EXHIBIT 4.1
WILSHIRE FINANCIAL SERVICES GROUP INC.
TO
BANKERS TRUST COMPANY, Trustee
___% NOTES DUE 2003
------------------------------
INDENTURE
Dated as of _________ __, 1996
------------------------------
TABLE OF CONTENTS /*//
Page
ARTICLE ONE Definitions and Other Provisions of General Application....................1
Section 1.1 Definitions....................................................1
Section 1.2 Compliance Certificates and Opinions.........................19
Section 1.3 Form of Documents Delivered to Trustee.......................20
Section 1.4 Acts of Holders, Record Dates................................20
Section 1.5 Notices, Etc., to Trustee and Company........................22
Section 1.6 Notice to Holders; Waiver....................................22
Section 1.7 Conflict with Trust Indenture Act............................23
Section 1.8 Effect of Headings and Table of Contents.....................23
Section 1.9 Successors and Assigns.......................................23
Section 1.10 Separability Clause.........................................23
Section 1.11 Benefits of Indenture........................................23
Section 1.12 Governing Law; Choice of Forum..............................23
Section 1.13 Legal Holidays..............................................25
ARTICLE TWO Note Forms................................................................25
Section 2.1 Forms Generally..............................................25
Section 2.2 Form of Face of Note.........................................25
Section 2.3 Form of Reverse of Note......................................27
Section 2.4 Form of Legend for Global Notes..............................29
----------
/*// This Table fo Contents is not part of the Indenture
i
Page
Section 2.5 Form of Trustee's Certificate of
Authentication................................................30
ARTICLE THREE The Notes..............................................................31
Section 3.1 Global Note; Depositary.......................................31
Section 3.2 Amount........................................................31
Section 3.3 Denominations.................................................31
Section 3.4 Execution, Authentication, Delivery and
Dating........................................................32
Section 3.5 Temporary Notes...............................................32
Section 3.6 Registration; Registration of Transfer and
Exchange......................................................33
Section 3.7 Mutilated, Destroyed, Lost and Stolen
Notes.........................................................34
Section 3.8 Payment of Interest; Interest Rights
Preserved.....................................................34
Section 3.9 Persons Deemed Owners.........................................36
Section 3.10 Cancellation.................................................36
Section 3.11 Computation of Interest......................................36
ARTICLE FOUR Book-Entry Provisions for Global Notes...................................37
Section 4.1 Applicability of Article......................................37
Section 4.2 Book-Entry Provisions For Global Note.........................37
ARTICLE FIVE Remedies.................................................................39
Section 5.1 Events of Default............................................39
Section 5.2 Acceleration of Maturity; Rescission and Annulment...........40
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee......................................................41
Section 5.4 Trustee May File Proofs of Claim.............................42
Section 5.5 Trustee May Enforce Claims Without Possession of Notes.......42
Section 5.6 Application of Money Collected...............................43
Section 5.7 Limitation on Suits..........................................43
ii
Page
Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest.........................................44
Section 5.9 Restoration of Rights and Remedies...........................44
Section 5.10 Rights and Remedies Cumulative..............................44
Section 5.11 Delay or Omission Not Waiver................................44
Section 5.12 Control by Holders..........................................44
Section 5.13 Waiver of Past Defaults.....................................45
Section 5.14 Undertaking for Costs.......................................45
Section 5.15 Waiver of Usury, Stay or Extension Laws.....................46
ARTICLE SIX The Trustee..............................................................46
Section 6.1 Certain Duties and Responsibilities..........................46
Section 6.2 Notice of Defaults...........................................47
Section 6.3 Certain Rights of Trustee....................................47
Section 6.4 Not Responsible for Recitals or Issuance of Notes.............48
Section 6.5 May Hold Notes................................................48
Section 6.6 Money Held in Trust...........................................48
Section 6.7 Compensation and Reimbursement................................49
Section 6.8 Disqualification; Conflicting Interests.......................49
Section 6.9 Corporate Trustee Required; Eligibility.......................49
Section 6.10 Resignation and Removal; Appointment of Successor............50
Section 6.11 Acceptance of Appointment by Successor.......................51
