EXHIBIT 4
================================================================================
SOUTHERN PACIFIC FUNDING CORPORATION
ISSUER,
AND
HALLMARK AMERICA, INC.,
OCEANMARK FINANCIAL CORPORATION, AND
NATIONAL CAPITAL HOLDINGS, INC.
COLLECTIVELY, SUBSIDIARY GUARANTORS
AND
THE BANK OF NEW YORK
TRUSTEE
_________________________________________
INDENTURE
DATED AS OF [OCTOBER __,] 1997
_________________________________________
$125,000,000
___% SENIOR SECURITIES DUE 2004
================================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions............................................ 1
SECTION 1.2. Incorporation by Reference of TIA...................... 20
SECTION 1.3. Rules of Construction.................................. 21
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating....................................... 21
SECTION 2.2. Execution and Authentication.......................... 22
SECTION 2.3. Registrar and Paying Agent............................ 22
SECTION 2.4. Paying Agent to Hold Assets in Trust.................. 23
SECTION 2.5. Securityholder Lists.................................. 24
SECTION 2.6. Transfer and Exchange................................. 24
SECTION 2.7. Replacement Securities................................ 26
SECTION 2.8. Outstanding Securities................................ 27
SECTION 2.9. Treasury Securities................................... 27
SECTION 2.10. Temporary Securities.................................. 28
SECTION 2.11. Cancellation.......................................... 28
SECTION 2.12. Defaulted Interest.................................... 28
SECTION 2.13. CUSIP Numbers......................................... 29
ARTICLE III
REDEMPTION
SECTION 3.1. Notices to Trustee..................................... 30
SECTION 3.2. Selection of Securities to Be Redeemed................. 30
SECTION 3.3. Notice of Redemption................................... 31
SECTION 3.4. Effect of Notice of Redemption......................... 32
SECTION 3.5. Deposit of Redemption Price............................ 32
SECTION 3.6. Securities Redeemed in Part............................ 33
SECTION 3.7. Optional Redemption.................................... 33
SECTION 3.8. Mandatory Redemption................................... 34
SECTION 3.9. Offer to Redeem by Application of Excess Proceeds...... 34
i
ARTICLE IV
COVENANTS
PAGE
----
SECTION 4.1. Payment of Securities.................................... 36
SECTION 4.2. Maintenance of Office or Agency.......................... 36
SECTION 4.3. Limitation on Restricted Payments........................ 37
SECTION 4.4. Corporate and Partnership Existence...................... 40
SECTION 4.5. Payment of Taxes and Other Claims........................ 40
SECTION 4.6. Maintenance of Properties and Insurance.................. 40
SECTION 4.7. Compliance Certificate; Notice of Default................ 41
SECTION 4.8. Reports.................................................. 41
SECTION 4.9. Limitation on Status as Investment Company............... 42
SECTION 4.10. Limitation on Transactions with Affiliates............... 42
SECTION 4.11. Limitation on Incurrence of Additional
Indebtedness and Issuance of Preferred Stock............. 43
SECTION 4.12. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries........... 45
SECTION 4.13. Limitation on Liens...................................... 46
SECTION 4.14. Limitation on Consolidation or Sales of Assets........... 46
SECTION 4.15. Waiver of Stay, Extension or Usury Laws.................. 48
SECTION 4.16. Limitation on Ownership of Subsidiary Stock.............. 48
SECTION 4.17. Limitations on Lines of Business......................... 48
SECTION 4.18. Payments for Consent..................................... 49
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.............. 49
SECTION 5.2. Successor Corporation Substituted........................ 50
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default........................................ 50
SECTION 6.2. Acceleration of Maturity Date; Rescission and Annulment.. 51
SECTION 6.3. Collection of Indebtedness and Suits for
Enforcement by Trustee................................... 52
SECTION 6.4. Trustee May File Proofs of Claim......................... 53
SECTION 6.5. Trustee May Enforce Claims Without Possession of
Securities............................................... 54
ii
PAGE
----
SECTION 6.6. Priorities........................................... 54
SECTION 6.7. Limitation on Suits.................................. 54
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest................................. 55
SECTION 6.9. Rights and Remedies Cumulative....................... 55
SECTION 6.10. Delay or Omission Not Waiver......................... 56
SECTION 6.11. Control by Majority.................................. 56
SECTION 6.12. Waiver of Existing or Past Default................... 56
SECTION 6.13. Undertaking for Costs................................ 57
SECTION 6.14. Restoration of Rights and Remedies................... 57
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee.................................... 57
SECTION 7.2. Rights of Trustee.................................... 59
SECTION 7.3. Individual Rights of Trustee......................... 60
SECTION 7.4. Trustee's Disclaimer................................. 60
SECTION 7.5. Notice of Default.................................... 60
SECTION 7.6. Reports by Trustee to Holders........................ 60
SECTION 7.7. Compensation and Indemnity........................... 61
SECTION 7.8. Replacement of Trustee............................... 62
SECTION 7.9. Successor Trustee by Merger, Etc..................... 63
SECTION 7.10. Eligibility; Disqualification........................ 63
SECTION 7.11. Preferential Collection of Claims Against Company.... 63
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Discharge; Option to Effect Legal Defeasance
or Covenant Defeasance............................... 63
SECTION 8.2. Legal Defeasance and Discharge....................... 63
SECTION 8.3. Covenant Defeasance.................................. 64
SECTION 8.4. Conditions to Legal or Covenant Defeasance........... 64
SECTION 8.5. Deposited Cash and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provisions.. 66
SECTION 8.6. Repayment to the Company............................. 66
SECTION 8.7. Reinstatement........................................ 67
iii
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
PAGE
----
SECTION 9.1. Amendments, Supplements and Waivers with
Consent of Holders.................................. 67
SECTION 9.2. Amendments, Supplements and Waivers to
Indentures and Securities without Consent of Holders 68
SECTION 9.3. Compliance with Trust Indenture Act................. 69
SECTION 9.4. Revocation and Effect of Consents................... 70
SECTION 9.5. Notation on or Exchange of Notes.................... 70
SECTION 9.6. Trustee to Sign Amendments, Etc..................... 71
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. Repurchase of Securities at Option of the
Holder Upon a Change of Control..................... 71
ARTICLE XI
GUARANTEE
SECTION 11.1. Guarantee............................................ 74
SECTION 11.2. Execution and Delivery of Guarantee.................. 77
SECTION 11.3. Certain Bankruptcy Events............................ 77
SECTION 11.4. Limitation on Merger of Subsidiaries and
Release of Subsidiary Guarantors..................... 77
ARTICLE XII
MISCELLANEOUS
SECTION 12.1. TIA Controls......................................... 78
SECTION 12.2. Notices.............................................. 78
SECTION 12.3. Communications by Holders with Other Holders......... 79
SECTION 12.4. Certificate and Opinion as to Conditions Precedent... 79
SECTION 12.5. Statements Required in Certificate or Opinion........ 80
SECTION 12.6. Rules by Trustee, Paying Agent, Registrar............ 80
SECTION 12.7. Legal Holidays....................................... 80
SECTION 12.8. Governing Law........................................ 80
iv
PAGE
----
SECTION 12.9. No Adverse Interpretation of Other Agreements..... 81
SECTION 12.10. No Recourse Against Others........................ 81
SECTION 12.11. Successors........................................ 81
SECTION 12.12. Duplicate Originals............................... 81
SECTION 12.13. Severability...................................... 82
SECTION 12.14. Table of Contents, Headings, Etc.................. 82
EXHIBIT A FORM OF SECURITY.................................. A-1
v
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
------- ---------
310(a)(1).............................................................................. 7.10
(a)(2)................................................................................ 7.10
(a)(3)................................................................................ N.A.
(a)(4)................................................................................ N.A.
(a)(5)................................................................................ 7.10
(b)................................................................................... 7.8
7.10
12.2
(c)................................................................................... N.A.
311(a)................................................................................. 7.11
(b)................................................................................... 7.11
(c)................................................................................... N.A.
312(a)................................................................................. 2.5
(b)................................................................................... 12.3
(c)................................................................................... 12.3
313(a)................................................................................. 7.6
(b)(1)................................................................................ 7.6
(b)(2)................................................................................ 7.6
(c)................................................................................... 7.6;
12.2
(d)................................................................................... 7.6
314(a)................................................................................. 4.7(a);
4.8
(b)................................................................................... N.A.
(c)(1)................................................................................ 2.2;
7.2;
12.4
(c)(2)................................................................................ 7.2;
12.4
(c)(3)................................................................................ N.A.
(d)................................................................................... N.A.
(e)................................................................................... 12.5
(f)................................................................................... N.A.
315(a)................................................................................. 7.1(b)
(b)................................................................................... 7.5;
12.2
(c)................................................................................... 7.1(a)
vi
TIA INDENTURE
SECTION SECTION
------- ---------
(d).................................................................................. 6.11;
.................................................................................. 7.1(b)
.................................................................................. (c)
(e).................................................................................. 6.13
316(a)(last sentence)................................................................. 2.9
(a)(1)(A)............................................................................ 6.11
(a)(1)(B)............................................................................ 6.12
(a)(2)............................................................................... N.A.
(b).................................................................................. 6.7;
6.8
6.12
317(a)(1)............................................................................. 6.3
(a)(2)............................................................................... 6.4
(b).................................................................................. 2.4
__________
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
vii
INDENTURE, dated as of [October __,] 1997, by and between Southern
Pacific Funding Corporation, a California corporation (the "Company"), as
issuer, each Subsidiary of the Company executing a Subsidiary Guarantee in
accordance with the provisions hereof, and [_________,] 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 Company's ___%
Senior Securities due 2004 (the "Securities"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. 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 such Person or a Subsidiary of such Person or became a
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 Subsidiary of such specified Person, and (ii)
Indebtedness secured by a Lien encumbering any asset acquired by such specified
Person.
"Acquisition" means the purchase or other acquisition of any person or
substantially all the assets of any person or operating unit by any other
person, whether by purchase, merger, consolidation, or other transfer, and
whether or not for consideration.
"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; provided, that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Affiliate Transaction" shall have the meaning specified in Section
4.10.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of a sale and
leaseback and the sale or other disposition of any Residual Receivables) other
than sales of Receivables in connection with Securitizations, Qualified Whole
Loan Sales or Warehouse Facilities and sales of defaulted
assets, in each case in the ordinary course of business (provided that the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company and its Restricted Subsidiaries taken as a whole will be governed
by the provisions of this Indenture described above under Section 10.1 hereof
and/or the provisions described above under Section 5.1 hereof and not by the
provisions of the Asset Sale covenant), and (ii) the issuance by any of the
Company's Restricted Subsidiaries of Equity Interests, or the sale by the
Company or any of its Restricted Subsidiaries of any Equity Interests of their
Restricted Subsidiaries (other than directors qualifying shares), in the case of
either clause (i) or (ii), whether in a single transaction or a series of
related transactions (a) that have a fair market value in excess of $1.0 million
or (b) for net proceeds in excess of $1.0 million. Notwithstanding the
foregoing, the following will not be deemed to be Asset Sales: (i) an issuance
of Equity Interests by a Subsidiary of the Company to the Company or to a
Subsidiary Guarantor of the Company; (ii) a Restricted Payment that is permitted
by Section 4.12 hereof; (iii) a sale, lease, conveyance or other disposition by
a Restricted Subsidiary of the Company to the Company or a Subsidiary Guarantor
or by the Company to a Subsidiary Guarantor and (iv) stock splits, dividends or
other distributions to the Company's shareholders payable in Equity Interests of
the Company (other than Disqualified Capital Stock).
"Asset Sale" shall have the meaning specified in Section 4.14.
"Asset Sale Offer" shall have the meaning specified in Section 4.14.
"Asset Sale Offer Amount" shall have the meaning specified in Section
4.14.
"Asset Sale Offer Period" shall have the meaning specified in Section
4.14.
"Asset Sale Offer Price" shall have the meaning specified in Section
4.14.
"Average Life" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of the
products (a) of the number of years from the date of determination to the date
or dates of each successive scheduled principal (or redemption) payment of such
security or instrument and (b) the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal,
state or foreign law for the relief of debtors.
"Beneficial Owner" or "beneficial owner" for purposes of the
definition of Change of Control has the meaning attributed to it in Rules 13d-3
and 13d-5 under the Exchange Act (as in effect on the Issue Date), whether or
not applicable, 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.
2
"Board of Directors" means, with respect to any Person, the board of
directors of such Person or any committee of the board of directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the board of directors of such Person.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"Book-Entry Residual Receivables" means the interest represented by a
ledger entry on the books of a trustee of a Securitization Trust relating to
Residual Receivables of the Company derived from Receivables originated by a
Strategic Alliance Client for sale into such Securitization Trust as part of a
Securitization of Receivables by the Company or any of its Restricted
Subsidiaries, net of the amount of fees paid to the Company by such Strategic
Alliance Client for arranging the securitization of such Receivables.
"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 Contribution" means any contribution to the equity of the
Company for which no consideration (other than the issuance of Equity Interests
(other than Disqualified Stock) of the Company) is paid.
"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 (whether general or limited) or membership
interests 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" or "cash" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public or private debts.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (iii) certificates of deposit
and Eurodollar time deposits with maturities of one year or less from the date
of acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any domestic commercial bank having
capital and surplus in excess of $500.0 million and a Xxxxx Bank Watch Rating of
"B" or better, (iv) repurchase obligations with a term of not more than seven
days for underlying securities of the
3
types described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above, (v)
commercial paper having one of the two highest ratings obtainable from Moody's
or Standard & Poor's and in each case maturing within nine months after the date
of acquisition, and (vi) money market funds, the portfolios of which are limited
to investments described in clauses (i) through (v) above.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation and excluding sales, leases, transfers, conveyances or
other dispositions pursuant to whole loan sales, Securitizations, Warehouse
Facilities or Residual Receivables financing arrangements otherwise permitted by
this Indenture entered into in the ordinary course of business), in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole to any "person" (as
such term is used in Section 13(d)(3) of the Exchange Act) other than a
Permitted Holder, (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company, (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any "person" (as defined above) other than a Permitted Holder becomes
the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5
under the Exchange Act), directly or indirectly, of more than 50% of the Voting
Stock of the Company (measured by general voting power rather than number of
shares), (iv) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors or (v) the Company
consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Company is converted into or exchanged for cash, securities or other property,
other than any such transaction where the Voting Stock of the Company
outstanding immediately prior to such transaction is converted into or exchanged
for Voting Stock (other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of such Voting Stock of
such surviving or transferee Person (immediately after giving effect to such
issuance). For purposes of this definition, any transfer of an equity interest
of an entity that was formed for the purpose of acquiring Voting Stock of the
Company will be deemed to be a transfer of such portion of such Voting Stock as
corresponds to the portion of the equity of such entity that has been so
transferred.
"Change of Control Offer" shall have the meaning specified in Section
10.1.
"Change of Control Offer Period" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Date" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Price" shall have the meaning specified in
Section 10.1.
4
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture, and thereafter means such
successor.
"Consolidated Leverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of all consolidated Indebtedness of the
Company and its Restricted Subsidiaries excluding (A) Permitted Warehouse Debt,
and (B) Hedging Obligations permitted to be incurred pursuant to clause (6) of
the covenant described under Section 4.11 hereof to (ii) the Consolidated Net
Worth of the Company.
"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 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 Restricted Subsidiary
thereof, (ii) the Net Income of any Restricted Subsidiary 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 Restricted 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 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 made
within 12 months after the acquisition of such business) subsequent to the date
of this Indenture 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 charges as of such date, all of the foregoing determined in
accordance with GAAP.
"Continuing Director" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on
5
the Issue Date or (ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Directors constituting
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Convertible Securities" shall mean the Company's Convertible
Subordinated Securities Due 2006 issued November 1, 1996.
"Corporate Trust Office" means the office of the Trustee in the
Borough of Manhattan, The City of New York.
"Covenant Defeasance" shall have the meaning specified in Section 8.3.
"Credit Enhancement Agreements" means, collectively, any document,
instrument or agreement entered into by the Company, or any of its Restricted
Subsidiaries, and any Person exclusively for the purpose of providing credit
support for asset-backed securities issued in connection with Securitizations.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"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.
"Defaulted Interest" shall have the meaning specified in Section 2.12.
"Depository" means, with respect to the Securities issuable or issued
in whole or in part in global form, the person specified in Section 2.3 as the
Depository with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"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, (i) matures or is
mandatorily redeemable, in whole or in part, pursuant to a sinking fund
obligation or otherwise, or (ii) is convertible into or exchangeable for
Indebtedness or Disqualified Stock, in whole or in part, or (iii) is redeemable,
in whole or in part, at the option of the Holder thereof at any time, in any
such case, 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 resolution of the
Board of Directors delivered to the Trustee) as Disqualified Stock.
"Eligible Receivables" means, at the time of determination,
Receivables meeting the sale or loan eligibility criteria set forth in one or
more of the Warehouse Facilities to which
6
the Company or any of its Restricted Subsidiaries is a party at such time and is
eligible for sale in a Securitization or pursuant to a Qualified Whole Loan
Purchase.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire such Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, such Capital Stock).
"Event of Default" shall have the meaning specified in Section 6.1.
