dollars, on
November 1, 2004.
Interest Payment Dates: May 1 and November 1, commencing on May 1,
1998.
Interest Record Dates: April 15 and October 15.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officer.
METRIS COMPANIES INC.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
Dated: [ ]
A-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10% Senior Notes due 2004, Series A, described
in the within-mentioned Indenture.
Dated:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
-------------------------------------
Authorized Signatory
A-3
(REVERSE OF SECURITY)
METRIS COMPANIES INC.
10% Senior Note due 2004, Series A
1. INTEREST.
METRIS COMPANIES INC. promises to pay interest on the principal
amount of this Security at the rate per annum shown above. Cash interest on
the Securities will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from November 7, 1997. The
Company will pay interest semi-annually in arrears on each Interest Payment
Date, commencing on May 1, 1998. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal from time to
time on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand,
in each case at the rate borne by the Securities
2. METHOD OF PAYMENT.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of
business on the Interest Record Date immediately preceding the Interest
Payment Date even if the Securities are canceled on registration of transfer
or registration of exchange after such Interest Record Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company shall pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private
debts ("U.S. LEGAL TENDER"). However, the Company may pay principal and
interest by wire transfer of Federal funds (provided that the Paying Agent
shall have received wire instructions on or prior to the relevant Interest
Record Date), or interest by check payable in such U.S. Legal Tender. The
Company may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR.
Initially, The First National Bank of Chicago (the "TRUSTEE") will
act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar without notice to the Holders. The Company may, subject to
certain exceptions, act as Registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
November 7, 1997 (the "INDENTURE"), by and among the Company, the Guarantors
named therein and the Trustee. Capitalized terms herein are used as defined
in the Indenture unless otherwise defined herein. This Security is one of a
duly authorized issue of Securities of the Company designated as its 10%
Senior Notes due 2004, Series A (the "INITIAL SECURITIES"), limited in
aggregate principal amount to $100,000,000, which may be issued under the
Indenture. The Securities include the Initial Securities, the Private
Exchange Securities (as defined in the Indenture) and the Unrestricted
Securities (as defined in the Indenture). All Securities issued under the
Inden-
A-4
ture are treated as a single class of securities under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of
the Indenture (except as otherwise indicated in the Indenture) until such
time as the Indenture is qualified under the TIA, and thereafter as in effect
on the date on which the Indenture is qualified under the TIA.
Notwithstanding anything to the contrary herein, the Securities are subject
to all such terms, and holders of Securities are referred to the Indenture
and the TIA for a statement of them. The Securities are general unsecured
obligations of the Company.
Payment on the Securities is guaranteed (each, a "GUARANTEE") on a
senior basis, jointly and severally, by Metris Direct, Inc. and each
Restricted Subsidiary of the Company which guarantees the Securities (each, a
"GUARANTOR") pursuant to Article Ten of the Indenture. In certain
circumstances, the Guarantees may be released.
5. OPTIONAL REDEMPTION.
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after November 1, 2001, at the redemption
prices (expressed as a percentage of principal amount) set forth below, plus
accrued and unpaid interest thereon, if any, to the Redemption Date (subject
to the right of holders of record on the relevant Interest Record Date to
receive interest due on the relevant Interest Payment Date) if redeemed
during the 12-month period commencing on November 1 of the years indicated
below:
Year Percentage
---- ----------
2001 107.50%
2002 105.00%
2003 102.50%
6. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select
for redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities
and portions of them the Trustee so selects shall be in amounts of $1,000
principal amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal
amount equal to the unredeemed portion thereof will be issued in the name of
the Holder thereof upon cancellation of the original Security. On and after
the Redemption Date, interest will cease to accrue on Securities or portions
thereof called for redemption so long as the Company has deposited with the
Paying Agent for the Securities funds in satisfaction of the redemption price
pursuant to the Indenture and the Paying Agent is not prohibited from paying
such funds to the Holders pursuant to the terms of the Indenture.
7. CHANGE OF CONTROL OFFER.
Following the occurrence of a Change of Control (the date of such
occurrence being the "CHANGE OF CONTROL DATE"), the Company shall, within 30
days after the Change of Control Date, make an Offer to Purchase all
Securities then outstanding at a purchase price in cash equal to 101% of the
aggregate
A-5
principal amount thereof, plus accrued and unpaid interest thereon,
if any, to the Purchase Date (subject to the right of Holders of record on
the relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date).