Section 6.12 Merger, Conversion, Consolidation or Succession to Business..52
Section 6.13 Preferential Collection of Claims Against Company............52
Section 6.14 Appointment of Authenticating Agent..........................52
iii
Page
ARTICLE SEVEN Holders' Lists and Reports by Trustee and Company.....................54
Section 7.1 Company to Furnish Trustee Names and Addresses of
Holders; Trustee to Furnish Note Register.....................54
Section 7.2 Preservation of Information; Communications to Holders........55
Section 7.3 Reports by Trustee............................................55
ARTICLE EIGHT Amendments, Supplements and Waivers....................................56
Section 8.1 Supplemental Indentures Without Consent of Holders............56
Section 8.2 Supplemental Indentures with Consent of Holders...............57
Section 8.3 Execution of Supplemental Indentures..........................58
Section 8.4 Effect of Supplemental Indentures.............................58
Section 8.5 Conformity with Trust Indenture Act...........................58
Section 8.6 Reference in Notes to Supplemental Indentures.................58
Section 8.7 Notice of Supplemental Indenture..............................58
ARTICLE NINE Covenants................................................................59
Section 9.1 Payment of Principal, Premium and Interest...................59
Section 9.2 Maintenance of Office or Agency..............................59
Section 9.3 Money for Notes Payments to Be Held in Trust.................59
Section 9.4 Statement by Officers as to Default..........................61
Section 9.5 Payment of Taxes and Other Claims............................61
Section 9.6 Maintenance of Properties....................................61
Section 9.7 Corporate Existence; Keeping of Books........................62
Section 9.8 Insurance....................................................62
Section 9.9 Net Worth Maintenance........................................62
Section 9.10 Limitations on Indebtedness..................................62
Section 9.11 Liquidity Maintenance........................................64
iv
Page
Section 9.12 Limitations on Restricted Payments...........................65
Section 9.13 Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries........................................66
Section 9.14 Limitations on Transactions with Affiliates...................67
Section 9.15 Limitations on Liens and Guarantees...........................68
Section 9.16 Offer to Purchase upon a Change of Control Event..............68
Section 9.17 Payments for Consent..........................................70
Section 9.18 Waiver of Certain Covenants...................................70
ARTICLE TEN Merger, Consolidation and Transfer of Assets..............................71
Section 10.1 Merger, Consolidation or Transfer of Assets of the Company....71
Section 10.2 Successor Substituted.........................................71
Section 10.3 Notes to Be Secured in Certain Events.........................72
ARTICLE ELEVEN Redemption of Notes....................................................72
Section 11.1 Applicability of Article.....................................72
Section 11.2 Optional Redemption..........................................72
Section 11.3 Election to Redeem; Selection by Trustee of Notes
to Be Redeemed...............................................72
Section 11.4 Notice of Redemption.........................................73
Section 11.5 Deposit of Redemption Price..................................74
Section 11.6 Notes Payable on Redemption Date.............................74
Section 11.7 Notes Redeemed in Part.......................................74
ARTICLE TWELVE Defeasance and Covenant Defeasance.....................................75
Section 12.1 Option to Effect Legal Defeasance or Covenant Defeasance......75
Section 12.2 Legal Defeasance and Discharge................................75
Section 12.3 Covenant Defeasance...........................................75
Section 12.4 Conditions to Legal or Covenant Defeasance....................76
v
Page
Section 12.5 Deposited Money and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions.................77
Section 12.6 Reinstatement.................................................78
ARTICLE THIRTEEN Miscellaneous.........................................................78
Section 13.1. No Recourse Against Others...................................78
Section 13.2. Execution in Counterparts....................................78
vi
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF ________________, 1996/*//
TIA Section Indenture Section
310(a)(1).................................... 6.9
(a)(2)....................................... 6.9
(a)(3)....................................... Not Applicable
(a)(4)....................................... Not Applicable
(a)(5)....................................... 6.9
(b).......................................... 1.5, 6.8, 6.9, 6.10, 6.11
(c).......................................... Not Applicable
311(a).......................................... 6.13
(b).......................................... 6.13
(c).......................................... Not Applicable
312(a).......................................... 7.1, 7.2
(b).......................................... 7.2
(c).......................................... 7.2