"Event of Loss" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Excess Spread" means, over the life of a pool of Receivables that
have been sold by the Company or a Restricted Subsidiary in a Securitization
(including Receivables which have been contributed by a Strategic Alliance
Client to any such Securitization), the amount determined by deriving the net
present value of the cash flows expected to be received by the Company or any
Restricted Subsidiary of the Company from the Securitization of such Receivables
(exclusive of any proceeds from the sale of certificates by the Company or any
of its Restricted Subsidiaries to any underwriter of the related certificates),
less the net present value of any servicing fees and any liabilities of the
Company or any of its Restricted Subsidiaries (based on the Company's or such
Restricted Subsidiary's historical liabilities to Securitization trustees).
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries in existence on the date of this Indenture.
"fair market value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between an informed and willing seller and an informed, willing and able
buyer, neither of whom is under undue pressure or compulsion to complete the
transaction.
"Foreign Residual Receivables" means Residual Receivables that relate
to Receivables which originated from jurisdictions outside the United States of
America.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
that is incorporated in a jurisdiction other than the United States of America
or 80% of the sales, earnings or assets of which are located in, generated from
or derived from operations located in jurisdictions outside the United States of
America.
7
"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 such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect at the relevant time.
"Global Security" means a Security that contains the information
referred to in footnote 5 to the form of Security attached hereto as Exhibit A.
"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. Notwithstanding the foregoing, the term "Guarantee" does not
include obligations pursuant to representations, warranties, covenants and
indemnities in connection with a Securitization or Warehouse Facility.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate or currency swap agreements,
cap agreements, collar agreements and related agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in value of assets owned, financed or sold, or of liabilities incurred or
assumed, or of pre-funding arrangements, in any case in the ordinary course of
business of such Person and not for speculative purposes.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" or "incur" shall have the meaning specified in Section 4.11.
"Incurrence Date" shall have the meaning specified in Section 4.11.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of (i) 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 unpaid deferred balance 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, (ii) all indebtedness of others secured
by a Lien on any asset of such Person (whether or not such indebtedness is
assumed by such Person; provided that if such indebtedness is not assumed by
such Person such indebtedness shall be limited to the lesser of the principal
amount of such indebtedness or the fair market value of the asset encumbered by
such Lien), (iii) without duplication, all Warehouse Debt, (iv) all obligations
of such Person with respect to the redemption, repayment or other repurchase of
any Disqualified Stock and, in the case of any
8
Subsidiary Guarantor, preferred stock (but excluding in each case any accrued
dividends thereon), and (v) to the extent not otherwise included, the Guarantee
by such Person of any indebtedness of any other Person to the extent of any
Guarantee of such indebtedness provided by such Person. Except in the case of
Warehouse Debt (the amount of which shall be determined in accordance with the
definition thereof) and except in the case of Hedging Obligations (the amount of
which shall be determined on a net basis after rights of set-off and related
positions), the amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
Notwithstanding the foregoing, the term "Indebtedness" does not include
obligations pursuant to representations, warranties, covenants and indemnities
in connection with a Securitization, Qualified Whole Loan Sale or Warehouse
Facility.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Interest Payment Date" means the stated due date of an installment of
interest on the Securities.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates including, without
limitation, Quasi-Subsidiaries and Strategic Alliance Clients) in the forms of
direct or indirect loans (including Guarantees of Indebtedness), 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 of another Person, 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;
provided that an acquisition of Equity Interests or other securities by the
Company or any Restricted Subsidiary for consideration consisting solely of
common equity securities of the Company (other than Disqualified Stock) shall
not be deemed to be an Investment.
"Issue Date" means , 1997.
"Legal Defeasance" shall have the meaning specified in Section 8.2.
"Legal Holiday" shall have the meaning specified in Section 13.7.
"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).
9
"Maturity Date" means, when used with respect to any Security, the
date specified on such Security as the fixed date on which the final installment
of principal of such Security is due and payable (in the absence of any
acceleration thereof pursuant to the provisions of this Indenture regarding
acceleration of Indebtedness or any Change of Control Offer or Asset Sale
Offer).
"Xxxxx'x" means Xxxxx'x Investors Services, Inc. and its successors.
"Mortgage Loan" means any mortgage, deed of trust or other instrument
creating a lien on an estate in fee simple in a property, secured by a note or
other evidence of an obligor's indebtedness under such mortgage, deed of trust
or other instrument.
"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 and
dispositions of any equity Investment in a Strategic Alliance Client or Quasi-
Subsidiary) 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).
"Net Cash Proceeds" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale of Qualified Capital
Stock and by the Company and its Subsidiaries in respect of an Asset Sale or an
Event of Loss plus, in the case of an issuance of Qualified Capital Stock of the
Company upon any exercise, exchange or conversion of securities (including
options, warrants, rights and convertible or exchangeable debt) of the Company
that were issued for cash on or after the Issue Date, the amount of cash
originally received by the Company upon the issuance of such securities
(including options, warrants, rights and convertible or exchangeable debt) less,
in each case, the sum of all payments, fees, commissions and (in the case of
Asset Sales, reasonable and customary), expenses (including, without limitation,
the fees and expenses of legal counsel and investment banking fees and expenses)
incurred in connection with such Asset Sale, Event of Loss or sale of Qualified
Capital Stock, and, in the case of an Asset Sale only, less an amount (estimated
reasonably and in good faith by the Company or the amount actually incurred, if
greater) of income, franchise, sales and other applicable taxes required to be
paid by the Company or any of its Subsidiaries in connection with such Asset
Sale.
"Net Proceeds" means the aggregate Cash Equivalent proceeds received
by the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any Cash Equivalent 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
10
commissions) incurred as a result thereof, taxes paid or payable, in the good
faith estimation of the Company, 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 (other than
Indebtedness subordinated in right of payment to the Securities) secured by a
Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), or (b) is directly or indirectly liable (as a
guarantor or otherwise); and (ii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries, including the stock of such
Unrestricted Subsidiary.
"Officer" means, with respect to the Company or any Subsidiary
Guarantor, the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer, the Treasurer, the Controller, or the Secretary of the
Company or such Subsidiary Guarantor.
"Officers' Certificate" means, with respect to the Company or any
Subsidiary Guarantor, a certificate signed by two Officers or by an Officer and
an Assistant Secretary of the Company or such Subsidiary Guarantor and otherwise
complying with the requirements of Sections 13.4 and 13.5.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
13.4 and 13.5.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Permitted Businesses" means any consumer or commercial finance
business or any financial service business.
"Permitted Holder" means Imperial Credit Industries, Inc.
"Permitted Investments" means (a) any Investment in the Company or in
a Restricted Subsidiary that is engaged in a Permitted Business; (b) any
Investment in Cash Equivalents; (c) any Investment by the Company or any
Restricted Subsidiary in a Person if, as a result of such Investment, (i) such
Person becomes a Restricted Subsidiary and a Subsidiary Guarantor that is
engaged in a Permitted Business 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 Restricted Subsidiary that is
a Subsidiary Guarantor and that is engaged in a Permitted Business; (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 the covenant
described above under Section 10.1, (e) any creation, purchase or other
acquisition
11
of Receivables, Residual Receivables or Servicing Receivables in the ordinary
course of business; (f) other Investments in any Person that do not exceed $5.0
million in the aggregate since the Issue Date; (g) any Investment in a Strategic
Alliance Client to the extent such Investment consists of options, warrants or
other securities that are convertible or exchangeable for equity securities of
such Strategic Alliance Client and is received by the Company or a Restricted
Subsidiary without the payment of any consideration other than the concurrent
provision by the Company or such Restricted Subsidiary to such Strategic
Alliance Client of asset securitization or asset sale expertise on terms
determined by the Company to be fair and reasonable to the Company or such
Restricted Subsidiary from a financial point of view without taking into
consideration any value that may inhere in such option, warrant or convertible
or exchangeable security; and (h) any loans or advances to a Strategic Alliance
Client to the extent such loans or advances consist of Indebtedness of such
Strategic Alliance Client in an aggregate principal amount at any time
outstanding not to exceed 100% of the aggregate book value (calculated in
accordance with GAAP) of the Book-Entry Residual Receivables credited to such
Strategic Alliance Client.
"Permitted Liens" means (i) Liens on Receivables or other assets
(other than Residual Receivables and Book-Entry Residual Receivables) securing
Warehouse Debt or Hedging Obligations (or Guarantees of Warehouse Debt or
Hedging Obligations); (ii) Liens on Servicing Receivables, Residual Receivables
and on the Capital Stock of Restricted Subsidiaries of the Company substantially
all of the assets of which are Residual Receivables; provided, however, that,
(x) no Lien shall be placed on any Retained Residual Receivable unless after
giving effect to such sale, conveyance or other disposition the aggregate amount
of Senior Residual Receivables of the Company and its Restricted Subsidiaries
which are unencumbered by any Lien would be greater than or equal to 250% of all
Senior Indebtedness of the Company and its Restricted Subsidiaries, (y) after
giving effect to the incurrence of such Lien the aggregate amount of Senior
Residual Receivables of the Company and its Restricted Subsidiaries which are
unencumbered by any Lien would be greater than or equal to 150% of all Senior
Indebtedness of the Company and its Restricted Subsidiaries; provided, that for
purposes of calculating the aggregate amount of Senior Residual Receivables of
the Company and its Restricted Subsidiaries which are unencumbered by any Lien
in clauses (x) and (y) above, no more than 25% of the aggregate book value
thereof shall constitute Retained Residual Receivables; (iii) Liens in favor of
the Company or any Restricted Subsidiary; (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 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; (vii)
Liens existing on the Issue Date; (viii) 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, provided that any reserve or
12
other appropriate provision as shall be required in conformity with GAAP shall
have been made therefor; (ix) Liens (including, without limitation, Liens on
Residual Receivables) in favor of a monoline insurance company or other provider
of credit enhancement pursuant to a Credit Enhancement Agreement; (x) 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 $1.0
million at any one time outstanding and that (a) are not incurred in connection
with the borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or such Restricted
Subsidiary; (xi) Liens imposed by law, including but not limited to carriers',
warehousemen's and mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceedings or, other Liens arising out
of judgments or awards against the Company or any of its Restricted Subsidiaries
with respect to which the Company or such Restricted Subsidiary shall then be
proceeding with an appeal or other proceedings for review; (xii) survey
exceptions, easements and other restrictions on the use of property; (xiii)
Liens securing Indebtedness the proceeds of which were utilized by the Company
or a Restricted Subsidiary solely to fund any advances to Securitization Trusts
permitted by clause (v) of the second full paragraph under Section 4.3 provided
that such Liens encumber no assets other than the contractual right of the
Company or such Restricted Subsidiary, as the case may be, to be reimbursed in
respect of any advances funded by such Indebtedness; and (xiv) Liens to secure
any Refinancing (or successive Refinancings), in whole or in part, of any
Indebtedness (or commitment for Indebtedness) existing on the Issue Date;
provided, however, that (x) any such new Lien shall be a Lien on the same asset
class or interest securing the original Lien, (y) the Indebtedness secured by
such Lien is not, solely by virtue of the Refinancing (unless otherwise
permitted by this Indenture), increased to an amount greater than the greater of
(A) the outstanding principal amount of the Indebtedness existing on the Issue
Date secured by such Lien, or (B) if such Lien secures Indebtedness under a line
of credit, the commitment amount of such line of credit existing on the Issue
Date and (z) such Indebtedness is not otherwise prohibited by this Indenture.
Any determination of Senior Residual Receivables shall be based on the
consolidated balance sheet of the Company and its Restricted Subsidiaries for
the most recently ended fiscal quarter for which financial statements are
available, after giving pro forma effect to the Lien for which such
determination is being made and to any other sale of or Lien on or reduction of
Residual Receivables since the date of such balance sheet.
"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 or refund other Indebtedness or Disqualified Stock of
the Company or any of its Restricted Subsidiaries (other than Indebtedness
incurred pursuant to clauses (1), (2), (6), (7), (8), (9) and (10) of the second
paragraph of Section 4.11 provided that: (i) the principal amount (or accreted
value, if applicable) or mandatory redemption amount of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable) or mandatory redemption amount, plus accrued but unpaid
interest or dividends on, the Indebtedness or Disqualified Stock so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
contractual
13
prepayment charges and reasonable expenses incurred in connection therewith);
(ii) such Permitted Refinancing Indebtedness has a final maturity or final
redemption date later than the final maturity or final redemption date of, and
has a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness or Disqualified Stock being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness or Disqualified Stock being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Securities, such Permitted Refinancing Indebtedness is subordinated in right of
payment to, the Securities on terms at least as favorable to the Holders of the
Securities as those contained in the documentation governing the Indebtedness or
Disqualified Stock being extended, refinanced, renewed, replaced, defeased or
refunded; and (iv) such Indebtedness is incurred or such Disqualified Stock is
issued either by the Company or by the Restricted Subsidiary who is the obligor
n the Indebtedness or Disqualified Stock being extended, refinanced, renewed,
replaced, defeased or refunded.
"Permitted Warehouse Debt" means Warehouse Debt of the Company or a
Restricted Subsidiary outstanding under one or more Warehouse Facilities
(excluding any Guarantees issued by the Company or a Restricted Subsidiary in
connection therewith); provided, however, that (i) the assets purchased with
proceeds of such Warehouse Debt are or, prior to any funding under the Warehouse
Facility with respect to such assets, were eligible to be recorded as held for
sale on the consolidated balance sheet of the Company and its Restricted
Subsidiaries in accordance with GAAP, (ii) such Warehouse Debt will be deemed
Permitted Warehouse Debt (a) in the case of a Purchase Facility, only to the
extent the holder of such Warehouse Debt has no contractual recourse to the
Company or any of its Restricted Subsidiaries to satisfy claims in respect of
such Warehouse Debt in excess of the realizable value of the Eligible
Receivables financed thereby, and (b) in the case of any other Warehouse
Facility, at the time such Warehouse Debt is incurred, only to the extent of the
lesser of (A) the amount advanced by the lender with respect to the Eligible
Receivables financed under such Warehouse Facility, and (B) 100% of the
aggregate principal amount of such Eligible Receivables and (iii) any such
Indebtedness incurred under such Warehouse Facility has not been outstanding in
excess of 364 days.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Public Equity Offering" means an underwritten offering of common
stock of the Company for cash pursuant to an effective registration statement
under the Securities Act.
"Purchase Facility" means any Warehouse Facility in the form of a
purchase and sale facility pursuant to which the Company or a Restricted
Subsidiary sells Receivables to a financial institution, commercial paper
facility or conduit and retains a right of first refusal or other repurchase
arrangement upon the subsequent resale of such Receivables by such financial
institution, commercial paper facility or conduit.
14
"property" means any right or interest in or to property or assets of
any kind whatsoever, whether real, personal or mixed and whether tangible,
intangible, contingent, direct or indirect.
"Qualified Whole Loan Sale" means any sale of a pool of Receivables to
one or more third parties on an arms length basis and pursuant to a sale and
purchase agreement containing standard representations, warranties and covenants
relating to the Mortgage Loans sold and purchased thereunder.
"Qualifying Disposition" means an Asset Sale resulting from the
exercise by a Quasi-Subsidiary (or any of its Affiliates other than the Company
and its Affiliates) of a call option on Equity Interests of such Quasi-
Subsidiary owned by the Company (or any of its Restricted Subsidiaries), so long
as the Company (or such Restricted Subsidiary) receives Net Proceeds in Cash
Equivalents therefrom in an amount at least equal to the initial book value of
the Company's (or such Restricted Subsidiary's) Investment in such Equity
Interests.
"Quasi-Subsidiary" means any Person (i) who is a Subsidiary of the
Company and (ii) who has (together with any call options held by any of its
Affiliates other than the Company and its Affiliates) one or more call options
or similar arrangements which, upon exercise thereof, would result in the
Company no longer, directly or indirectly through any of its Restricted
Subsidiaries, (x) with respect to any corporation, association or other business
entity, owning 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, or (y) with respect to
any partnership or limited liability company (a) being the sole general partner
or the managing general partner or managing member of such Person or (b) being
the only general partner or managing member of such Person.
"Receivables" means consumer and commercial loans, including Mortgage
Loans, leases and receivables purchased or originated by the Company or any
Restricted Subsidiary; provided, however, that for purposes of determining the
principal value of a Receivable at any time, such principal value shall be
determined in accordance with GAAP, consistently applied, as of the then most
recent practicable date.
"Record Date" means a Record Date specified in the Securities whether
or not such Record Date is a Business Day, or, if applicable, as specified in
Section 2.12.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the form of Security attached hereto as
Exhibit A.
"Redemption Price," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to Paragraph 5
in the form of Security attached hereto as Exhibit A, which shall include,
without duplication, in each case, accrued and unpaid interest, if any, to the
Redemption Date.
15
"Refinance" means, in respect of any Indebtedness, to extend,
refinance, renew, replace, defease, refund, repay, prepay, redeem, or retire, or
to issue other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Registrar" shall have the meaning specified in Section 2.3.
"Residual Receivables" means at any time, the capitalized asset value
of Excess Spread of the Company and its Restricted Subsidiaries (including,
without limitation, interest-only and residual certificates of a Securitization
Trust), with respect to any Receivable pool of any Securitization Trust,
calculated in accordance with GAAP, consistently applied, less an amount equal
to the net Indebtedness owed by the Company to a Strategic Alliance Client in
consideration for a contribution of Receivables (represented by a Book-Entry
Receivable of such entity).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" means any Subsidiary other than an
Unrestricted Subsidiary.
"Retained Residual Receivables" shall have the meaning Section 4.14.