8. LIMITATION ON DISPOSITION OF ASSETS.
The Company is, subject to certain conditions and certain
exceptions, obligated to make an Offer to Purchase Securities at a purchase
price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Purchase Date (subject to the right of
Holders of record on the Interest Relevant Record Date to receive interest
due on the relevant Interest Payment Date) with the proceeds of certain asset
dispositions.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange any Securities or portions thereof selected for
redemption, except the unredeemed portion of any security being redeemed in
part.
10. PERSONS DEEMED OWNERS.
The registered Holder of a Security shall be treated as the owner
of it for all purposes.
11. UNCLAIMED FUNDS.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Company at their written request. After that, all liability of the Trustee
and such Paying Agent with respect to such funds shall cease.
12. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guarantees, except
for certain provisions thereof, and may be discharged from obligations to
comply with certain covenants contained in the Indenture, the Securities and
the Guarantees, in each case upon satisfaction of certain conditions
specified in the Indenture.
13. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture, the Securities and
the Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders
of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto
may amend or supplement the Indenture, the Securities and the Guarantees to,
among other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated
Securities or
A-6
comply with any requirements of the SEC in connection with the qualification
of the Indenture under the TIA, or make any other change that does not
materially adversely affect the rights of any Holder of a Security.
14. RESTRICTIVE COVENANTS.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets,
to permit restrictions on dividends and other payments by Restricted
Subsidiaries to the Company, to consolidate, merge or sell all or
substantially all of its assets and to engage in transactions with
affiliates. The limitations are subject to a number of important
qualifications and exceptions. The Company must report annually to the
Trustee on compliance with such limitations.
15. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately
in the manner and with the effect provided in the Indenture. Holders of
Securities may not enforce the Indenture, the Securities or the Guarantees
except as provided in the Indenture. The Trustee is not obligated to enforce
the Indenture, the Securities or the Guarantees unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of
Securities notice of certain continuing Defaults or Events of Default if it
determines that withholding notice is in their interest.
16. TRUSTEE DEALINGS WITH COMPANY AND GUARANTORS.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company, the Guarantors, their respective Subsidiaries or their
respective Affiliates as if it were not the Trustee.
17. NO RECOURSE AGAINST OTHERS.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or any Guarantor under the Securities or the
Guarantees, as the case may be, or this Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Securities and the Guarantees.
18. AUTHENTICATION.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
19. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint ten-
A-7
ants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
20. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the accuracy of such numbers
as printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
21. REGISTRATION RIGHTS.
Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will be obligated to consummate an exchange offer pursuant to
which the Holder of this Security shall have the right to exchange this
Security for a 10% Senior Subordinated Note due 2004, Series B, of the
Company which has been registered under the Securities Act, in like principal
amount and having terms identical in all material respects to the Initial
Securities. The Holders shall be entitled to receive certain liquidated
damages payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
22. GOVERNING LAW.
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee thereof without regard to principles of conflicts
of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
A-8
[FORM OF SECURITY GUARANTEE]
SENIOR GUARANTEE
For value received, the undersigned Guarantor (as defined in the
Indenture referred to in the Security upon which this notation is endorsed)
hereby unconditionally guarantees on a senior basis (such Guarantee by the
Guarantor being referred to herein as the "GUARANTEE") the due and punctual
payment of the principal of, premium, if any, and interest on the Securities,
whether at maturity, by acceleration or otherwise, the due and punctual
payment of interest on the overdue principal, premium and interest on the
Securities, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee, all in accordance with the terms
set forth in Article Ten of the Indenture (as defined below). This Guarantee
will become effective in accordance with Article Ten of the Indenture and its
terms shall be evidenced therein. The validity and enforceability of any
Guarantee shall not be affected by the fact that it is not affixed to any
particular Security.
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Indenture dated as of November 7, 1997,
among Metris Companies Inc., each of the Guarantors named therein and The
First National Bank of Chicago, as trustee, as amended or supplemented (the
"INDENTURE").
The obligations of the undersigned to the Holders of Securities and
to the Trustee pursuant to this Guarantee and the Indenture are expressly set
forth in Article Ten of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Guarantee and all of the other
provisions of the Indenture to which this Guarantee relates.
This Security Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Security Guarantee is noted shall have been executed by the Trustee
under the Indenture by the manual signature of one of its authorized officers.
This Security Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to
principles of conflicts of laws to the extent that the application of the
laws of another jurisdiction would be required thereby.
This Security Guarantee is subject to release upon the terms set
forth in the Indenture.
METRIS DIRECT, INC.