313(a).......................................... 7.3
(b)(1)....................................... Not Applicable
(b)(2)....................................... 7.3
(c).......................................... 1.6, 7.3
(d).......................................... 7.3
314(a).......................................... 1.5, 1.6, 7.4
(b).......................................... Not Applicable
(c)(1)....................................... 1.2
(c)(2)....................................... 1.2
(c)(3)....................................... Not Applicable
(d).......................................... Not Applicable
(e).......................................... 1.2
(f).......................................... Not Applicable
315(a).......................................... 6.1
(b).......................................... 1.6, 6.2
(c).......................................... 6.1
(d).......................................... 6.1
(e).......................................... 5.14
316(a)(last sentence)........................... 1.1 (definition of "Outstanding")
316(a)(1)(A).................................... 5.12
(a)(1)(B).................................... 5.13
(a)(2)....................................... Not Applicable
(b).......................................... 5.7, 5.8
(c).......................................... 1.4
317(a)(1)....................................... 5.3
(a)(2)....................................... 5.4
(b).......................................... 6.6, 9.3
318(a).......................................... 1.7
(b).......................................... 6.6, 9.3
(c).......................................... 1.7
/*// This Reconciliation and tie is not part of the Indenture.
INDENTURE, dated as of _______________ __, 1996, between WILSHIRE
FINANCIAL SERVICES GROUP INC., a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company"), having its
principal office at 0000 XX Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000, and
BANKERS TRUST COMPANY, a New York banking corporation, as Trustee (herein
called the "Trustee").
RECITALS OF THE COMPANY
A. The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of up to $86,250,000 in principal
amount of its unsecured ___% Notes due 2003 (herein called the "Notes"), to be
issued as in this Indenture provided.
B. All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(5) the word "including" is not limiting;
(6) references in this Indenture to any agreement, other document or
law "as amended" or "as amended from time to time," or to "amendments" of any
document or law, shall include any amendments, supplements, replacements,
renewals or other modifications from time to time, provided in the case of
modifications to documents, such modifications are permissible under this
Indenture; and
(7) references in this Indenture to any law include regulations
promulgated thereunder from time to time.
"Acquired Indebtedness" means Indebtedness of a person (i) existing
at the time such Person becomes a Subsidiary of or is merged with or into any
other Person or (ii) assumed in connection with the acquisition of assets from
such Person, in each case, other than Indebtedness incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary of such other
Person or such acquisition. Acquired Indebtedness shall be deemed to be
incurred on the date of the related acquisition of assets from such Person or
the date such Person becomes a Subsidiary of or is merged with or into such
other Person.
"Act", when used with respect to any Holder, has the meaning
specified in Section 1.4.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly Controlling or Controlled by or under direct or
indirect common Control with such specified Person and any legal or beneficial
owner, directly or indirectly, of 20% or more of the Voting Stock of such
specified Person. Notwithstanding the foregoing, no Securitization Entity
shall be deemed an Affiliate of the Company.
"Applicable Law" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws, rules, regulations and ordinances of
any Governmental Authority, (ii) Governmental Approvals and (iii) orders,
decisions, judgments, awards and decrees of any Governmental Authority.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Notes.
"Authorized Officer" means any officer of the Company designated by
a Board Resolution to take certain actions as specified in this Indenture.
"Average Life to Stated Maturity" means, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date
of determination to the date or dates of each successive
2
scheduled principal payment of such Indebtedness multiplied by (b) the amount
of each such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means the board of directors or any duly
authorized committee of that board. Unless otherwise indicated, "Board of
Directors" means the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors of the Company, or by action of an Authorized
Officer designated as such pursuant to a resolution of the Board of Directors
of the Company, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" of any Person means any obligations of
such Person under any capital lease for real or personal property which, in
accordance with GAAP, is required to be recorded as a capitalized lease
obligation; and, for the purpose of this Indenture, the amount of such
obligation at any date shall be the capitalized amount thereof at such date,
determined in accordance with GAAP.