"S&P" means Standard & Poor's, a division of The McGraw Hill
Companies, and its successors.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"Securitization" means a public or private sale or pledge of
Receivables in the ordinary course of business and by which the Company or a
Restricted Subsidiary directly or indirectly sells, conveys, pledges or
otherwise creates a Lien on a pool of specified Receivables, including any such
transaction involving the sale of specified Receivables to a Securitization
Trust which issues securities to investors in such Securitization Trust and
creates Residual Receivables.
"Securitization Trust" means any Person that is not a Restricted
Subsidiary established exclusively for the purpose of issuing securities in
connection with any Securitization, the obligations of which are without
recourse to the Company or any of its Subsidiaries (other
16
than obligations constituting Indebtedness incurred in accordance with the first
paragraph of the covenant described Section 4.11.
"Securityholder" or "Holder" means the Person in whose name a Security
is registered on the Registrar's books.
"Senior Indebtedness" means all Indebtedness of any Person that is not
subordinated in right of payment to any other Indebtedness or other obligations
of such Person, excluding Permitted Warehouse Debt and Hedging Obligations
permitted to be incurred under this Indenture and, in the case of Indebtedness
secured by Senior Residual Receivables, the lesser of (x) the amount of such
Indebtedness and (y) the amount of the Senior Residual Receivables securing such
Indebtedness.
"Senior Residual Receivables" means Residual Receivables of the
Company or any of its Restricted Subsidiaries which are not structurally
subordinated to any other interest in the Securitization of a pool of
Receivables creating such Residual Receivables other than the certificates
initially distributed by an underwriter or underwriters in connection with such
Securitization.
"Servicing Receivables" means the servicing rights or any interest
therein with respect to any Receivables.
"Special Record Date" for payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity" means _____________.
"Strategic Alliance Client" means any Person (other than a Restricted
Subsidiary) engaged in a Permitted Business to which the Company provides, or
reasonably expects to provide, financing, asset securitization or asset sales
expertise in return for commitments by such Strategic Alliance Client to sell
Receivables, from time to time, to the Company or a Restricted Subsidiary of the
Company.
"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 or limited liability company (a) the sole
general partner or the managing general partner or managing member of which is
such Person or a Subsidiary of such Person or (b) the only general partners or
managing members of which are such Person or one or more Subsidiaries of such
Person (or any combination thereof).
17
"Subsidiary Guarantee" means the Guarantee of the Securities in
accordance with the provisions of this Indenture.
"Subsidiary Guarantor" means any Subsidiary of the Company that
executes a Subsidiary Guarantee in accordance with the provisions of this
Indenture.
"Subsidiary Guarantors" means each of the Company's Subsidiaries other
than (i) any Receivables Subsidiaries or (ii) any Foreign Subsidiaries; provided
that any Foreign Subsidiary that, at the option and in the sole discretion of
the Company, guarantees the obligations of the Company under the Securities and
this Indenture pursuant to Section 11.1 hereof, shall be deemed to be a
Subsidiary Guarantor.
"TIA" means the Trust Indenture Act of 1939, as amended, (15 U.S. Code
(S)(S) 77aaa-77bbbb) as in effect on the date of the execution of this
Indenture, except as provided in Section 9.3.
"Treasury Rate" means the yield to maturity at the time of computation
of U.S. Treasury securities with a constant maturity (as complied and published
in the most recent Federal Reserve Release H.15 (519) which has become publicly
available at least two Business Days prior to the applicable Redemption Date
(or, if such statistical release is no longer published, any publicly available
source or similar market data)) closest to the period from the applicable
Redemption Date to ________________, provided, however, that if the period from
such Redemption Date to _________________, is not equal to the constant maturity
of a U.S. Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of one year) from the weekly average yields of U.S. Treasury
securities for which such yields are given, except that if the period from the
applicable Redemption Date to _________________, is less than one year, the
weekly average yield on actually traded U.S. Treasury securities adjusted to a
constant maturity of one year shall be used.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer within the corporate trust division
(or any successor group) of the Trustee or any other 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 matter, any other officer of the Trustee to whom such
trust matter is referred because of his knowledge of and familiarity with the
particular subject.
"Underwriting Agreement" means the Underwriting Agreement dated
October __________, 1997 by and between the Company and the Underwriters, as
such agreement
18
may be amended, modified or supplemented from time to time in accordance with
the terms thereof.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution; but only to the extent that such Subsidiary: (a) is not party to any
agreement, contract, arrangement or understanding with the Company or any
Restricted Subsidiary 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; (b) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (other than obligations constituting Indebtedness incurred
in accordance with the first paragraph of the covenant described under Section
4.11 (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 (c) has not guaranteed or
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 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 the covenant described above Section
4.3. 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 the covenant described under the
Section 4.11 the Company shall be in default of such covenant). 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 and issuance of preferred stock by a Restricted
Subsidiary of the Company of any outstanding Indebtedness or outstanding issue
of preferred stock of such Unrestricted Subsidiary and such designation shall
only be permitted if (i) such Indebtedness and preferred stock is permitted
under the covenant described under the Section 4.11 (ii) such Subsidiary becomes
a Subsidiary Guarantor, and (iii) no Default or Event of Default would exist
following such designation.
"U.S. Government Obligations" means direct non-callable obligations
of, or noncallable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote generally in the election of
the Board of Directors of such Person.
"Warehouse Debt" means Indebtedness of the Company or a Restricted
Subsidiary equal to the greater of (x) the consideration received by the Company
or its Restricted
19
Subsidiaries under a Warehouse Facility and (y) in the case of a Purchase
Facility, the book value of the Eligible Receivables financed under such
Warehouse Facility, until such time as such Eligible Receivables are (i)
securitized, (ii) repurchased by the Company or its Restricted Subsidiaries or
(iii) sold by the counterparty under the Warehouse Facility to a Person who is
not an Affiliate of the Company, including any Guarantees issued by the Company
or a Restricted Subsidiary in connection therewith.
"Warehouse Facility" means any funding arrangement, including Purchase
Facilities, with a financial institution or other lender or purchaser or any
conduit or special purpose vehicle used in connection with such funding
arrangement, to the extent (and only to the extent) that the Company or any of
its Restricted Subsidiaries incurs Warehouse Debt thereunder exclusively to
finance or refinance the purchase or origination of Receivables by the Company
or a Restricted Subsidiary prior to securitization.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or Disqualified Stock at any date, the number of years obtained by
dividing (i) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity (or final redemption,
in the case of Disqualified Stock), 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 or mandatory redemption amount of Disqualified Stock.
"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 1.2. Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such
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 securityholder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
20
"obligor" on the indenture securities means the Company, each
Subsidiary Guarantor and 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 thereby.
SECTION 1.3. 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 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;
(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; and
(7) references to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
ARTICLE II
THE Securities
SECTION 2.1. Form and Dating.
---------------
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of Exhibit A hereto, which
Exhibit is 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. Any such notations, legends or endorsements not contained in the form
of Security attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Security shall be dated the date of its authentication.
21
The terms and provisions contained in the forms of Securities and the
Subsidiary Guarantees shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company, the Subsidiary
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Security or Subsidiary Guarantee conflicts
with the express provisions of this Indenture, the provisions of this Indenture
shall govern and be controlling.
SECTION 2.2. Execution and Authentication.
----------------------------
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Security for the Company by manual or facsimile signature.
An officer of each Subsidiary Guarantor shall sign the Subsidiary Guarantee for
such Subsidiary Guarantor by manual or facsimile signature.
If an Officer whose signature is on a Security or Subsidiary Guarantee
was an Officer at the time of such execution but no longer holds that office at
the time the Trustee authenticates the Security or the Subsidiary Guarantee, as
the case may be, such signature shall nevertheless be valid and the Officer
shall nevertheless bind the Company or Subsidiary Guarantor, as the case may be,
to the terms of the Securities and this Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate the Securities for original issue in
the aggregate principal amount of up to $125,000,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of Securities to be authenticated and the date on
which the Securities are to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $125,000,000, except as
provided in Section 2.7 hereof. Upon the written order of the Company in the
form of an Officers' Certificate, the Trustee shall authenticate Securities in
substitution of Securities originally issued to reflect any name change of the
Company.
The Trustee may appoint an authenticating agent 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 has the
same rights as an Agent to deal with the Company, any Affiliate of the Company,
or any of their respective Subsidiaries.
Securities shall be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiples thereof.
22
SECTION 2.3. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or for exchange ("Registrar"), and an office or agency
where Securities may be presented for payment ("Paying Agent"), and where
notices and demands to or upon the Company in respect of the Securities may be
served. The Company may act as Registrar or Paying Agent, except that, for the
purposes of Articles III, VIII, X, and Section 4.14 hereof and as otherwise
specified in this Indenture, neither the Company nor any Affiliate of the
Company shall act as Paying Agent. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-Registrars and one or more additional Paying Agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
Paying Agent. The Company may change any paying Agent or Registrar without
notice to any Holder. The Company hereby initially appoints the Trustee as
Registrar and Paying Agent and to act as agent for service of notices and
demands in connection with the Securities and the Subsidiary Guarantees; by its
acknowledgement and acceptance on the signature page hereto, the Trustee hereby
initially agrees so to act.
The Company shall enter into an appropriate written agency agreement
with any Agent (including the Paying Agent) not a party to this Indenture, which
agreement shall implement the provisions of this Indenture that relate to such
Agent, and shall furnish a copy of each such agreement to the Trustee. The
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints the Depository Trust Company ("DTC"),
to act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Securities.
Upon the occurrence of an Event of Default described in Section
6.1(vi) or (vii) hereof, the Trustee shall, or upon the occurrence of any other
Event of Default by notice to the Company, the Registrar and the Paying Agent,
the Trustee may assume the duties and obligations of the Registrar and the
Paying Agent hereunder.
SECTION 2.4. 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, premium, if any, or interest on, the Securities (whether such
assets have been distributed to it by the Company or any other obligor on the
Securities), and shall notify the Trustee in writing of any Default in making
any such payment. If either of the Company or a Subsidiary of the Company acts
as paying Agent,
23
it shall segregate such assets and hold them as a separate trust fund for the
benefit of the Holders or the Trustee. 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 or any Event of 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, the Paying Agent (if other than the Company) shall have no further
liability for such assets.
SECTION 2.5. Securityholder 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 and shall otherwise comply with TIA (S)312(a). If the Trustee or any
Paying Agent is not the Registrar, the Company shall furnish to the Trustee on
or before the third Business Day preceding each Interest Payment Date and at
such other times as the Trustee or any such Paying Agent may request in writing
a list in such form and as of such date as the Trustee or any such Paying Agent
reasonably may require of the names and addresses of Holders and the Company
shall otherwise comply with TIA (S)312(a).
SECTION 2.6. Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Definitive Securities. When
----------------------------------------------
Securities are presented to the Registrar with a request:
(i) to register the transfer of such Securities; or
(ii) to exchange such Securities for an equal principal
amount of Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Securities surrendered for registration of transfer or exchange shall
be duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
(b) Restrictions on Transfer of a Security for a Beneficial Interest
----------------------------------------------------------------
in a Global Security. A Security 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 Trustee of a Security, duly endorsed or accompanied
by appropriate instruments of transfer, in form satisfactory to the Trustee,
together with written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an endorsement on the Global Security to
reflect an increase in the aggregate principal amount of the Securities
represented by the Global Security, then the Trustee shall cancel such Security
and cause, or direct the Securities Custodian
24
to cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Custodian, the aggregate principal
amount of Securities represented by the Global Security to be increased
accordingly. If no Global Securities are then outstanding, the Company shall
issue and the Trustee shall authenticate a new 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 Depositary, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Security
------------------------------------------------------
for a Definitive Security.
-------------------------
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
definitive Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a Global Security pursuant to this Section 2.6(d)
shall be registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such definitive Securities to the persons in whose names such
Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global
-----------------------------------------------
Securities. Notwithstanding any other provisions of this Indenture (other than
----------
the provisions set forth in subsection (f) of this Section 2.6), a Global
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Securities in Absence of
-----------------------------------------------------
Depositary. If at any time:
----------
(i) the Depositary for the Securities notifies the Company
that the Depositary is unwilling or unable to continue as Depositary for
the Global Securities and a successor Depositary for the Global Securities
is not appointed by the Company within ninety days after delivery of such
notice; or
(ii) the Company, in its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of Securities under
this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of definitive Securities,
will, or its authenticating agent
25
will, authenticate and deliver definitive Securities, in an aggregate principal
amount equal to the principal amount of the Global Securities, in exchange for
such Global Securities.
(g) Cancellation and/or Adjustment of Global Security. At such time
-------------------------------------------------
as all beneficial interests in a Global Security have either been exchanged for
definitive Securities, redeemed, repurchased or cancelled, such Global Security
shall be returned to or retained and cancelled by the Trustee. At any time
prior to such cancellation, if any beneficial interest in a Global Security is
exchanged for definitive Securities, redeemed, repurchased or cancelled, the
principal amount of Securities represented by such Global Security shall be
reduced and an endorsement shall be made on such Global Security, by the Trustee
or the Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
(h) Obligations with respect to Transfers and Exchanges of
------------------------------------------------------
Definitive Securities.
---------------------
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee or any authenticating agent of the
Trustee shall authenticate definitive Securities and Global Securities at
the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments, or similar governmental charge payable upon
exchanges or transfers pursuant to Section 2.2 (fourth paragraph), 2.10,
3.6, 4.12, 9.5 or 10.1 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange of (a) any Securities selected for redemption in
whole or in part pursuant to Article III hereof, except the unredeemed
portion of any Security being redeemed in part, or (b) any Security for a
period beginning 15 Business Days before the mailing of a notice of an
offer to repurchase pursuant to Article X or Section 4.14 hereof or
redemption of Securities pursuant to Article III hereof and ending at the
close of business on the day of such mailing.
(iv) 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 Depositary participants or beneficial owners of interests 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 thereof.
26
SECTION 2.7. Replacement Securities.
----------------------
If any mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Trustee, to the Trustee to the effect that the Security has
been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee, upon written order of the Company signed by two Officers, shall
authenticate a replacement Security if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both the Company and the
Trustee, to protect the Company, the Trustee or any Agent from any loss which
any of them may suffer if a Security is replaced. The Company may charge such
Holder for its reasonable, out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
SECTION 2.8. Outstanding Securities.
----------------------
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee, except those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Security, except as provided in
Section 2.9 hereof.
If a Security is replaced pursuant to Section 2.7 hereof (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 2.7
hereof.
If the principal amount of any Security is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or an Affiliate of the Company) holds cash sufficient to pay
all of the principal and interest and premium, if any, due on the Securities
payable on that date and payment of the Securities called for redemption is not
otherwise prohibited, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
27
SECTION 2.9. Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company, any Subsidiary of the company or any
of their respective Affiliates shall be considered as though not outstanding,
except that, for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, amendment, supplement, waiver or
consent, only Securities that a Trust Officer of the Trustee knows are so owned
shall be so disregarded. Notwithstanding the foregoing, Securities that are to
be acquired by the Company, any Subsidiary of the Company or and Affiliate of
the Company pursuant to an exchange offer, tender offer or other agreement shall
not be deemed to be owned by the Company, a Subsidiary of the Company or an
Affiliate of the Company until legal title to such Securities passes to the
Company, such Subsidiary or such Affiliate, as the case may be.
SECTION 2.10. Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company reasonably and in good faith consider
appropriate for temporary Securities and as shall be reasonable acceptable to
the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall, upon receipt of a written order of the Company in the form of an
Officers' Certificate, authenticate definitive Securities in exchange for
temporary Securities. Until so exchanged, Holders of temporary Securities shall
in all respects be entitled to the same benefits under this Indenture as Holders
of permanent Securities authenticated and delivered hereunder.
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 registration, transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or an Affiliate of the Company), and no one
else, shall cancel and, without the written direction of the Company to the
contrary, shall cancel all Securities surrendered for registration of transfer,
exchange, payment or cancellation and shall destroy cancelled Securities
(subject to the record retention requirement of the Exchange Act).
Certification of the destruction of all cancelled Securities shall be delivered
to the Company promptly following any such destruction. Subject to Section 2.7
hereof, the Company may not issue new Securities to replace Securities that have
been paid or delivered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section 2.11, except as expressly permitted in the form of Securities
and as permitted by this Indenture.
28
SECTION 2.12. Defaulted Interest.
------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more predecessor Securities) is registered
at the close of business on the Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date plus, to the extent
lawful, any interest payable on the defaulted interest at the rate and in the
manner provided in Section 4.1 hereof and the Security (herein called "Defaulted
Interest"), shall forthwith cease to be payable to the registered holder on the
relevant Record Date, or, as applicable, the Special Record Date (as defined
below), and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee and
the Paying Agent in writing of the amount of Defaulted Interest proposed to
be paid on each Security and the date of the proposed payment, and at the
same time the Company shall deposit with the Paying Agent an amount of cash
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Paying
Agent for such deposit prior to the date of the proposed payment, such cash
when deposited to be held in trust for the benefit of the persons entitled
to such Defaulted Interest as provided in this clause (1). Thereupon the
Paying Agent shall fix a special record date for the payment of such
Defaulted Interest (a "Special Record Date"), which shall be not more than
15 days, and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Paying Agent of
the notice of the proposed payment. The Paying Agent shall promptly notify
the Company and the Trustee of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder at his address as it
appears in the Security register not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the persons in whose
names the Securities (or their respective predecessor Securities) are
registered on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee and the Paying
29
Agent of the proposed payment pursuant to this clause, such manner shall be
deemed practicable by the Trustee and the Paying Agent.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of, transfer of, in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.13. CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers, and, if
so, the Trustee shall use CUSIP numbers in notices of redemption or exchange as
a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE III
REDEMPTION
SECTION 3.1. Notices to Trustee.