By:
------------------------------------
Name:
Title:
A-9
ASSIGNMENT FORM
I or we assign and transfer this Security to
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
-------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint_______________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:___________________ Signed:______________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:__________________________________________________________
Participant in a recognized Signature Guarantee Medallion Program
(or other signature guarantor program reasonably acceptable to the
Trustee)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.07 or Section 4.14 of the Indenture, check the
appropriate box:
Section 4.07 [ ] Section 4.14 [ ]
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.07 or Section 4.14 of the Indenture,
state the amount: $_____________
Dated:___________________ Your Signature: ______________________________
(Signed exactly as name appears
on the other side of this
Security)
Signature Guarantee:__________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
EXHIBIT B
[FORM OF SERIES B SECURITY]
METRIS COMPANIES INC.
10% Senior Note due 2004, Series B
CUSIP No.:[ ]
No. [ ] $[ ]
METRIS COMPANIES INC., a Delaware corporation (the "COMPANY", which
term includes any successor corporation), for value received, promise to pay
to [ ] or registered assigns the principal sum of [ ]Dollars, on
November 1, 2004.
Interest Payment Dates: May 1 and November 1, commencing on May 1,
1998.
Interest Record Dates: April 15 and October 15.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officer.
METRIS COMPANIES INC.
By:
-----------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
Dated: [ ]
B-1
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10% Senior Notes due 2004, Series B, described
in the within-mentioned Indenture.
Dated:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
-----------------------------------
Authorized Signatory
B-2
(REVERSE OF SECURITY)
METRIS COMPANIES INC.
10% Senior Note due 2004, Series B
1. INTEREST.
METRIS COMPANIES INC. promises to pay interest on the principal
amount of this Security at the rate per annum shown above. Cash interest on
the Securities will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from November 15, 1997. The
Company will pay interest semi-annually in arrears on each Interest Payment
Date, commencing on May 1, 1998. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal from time to
time on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand,
in each case at the rate borne by the Securities
2. METHOD OF PAYMENT.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of
business on the Interest Record Date immediately preceding the Interest
Payment Date even if the Securities are canceled on registration of transfer
or registration of exchange after such Interest Record Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company shall pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private
debts ("U.S. LEGAL TENDER"). However, the Company may pay principal and
interest by wire transfer of Federal funds (provided that the Paying Agent
shall have received wire instructions on or prior to the relevant Interest
Record Date), or interest by check payable in such U.S. Legal Tender. The
Company may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR.
Initially, The First National Bank of Chicago (the "TRUSTEE") will
act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar without notice to the Holders. The Company may, subject to
certain exceptions, act as Registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
November 7, 1997 (the "INDENTURE"), by and among the Company, the Guarantors
named therein and the Trustee. Capitalized terms herein are used as defined
in the Indenture unless otherwise defined herein. This Security is one of a
duly authorized issue of Securities of the Company designated as its 10%
Senior Notes due 2004, Series B limited in aggregate principal amount to
$100,000,000, which may be issued under the Indenture. The Securities
include the Initial Securities (as defined in the Indenture), the Private
Exchange Securities (as defined in the Indenture) and the Unrestricted
Securities (as defined in the Indenture). All Securities issued under the
Inden-
B-3
ture are treated as a single class of securities under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of
the Indenture (except as otherwise indicated in the Indenture) until such
time as the Indenture is qualified under the TIA, and thereafter as in effect
on the date on which the Indenture is qualified under the TIA.
Notwithstanding anything to the contrary herein, the Securities are subject
to all such terms, and holders of Securities are referred to the Indenture
and the TIA for a statement of them. The Securities are general unsecured
obligations of the Company.
Payment on the Securities is guaranteed (each, a "GUARANTEE") on a
senior basis, jointly and severally, by Metris Direct, Inc. and each
Restricted Subsidiary of the Company which guarantees the Securities (each, a
"GUARANTOR") pursuant to Article Ten of the Indenture. In certain
circumstances, the Guarantees may be released.
5. OPTIONAL REDEMPTION.
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after November 1, 2001, at the redemption
prices (expressed as a percentage of principal amount) set forth below, plus
accrued and unpaid interest thereon, if any, to the Redemption Date (subject
to the right of holders of record on the relevant Interest Record Date to
receive interest due on the relevant Interest Payment Date) if redeemed
during the 12-month period commencing on November 1 of the years indicated
below:
Year Percentage
---- ----------
2001 107.50%
2002 105.00%
2003 102.50%
6. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select
for redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities
and portions of them the Trustee so selects shall be in amounts of $1,000
principal amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal
amount equal to the unredeemed portion thereof will be issued in the name of
the Holder thereof upon cancellation of the original Security. On and after
the Redemption Date, interest will cease to accrue on Securities or portions
thereof called for redemption so long as the Company has deposited with the
Paying Agent for the Securities funds in satisfaction of the redemption price
pursuant to the Indenture and the Paying Agent is not prohibited from paying
such funds to the Holders pursuant to the terms of the Indenture.