"Capital Stock" in any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents or
interests in (however designated) capital stock in such Person, including,
with respect to a corporation, common stock, Preferred Stock and other
corporate stock and, with respect to a partnership, partnership interests,
whether general or limited, and any rights (other than debt securities
convertible into corporate stock, partnership interests or other capital
stock), warrants or options exchangeable for or convertible into such
corporate stock, partnership interests or other capital stock.
"Change of Control Event" means an event or series of events by
which
(a) any "person" or "group" (as such terms are used in Sections 13(
d) and 14(d) of the Exchange Act), other than the Existing Principal
Stockholders, is or becomes after the date of issuance of the Notes the
"beneficial owner" (as defined in Rules 13 d-3 and 13d-5 under the
Exchange Act as in effect on the date of the In-denture), of more than 40%
of the total voting power of all Voting Stock of the Company then
outstanding;
(b) (1) another corporation merges into the Company or the Company
consolidates with or merges into any other corporation, or
(2) the Company conveys, transfers or leases all or
substantially all its assets to any person or group, in one transaction or
a series of
3
transactions other than any conveyance, transfer or lease between the
Company and a Wholly-Owned Subsidiary of the Company,
in each case, with the effect that a person or group, other than the Existing
Principal Stockholders, is or becomes the beneficial owner of more than 40% of
the total voting power of all Voting Stock of the surviving or transferee
corporation of such transaction or series of transactions;
(c) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Compan y's Board of
Directors, or whose nomination for election by the Compan y's shareholders
was approved by a vote of a majority of the directors then still in office
who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved, cease for
any reason to constitute a majority of the directors then in office; or
(d) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company.
"Change of Control Purchase Date," "Change of Control Purchase
Notice," "Change of Control Purchase Price" and "Change of Control Purchase
Offer" are defined in Section 9.16.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board or its President, and by its Chief Financial Officer,
its Controller or an Assistant Controller, and delivered to the Trustee.
"Consolidated Depreciation and Amortization Expense" means with
respect to any Person for any period, the total amount of depreciation and
amortization expense of such Person for such period on a consolidated basis
and otherwise determined in accordance with GAAP.
"Consolidated EBITDA" means, with respect to any Person for any
period, the Consolidated Net Income (Loss) of such Person for such period plus
(a) provision for taxes based on income or profits of such Person for such
period deducted in computing Consolidated Net Income (Loss) plus (b)
Consolidated Interest Expense of such Person for such period, plus (c)
Consolidated Depreciation and Amortization Expense of such Person for such
period to the extent such depreciation and amortization were deducted in
computing
4
Consolidated Net Income (Loss), plus (d) without duplication, any other non-
cash charges reducing Consolidated Net Income (Loss) of such Person for such
period less (e) without duplication, non-cash items increasing Consolidated
Net Income (Loss) of such Person for such period in each case, on a
consolidated basis for such Person in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any period,
the sum of: (a) consolidated interest expense of such Person for such period,
other than interest expense on deposits, Permitted Acquisition Indebtedness
and Permitted Repurchase Facilities, whether paid or accrued (except to the
extent accrued in a prior period), to the extent such expense was deducted in
computing Consolidated Net Income (Loss) (including amortization of original
issue discount, non-cash interest payments and the interest component of
Capital Lease Obligations, excluding amortization of deferred financing fees)
and (b) consolidated capitalized interest of such Person for such period,
whether paid or accrued, to the extent such expense was deducted in computing
Consolidated Net Income (Loss).
"Consolidated Net Income (Loss)" of any Person means, for any
period, the consolidated net income (or loss) of such Person and its
consolidated Subsidiaries for such period as determined in accordance with
GAAP, adjusted, to the extent included in calculating such net income (loss),
by excluding, without duplication, (i) the portion of net income (or loss) of
any other Person (other than any of such Person's consolidated Subsidiaries)
in which such Person or any of its Subsidiaries has an ownership interest,
except to the extent of the amount of dividends or other distributions
actually paid to such Person or its consolidated Subsidiaries in cash by such
other Person during such period, (ii) net income (or loss) of any Person
combined with such Person or any of its Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(iii) any gain or loss, net of taxes, realized upon the termination of any
employee pension benefit plan and (iv) solely for the purpose of determining
Consolidated Net Income (Loss) in connection with the calculation of
Restricted Payments permitted to be made hereunder, the net income of any
consolidated Subsidiary of such Person to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that
income is not at the time permitted, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulations applicable to that Subsidiary
or its shareholders; provided that, upon the termination or expiration of such
dividend or distribution restrictions, the portion of net income (or loss) of
such consolidated Subsidiary allocable to such Person and previously excluded
shall be added to the Consolidated Net Income (Loss) of such Person to the
extent of the amount of dividends or other distributions available to be paid
to such Person in cash by such Subsidiary.