------------------
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee at
least 30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the Redemption Date, (iii) the principal amount of
Securities to be redeemed, (iv) the redemption price and (v) whether it wants
the Paying Agent to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of Securities to
be redeemed pursuant to Section 3.7 hereof by crediting against any such
redemption Securities it has not previously delivered to the Trustee and the
Paying Agent for cancellation, it shall so notify the Trustee, in the form of an
Officers' Certificate, and the Paying Agent of the amount of the reduction and
deliver such Securities with such notice.
The Company shall give each notice to the Trustee and the Paying Agent
provided for in this Section 3.1 at least 40 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee and the Paying
Agent). Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
30
SECTION 3.2. Selection of Securities to Be Redeemed.
--------------------------------------
If less than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed on a pro rata basis, by lot or by
such other method as the Trustee shall determine to be appropriate and fair and
in such manner as complies with any applicable Depositary, legal and stock
exchange requirements.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
and the Paying Agent in writing of the Securities selected for redemption and,
in the case of any Security selected for partial redemption, the principal
amount thereof to be redeemed. Securities in denominations of $1,000 may be
redeemed only in whole. The Trustee may select for redemption portions (equal
to $1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
SECTION 3.3. Notice of Redemption.
--------------------
At least 30 days, but not more than 60 days prior to the Redemption
Date, the Company shall mail or cause to be mailed, by first class mail, postage
prepaid, a notice of re demption to the Trustee, the Paying Agent and each
Holder whose Securities are to be redeemed at such Holder's last address as then
shown upon the registry books of the Registrar. At the Company's request, the
Paying Agent shall give the notice of redemption in the Company's name and at
the Company's expense. Each notice for redemption shall identify the Securities
to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price, including accrued and unpaid interest, to
be paid upon such redemption;
(c) if any Security is being redeemed in part, the portion of the
principal amount equal to the unredeemed portion thereof and that, on and
after the Redemption Date, upon surrender of such Security, a new Security
or Securities in a principal amount equal to the unredeemed portion thereof
shall be issued;
(d) the name and address of the Paying Agent;
(e) that Securities called for redemption must be surrendered to the
Paying Agent at the address specified in such notice to collect the
Redemption Price;
(f) that, unless the Company defaults in making such 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
of such Securities is to receive payment
31
of the Redemption Price, including accrued and unpaid interest to the
Redemption Date, upon surrender to the Paying Agent of the Securities
called for redemption and to be redeemed;
(g) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate prin cipal amount of such Securities to
be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption;
(h) the CUSIP number of the Securities to be redeemed and that no
representation is made as to the correctness or accuracy of the CUSIP
number listed in such notice or printed on the Securities; and
(i) that the notice is being sent pursuant to this Section 3.3 and
pursuant to the optional redemption provisions of Paragraph 5 of the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided,
however, that the Company shall deliver to the Trustee, at least 15 days prior
to the Redemption Date, an Officer's Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such notice
as provided in the preceding paragraph.
SECTION 3.4. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.3
hereof, Securities called for redemption become irrevocably due and payable on
the Redemption Date and at the Redemption Price, including accrued and unpaid
interest to the Redemption Date. Upon surrender to the Trustee or Paying Agent,
such Securities called for redemption shall be paid at the Redemption Price,
including interest, if any, accrued and unpaid to the Redemption Date; provided
that if the Redemption Date is after a regular record date and on or prior to
the Interest Payment Date to which such Record Date relates, any accrued
interest shall be payable to the Holder of the redeemed Securities registered at
the close of business on the relevant Record Date; and provided, further, that
if a Redemption Date is a non-Business Day or a Legal Holiday, payment shall be
made on the next succeeding Business Day and no interest shall accrue for the
period from such Redemption Date to such succeeding Business Day.
SECTION 3.5. Deposit of Redemption Price.
---------------------------
On or prior to 10 a.m., New York City time, on the Redemption Date,
the Company shall deposit with the Trustee or with the Paying Agent (other than
the Company or an Affiliate of the Company) cash or U.S. Government Securities
sufficient to pay the Redemption Price of, and accrued and unpaid interest on,
all Securities to be redeemed on such Redemption Date (other than Securities or
portions thereof called for redemption on that date that have been delivered by
the Company to the Trustee for cancellation). The Trustee or the
32
Paying Agent shall promptly return to the Company any cash or U.S. Government
Securities so deposited which is not required for that purpose upon the written
request of the Company.
If the Company complies with the provisions of the preceding paragraph
and the other provisions of this Article III and payment of the Securities, or
portions of the Securities called for redemption is not prohibited, interest on
the Securities to be redeemed shall cease to accrue on the applicable Redemption
Date, whether or not such Securities are presented for payment. Notwithstanding
anything herein to the contrary, if any Security called for redemption in the
manner provided in the Securities shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall continue to accrue and be paid from the Redemption
Date until such payment is made on the unpaid principal, and, to the extent
lawful, on any interest not paid on such unpaid principal, in each case at the
rate and in the manner provided in Section 4.1 hereof and the Security.
SECTION 3.6. Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge to the Holder, a new Security or Securities equal
in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.7. Optional Redemption.
-------------------
The Company shall not have the option to redeem Securities prior to
_______________, 2001. Thereafter, the Company shall have the option to redeem
the Securities, in whole or in part, at any time or from time to time, upon not
less than 30 nor more than 60 days' prior notice to each Holder, at the
following redemption prices (expressed as percentages of principal amount) set
forth below, in each case (subject to the right of Holders of record on a Record
Date that is on or prior to such Redemption Date to receive interest due on the
Interest Payment Date to which such Record Date relates), plus accrued and
unpaid interest thereon to the applicable Redemption Date, in each case (subject
to the right of Holders of record on a Record Date that is on or prior to such
Redemption Date to receive interest due on the Interest Payment Date to which
such Record Date relates), if redeemed during the twelve-month period commencing
on ___________ of the years indicated below:
Year Percentage
---- ----------
2001 %
2002 %
2003 and thereafter %
In addition, at any time prior to , 2001, upon a Public Equity
Offering of common stock of the Company for cash, up to 30% of the aggregate
principal amount of the Securities originally issued may be redeemed at the
option of the Company within 60 days of such Public
33
Equity Offering, on not less than 30 days, but not more than 60 days notice to
each holder of the Securities to be redeemed, with cash from the Net Cash
Proceeds of such Public Equity Offering, at a redemption price equal to
% of the principal amount thereof, together with accrued and unpaid interest, if
any (subject to the right of Holders of record on an Interest Record Date to
receive interest due on an Interest Payment Date that is on or prior to such
Redemption Date), provided that at least $87.5 million of the aggregate
principal amount of the Securities remain outstanding immediately following such
redemption.
Any redemption pursuant to this Section 3.7 shall be made pursuant to
the provisions of Sections 3.1 through 3.6 hereof.
SECTION 3.8. Mandatory Redemption.
--------------------
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Securities.
SECTION 3.9. Offer to Redeem by Application of Excess Proceeds.
-------------------------------------------------
In the event that, pursuant to Section 4.14 hereof, the Company shall
be required to commence an Asset Sale Offer, it shall follow the procedure
specified below.
The Asset Sale Offer shall remain open for the minimum period of time
required by Rule 14e-1 under the Exchange Act ("Rule 14e-1") and no longer (the
"Asset Sale Offer Period"). No later than five Business Days after the
termination of the Asset Sale Offer Period (the "Asset Sale Purchase Date"), the
Company shall purchase the principal amount of Securities required to be
purchased pursuant to Section 4.14 hereof (the "Asset Sale Offer Amount") or, if
less than the Asset Sale Offer Amount has been tendered, all the Securities
tendered in response to the Asset Sale Offer.
If the Asset Sale Purchase Date is on or after an Interest Record Date
and on or before the related Interest Payment Date, any accrued an unpaid
interest shall be paid to the Person in whose name a Security is registered at
the close of business on such Record Date, and such interest shall not be
payable to Holders who tender Securities pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders. The
notice shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Asset Sale Offer. The Asset Sale
Offer shall be made to all Holders. The notice, which shall govern the terms of
the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.9 and Section 4.14 hereof and the length of time the Asset Sale Offer shall
remain open;
34
(b) the Asset Sale Offer Amount, the purchase price and the Asset Sale
Purchase Date;
(c) that any Security not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any
Security accepted for payment pursuant to the Asset Sale Offer shall cease to
accrete or accrue interest after the Asset Sale purchase Date;
(e) that Holders electing to have a Security purchased pursuant to an
Asset Sale Offer may only elect to have all of such Security purchased an may
not elect to have only a portion of such Security purchased;
(f) that Holders electing to have a Security purchased pursuant to any
Asset Sale Offer shall be required to surrender the Security, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Security
completed, or transfer by book-entry transfer, to the Company, the Security
completed, or transfer by book-entry transfer, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address specified in the
notice at least three days before the Asset Sale Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of a the Asset Sale Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Security
purchased;
(h) that, if the aggregate principal amount of Securities surrendered
by Holders exceeds the Asset Sale Offer Amount, the Company shall select the
Securities to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Securities in denominations of
$1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Securities were purchased only in part shall be
issued new Securities equal in principal amount to the unpurchased portion of
the Securities surrendered (or transferred by book-entry transfer).
On or before the Asset Sale Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis, to the extent necessary,
the Asset Sale Offer Amount of Securities or portions thereof tendered pursuant
to the Asset Sale Offer, or if less than the Asset Sale Offer Amount has been
tendered, all such Securities tendered, and shall deliver to the Trustee an
Officers' Certificate stating that such Securities or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section
3.9. The Company, the Depositary or the Paying Agent, as the case may be, shall
promptly (but in any
35
case no later than the Asset Sale Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Securities
tendered by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Security, and the Trustee, upon delivery of
an Officer's Certificate from the Company, shall authenticate and mail or
deliver such new Security to such Holder, in a principal amount equal to any
unpurchased portion of any Security surrendered. Any Security not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Asset Sale Offer on the Asset
Sale Purchase Date.
Other than as specifically provided in this Section 3.9, any purchase
pursuant to this Section 3.9 shall be made pursuant to the provisions of
Sections 3.1 through 3.6 hereof.
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities.
---------------------
The Company shall pay the principal of, premium, if any, and interest
on the Securities on the dates and in the manner provided herein and in the
Securities. Principal, premium, if any and interest on the Securities shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or an Affiliate of the Company) holds for the benefit of the Holders
(on or before 10:00 a.m. New York City time to the extent necessary to provide
the funds to the Depository in accordance with the Depository's procedures) on
that date cash deposited and designated for and sufficient to pay all principal,
premium, if any, and interest then due.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
SECTION 4.2. Maintenance of Office or Agency.
-------------------------------
The Company and the Subsidiary Guarantors shall maintain in the
Borough of Manhattan, The City of New York, an office or agency where Securities
may be presented or surrendered for payment, where Securities may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company and the Subsidiary Guarantors in respect of the Securities and
this Indenture may be served. The Company and the Subsidiary Guarantors shall
give prompt written notice to the Trustee and the Paying Agent of the location,
and any change in the location, of such office or agency. If at any time the
Company and the Subsidiary Guarantors shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee and the Paying Agent 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 12.2 hereof.
36
The Company and the Subsidiary Guarantors may also from time to time
designate one or more other offices or agencies where the Securities may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company or the Subsidiary Guarantors
of their obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company and the Subsidiary
Guarantors shall give prompt written notice to the Trustee and the Paying Agent
of any such designation or rescission and of any change in the location of any
such other office or agency. The Company hereby initially designates the
Corporate Trust Office of the Trustee as such office or agency of the Company in
accordance with Section 2.3.
SECTION 4.3. Limitation on Restricted Payments.
---------------------------------
The Company shall not, and shall not permit any of its Restricted Subsidiaries
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) other than
dividends or other payments or distributions payable in Equity Interests
(excluding Disqualified Stock) of the Company or dividends or other payments or
distributions payable to the Company or any Subsidiary Guarantor; (ii) purchase,
redeem or otherwise acquire or retire for value (including, without limitation,
any payment in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company or any of its Subsidiaries (other
than any such Equity Interests owned by any Wholly-Owned Restricted Subsidiary
of the Company); (iii) make any principal payment on or with respect to,
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Securities or any Subsidiary Guarantee
(other than intercompany Indebtedness payable to the Company or a Subsidiary
Guarantor by any Restricted Subsidiary), except at its final stated maturity; or
(iv) make any Restricted Investment (all such payments and other actions set
forth in clauses (i) through (iv) 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 test set forth in the first
paragraph of the covenant described below under Section 4.11; 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 clauses (ii)
and (iii) 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 but not including the last
37
day of the first fiscal quarter ending immediately following the Issue Date to
the last day of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment, unless such Restricted Payment occurs after the date which financial
statements for such fiscal quarter would be required to be filed pursuant to the
Exchange Act, in which case the period shall include the last day of the
Company's most recently ended fiscal quarter regardless of whether internal
financial statements are available (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 Equivalents proceeds received by the Company (other than from its
Subsidiaries) from Capital Contributions after the Issue Date or the issue or
sale after the Issue Date of (x) Equity Interests of the Company (other than
Disqualified Stock) or (y) Disqualified Stock or Indebtedness represented by
securities of the Company that have been converted into (or exchanged for) such
Equity Interests (other than Equity Interests (or Disqualified Stock or
convertible or exchangeable debt securities) sold to a Subsidiary of the Company
and other than Disqualified Stock or other Indebtedness represented by
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
for cash or otherwise liquidated or repaid for cash, the lesser of (A) the cash
return to the Company or one of its Restricted Subsidiaries of capital with
respect to such Restricted Investment (less the cost of disposition, if any)
which cash is not subject to restriction and (B) the initial amount of such
Restricted Investment.
The foregoing provisions will not prohibit the following Restricted
Payments: (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 Indenture; (ii) the purchase, redemption or
other acquisition or retirement for value of any Equity Interests of the Company
in exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of other Equity Interests of the
Company (other than any Disqualified Stock); provided, that the amount of any
such net Cash Equivalents proceeds that are utilized for such redemption,
repurchase, retirement or other acquisition shall be excluded from clause
(c)(ii) of the preceding paragraph; (iii) the payment of principal on, or
purchase, redemption, defeasance or other acquisition or retirement for value of
Indebtedness with the net cash proceeds from an incurrence of, Permitted
Refinancing Indebtedness or the substantially concurrent sale (other than to a
Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); provided, that the amount of any such net Cash Equivalents
proceeds from any such sale of Equity Interests or Indebtedness (to the extent
such Indebtedness is used to refinance the Convertible Securities) that are
utilized for such redemption, repurchase, retirement or other acquisition shall
be excluded from clause (c)(ii) of the preceding paragraph; (iv) payments in an
amount not to exceed $500,000 in the aggregate during any fiscal year of the
Company (plus (x) any such amount not utilized in the preceding fiscal year and
(y) the aggregate amount of net proceeds from the reissuance of such Equity
Interests to employees or directors of the Company other than Disqualified
Stock, provided, that the amount of net proceeds from any such reissuance of
Equity Interests shall be excluded from clause (c)(ii) of the preceding
paragraph) in connection with the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company held by an employee
or director of the Company or any of its Subsidiaries, related to compensation
or severance arrangements; (v)
38
advances to a Securitization Trust required to be made by the Company or any
Restricted Subsidiary (in its capacity as the holder of the residual interest in
such trust) if such advances rank senior in right of payment to all other
interests in, and Indebtedness of, such trust; (vi) the exercise or conversion
of an option, warrant or other security convertible or exchangeable for an
equity security of a Strategic Alliance Client in connection with a
substantially simultaneous sale or other disposition by the Company or a
Restricted Subsidiary of such equity security for an amount in excess of the
exercise price or other consideration paid by the Company or a Restricted
Subsidiary in connection with such exercise or conversion; (vii) the making and
consummation of any offer to repurchase any Indebtedness upon the occurrence of
a change of control under and as defined in the documents governing such
Indebtedness; provided, that in connection with Indebtedness incurred after the
Issue Date, the definition of "change of control" is the same in all material
respects as the definition of "Change of Control" set forth in this Indenture
and payments pursuant thereto are not required to be made prior to the date on
which the Change of Control Payment is required to be made under this Indenture
and, with respect to any Indebtedness pari passu or subordinated in right of
payment to the Securities, no sooner than 60 days after the date such Change of
Control Offer is required to be made and (viii) the purchase, redemption or
other acquisition or retirement for value by any Restricted Subsidiary of any
Equity Interests of such Restricted Subsidiary.
The Board of Directors 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 to the
Company or a Restricted Subsidiary 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 4.3. All such outstanding Investments will be deemed to constitute
Investments in an amount equal to 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 Restricted Payments other than cash shall be the
fair market value (evidenced by an Officers' Certificate on the date of the
Restricted Payment) of the asset(s) 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 in excess of $1.0 million shall be determined by the Board of
Directors 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, in each case, of national
standing if such fair market value exceeds $10.0 million. Not later than the
date of making any Restricted Payment, the Company shall deliver to the Trustee
an Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by Section 4.3 were
computed.
39
SECTION 4.4. Corporate and Partnership Existence.