7. CHANGE OF CONTROL OFFER.
Following the occurrence of a Change of Control (the date of such
occurrence being the "CHANGE OF CONTROL DATE"), the Company shall, within 30
days after the Change of Control Date, make an Offer to Purchase all
Securities then outstanding at a purchase price in cash equal to 101% of the
aggregate
B-4
principal amount thereof, plus accrued and unpaid interest thereon, if any,
to the Purchase Date (subject to the right of Holders of record on the
relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date).
8. LIMITATION ON DISPOSITION OF ASSETS.
The Company is, subject to certain conditions and certain
exceptions, obligated to make an Offer to Purchase Securities at a purchase
price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Purchase Date (subject to the right of
Holders of record on the Interest Relevant Record Date to receive interest
due on the relevant Interest Payment Date) with the proceeds of certain asset
dispositions.
9. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange any Securities or portions thereof selected for
redemption, except the unredeemed portion of any security being redeemed in
part.
10. PERSONS DEEMED OWNERS.
The registered Holder of a Security shall be treated as the owner
of it for all purposes.
11. UNCLAIMED FUNDS.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Company at their written request. After that, all liability of the Trustee
and such Paying Agent with respect to such funds shall cease.
12. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guarantees, except
for certain provisions thereof, and may be discharged from obligations to
comply with certain covenants contained in the Indenture, the Securities and
the Guarantees, in each case upon satisfaction of certain conditions
specified in the Indenture.
13. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture, the Securities and the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders
of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto
may amend or supplement the Indenture, the Securities and the Guarantees to,
among other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated
Securities or
B-5
comply with any requirements of the SEC in connection with the qualification
of the Indenture under the TIA, or make any other change that does not
materially adversely affect the rights of any Holder of a Security.
14. RESTRICTIVE COVENANTS.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets,
to permit restrictions on dividends and other payments by Restricted
Subsidiaries to the Company, to consolidate, merge or sell all or
substantially all of its assets and to engage in transactions with
affiliates. The limitations are subject to a number of important
qualifications and exceptions. The Company must report annually to the
Trustee on compliance with such limitations.
15. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately
in the manner and with the effect provided in the Indenture. Holders of
Securities may not enforce the Indenture, the Securities or the Guarantees
except as provided in the Indenture. The Trustee is not obligated to enforce
the Indenture, the Securities or the Guarantees unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of
Securities notice of certain continuing Defaults or Events of Default if it
determines that withholding notice is in their interest.
16. TRUSTEE DEALINGS WITH COMPANY AND GUARANTORS.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company, the Guarantors, their respective Subsidiaries or their
respective Affiliates as if it were not the Trustee.
17. NO RECOURSE AGAINST OTHERS.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or any Guarantor under the Securities or the
Guarantees, as the case may be, or this Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Securities and the Guarantees.
18. AUTHENTICATION.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
19. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint ten-
B-6
ants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
20. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the accuracy of such numbers
as printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
21. GOVERNING LAW.
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee thereof without regard to principles of conflicts
of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
[FORM OF SECURITY GUARANTEE]
SENIOR GUARANTEE
For value received, the undersigned Guarantor (as defined in the
Indenture referred to in the Security upon which this notation is endorsed)
hereby unconditionally guarantees on a senior basis (such Guarantee by the
Guarantor being referred to herein as the "GUARANTEE") the due and punctual
payment of the principal of, premium, if any, and interest on the Securities,
whether at maturity, by acceleration or otherwise, the due and punctual
payment of interest on the overdue principal, premium and interest on the
Securities, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee, all in accordance with the terms
set forth in Article Ten of the Indenture (as defined below). This Guarantee
will become effective in accordance with Article Ten of the Indenture and its
terms shall be evidenced therein. The validity and enforceability of any
Guarantee shall not be affected by the fact that it is not affixed to any
particular Security.
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Indenture dated as of November 7, 1997,
among Metris Companies Inc., each of the Guarantors named therein and The
First National Bank of Chicago, as trustee, as amended or supplemented (the
"INDENTURE").
The obligations of the undersigned to the Holders of Securities and
to the Trustee pursuant to this Guarantee and the Indenture are expressly set
forth in Article Ten of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Guarantee and all of the other
provisions of the Indenture to which this Guarantee relates.