"Consolidated Net Worth" of any Person and its Subsidiaries mean as
of the date of determination all amounts that would be included under
stockholders' equity on a consolidated balance sheet of such Person and its
Subsidiaries determined in accordance with GAAP.
"Control" when used with respect to any specified Person means the
power to direct the management and policies of such Person directly or
indirectly, whether through
5
ownership of voting securities (or pledge of voting securities if the pledgee
thereof may on the date of determination exercise or control the exercise of
the voting rights of the owner of such voting securities), by contract or
otherwise; and the terms "to Control," "Controlling" and "Controlled" have
meanings correlative to the foregoing.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office as of the date hereof is located at Four Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Covenant Defeasance" has the meaning specified in Section 12.3.
"Credit Support" means credit support designed to enhance the
likelihood of payment on securities issued in connection with a securitization
of loans or other assets which are generally funded with the proceeds of such
securitization, including without limitation subordination of certain classes
of securities, insurance policies, representations and warranties, reserve
funds, liquidity reserves, lost- and missing- note reserves and letters of
credit.
"Currency Agreement" means, with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement to which
such Person is a party or a beneficiary.
"Default" means an event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default.
"Defaulted Interest" has the meaning specified in Section 3.8.
"Depositary" has the meaning specified in Section 3.1.
"Disqualified Capital Stock" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part on, or prior to, or
is exchangeable for debt securities of the Company or its Subsidiaries prior
to, the final Stated Maturity of principal of the Notes; provided that only
the amount of such Capital Stock that is redeemable prior to the Stated
Maturity of principal of the Notes shall be deemed to be Disqualified Capital
Stock.
"Disinterested Director" of any Person means, with respect to any
transaction or series of related transactions, a member of the board of
directors of such Person who does not have any material direct or indirect
financial interest in or with respect to such transaction or series of related
transactions.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
6
"Existing Principal Stockholders" means, individually or
collectively, Xxxxxx X. Xxxxxxxxxx and Xxxxxxxx X. Xxxxxxxxxx and their
respective estates, spouses, heirs, ancestors, lineal descendants and legatees
and legal representatives of any of the foregoing and the trustee of any bona
fide trust of which one or more of the foregoing are the trustees or the
majority beneficiaries, and any entity of which any of the foregoing,
individually or collectively, beneficially owns more than 50% of the Voting
Stock thereof.
"Fair Market Value" means, with respect to any asset, the price
which could be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of which is under
compulsion to complete the transaction; provided, however, that the Fair
Market Value of any asset or assets shall be determined by the Board of
Directors of the Company, acting in good faith, and shall be evidenced by a
Board Resolution.
"Federal Deposit Insurance Corporation" means the Federal Deposit
Insurance Corporation or any successor thereto.
"Fixed Charges" means, with respect to any Person for any period,
the sum of (i) Consolidated Interest Expense of such Person for such period,
and (ii) the product of (A) all cash dividend payments on any series of
Preferred Stock or Disqualified Capital Stock of such Person or its
Subsidiaries for such period, and (B) a fraction, the numerator of which is
one and the denominator of which is one minus the then-current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case on a consolidated basis and in accordance with GAAP.
"GAAP" means generally accepted accounting principles as in effect
on the date of computation.
"Global Note" means a Note bearing the legend prescribed in Section
2.4 evidencing all or part of the Notes, authenticated and delivered to the
Depositary or its nominee, and registered in the name of such Depositary or
nominee.
"Global Note Holder" has the meaning specified in Section 3.1.
"Governmental Approval" means an authorization, consent, approval,
permit, license, registration or filing with any Governmental Authority.