-----------------------------------
Except as otherwise permitted by Article V, Section 4.14 or Section
11.4, the Company and the Subsidiary Guarantors shall do or cause to be done all
things necessary to pre serve and keep in full force and effect their respective
corporate, partnership or other organizational existence, as the case may be,
and the corporate, partnership or other organizational existence, as the case
may be, of each of their Subsidiaries in accordance with the respective
organizational documents of each of them and the material rights (charter and
statutory) and material corporate franchises of the Company, the Subsidiary
Guarantors and each of their respective Subsidiaries; provided, however, that
neither the Company nor any Subsidiary Guarantor shall be required to preserve,
with respect to themselves, any right or franchise, and with respect to any of
their respective Subsidiaries, any such existence, right or franchise, if (a)
the Company shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and (b) the loss thereof is not
adverse in any material respect to the Holders.
SECTION 4.5. Payment of Taxes and Other Claims.
---------------------------------
The Company and the Subsidiary Guarantors shall, and shall cause each
of their Subsidiaries to, pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company, any Subsidiary
Guarantor or any of their Subsidiaries or any of their respective properties
and assets and (ii) all lawful claims, whether for labor, materials, supplies or
services, which have become due and payable and which by law have or may become
a Lien upon the property and assets of the Company, any Subsidiary Guarantor or
any of their Subsidiaries; provided, however, that neither the Company nor any
Subsidiary Guarantor shall be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which disputed amounts adequate reserves have been
established in accordance with GAAP.
SECTION 4.6. Maintenance of Properties and Insurance.
---------------------------------------
The Company and the Subsidiary Guarantors shall cause all material
properties used or useful to the conduct of their business and the business of
each of their Subsidiaries to be maintained and kept in good condition, repair
and working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in their reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
nothing in this Section 4.6 shall prevent the Company or any Subsidiary
Guarantor from discontinuing any operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is
(a)(i) in the judgment of the Board of Directors of the Company, desirable in
the conduct of the busi-
40
ness of the Company and (ii) not adverse in any material respect to the Holders
or (b) otherwise permitted under Section 4.14.
The Company and the Subsidiary Guarantors shall provide, or cause to
be provided, for themselves and each of their Subsidiaries, insurance
(including appropriate self-insurance) against loss or damage of the kinds that,
in the reasonable, good faith opinion of the Board of Directors of the Company
is adequate and appropriate for the conduct of the business of the Company, the
Subsidiary Guarantors and such Subsidiaries in a prudent manner, with (except
for self-insurance) reputable insurers or with the government of the United
States of America or an agency or instrumentality thereof, in such amounts, with
such deductibles, and by such methods as shall be customary, in the reasonable,
good faith opinion of the Company and adequate and appropriate for the conduct
of the business of the Company, the Subsidiary Guarantors and such Subsidiaries
in a prudent manner for entities similarly situated in the industry.
SECTION 4.7. Compliance Certificate; Notice of Default.
-----------------------------------------
(a) The Company shall deliver to the Trustee within 120 days after
the end of its fiscal year an Officers' Certificate, one of the signers of which
shall be the principal executive, principal financial or principal accounting
officer of the Company, complying with Section 314(a)(4) of the TIA and stating
that a review of its activities and the activities of its Subsidiaries, if any,
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture (without
regard to notice requirements or grace periods) and further stating, as to each
such Officer signing such certificate, whether or not the signer knows of any
failure by the Company, any Subsidiary Guarantor or any Subsidiary of the
Company to comply with any conditions or covenants in this Indenture and, if
such signer does know of such a failure to comply, the certificate shall
describe such failure with particularity. The Officers' Certificate shall also
notify the Trustee should the relevant fiscal year end on any date other than
the current fiscal year end date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto. The Trustee shall not be deemed to have knowledge of any
Default, any Event of Default or any such fact unless one of its Trust Officers
receives written notice thereof from the Company or any of the Holders.
SECTION 4.8. Reports.
-------
Whether or not required by the rules and regulations of the
Commission, so long as any of the Securities are outstanding, the Company shall
furnish to the Holders of the Securities (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms (but excluding exhibits thereto; provided that the Company shall
41
make such exhibits available free of charge upon request), 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 notes 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 Commission on Form 8-K (but excluding exhibits thereto;
provided that the Company shall make such exhibits available free of charge upon
request) if the Company were required to file such reports. In addition, whether
or not required by the rules and regulations of the Commission, the Company
shall file a copy of all such information and reports with the Commission for
public availability (unless the Commission will not accept such a filing) and
make such information available to securities analysts and prospective investors
upon request.
SECTION 4.9. Limitation on Status as Investment Company.
------------------------------------------
Neither the Company nor any of the Subsidiary Guarantors shall, nor
shall the Company permit any of its Restricted Subsidiaries to become required
to register as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or otherwise become subject to
regulation under the Investment Company Act.
SECTION 4.10. Limitation on Transactions with Affiliates.
------------------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, 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 actions, considered separately, 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 $1.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, an opinion as to the fairness
to the Company or such Restricted Subsidiary of such Affiliate Transaction from
a financial point of view issued by an accounting, appraisal or investment
banking firm, in each case, of national standing; provided that Affiliate
Transactions shall not include (A) any employment agreement, stock option,
employee benefit,
42
indemnification, compensation (including the payment of reasonable fees to
Directors of the Company or its Restricted Subsidiaries who are not employees of
the Company or its Restricted Subsidiaries), business expense reimbursement or
other employment-related agreement, arrangement or plan entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of business
of the Company or such Restricted Subsidiary, (B) transactions between or among
the Company and/or its Restricted Subsidiaries and Strategic Alliance Clients
not otherwise prohibited by this Indenture, (C) loans or advances to employees
in the ordinary course of business of the Company or its Restricted
Subsidiaries, but in any event not to exceed $500,000 in aggregate principal
amount outstanding at any one time, and (D) Restricted Payments that are
permitted by the provisions of Section 4.3 hereunder, (E) Permitted Investments
enumerated in clauses (a), (b), (c), (g) and (h) of the definition thereof, (F)
the tax sharing agreement with ICII, relating to periods prior to the Company's
initial public offering, (G) administrative benefits and services provided to
the Company by ICII, including computer hardware and software, in an annual
amount not in excess of $100,000, (H) a registration rights agreement with ICII
entered into in November 1996 and (I) a five year consulting agreement with The
Xxxxx Consulting Group entered into in June 1996.
SECTION 4.11. Limitation on Incurrence of Additional Indebtedness and
-------------------------------------------------------
Issuance of Preferred Stock.
---------------------------
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guaranty or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) or issue
Disqualified Stock, and that the Company will not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock except for preferred stock
issued to and held by the Company or any Subsidiary Guarantor, provided that any
subsequent issuance or transfer of Capital Stock that results in such Subsidiary
Guarantor ceasing to be a Subsidiary Guarantor or any subsequent transfer of
such preferred stock (other than to the Company or any other Subsidiary
Guarantor) will be deemed, in each case, to constitute the issuance of such
preferred stock by the issuer thereof; provided, however, that the Company or
any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock and any Subsidiary Guarantor may issue preferred stock
if, on the date of such incurrence or issuance and after giving effect thereto,
the Consolidated Leverage Ratio does not exceed 2.0 to 1.0.
The foregoing provisions will not apply to:
(1) the existence of Warehouse Facilities, regardless of amount, and
the incurrence of Permitted Warehouse Debt by the Company or any of its
Restricted Subsidiaries; provided, however, that to the extent any such
Indebtedness of the Company or a Restricted Subsidiary of the Company ceases to
constitute Permitted Warehouse Debt, to such extent such Indebtedness shall be
deemed to be incurred by the Company or such Restricted Subsidiary of the
Company, as the case may be, at such time;
43
(2) the incurrence by the Company or any Restricted Subsidiary of
intercompany Indebtedness owing to the Company or any Subsidiary Guarantor;
provided, however, that (i)(A) any subsequent issuance or transfer of any
Capital Stock which results in any such Indebtedness being held by a Person
other than a Subsidiary Guarantor and (B) any sale or transfer of any such
Indebtedness to a Person that is not either the Company or a Subsidiary
Guarantor, shall be deemed, in each case, to constitute the incurrence of such
Indebtedness by the Company or such Subsidiary Guarantor, as the case may be, at
such time, and (ii) any Indebtedness (x) of the Company to any Subsidiary
Guarantor or (y) of any Subsidiary Guarantor to the Company is permitted as a
Restricted Payment by the covenant described above in Section 4.3;
(3) the incurrence by the Company of Indebtedness represented by the
Securities and the incurrence by the Subsidiary Guarantors of Subsidiary
Guarantees;
(4) Indebtedness of the Company and the Subsidiary Guarantors
outstanding on the Issue Date;
(5) the incurrence by the Company or any of the Subsidiary Guarantors
of Permitted Refinancing Indebtedness;
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations directly related to (i) Indebtedness of the
Company or a Restricted Subsidiary of the Company that was permitted by this
Indenture to be incurred, (ii) Receivables held by the Company or a Restricted
Subsidiary pending sale in a Securitization of a Qualified Whole Loan Sale,
(iii) Receivables of the Company or a Restricted Subsidiary that have been sold
pursuant to a Warehouse Facility or (iv) Receivables that the Company or a
Restricted Subsidiary reasonably expects to purchase or commit to purchase,
finance or accept as collateral; provided, however, that, in the case of each of
the foregoing clauses (i) through (iv), such Hedging Obligations are customary
in the industry;
(7) the Guarantee by the Company or any of the Subsidiary Guarantors
of the Indebtedness of the Company or another Subsidiary Guarantor that was
permitted to be incurred by another provision of this covenant;
(8) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness in an aggregate principal amount at any time outstanding (including
any Indebtedness issued to refinance, replace, retire or otherwise acquire such
Indebtedness) not to exceed $15.0 million;
(9) (A) the incurrence by an Unrestricted Subsidiary of the Company of
Non-Recourse Debt (including, without limitation, Non-Recourse Debt that would
constitute Permitted Warehouse Debt if incurred by a Subsidiary Guarantor);
provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt
of the Unrestricted Subsidiary, such event shall be deemed to constitute an
incurrence of Indebtedness by a Restricted Subsidiary at such time and (B) the
issuance by an Unrestricted Subsidiary of the Company of preferred stock;
provided, however, that if any such Unrestricted Subsidiary shall become a
Restricted Subsidiary, such
44
event shall be deemed to constitute the issuance of Disqualified Capital Stock
or preferred stock, as applicable, by a Restricted Subsidiary at such time; and
(10) the incurrence by the Company or any Subsidiary Guarantor of
Indebtedness owing to any Strategic Alliance Client in an aggregate principal
amount outstanding at any one time (including any Indebtedness issued to
refinance, replace, retire or otherwise acquire such Indebtedness) not to exceed
the aggregate amount of the Book Entry Residual Receivable relating to such
Strategic Alliance Client outstanding at any one time.
In addition, the Company shall not, and shall not permit any
Subsidiary Guarantor to, incur any Indebtedness that is contractually
subordinated to any Indebtedness of the Company or any such Subsidiary Guarantor
unless such Indebtedness is also contractually subordinated to the Securities,
or the Subsidiary Guarantee of such Subsidiary Guarantor (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 of limited recourse.
For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Indebtedness described in clauses (1) through (10) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, at the
time incurred or deemed incurred the Company shall, in its sole discretion,
classify such item of Indebtedness in any manner that complies with this Section
4.11 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 4.12. Limitation on Dividends and Other Payment Restrictions
------------------------------------------------------
Affecting Restricted Subsidiaries.
---------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary 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 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 (other than Receivables) to the Company or any of its Restricted
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (a) agreements relating to Indebtedness as in effect as of the Issue
Date, and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, additions (including additional Warehouse Facilities),
replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
additions, replacements or refinancings are no more restrictive with respect to
such dividend and other payment restrictions than those contained in the
agreements relating to Indebtedness as in effect on the Issue Date, (b)
applicable law, (c) any instrument governing
45
Acquired Debt 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 Acquired Debt was incurred or such Capital Stock was incurred or
issued or its terms amended in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the property or assets of any Person, other than the Person or the property
or assets of the Person, so acquired, provided that such Person is not taken
into account in determining on a pro forma basis whether such acquisition
subject to such Acquired Debt was permitted by the terms of this Indenture, (d)
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, and (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.
SECTION 4.13. Limitations on Layering Indebtedness.
------------------------------------
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, directly or indirectly, incur, or suffer to exist any
Indebtedness (other than the Securities) that is subordinate in right of payment
to any other Indebtedness of the Company or a Guarantor unless, by its terms,
such Indebtedness is subordinate in right of payment to, or ranks pari passu
with, the Securities or the Guarantees, as applicable.
SECTION 4.14. Limitation on Consolidation or Sales of Assets.
----------------------------------------------
The Company shall not, and shall not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless (i) the Company (or the Restricted
Subsidiary, as the case may be) receives consideration at the time of such Asset
Sale at least equal to the fair market value (evidenced by an Officers'
Certificate delivered to the Trustee and, with respect to any Asset Sale
involving consideration in excess of $5.0 million, a resolution of the Company's
Board of Directors) of the assets or Equity Interests issued or sold or
otherwise disposed of except in the case of a Qualifying Disposition and (ii) at
least 85% (or, in the case of the sale or other disposition of any Residual
Receivables (or interest therein), 50%, subject to the restrictions in the
following paragraph) of the consideration therefor received by the Company or
such Restricted Subsidiary is in the form of Cash Equivalents; provided that the
amount of (x) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet) of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Securities or any Subsidiary Guarantee thereof) that
are expressly assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (y) any currencies, securities, notes or
other obligations received by the Company or any such Restricted Subsidiary from
such transferee that are converted by the Company or such Restricted Subsidiary
into Cash Equivalents within 30 days after receipt (to
46
the extent of the cash received), shall be deemed to be Cash Equivalents for
purposes of this provision.
Further, the Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly sell or otherwise convey or
dispose of any Residual Receivables or interest therein for consideration of
which less than 85% is in the form of Cash Equivalents, unless: (i) from and
after the Issue Date, upon the creation of any Senior Residual Receivables by
the Company or any Restricted Subsidiary, the Company shall designate, by an
Officers' Certificate delivered to the Trustee, Senior Residual Receivables with
an aggregate book value equal to 25% of the book value of the Senior Residual
Receivables so created as Retained Residual Receivables and which Retained
Residual Receivables are of a quality at least equal to the mean quality of such
Senior Residual Receivables so created (which determination shall be made by the
officers of the Company in good faith ("Retained Residual Receivables")) and no
such designation shall have been revoked; (ii) none of the Residual Receivables
sold, conveyed or otherwise disposed of constitute Retained Residual Receivables
unless after giving effect to such sale, conveyance or other disposition, the
aggregate amount of Senior Residual Receivables of the Company and its
Restricted Subsidiaries which are unencumbered by any Lien would be greater than
or equal to 250% of all Senior Indebtedness of the Company and its Restricted
Subsidiaries; and (iii) after giving effect to any such sale, conveyance or
other disposition of Residual Receivables the aggregate amount of Senior
Residual Receivables of the Company and its Restricted Subsidiaries which are
unencumbered by any Lien would be greater than or equal to 150% of all Senior
Indebtedness of the Company and its Restricted Subsidiaries; provided, that for
purposes of calculating the aggregate amount of Senior Residual Receivables of
the Company and its Restricted Subsidiaries which are unencumbered by any Lien
in clauses (ii) and (iii) above, no more than 25% of the aggregate book value
thereof shall constitute Retained Residual Receivables. This Indenture will
provide that from time to time the Company may revoke the designation of any
Senior Residual Receivable as a Retained Residual Receivable if the Company
simultaneously designates as Retained Residual Receivables (in addition to any
other such designation otherwise required by this Indenture) Senior Residual
Receivables (not subject to any Lien) with an aggregate book value and of a
quality equal to or greater than that of the Senior residual Receivables as to
which such designation has been revoked (which determination shall be made by
the officers of the Company in good faith). Any determination of the amount of
Residual Receivables shall be based on the consolidated balance sheet of the
Company and its Restricted Subsidiaries for the most recently ended fiscal
quarter for which financial statements are available, after giving pro forma
effect to the Asset Sale for which such determination is being made and to any
other sale of or Lien on or reduction of Residual Receivables, including
Retained Residual Receivables, since the date of such balance sheet.
The Company or any Restricted Subsidiary, as the case may be, may
within 180 days after the receipt of any Net Proceeds from an Asset Sale subject
to this covenant, apply an amount equal to 100% of such Net Proceeds to (i) a
Permitted Investment (other than in Receivables that, at the time of purchase,
are not Eligible Receivables), (ii) the making of any capital expenditure, or
(iii) the acquisition of any other tangible assets (other than in Receivables
that, at the time of purchase, are not Eligible Receivables), in each case, in
or with respect to
47
a Permitted Business. Pending the final application of any such Net Proceeds,
the Company or such Restricted Subsidiary may temporarily reduce outstanding
Indebtedness or otherwise invest such Net Proceeds in any manner not prohibited
by this Indenture. Any Net Proceeds from Asset Sales not applied or invested as
provided in the first sentence of this paragraph will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0
million, this Indenture will require the Company to make an offer to all Holders
of the Securities (an "Asset Sale Offer") to purchase the maximum principal
amount of the Securities that may be purchased out of the Excess Proceeds, at an
offer price in cash in an amount equal to 100% of the principal amount thereof
plus accrued and unpaid interest thereon to the date of purchase, in accordance
with the procedures set forth in this Indenture.
To the extent that the aggregate amount of the Securities tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company or
the Restricted Subsidiary, as the case may be, may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate principal amount of
the Securities surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee is required to select the Securities to be purchased on a
pro rata basis. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
SECTION 4.15. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company and each of the Subsidiary Guarantors covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law which would prohibit or
forgive the Company or any Subsidiary Guarantor from paying all or any portion
of the principal of, premium of, or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company and each of the Subsidiary Guarantors
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 4.16. Limitation on Ownership of Subsidiary Stock.