This Security Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Security Guarantee is noted shall have been executed by the Trustee
under the Indenture by the manual signature of one of its authorized officers.
This Security Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to
principles of conflicts of laws to the extent that the application of the
laws of another jurisdiction would be required thereby.
This Security Guarantee is subject to release upon the terms set
forth in the Indenture.
METRIS DIRECT, INC.
By:
------------------------------
Name:
Title:
B-8
ASSIGNMENT FORM
I or we assign and transfer this Security to
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
-------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint--------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Signed:
------------------------ -----------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
-----------------------------------------------------------
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.07 or Section 4.14 of the Indenture, check the
appropriate box:
Section 4.07 [ ] Section 4.14 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.07 or Section 4.14 of the Indenture, state
the amount: $_____________
Dated: Your Signature:
-------------------- ---------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
-----------------------------------------------------------
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall
bear a legend (which would be in addition to any other legends required in
the case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
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EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 10% Senior Notes due 2004
(THE "SECURITIES") OF METRIS COMPANIES INC.
This Certificate relates to $_______ principal amount of Securities
held in the form of* ___ a beneficial interest in a Global Security or*
_______ Physical Securities by ______ (the "TRANSFEROR").
The Transferor:*
/ / has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Physical Security or Physical Securities in definitive,
registered form of authorized denominations and an aggregate number equal to
its beneficial interest in such Global Security (or the portion thereof
indicated above); or
/ / has requested that the Registrar by written order exchange or
register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such
Indenture, and that the transfer of the Securities does not require
registration under the Securities Act of 1933, as amended (the "ACT"),
because*:
/ / Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
/ / Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act) which delivers a certificate to the Trustee in the form of
EXHIBIT E to the Indenture.
/ / Such Security is being transferred in reliance on Rule 144 under
the Act.
/ / Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 under the Act to a person other than an institutional
"accredited investor." [An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
certification.]
----------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
-------------------------------------
[Authorized Signatory]
Date:
----------------------
*Check applicable box.
D-1
EXHIBIT E
FORM OF TRANSFEREE LETTER OF REPRESENTATION
Metris Companies Inc.
c/o The First National Bank of Chicago
0 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Dear Sirs:
This certificate is delivered to request a transfer of $________
principal amount of the 10% Senior Notes due 2004 (the "NOTES") of Metris
Companies Inc. (the "COMPANY"). Upon transfer, the Notes would be registered
in the name of the new beneficial owner as follows:
Name:
----------------------------------
Address:
-------------------------------
Taxpayer ID Number:
--------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the
"SECURITIES ACT")) purchasing for our own account or for the account of such
an institutional "accredited investor" at least $250,000 principal amount of
the Notes, and we are acquiring the Notes not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risk of our investment in the
Notes and we invest in or purchase securities similar to the Notes in the
normal course of our business. We and any accounts for which we are acting
are each able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted
in the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Notes to offer, sell or otherwise
transfer such Notes prior to the date which is two years after the later of the
date of original issue and the last date on which the Company or any affiliate
of the Company was the owner of such Notes (or any predecessor thereto) (the
"RESALE RESTRICTION TERMINATION DATE") only (a) to the Company, (b) pursuant
to a registration statement which has been declared effective under the
Securities Act, (c) in a transaction complying with the requirements of
Rule 144A under the Securities Act, to a person we reasonably believe is a
qualified institutional buyer under Rule 144A (a "QIB") that purchases for its
own account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that is purchasing for its own account or for the
account of such an institutional "accredited investor," in each case in a
minimum principal amount of Notes of $250,000, (e) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act or (f) pursuant to any other available exemption from
the registration requirements of the Securities Act, subject in each of the
foregoing cases
E-1
to any requirement of law that the disposition of our property or the
property of such investor account or accounts be at all times within our or
their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Notes
is proposed to be made pursuant to clause (d) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act and that it is acquiring such Notes
for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the
Resale Restriction Termination Date of the Notes pursuant to clause (d), (e)
or (f) above to require the delivery of an opinion of counsel, certificates
and/or other information satisfactory to the Company and the Trustee.
Dated: TRANSFEREE:
----------------------- -----------------------------
By:
-------------------------------------
E-2
EXHIBIT F
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
_______________, ____
The First National Bank of Chicago
0 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Corporate Trust Administration
Re: Metris Companies Inc. (the "Company")
10% Senior Notes due 2004, Series A, and
10% Senior Notes due 2004, Series B (the "Securities")
------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $____________ aggregate
principal amount of the Securities, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
F-1
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-------------------------------------
[Authorized Signatory]
F-2