"Governmental Authority" with respect to any Person, means any
nation (including an Indian nation), any state or other political subdivision
thereof and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, including any
government authority, agency, department, board, commission or instrumentality
of the United States, any state of the United States or any political
subdivision thereof, and any tribunal or arbitrator(s) of competent
jurisdiction in each case, having jurisdiction or authority over such Person.
7
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation of such
Person (whether arising by virtue of partnership arrangements, or by
agreements to purchase assets, goods, securities or services, to take-or-pay
or to maintain financial statement conditions or otherwise) or (ii) entered
into for the purpose of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided,
however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor" means any person Guaranteeing any obligation.
"Guaranteed Indebtedness" of any Person means, without duplication,
all Indebtedness of any other Person guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or indirectly by such
person through an agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (ii)
to purchase, sell or lease (as lessee or lessor) property, or to purchase or
sell services, primarily for the purpose of enabling the debtor to make
payment of such Indebtedness or to assure the holder of such Indebtedness
against loss, (iii) to supply funds to, or in any other manner invest in, the
debtor (including any agreement to pay for property or services without
requiring that such property be received or such services be rendered), (iv)
to maintain working capital or equity capital of the debtor, or otherwise to
maintain the net worth, solvency or other financial condition of the debtor,
or (v) otherwise to assure a creditor with respect to Indebtedness against
loss; provided that the term shall not include endorsements for collection of
deposit, in either case in the ordinary course of business.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holders" or "Noteholders" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary. The term
"Incurrence" when used as a noun shall have a correlative meaning. The
accretion of principal of a non-interest bearing or other discount security
shall be deemed the Incurrence of Indebtedness.
8
"Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, excluding any trade payables
and other accrued current liabilities arising in the ordinary course of
business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit issued
under letter of credit facilities, and in connection with any agreement by
such Person to purchase, redeem, exchange, convert or otherwise acquire for
value any Capital Stock of such Person now or hereafter outstanding, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person, but excluding trade payables arising in the
ordinary course of business, (iv) all obligations under Interest Rate
Agreements of such Person, (v) all Capital Lease Obligations of such Person,
(vi) all Indebtedness referred to in clauses (i) through (v) above of other
Persons and all dividends payable by other Persons, the payment of which is
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien, upon or with
respect to property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness (the amount of such
obligations being deemed to be the lesser of the value of such property or
asset or the amount of the obligations so secured), (vii) all guarantees by
such Person of Guaranteed Indebtedness, (viii) all Disqualified Capital Stock
(valued at the greater of book value and voluntary or involuntary maximum
fixed repurchase price plus accrued and unpaid dividends) of such Person, and
(ix) any amendment, supplement, modification, deferral, renewal, extension,
refunding or refinancing or any liability of the types referred to in clauses
(i) through (viii) above. For purposes hereof, (x) the "maximum fixed
repurchase price" of any Disqualified Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to the Indenture, and if such price is based upon, or measured by,
the fair market value of such Disqualified Capital Stock, such fair market
value is to be determined in good faith by the board of directors (or any duly
authorized committee thereof) of the issuer of such Disqualified Capital
Stock, and (y) Indebtedness is deemed to be incurred pursuant to a revolving
credit facility each time an advance is made thereunder.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Interest Payment Date" means the date on which any installment of
interest on the Notes becomes due and payable, as provided in Section 2.2.
9
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, repurchase agreement, futures contract or other
financial agreement or arrangement designed to protect the Company or any
Subsidiary against fluctuations in interest rates.
"Issue Date" means the date on which the Notes are originally
issued.
"Junior Indebtedness" means any Indebtedness of the Company
subordinated in right of payment of either principal, premium (if any) or
interest thereon to the Notes.
"Legal Defeasance" has the meaning specified in Section 12.2.
"Legal Holiday" means any Saturday, Sunday or other day on which
banks in the States of New York or Oregon are authorized or obligated by law
or executive order to be closed for business.