-------------------------------------------
The Company (i) will not directly or indirectly beneficially own less
than a majority of the aggregate voting power of any of its now owned or
hereafter acquired or formed Quasi-Subsidiaries and (ii) will not permit any of
its Quasi-Subsidiaries to cease being eligible to file consolidated financial
statements with the Company in accordance with GAAP, (including, without
limitation, pursuant to any transaction which results in a Quasi-Subsidiary
ceasing to be a Subsidiary of the Company or pursuant to the exercise of a call
option) unless, in each case, all outstanding Investments made by the Company
and its Restricted Subsidiaries in such Quasi-Subsidiary (excluding any
Investments consisting of common stock of the Company) shall have
48
been repaid to the Company or to the Restricted Subsidiary making such
Investment in Cash Equivalents (which Cash Equivalents are not subject to
restriction).
SECTION 4.17. Limitation on Liens.
-------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens.
SECTION 4.18. Limitations on Lines of Business.
--------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage to any substantial extent in any business other than Permitted
Businesses.
SECTION 4.19. Payments for Consent.
--------------------
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 of the 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 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 4.20. Transactions Not Subject to Covenants.
-------------------------------------
Notwithstanding anything to the contrary in this Indenture, the
consummation of the Transactions shall not be prohibited by this Indenture. In
addition, none of the Transactions shall be deemed to be a Restricted Payment or
an Asset Sale, or taken into account in any calculation under Section 4.3.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.
-------------------------------------------
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 Person unless (i) the
Company is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which such
49
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 Person formed by
or surviving any such consolidation or merger (if other than the Company) or the
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 after such
transaction no Default or Event of Default exists; and (iv) the Company 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 (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) will (unless
such transaction involves the merger of the Company and one of its Wholly-Owned
Subsidiaries which is also a Subsidiary Guarantor and which transaction is not
in connection with any other transaction) 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 first paragraph of the covenant
described above in Section 4.11. For purposes of this covenant, the sale,
lease, conveyance, assignment, transfer, or other disposition of all or
substantially all of the properties and assets of one or more Subsidiaries of
the Company, which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
SECTION 5.2. Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.1 hereof, the successor, the assets
of the Company in accordance with Section 5.1 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company) and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Securities except in the case of a sale of all
of the Company's assets that meet the requirements of Section 5.1 hereof.
50
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default for 30 days in the payment when due of interest on the
Securities;
(ii) default in payment when due of the principal of or premium, if
any, on the Securities;
(iii) failure by the Company to comply with the provisions described
above in Sections 10.1, 4.3, 4.11, 4.12, 4.13 or 4.14;
(iv) failure by the Company for 30 days after notice to comply with
any of its other agreements in this Indenture the Pledge Agreement or the
Securities;
(v) 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 Subsidiaries (or
the payment of which is guaranteed by the Company or any of its Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after the
date of this Indenture, which default
(1) 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
(2) results in the acceleration of such Indebtedness prior to its
express maturity; and
(3) 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;
51
(vi) failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $2.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days;
(vii) the Company or any of its Significant Subsidiaries shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall consent
to the filing of a bankruptcy proceeding against it, or shall file a petition
or answer or consent seeking reorganization under any bankruptcy or similar
law or similar statute, or shall consent to the filing of any such petition,
or shall consent to the appointment of a Custodian, receiver, liquidator,
trustee, or assignee in bankruptcy or insolvency of it or any substantial
part of its assets or property, or shall make a general assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
generally as they become due, fail generally to pay its debts as they become
due, or take any corporate action in furtherance of any of the foregoing; and
(viii) except as permitted by this Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be invalid or
unenforceable or shall cease for any reason to be in full force and effect or
any Subsidiary Guarantor or any Person acting on behalf of any Subsidiary
Guarantor shall deny or disaffirm its obligations under its Subsidiary
Guarantee.
The Company shall deliver to the Trustee annually a statement
regarding compliance with this Indenture, and the Company is required, upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
SECTION 6.2. Acceleration of Maturity Date; Rescission and Annulment.
-------------------------------------------------------
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Securities
may declare all the Securities to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company or any
Subsidiary, all outstanding Securities will become due and payable without
further action or notice. Holders of the Securities may not enforce this
Indenture or the Securities except as provided in this Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Securities notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Securities pursuant to the
optional redemption provisions of this Indenture,
52
an equivalent premium shall also become and be immediately due and payable to
the extent permitted by law upon the acceleration of the Securities. If an Event
of Default occurs prior to _____________, 2003 by reason of any willful action
(or inaction) taken (or not taken) by or on behalf of the Company with the
intention of avoiding the prohibition on redemption of the Securities prior to
__________, 2003 then the premium specified in this Indenture shall also become
immediately due and payable to the extent permitted by law upon the acceleration
of the Securities.
The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may, on behalf of the
Holders of all of the Securities, waive any existing Default or Event of Default
(other than a Default or Event of Default relating to the release of any
Subsidiary Guarantor from its obligations under this Indenture or its Subsidiary
Guaranty which waiver shall require the Holders of at least 66/2//3% in
principal amount of the Securities then outstanding) and its consequences under
this Indenture except a continuing Default or Event of Default in the payment of
premium, if any, or interest on, or the principal of, the Securities.
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company covenants that if an Event of Default in payment of
principal, premium or interest specified in clause (i) or (ii) of Section 6.1
hereof occurs and is continuing, the Company shall, upon demand of the Trustee,
pay to it, for the benefit of the Holders of such Securities, the whole amount
then due and payable on such Securities for principal, premium, if any, and
interest, and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any), and on any
overdue interest, at the rate borne by the Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including compensation to, and expenses, disbursements and advances
of the Trustee and its agents and counsel and all other amounts due the Trustee
under Section 7.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
53
SECTION 6.4. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irre spective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise to take any and all actions under the TIA, including
(1) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee
and its agent and counsel and all other amounts due the Trustee under Section
7.7) and of the Holders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliver able on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the 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 it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 7.7 hereof.
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.
SECTION 6.5. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
----------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee and its agents and counsel
and all other amounts due the Trustee under Section 7.7, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has
been recovered.
54
SECTION 6.6. Priorities.
----------
Any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium,
if any, or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7 hereof;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium, if any, and interest on, the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Securities for principal, premium, if any, and interest,
respectively; and
THIRD: To the Company, the Subsidiary Guarantors or such other Person
as may be lawfully entitled thereto, the remainder, if any, each as their
respective interests may appear.
The Trustee may, but shall not be obligated to, fix a record date and
payment date for any payment to the Holders under this Section 6.6.
SECTION 6.7. Limitation on Suits.
-------------------
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(A) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(B) the Holders of not less than 25% in aggregate principal amount of
then outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be
incurred or reasonably probable to be incurred in compliance with such
request;
(D) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
55
(E) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
--------------------
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium, if any, and interest on, such
Security on the Maturity Dates of such payments as expressed in such Security
(in the case of redemption, the Redemption Price on the applicable Redemption
Date, in the case of a Change of Control, the Change of Control Purchase Price
on the Change of Control Purchase Date, and in the case of an Asset Sale, the
Asset Sale Offer Price on the relevant purchase date) and to institute suit for
the enforcement of any such payment after such respective dates, and such rights
shall not be impaired without the consent of such Holder.
SECTION 6.9. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7
hereof, no right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.10. Delay or Omission Not Waiver.
----------------------------
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right and remedy given by this Article VI or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
56
SECTION 6.11. Control by Majority.
-------------------
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, provided, that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Holders not taking part in such direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.12. Waiver of Existing or Past Default.
----------------------------------
Subject to Section 6.8, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Securities may, on
behalf of all Holders, waive any existing or past Default or Event of Default
hereunder and its consequences under this Indenture, except a Default
(a) in the payment of the principal of, premium, if any, or interest
on, any Security as specified in clauses (i) and (ii) of Section 6.1 hereof and
not yet cured, or
(b) in respect of a covenant or provision hereof which, under Article
IX, cannot be modified or amended without the consent of the Holder of each
outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
SECTION 6.13. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that 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, suffered or omitted to be taken by it
as Trustee, any court may in its discretion require the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 6.13
57
shall not apply to any suit instituted by the Company, to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 10% in aggregate principal amount of the outstanding
Securities, or to any suit instituted by any Holder for enforcement of the
payment of principal of, or premium, if any, or interest on, any Security on or
after the respective Maturity Date expressed in such Security (including, in the
case of redemption, on or after the Redemption Date).
SECTION 6.14. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Subsidiary Guarantors, the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed, subject to
the terms hereof.
SECTION 7.1. Duties of Trustee.
-----------------
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(i) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no others, and no covenants or obligations
shall be implied in or read into this Indenture which are adverse to the
Trustee, and
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. 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 the
58
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of this
Section 7.1,
(ii) 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
(iii) 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 6.11 hereof.
(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 at the request, order or direction of the Holders or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company
(including without limitation to the extent the Trustee receives funds prior to
the Interest Payment Date in order to comply with the provisions of Section 4.1
hereof). Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1 hereof:
(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 such document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 12.4 and 12.5 hereof. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such certificate or advice of counsel.
59
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it or its agent
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Unless otherwise specifically provided for in this Indenture, any
request, direction or notice from the Company or any Subsidiary Guarantor shall
be sufficient if signed by an Officer of the Company or such Subsidiary
Guarantor, as applicable.
(h) The Trustee shall have no duty to inquire as to the performance
of the Company's or any Subsidiary Guarantor's covenants in Article IV hereof or
as to the performance by any Agent of its duties hereunder. In addition, the
Trustee shall not be deemed to have knowledge of any Default or Event of Default
except (i) any Event of Default occurring pursuant to Sections 6.1(i), 6.1(ii)
and 4.1 hereof, or (ii) any Default or Event of Default of which the Trustee
shall have received written notification or obtained actual knowledge.
(i) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate.
SECTION 7.3. 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, any
Subsidiary Guarantor, any of their Subsidiaries, or their respective Affiliates
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11 hereof.
60
SECTION 7.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities and 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 in the Securities, other than the Trustee's
certificate of authentication, or the use or application of any funds received
by a Paying Agent other than the Trustee.
SECTION 7.5. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (or premium, if any), of, or interest on, any Security
(including the payment of the Change of Control Purchase Price on the Change of
Control Payment Date, the payment of the Redemption Price on the Redemption Date
and the payment of the Asset Sale Offer Price on the relevant purchase date),
the Trustee may withhold the notice if and so long as a Trust Officer in good
faith determines that withholding the notice is in the interest of the
Securityholders.
SECTION 7.6. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each November 1 beginning with the November 1
following the date of this Indenture, and for so long as Securities remain
outstanding, the Trustee shall, if required by law, mail to each Securityholder
a brief report dated as of such November 1 that complies with TIA (S) 313(a).
The Trustee also shall comply with TIA (S)(S) 313(b) and 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed in accordance with TIA (S) 313(d).
SECTION 7.7. Compensation and Indemnity.
--------------------------
The Company and the Subsidiary Guarantors jointly and severally agree
to pay to the Trustee from time to time reasonable compensation 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 and the Subsidiary
Guarantors shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it in accordance with
this Indenture. Such expenses shall include the reasonable compensation,
disbursements and expens es of the Trustee's agents, accountants, experts and
counsel.
The Company and the Subsidiary Guarantors jointly and severally agree
to indemnify the Trustee (in its capacity as Trustee) and each of its officers,
directors, attorneys-in-fact and agents for, and hold it harmless against, any
claim, demand, expense (including but not
61
limited to reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel), loss or liability incurred by it without negligence or bad
faith on the part of the Trustee, arising out of or in connection with the
administration of this trust and its rights or duties hereunder, including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. The Company and the
Subsidiary Guarantors shall defend the claim and the Trustee shall provide
reasonable cooperation at the Company's and the Subsidiary Guarantors' expense
in the defense. The Trustee may have separate counsel and the Company and the
Subsidiary Guarantors shall pay the reasonable fees and expenses of such
counsel; provided, that the Company and the Subsidiary Guarantors will not be
required to pay such fees and expenses if they assume the Trustee's defense and
there is no conflict of interest between the Company and the Subsidiary
Guarantors and the Trustee in connection with such defense. The Company and the
Subsidiary Guarantors need not pay for any settlement made without their written
consent. The Company and the Subsidiary Guarantors need not reimburse any
expense or indemnify against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's and the Subsidiary Guarantors' payment
obligations in this Section 7.7, the Trustee shall have a lien prior to the
Securities on all assets held or collected by the Trustee, in its capacity as
Trustee, except assets held in trust to pay principal and premium, if any, of or
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(vi) or (vii) of this Indenture occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
The Company's and the Subsidiary Guarantors' obligations under this
Section 7.7 and any lien arising hereunder shall survive the resignation or
removal of the Trustee, the discharge of the Company's and the Subsidiary
Guarantors' obligations pursuant to Article VIII of this Indenture and any
rejection or termination of this Indenture under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in aggregate principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee 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 hereof;
(b) the Trustee is adjudged bankrupt or insolvent;
62
(c) a receiver, 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 Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder
or 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. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in Section
7.7 hereof have been paid, the retiring Trustee shall transfer all property held
by it as trustee to the successor Trustee, subject to the lien provided in
Section 7.7 hereof, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all 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
Holder or Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Securityholder 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
7.8, the Company's and the Subsidiary Guarantors' obligations under Section 7.7
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.9. 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, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
The Trustee shall at all times satisfy the requirements of TIA (S)
310(a)(1), (2) and (5). The Trustee shall have a combined capital and surplus
of at least $100 million as set forth
63
in its most recent published annual report of condition. The Trustee shall
comply with TIA (S) 310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Discharge; Option to Effect Legal Defeasance or Covenant
--------------------------------------------------------
Defeasance.
----------
This Indenture shall cease to be of further effect (except that the
Company's and the Subsidiary Guarantors' obligations under Section 7.7 and the
Trustee's and the Paying Agent's obligations under Sections 8.6 and 8.7 shall
survive) when all outstanding Securities theretofore authenticated and issued
have been delivered (other than destroyed, lost or stolen Securities that have
been replaced or paid) to the Trustee for cancellation and the Company or the
Subsidiary Guarantors have paid all sums payable hereunder. In addition, the
Company may elect to have Section 8.2, at the Company's option and at any time
within one year of the Maturity Date of the Securities, or Section 8.3, at the
Company's option at any time, of this Indenture applied to all outstanding
Securities upon compliance with the conditions set forth below in this Article
VIII.
SECTION 8.2. Legal Defeasance and Discharge.
------------------------------
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and the Subsidiary Guarantors shall
be deemed to have been discharged from their respective obligations with respect
to all outstanding Securities on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented and this Indenture shall cease to be of
further effect as to all outstanding Securities and Guarantees, except as to be
deemed to be "outstanding "only for the purposes of Section 8.5 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, and the
Company and the Subsidiary Guarantors shall be deemed to have satisfied all
other of their respective obligations under such Securities and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following which
shall survive until otherwise terminated or dis charged hereunder: (a) the
rights of Holders of outstanding Securities to receive payments in respect of
the principal of, premium, if any, and interest on such Securities when such
payments
64
are due from the trust described in Section 8.5, (b) the Company's obligations
with respect to such Securities under Sections 2.4, 2.6, 2.7, 2.10, 4.2, 8.5,
8.6 and 8.7 hereof and (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's and the Subsidiary Guarantors'
obligations in connection therewith. Subject to compliance with this Article
VIII, the Company may exercise its option under this Section 8.2 notwithstanding
the prior exercise of its option under Section 8.3 hereof with respect to the
Securities.
SECTION 8.3. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company and the Subsidiary Guarantors shall
be released from their respective obligations under the covenants contained in
Sections 4.3, 4.6, 4.7, 4.8, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17 and 4.18,
Article V and Article X hereof with respect to the out standing Securities on
and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Securities shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, neither the Company nor any Subsidiary Guarantor
need comply with and shall have any liability in respect of any term, condition
or limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document, but, except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby. In addition, upon the Company's
exercise under Section 8.1 hereof of the option applicable to this Section 8.3,
Sections 6.1(iii) through 6.1(viii) hereof shall not constitute Events of
Default with respect to the Securities.
SECTION 8.4. Conditions to Legal or Covenant Defeasance.
------------------------------------------
(a) The Company shall, at its option and at any time, elect to have
all of its obligations and the obligations of the Subsidiary Guarantors
discharged with respect to the outstanding Securities ("Legal Defeasance")
except for (i) the rights of Holders of outstanding Securities to receive
payments in respect of the principal of, premium, if any, and interest on such
Securities when such payments are due from the trust referred to below, (ii) the
Company's obligations with respect to the Securities concerning issuing
temporary Securities, registration of the Securities, mutilated, destroyed, lost
or stolen Securities and the maintenance of an office or agency for payment and
money for security payments held in trust, (iii) the rights, powers, trusts,
duties and immunities of the Trustee, and the Company's obligations in
connection therewith and (iv) the Legal Defeasance provisions of this Indenture.
In addition, the Company may, at its option and at any time, elect to have the
obligations of the Company and the Subsidiary Guarantors released with respect
to certain covenants that are described in this Indenture ("Covenant
Defeasance") and thereafter any omission to comply with such obligations shall
not constitute a Default or Event of Default with respect to the Securities. In
the event
65
Covenant Defeasance occurs, certain events (not including non-payment,
bankruptcy, receivership, rehabilitation and insolvency events) described under
"Events of Default" will no longer constitute an Event of Default with respect
to the Securities.