"Leverage Ratio" as of any date of determination means the ratio of
(i) the aggregate amount of all Indebtedness and Disqualified Capital Stock of
the Company, excluding (A) Indebtedness and Guarantees thereof permitted to be
incurred pursuant to Section 9.10 (e) (1), (2), (3), (6) and (7) hereof; (B)
Hedging Obligations permitted to be incurred pursuant to Section 9.10 (e)(13)
hereof; and (C) Junior Indebtedness of the Company to (ii) the Consolidated
Net Worth of the Company.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable,
now owned or hereafter acquired.
"Liquid Assets" shall include: (i) cash; (ii) any of the following
instruments that have a remaining term to maturity not in excess of 90 days
from the determination date: (a) repurchase agreements on obligations of, or
are guaranteed as to timely receipt of principal and interest by, the United
States or any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United States provided that the
party agreeing to repurchase such obligations is a primary dealer in U.S.
government securities, (b) federal funds and deposit accounts, including but
not limited to certificates of deposit, time deposits and bankers' acceptances
of any U.S. depository institution or trust company incorporated under the
laws of the United States or any state, provided that the debt of such
depository institution or trust company at the date of acquisition thereof has
been rated by Standard & Poor's Corporation in the highest short-term rating
category or has an equivalent rating from another nationally recognized rating
agency, or (c) commercial paper of any corporation incorporated under the laws
of the United States or any state thereof that on the date of acquisition is
rated investment grade by Standard & Poor's Corporation or has an equivalent
rating from another nationally recognized rating agency; (iii) any debt
instrument which is an obligation of, or is guaranteed as to the receipt of
principal and interest by the United States, its agencies or any U.S.
government sponsored enterprise, or (iv) any mortgage-backed or mortgage-
related security issued by the United States, its agencies, or
10
any U.S. government sponsored enterprise which the payment of principal and
interest from the mortgages underlying such securities will be passed through
to the holder thereof and which such security has a remaining weighted average
maturity of 15 years or less. Notwithstanding the foregoing, Liquid Assets
shall not include any debt instruments, securities or collateralized mortgage
obligations (real estate mortgage investment conduits) that would be
classified as a "High-Risk Mortgage Security" pursuant to the policy statement
adopted by the Federal Financial Institutions Examination Counsel on February
10, 1992, as reflected in Volume I of the Federal Reserve Report Service, Part
3-1562.
"Maturity", when used with respect to any Note, means the date on
which the principal of such Note or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, call for redemption, upon repurchase or
otherwise.
"Net Cash Proceeds" means, with respect to any issuance or sale of
Capital Stock, or options, warrants or rights to purchase Capital Stock, or
debt securities or Capital Stock that have been converted into or exchanged
for Capital Stock, or any capital contribution in respect of Capital Stock, as
referred to under Section 9.12 hereof, the proceeds of such issuance or sale
or capital contribution in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations when received in the form
of, or stock or other assets when disposed for, cash or cash equivalents
(except to the extent that such obligations are financed or sold with recourse
to the Company or any Subsidiary of the Company), net of attorney's fees,
accountant's fees and brokerage, consulting, underwriting and other fees and
expenses actually incurred in connection with such issuance or sale or capital
contribution and net of taxes paid or payable by the Company as a result
thereof.
"Non-Recourse Indebtedness" means, with respect to any Person,
Indebtedness of such Person for which (i) the sole recourse for collection of
principal and interest on such Indebtedness is against the specific assets
identified in the instruments evidencing or securing such Indebtedness, (ii)
such assets were acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred concurrently with the acquisition of such assets;
and (iii) no other assets (other than Credit Support) of such Person or of any
other Person may be realized upon or in collection of principal or interest on
such Indebtedness.
"Note Register" has the meaning specified in Section 3.6.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the Chief Executive Officer or the
President, and by the Chief Executive Officer, the President, the Chief
Financial Officer, the Controller or an Assistant Controller, of the Company
(provided that no one person signs twice on behalf of the Company), and
delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 9.4 shall be the principal executive,
financial or
11
accounting officer of the Company. Unless otherwise indicted, "Officers'
Certificate" means an Officers' Certificate of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company and who shall be acceptable to the Trustee.
"OTS" means the Office of Thrift Supervision or any successor
thereto.