(b) In order to exercise either Legal Defeasance or Covenant
Defeasance, the following conditions shall have occurred:
(i) the Company shall irrevocably have deposited with the Trustee,
in trust, for the benefit of the Holders of the Securities, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof, in 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 outstanding Securities on the stated maturity or on the
applicable redemption date, as the case may be, and the Company shall have
specified whether the Securities are being defeased to maturity or to a
particular redemption date;
(ii) in the case of Legal Defeasance, 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 (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 outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and shall 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;
(iii) in the case of the Covenant Defeasance, 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 outstanding
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 had such Covenant Defeasance not occurred;
(iv) 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 Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date of
deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any material agreement
or instrument (other than this Indenture covered by clause (iv) above) to
which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
66
(vi) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that 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 laws affecting creditors' rights
generally;
(vii) the Company shall deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities over the other creditors of
the Company or the Subsidiary Guarantors with the intent of defeating,
hindering, delaying or defrauding creditors of the Company, the Subsidiary
Guarantors or others; and
(viii) the Company shall deliver to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that it has complied with
all conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance.
If the funds deposited with the Trustee to effect Legal Defeasance or
Covenant Defeasance are insufficient to pay the principal of, premium, if any,
and interest on the Securities when due, then the obligations of the Company and
the Subsidiary Guarantors under this Indenture, the Securities and the
Guarantees will be revived and no such defeasance will be deemed to have
occurred.
SECTION 8.5. Deposited Cash and U.S. Government Securities to be Held
--------------------------------------------------------
in Trust; Other Miscellaneous Provisions.
----------------------------------------
Subject to Section 8.6 hereof, all cash and U.S. Government Securities
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.5, the "Paying Agent")
pursuant to Section 8.4 hereof in respect of the outstanding Securities shall be
held in trust and applied by the Paying Agent, in accordance with the provisions
of such Securities and this Indenture, to the payment, either directly or
through any other Paying Agent as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Securities
deposited pursuant to Section 8.4 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 8.6. Repayment to the Company.
------------------------
(a) Anything in this Article VIII to the contrary notwithstanding,
the Trustee or the Paying Agent shall deliver or pay to the Company from time to
time upon the request of the Company any cash or U.S. Government Securities held
by it as provided in Section 8.4 hereof which in the opinion of a nationally
recognized firm of independent public accountants expressed
67
in a written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.4(a) hereof), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
(b) Any cash and U.S. Government Securities (including the proceeds
thereof) deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of, premium, if any, or
interest on any Security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request; and the Holder of such Security shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 8.7. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Securities in accordance with Section 8.2 or 8.3 hereof, as the case
may be, of this Indenture by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Subsidiary Guarantors' obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as
the Trustee or Paying Agent is permitted to apply such money in accordance with
Sections 8.2 and 8.3 hereof, as the case may be; provided, however, that, if the
Company makes any payment of principal of, premium, if any, or interest on any
Security following 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 cash or U.S. Government Securities held by the Trustee or
Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Amendments, Supplements and Waivers with Consent of
---------------------------------------------------
Holders.
-------
Subject to Section 6.8 hereof, with the consent of the Holders of not
less than a majority in aggregate principal amount of the Securities then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for such Securities), by written act of said Holders delivered to
the Company and the Trustee, the Company or any Subsidiary Guarantor, when
authorized by Board Resolutions, and the Trustee may amend or supplement this
Indenture or the Securities or enter into an indenture or indentures
supplemental hereto for
68
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or the Securities or of modifying in any
manner the rights of the Holders under this Indenture or the Securities.
Subject to Section 6.8, the Holder or Holders of not less than a majority in
aggregate principal amount of then outstanding Securities may waive compliance
by the Company or any Subsidiary Guarantor or with any provision of this
Indenture or the Securities or its Subsidiary Guarantee of the Subsidiaries.
Notwithstanding any of the above, however, no such amendment, supplemental
indenture or waiver shall without the consent of the Holders of not less than
66 2/3% of the aggregate principal amounts of Securities at the time
outstanding alter the terms or provisions of Section 10.1 hereof in a manner
adverse to the Holders; and no such amendment, supplemental indenture or waiver
shall, without the consent of the Holder of each outstanding Security affected
thereby:
Except as provided in Section 9.2 hereof, this Indenture or the
Securities may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the Securities then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, the Securities), and any existing
default or compliance with any provision of this Indenture or the Securities may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Securities (including consents obtained in connection with
a tender offer or exchange offer for the Securities).
It shall not be necessary for the consent of the Holders under this
Section 9.1 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 9.1
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 supplemental indenture or
waiver.
After an amendment, supplement or waiver under this Section 9.2 or
under Section 9.4 hereof becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 9.2. Amendments, Supplements and Waivers to Indentures and
-----------------------------------------------------
Securities without Consent of Holders.
-------------------------------------
(a) Without the consent of each Holder affected, an amendment or
waiver may not (with respect to any Securities held by a non-consenting Holder):
(i) reduce the principal
69
amount of the Securities whose Holders must consent to an amendment, supplement
or waiver, (ii) reduce the principal of or change the fixed maturity of any
Security or alter the provisions with respect to the redemption of the
Securities (other than provisions relating to the covenants described above in
Section 10.1 hereof, (iii) reduce the rate of or change the time for payment of
interest on any Security, (iv) 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 of at
least a majority in aggregate principal amount of the Securities and a waiver of
the payment default that resulted from such acceleration), (v) make any Security
payable in money other than that stated in the Securities, (vi) make any change
in the provisions of this Indenture relating to waivers of past Defaults or the
rights of Holders of the Securities to receive payments of principal of or
premium, if any, or interest on the Securities, (vii) waive a redemption payment
with respect to any Security (other than a payment required by one of the
covenants described above in Section 10.1 hereof), or (viii) make any change in
the foregoing amendment and waiver provisions.
(b) Without the consent of at least 66 2/3% in principal amount of
the Securities then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Securities), an amendment or waiver may not (with respect to any
Securities held by a non-consenting Holder) release any Subsidiary Guarantor
from its obligations under this Indenture or its Subsidiary Guarantee of the
Securities (other than in accordance with this Indenture).
(c) Notwithstanding the foregoing, without the consent of any Holder
of the Securities, the Company and the Trustee may amend or supplement this
Indenture or the Securities to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Securities in addition to or in place of certificated
Securities (provided that the uncertificated Securities are issued in registered
form for purposes of Section 163(f) of the Code, or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of the Code), to
provide for the assumption of the Company's obligations to Holders of the
Securities in the case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the Holders of the Securities
or that does not adversely affect the legal rights under this Indenture of any
such Holder, or to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture Act.
SECTION 9.3. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if
70
notation of the consent is not made on any Security. However, any such Holder
or subsequent Holder may revoke the consent as to his Security or portion of his
Security by written notice to the Company or the Person designated by the
Company as the Person to whom consents should be sent if such revocation is
received by the Company or such Person before the date on which the Trustee
receives an Officers' Certificate certifying that the Holders of the requisite
principal amount of Securities have consented (and not theretofore revoked such
consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of
paragraphs (a) through (c) of Section 9.2 hereof, in which case, the amendment,
supplement or waiver shall bind only 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; provided, that any
such waiver shall not impair or affect the right of any Holder to receive
payment of principal and premium of and interest on a Security, on or after the
respective dates set for such amounts to become due and payable expressed in
such Security, or to bring suit for the enforce ment of any such payment on or
after such respective dates.
SECTION 9.5. 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
or require the Holder to put an appropriate notation on the Security. The
Trustee may place an appropriate notation on the Security thereafter
authenticated about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms. Any failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment, supplement or waiver.
SECTION 9.6. Trustee to Sign Amendments, Etc.
--------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided, that 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. 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,
71
supplement or waiver authorized pursuant to this Article IX is authorized or
permitted by this Indenture.
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. Repurchase of Securities at Option of the Holder Upon a
-------------------------------------------------------
Change of Control.
-----------------
(a) Upon the occurrence of a Change of Control, each Holder of the
Securities shall have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's
Securities pursuant to the offer described below (the "Change of Control Offer")
at an offer price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
purchase (the "Change of Control Payment"). Within ten days following any
Change of Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase the Securities on the date specified in such notice (the "Change
of Control Payment Date"), which date shall be no earlier than the earliest date
permitted under Rule 14e-1 under the Exchange Act ("Rule 14e-1") and no later
than 60 days from the date such notice is mailed. The Company shall comply with
the requirements of Rule 14e-1 and any other laws and/or regulations of the SEC
to the extent such laws and regulations are applicable in connection with the
repurchase of the Securities as a result of a Change of Control. To the extent
that any provisions of the laws and/or regulations of the SEC conflict with any
provision contained herein, the Company shall comply with the applicable SEC
laws and regulations and will not be deemed to have breached its obligations
hereunder.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment all the Securities or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
the Securities or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an Officers'
Certificate stating the aggregate principal amount of the Securities or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail to
each Holder of the Securities so tendered the Change of Control Payment for such
Securities, and the Trustee shall authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Security equal in principal
amount to any unpurchased portion of the Securities surrendered, if any;
provided that each such new Security will be in a principal amount of $1,000 or
an integral multiple thereof. The Company shall publicly announce the results
of the Change of Control Offer on or as soon as practicable following the Change
of Control Payment Date.
Notwithstanding the application of the provisions of Article V, the
Change of Control provisions described in this Section 10.1 shall apply to the
Securities. Except as
72
described above with respect to a Change of Control, the Holders of the
Securities may not require the Company to repurchase or redeem the Securities in
the event of a takeover, recapitalization or similar transaction.
The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control Offer and purchases
all the Securities validly tendered and not withdrawn under such Change of
Control Offer.
If the Change of Control Payment Date is on or after an Interest
Record Date and on or before the related Interest Payment Date, any accrued and
unpaid interest will be paid to the Person in whose name a Security is
registered at the close of business on such Record Date, and such interest will
not be payable to Holders who tender the Securities pursuant to the Change of
Control Offer.
(b) In the event that, pursuant to this Section 10.1, the Company
shall be required to commence a Change of Control Offer, the Company shall
follow the procedures set forth in this Section 10.1 as follows:
(i) the Change of Control Offer shall commence within 10 Business
Days following the occurrence of a Change of Control;
(ii) the Change of Control Offer shall remain open for 20 Business
Days following its commencement (the "Change of Control Offer Period");
(iii) upon the expiration of the Change of Control Offer Period, the
Company promptly shall purchase all of the tendered Securities at the Change
of Control Purchase Price;
(iv) if the Change of Control is on or after an Interest Record Date
and on or before the related Interest Payment Date, any accrued interest will
be paid to the Person in whose name a Security is registered at the close of
business on such record date, and no additional interest will be payable to
Securityholders who tender Securities pursuant to the Change of Control Offer;
(v) the Company shall provide the Trustee and the Paying Agent with
written notice of the Change of Control Offer at least three Business Days
before the commencement of any Change of Control Offer; and
(vi) on or before the commencement of any Change of Control Offer,
the Company or the Trustee (upon the request and at the expense of the
Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture) shall
govern the terms of the Change of Control Offer and shall state:
73
(A) that the Change of Control Offer is being made pursuant to this
Section 10.1 and that all Securities, or portions thereof, tendered
will be accepted for payment;
(B) the Change of Control Purchase Price (including the amount of
accrued but unpaid interest) and the Change of Control Purchase Date;
(C) that any Security, or portion thereof, not tendered or accepted
for payment will continue to accrue interest;
(D) that, unless the Company defaults in depositing cash with the
Paying Agent in accordance with the last paragraph of this Section
10.1, or such payment is prevented for any reason, any Security, or
portion thereof, accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of Control
Purchase Date;
(E) that Holders electing to have a Security, or portion thereof,
purchased pursuant to a Change of Control Offer will be required to
surrender the Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Security completed, to the Paying
Agent (which may not for purposes of this Section 10.1, notwithstanding
anything in this Indenture to the contrary, be the Company or any
Affiliate of the Company) at the address specified in the notice prior
to the expiration of the Change of Control Offer;
(F) that Holders will be entitled to withdraw their election, in
whole or in part, if the Paying Agent receives, prior to the
expiration of the Change of Control Offer, a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
the Securities the Holder is withdrawing and a statement containing a
facsimile signature and stating that such Holder is withdrawing his
election to have such principal amount of Securities purchased;
(G) that Holders whose Securities are purchased only in part will be
issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; and
(H) a brief description of the events resulting in such Change of
Control.
74
Any such Change of Control Offer shall comply with the requirements of
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 the Securities pursuant to a Change of Control Offer. To
the extent that the provisions of any securities laws or regulations conflict
with provisions of this Indenture relating to a Change of Control, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under such provisions of this
Indenture by virtue thereof.
ARTICLE XI
GUARANTEE
SECTION 11.1. Guarantee.
---------
(a) Each of the existing and future Restricted Subsidiaries of the
Company except as provided in paragraph (b) below, (in each case, a "Subsidiary
Guarantor"), jointly and severally guarantee irrevocably and unconditionally to
each Holder of a Security authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability against the Company and any other Subsidiary Guarantors of this
Indenture that: (i) the principal of and premium, if any, and interest on the
Securities will be paid in full when due, whether at the Maturity Date or
Interest Payment Date, by acceleration, call for redemption, upon a Change of
Control, an Asset Sale Offer or otherwise; (ii) (A) each Restricted Subsidiary
of the Company which is not a Foreign Subsidiary and which is not a Subsidiary
Guarantor (other than Restricted Subsidiaries having total assets with a book
value of less than $1 million and that do not guarantee any Indebtedness of the
Company or any of the Subsidiary Guarantors) and (B) each Foreign Subsidiary,
if, in the case of Foreign Subsidiaries, such Person guarantees or otherwise
becomes liable for Indebtedness of the Company or any Subsidiary Guarantor,
shall execute and deliver to the Trustee a guarantee (the "Subsidiary
Guarantee") pursuant to which each Subsidiary Guarantor shall guarantee payment
of the Securities and the performance of the Company's other obligations
hereunder; provided the obligations of each Subsidiary Guarantor under its
Subsidiary Guarantee will be designed so as not to constitute a fraudulent
conveyance under applicable law; and (iii) in case of any extension of time of
payment or renewal of any Securities or any of such other obligations, they will
be paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at maturity, by acceleration, call for redemption,
upon a Change of Control, an Asset Sale Offer or otherwise. Failing payment
when due of any amount so guaranteed for whatever reason, each Subsidiary
Guarantor shall be obligated to pay the same before failure so to pay becomes an
Event of Default.
If the Company or a Subsidiary Guarantor defaults in the payment of
the principal of, premium, if any, or interest on, the Securities when and as
the same shall become due, whether upon maturity, acceleration, call for
redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise, without the necessity of action by the Trustee or any Holder,
75
each Subsidiary Guarantor shall be required, jointly and severally, to promptly
make such payment in full.
Each Subsidiary Guarantor shall, within five Business Days after
becoming a Subsidiary of the Company (other than a Restricted Subsidiary with
less than $1 million in assets or any Foreign Subsidiary), execute and deliver
to the Trustee a supplemental indenture, which shall be in a form satisfactory
to the Trustee, making such Subsidiary Guarantor a party to this Indenture.
(b) Each Subsidiary Guarantor hereby agrees to the fullest extent
permitted by applicable law, that its obligations with regard to this Guarantee
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 delays in obtaining or realizing upon or failures to
obtain or realize upon collateral, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a Subsidiary
Guarantor. Each Subsidiary Guarantor hereby waives to the fullest extent
permitted by applicable law 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 or right to require
the prior disposition of the assets of the Company to meet its obligations,
protest, notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in the Securities and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Subsidiary Guarantor, or any
Custodian or similar official acting in relation to either the Company or such
Subsidiary Guarantor, any amount paid by either the Company or such Subsidiary
Guarantor to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Subsidiary Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Subsidiary Guarantor further agrees that, as between such Subsidiary Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand, (i) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Section 6.2 hereof for the purposes of this Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration as to the
Company of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.2
hereof, those obligations (whether or not due and payable) will forthwith become
due and payable by each of the Subsidiary Guarantors for the purpose of this
Guarantee.
(d) It is the intention of each Subsidiary Guarantor and the Company
that the obligations of each Subsidiary Guarantor hereunder shall be in, but not
in excess of, the maximum amount permitted by applicable law. Accordingly, if
the obligations in respect of the Guarantee would be annulled, avoided or
subordinated to the creditors of any Subsidiary Guarantor by a court of
competent jurisdiction in a proceeding actually pending before such
76
court as a result of a determination both that such Guarantee was made by such
Subsidiary Guarantor without fair consideration and, immediately after giving
effect thereto, such Subsidiary Guarantor was insolvent or unable to pay its
debts as they mature or left with an unreasonably small capital, then the
obligations of such Subsidiary Guarantor under such Guarantee shall be reduced
by such court if and to the extent such reduction would result in the avoidance
of such annulment, avoidance or subordination; provided, however, that any
reduction pursuant to this paragraph shall be made in the smallest amount as is
strictly necessary to reach such result. For purposes of this paragraph, "fair
consideration", "insolvency", "unable to pay its debts as they mature",
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
SECTION 11.2. Execution and Delivery of Guarantee.
-----------------------------------
Each Subsidiary Guarantor shall, by virtue of such Subsidiary
Guarantor's execution and delivery of an indenture supplement pursuant to
Section 11.1 hereof, be deemed to have signed on each Security issued hereunder
the notation of guarantee set forth on the form of the Securities attached
hereto as Exhibit A to the same extent as if the signature of such Subsidiary
Guarantor appeared on such Security.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the guarantee set forth in
Section 11.1 on behalf of each Subsidiary Guarantor. The notation of a
guarantee set forth on any Security shall be null and void and of no further
effect with respect to the guarantee of any Subsidiary Guarantor which, pursuant
to Section 11.4, is released from such Guarantee.
SECTION 11.3. Certain Bankruptcy Events.
-------------------------
Each Subsidiary Guarantor hereby covenants and agrees, to the fullest
extent that it may do so under applicable law, that in the event of the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, such Subsidiary Guarantor shall not file (or join in any filing of), or
otherwise seek to participate in the filing of, any motion or request seeking to
stay or to prohibit (even temporarily) execution on the Guarantee and hereby
waives and agrees not to take the benefit of any such stay of execution, whether
under Section 362 or 105 of the United States Bankruptcy Code or otherwise.
SECTION 11.4. Limitation on Merger of Subsidiaries and Release of
---------------------------------------------------
Subsidiary Guarantors.
---------------------
No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person), another
Person whether or not affiliated with such Subsidiary Guarantor unless (i)
subject to the provisions of the following paragraph, the Person formed by or
surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) assumes all the obligations of such Subsidiary Guarantor pursuant to
a supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the
77
Securities and this Indenture and (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists.
Upon a sale or other disposition of all of the assets of any
Subsidiary Guarantor, including by way of merger, consolidation or otherwise, or
a sale or other disposition of all of the capital stock of any Subsidiary
Guarantor, then such Subsidiary Guarantor or the Person acquiring the property
(in the event of a sale or other disposition of all of the assets of such
Subsidiary Guarantor) will be released and relieved of its obligations under its
Subsidiary Guarantee; provided that the Net Proceeds of such sale or other
disposition are applied in accordance with Section 4.14 hereof. Upon a sale or
other disposition of capital stock of a Quasi-Subsidiary pursuant to the
exercise of a call option or similar arrangement on such capital stock as a
result of which the Company and its Restricted Subsidiaries beneficially own
less than 50% of the issued and outstanding capital stock of any such Quasi-
Subsidiary, then such Quasi-Subsidiary shall be released and relieved of its
obligations under its Subsidiary Guarantee; provided that the Net Proceeds of
such sale or other disposition are applied in accordance with Section 4.14
hereof. In addition, in the event the Company designates a Restricted
Subsidiary to be an Unrestricted Subsidiary in accordance with Section 4.3
hereof, then such Restricted Subsidiary shall be released from its obligations
under its Subsidiary Guarantee.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1. TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 12.2. Notices.
-------
Any notices or other communications to the Company or any Subsidiary
Guarantor or the Trustee required or permitted hereunder shall be in writing,
and shall be sufficiently given if made by hand delivery, by telex, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
78
if to the Company or any Subsidiary Guarantor:
Southern Pacific Funding Corporation
Xxx Xxxxxxxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxxxxxxx, Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communica-
79
tion is mailed in the manner provided above, it is duly given, whether or not
the addressee receives it.
SECTION 12.3. Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders 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 (S) 312(c).
SECTION 12.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company or any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, such Person
shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
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 met; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such counsel, all
such conditions precedent have been met.
SECTION 12.5. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion 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 or opinion
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 or opinions contained in such
certificate or opinion 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 met;
and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been met; provided, however, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
80
SECTION 12.6. Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Secu rityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 12.7. Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 12.8. Governing Law.
-------------
THIS INDENTURE, THE GUARANTEES AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH OF THE
COMPANY AND THE SUBSIDIARY GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. EACH OF THE COMPANY AND THE SUBSIDIARY
GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY AND THE SUBSIDIARY GUARANTORS IN ANY OTHER JURISDICTION.
SECTION 12.9. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any Subsidiary Guarantor or any of their
respective Subsidiaries. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
81
SECTION 12.10. No Recourse Against Others.
--------------------------
No direct or indirect stockholder, partner, employee, officer or
director, as such, past, present or future of the Company, the Subsidiary
Guarantors or any successor entity, shall have any personal liability in respect
of the obligations of the Company or the Subsidiary Guarantors under the
Securities or this Indenture by reason of his or its status as such stockholder,
partner, employee, officer or director. Each Securityholder by accepting a
Security waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of the Securities.
SECTION 12.11. Successors.
----------
All agreements of the Company and the Subsidiary Guarantors in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 12.12. Duplicate Originals.
-------------------
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 12.13. Severability.
------------
In case any one or more of the provisions in this Indenture or in the
Securities or in the Guarantees shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
SECTION 12.14. Table of Contents, Headings, Etc.
---------------------------------
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
82
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
SOUTHERN PACIFIC FUNDING
CORPORATION, a California corporation
By: ____________________________________
Name:
Title:
Attest: __________________________
Name:
Title:
00
XXXXXXXX XXXXXXX, INC.
By: ____________________________________
Name:
Title:
Attest: __________________________
Name:
Title:
84
OCEANMARK FINANCIAL CORPORATION
By: ____________________________________
Name:
Title:
Attest: __________________________
Name:
Title:
85
NATIONAL CAPITAL HOLDINGS, INC.
By: ____________________________________
Name:
Title:
Attest: __________________________
Name:
Title:
86
THE BANK OF NEW YORK , as Trustee
By: ____________________________________
Name:
Title: Trust Officer
87
EXHIBIT A
[FORM OF SECURITY]
SOUTHERN PACIFIC FUNDING CORPORATION
___% SENIOR SECURITY DUE 2004
CUSIP No. ______________
No. $
Southern Pacific Funding Corporation, a California corporation
(hereinafter called the "Company", which term includes any successors under this
Indenture hereinafter referred to), for value received, hereby promises to pay
to _____, or registered assigns, the principal sum of _____ Dollars, on [October
__, 2004].
Interest Payment Dates: _____________ and ____________.
Record Dates: _____________ and ____________.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed.
Dated:
SOUTHERN PACIFIC FUNDING
CORPORATION, a California corporation
By: _______________________________
Name:
Title:
Attest: ___________________
Name:
Title:
A-1
HALLMARK AMERICA, INC.
By: __________________________________
Name:
Title:
Attest: _______________________
Name:
Title:
A-2
OCEANMARK FINANCIAL CORPORATION
By: ____________________________________
Name:
Title:
Attest: __________________________
Name:
Title:
A-3
NATIONAL CAPITAL HOLDINGS, INC.
By: ____________________________________
Name:
Title:
Attest: __________________________
Name:
Title:
A-4
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
________________________,
as Trustee
By ____________________________
Authorized Signatory
Dated:
A-5
SOUTHERN PACIFIC FUNDING CORPORATION
___% SENIOR SECURITY DUE 2004
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depositary Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx) ("XXX"), to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or 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./1/
1. Interest.
--------
Southern Pacific Funding Corporation, a California corporation
(hereinafter called the "Company," which term includes any successors under this
Indenture hereinafter referred to), promises to pay interest on the principal
amount of this Security at the rate of ____% per annum. To the extent it is
lawful, the Company promises to pay interest on any interest payment due but
unpaid on such principal amount at a rate of __% per annum compounded semi-
annually.
The Company will pay interest semi-annually on ______________ and
________________ of each year (each, an "Interest Payment Date"), commencing
________________ 1998. Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid on
the Securities, from the date of the original issuance. Interest will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
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 Record Date immediately preceding the Interest Payment Date. Holders
must surrender Securities to a Paying Agent to collect principal payments.
Except as provided below, the Company
--------------------
/1/ This paragraph should only be added if the Note is issued in global form.
A-6
shall pay principal and interest in such coin or currency of the United States
of America as at the time of payment shall be legal tender for payment of public
and private debts ("Cash"). The Securities will be payable as to principal,
premium and interest at the office or agency of the Company maintained for such
purpose within the Borough of Manhattan, the City and State of New York or, at
the option of the Company, payment of principal, premium and interest may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium on
all Global Securities and all other Securities the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent at least
5 Business Days prior to the relevant record date.
3. Paying Agent and Registrar.
--------------------------
Initially, the Bank of New York (the "Trustee"), will act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or co-
Registrar without notice to the Holders. The Company or any of its Subsidiaries
may, subject to certain exceptions, act as Paying Agent, Xxxxxxxxx xx xx-
Xxxxxxxxx.
0. Indenture.
---------
The Company issued the Securities under an Indenture, dated as of
___________, 1997 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in this Indenture unless otherwise
defined herein. The terms of the Securities include those stated in this
Indenture and those made part of this Indenture by reference to the Trust
Indenture Act, as in effect on the date of this Indenture. The Securities are
subject to all such terms, and Holders of Securities are referred to this
Indenture and said Act for a statement of them. The Securities are senior
obligations of the Company limited in aggregate principal amount to
$125,000,000. Each Holder of this Security, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be provided in this Indenture and (c)
appoints the Trustee his attorney-in-fact for such purpose.
5. Optional Redemption.
-------------------
Except as provided in this Paragraph 5 or in Article III of this
Indenture, the Company shall not have the right to redeem any Securities. The
Securities may be redeemed in whole or from time to time in part at any time on
and after ____________, 2001, at the option of the Company, at the Redemption
Price (expressed as a percentage of principal amount) set forth below with
respect to the indicated Redemption Date, in each case (subject to the right of
Holders of record on a Record Date that is on or prior to such Redemption Date
to receive interest due on the Interest Payment Date to which such Record Date
relates, plus any accrued but unpaid interest to the Redemption Date.
A-7
If redeemed during
the 12-month period
commencing , Redemption Price
----------------------------- ----------------
2001 . . . . . . . %
2002 . . . . . . . %
2003 and thereafter %
Notwithstanding the foregoing, until _____________, 2001, upon a
Public Equity Offering of common stock of the Company for cash, up to 30% of the
aggregate principal amount of the Securities originally outstanding may be
redeemed at the option of the Company within 60 days of such Public Equity
Offering, on not less than 30 days, but not more than 60 days, notice to each
holder of the Securities to be redeemed, with cash from the Net Cash Proceeds of
such Public Equity Offering, at a redemption price equal to _____ % of
principal, (subject to the right of Holders of record on a Record Date to
receive interest due on an Interest Payment Date that is on or prior to such
Redemption Date) together with accrued and unpaid interest, to the date of
redemption; provided, however, that at least $87.5 million of the aggregate
principal amount of the Securities originally outstanding remain outstanding
immediately following such redemption.
Any such redemption will comply with Article III of this Indenture.
6. Mandatory Redemption. The Company shall not be required to make mandatory
--------------------
redemption or sinking fund payments with respect to the Securities.
7. Notice of Redemption.
--------------------
Notice of redemption will be sent by first class mail, at least 30
days and not more than 60 days prior to the Redemption Date to the Holder of
each Security to be redeemed at such Holder's last address as then shown upon
the registry books of the Registrar. Securities may be redeemed in part in
multiples of $1,000 only.
Except as set forth in this Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on such Redemption Date, the
Securities called for redemption will cease to bear interest and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price, plus any accrued and unpaid interest to the Redemption Date.
8. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or ex-
A-8
change Securities in accordance with, this Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by
Indenture. The Registrar need not register the transfer of or exchange any
Securities (a) selected for redemption in whole or in part, or (b) for a period
beginning 15 Business Days before the mailing of a notice of an offer to
repurchase pursuant to Article X of this Indenture or Section 3.3 of this
---
Indenture or redemption of Securities pursuant to Article III of this Indenture
and ending at the close of business on the day of such mailing.
9. Persons Deemed Owners.
---------------------
The registered Holder of a Security may be treated as the owner of it
for all purposes.
10. Unclaimed Money.
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at its written request. After that, all liability of the Trustee
and such Paying Agent(s) with respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity.
-----------------------------------------
Except as set forth in this Indenture, if the Company irrevocably
deposits with the Trustee, in trust, for the benefit of the Holders, cash, U.S.
Government Securities or a combination thereof, in such amounts as will be
sufficient in the opinion of a nationally recognized firm of independent public
accountants selected by the Trustee, to pay the principal of, premium, if any,
and interest on the Securities to redemption or maturity and complies with the
other provisions of this Indenture relating thereto, the Company will be
discharged from certain provisions of this Indenture and the Securities
(including the financial covenants, but excluding its obligation to pay the
principal of, premium, if any, and interest on the Securities). Upon
satisfaction of certain additional conditions set forth in this Indenture, the
Company may elect to have its obligations discharged with respect to outstanding
Securities.
12. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, this Indenture or the Securities 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 under certain circum stances amend or supplement
this Indenture or the Securities to, among other things, cure
A-9
any ambiguity, defect or inconsistency, or make any other change that does not
adversely affect the rights of any Holder of a Security.
13. Restrictive Covenants.
---------------------
This Indenture imposes certain limitations on the ability of the
Company and any Subsidiary Guarantors to, among other things, Incur additional
Indebtedness and issue Preferred Stock, pay dividends or make certain other
Restricted Payments, enter into certain transactions with Affiliates, incur
Liens, sell assets and subsidiary stock, merge or consolidate with any other
Person or transfer (by lease, assignment or otherwise) substantially all of the
properties and assets of the Company. The limitations are subject to a number
of important qualifications and exceptions. The Company must periodically
report to the Trustee on compliance with such limitations.
14. Repurchase at Option of Holder.
------------------------------
(a) If there is a Change of Control, the Company shall be required to
offer to purchase on the Change of Control Purchase Date all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the Change of Control Purchase
Date. Holders of Securities will receive a Change of Control Offer from the
Company prior to any related Change of Control Purchase Date and may elect to
have such Securities purchased by completing the form entitled "Option of Holder
to Elect Purchase" appearing below.
(b) This Indenture imposes certain limitations on the ability of the
Company, the Subsidiary Guarantors or any of their respective Subsidiaries to
sell assets and subsidiary stock. In the event the proceeds from a permitted
Asset Sale exceed cer tain amounts, as specified in this Indenture, the Company
will be required either to reinvest the proceeds of such Asset Sale in a Related
Business, repay certain Indebtedness or to make an offer to purchase each
Holder's Securities at 100% of the principal amount thereof, plus accrued
interest, if any, to the purchase date.
15. Notation of Guarantee.
---------------------
As set forth more fully in this Indenture, the Persons constituting
Subsidiary Guarantors from time to time, in accordance with the provisions of
this Indenture, unconditionally and jointly and severally guarantee, in
accordance with Section 11.1 of this Indenture, to the Holder and to the Trustee
and its successors and assigns, that (i) the principal of and interest on the
Security will be paid, whether at the Maturity Date or Interest Payment Dates,
by acceleration, call for redemption upon a Change of Control Offer, upon an
Asset Sale Offer or otherwise, and all other obligations of the Company to the
Holder or the Trustee under this Indenture or this Security will be promptly
paid in full or performed, all in accordance with the terms of this Indenture
and this Security, and (ii) in the case of any extension of payment or renewal
of this Security or any of such
A-10
other obligations, they will be paid in full when due or performed in accordance
with the terms of such extension or renewal, whether at the Maturity Date, as so
extended, by acceleration, call for redemption, upon a Change of Control Offer,
upon an Asset Sale Offer or otherwise. Such guarantees shall cease to apply,
and shall be null and void, with respect to any Subsidiary Guarantor who,
pursuant to Article XI of this Indenture, is released from its guarantees, or
whose guarantees otherwise cease to be applicable pursuant to the terms of this
Indenture.
When a successor assumes all the obligations of its predecessor under
the Securities and this Indenture, the predecessor will be released from those
obligations.
16. Defaults and Remedies.
---------------------
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Securities
may declare all the Securities to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company or any
Subsidiary, all outstanding Securities will become due and payable without
further action or notice. Holders of the Securities may not enforce this
Indenture or the Securities except as provided in this Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Securities notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
17. Trustee Dealings with Company.
-----------------------------
The Trustee under this Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company, any Subsidiary Guarantor, any of their Subsidiaries or any of their
respective Affiliates, and may otherwise deal with such Persons as if it were
not the Trustee.
18. No Recourse Against Others.
--------------------------
A director, officer, employee, incorporator or stockholder, of the
Company, as such, shall not have any liability for any obligations of the
Company under the Securities 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.
A-11
19. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
20. 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 tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause 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.
22. Governing Law.
-------------
This Indenture and the Securities shall be governed by and construed
in accordance with the internal laws of the State of New York.
A-12
[FORM OF ASSIGNMENT]
I or we assign this Security to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_______________________________
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: _______________________________________________
________________________________________________________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee/*/
---------------------
/*/ NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs: (i)
The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion
Program (SEMP); or (iv) in such other guarantee program acceptable to the
Trustee.
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.14 or Article X of this Indenture, check the appropriate
box: [ ] Section 4.14 [ ] Article X.
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.14 or Article X of this Indenture, as the case
may be, state the amount you want to be purchased: $________.
Date: ________________ Signature: __________________________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee/**/
--------------------
/**/ NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs:
(i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New
York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange
Medallion Program (SEMP); or (iv) in such other guarantee program
acceptable to the Trustee.
A-14
SCHEDULE OF EXCHANGES OF DEFINITIVE Securities/***/
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized officer of
Principal Amount Principal Amount Security following Trustee or
Date of of this Global of this Global such decrease (or Securities
Exchange Security Security increase) Custodian
-----------------------------------------------------------------------------------------------
--------------------
/***/ This schedule should only be added if the Note is issued in global form.
A-15