"Outstanding", when used with respect to Notes, means, as of the
date of determination, all Notes theretofore authenticated and delivered under
this Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Notes for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Notes; provided that, if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(iii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture, other
than any such Notes in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Notes are held by a bona
fide purchaser in whose hands such Notes are valid obligations of the
Company
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) Notes owned
by the Company or any other obligor on the Notes or any Affiliate of the
Company shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Notes which a Responsible Officer of the Trustee knows to be so owned shall be
so disregarded. Notes so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Company or any other obligor on the Notes or any Affiliate
of the Company.
"Pari Passu Indebtedness" means any Indebtedness of the Company that
is pari passu in right of payment of principal, premium (if any) and interest
thereon to the Notes.
12
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Notes on behalf of the Company
or, if the Company is acting as its own Paying Agent, the Company.
"Permitted Acquisition Indebtedness" means any secured funding
arrangement with a financial institution or other lender to the extent (and
only to the extent) funding thereunder is used exclusively to finance or
refinance the purchase or origination of loans, real estate owned or other
financial assets by the Company or a Subsidiary.
"Permitted Liens" means (i) Liens for taxes, assessments,
governmental charges or claims that are being contested in good faith by
appropriate legal proceedings instituted and diligently conducted and for
which a reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made; (ii) statutory Liens of
landlords and carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen or other similar Liens imposed by law and arising in the ordinary
course of business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate legal proceedings promptly instituted
and diligently conducted and for which a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have
been made; (iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security; (iv) Liens incurred or deposits made to secure
the performance of tenders, bids, leases, statutory or regulatory obligations,
surety and appeal bonds, progress payments, development obligations,
government contracts, performance and return-of-money bonds and other
obligations of a similar nature, in each case incurred in the ordinary course
of business (exclusive of obligations for the payment of borrowed money or
otherwise constituting a liability in accordance with GAAP); (v) with respect
to property of the Company or any Subsidiary, Liens granted on such property
or assets in favor of the Person from whom the Company or such Subsidiary
acquired such property or assets which Liens secure the payment of a
contingent portion of the purchase price of such property so long as such
Liens are granted and such arrangement is entered into in the ordinary course
of business of the Company; (vi) attachment or judgment Liens not giving rise
to a Default or Event of Default and which are being contested in good faith
by appropriate proceedings; (vii) easements, rights-of-way, restrictions,
homeowners association assessments and similar charges or encumbrances that do
not materially interfere with the ordinary course of business of the Company
or any of its Subsidiaries; (viii) zoning restrictions, licenses, restrictions
on the use of real property or minor irregularities in title thereto, which do
not materially impair the use of such property in the ordinary course of
business of the Company or any Subsidiary or the value of such real property
for the purpose of such business; (ix) Liens in favor of the Company or any
Subsidiary that is a Wholly Owned Subsidiary of the Company; (x) Liens
existing on the Closing Date; (xi) Liens securing Non-Recourse Indebtedness of
the Company or a Subsidiary thereof, (xii) Liens with respect to the property
or assets of the Company or a Subsidiary securing Indebtedness permitted to be
incurred pursuant to Section 9.10 (e)(1), (2), (3), (6) and (7) hereof; (xiii)
Liens granted after the Issue Date on any assets or Capital Stock of the
Company or its Subsidiaries created in favor of the Holders; (xiv) Liens with
13
respect to the property or assets of a Subsidiary granted by such Subsidiary
to the Company to secure Indebtedness owing to the Company; (xv) Liens
securing Indebtedness which is incurred to refinance Permitted Indebtedness,
provided that such Liens constitute Permitted Liens under this clause (xv)
only to the extent that they do not extend to or cover any property or assets
of the Company or any Subsidiary other than the property or assets securing
the Indebtedness being refinanced; (xvi) leases or subleases granted to others
not materially interfering with the ordinary course of business of the Company
or any of its Subsidiaries; (xvii) other Liens securing obligations not
exceeding $1,000,000 in the aggregate; and (xviii) Liens securing Hedging
Obligations of the Company or such Subsidiary so long as such Hedging
Obligations relate to Indebtedness that is, and is permitted under this
Indenture to be, secured by a Lien on the same property securing such Hedging
Obligations.
"Permitted Payment" means, so long as no Default or Event of Default
is continuing,
(a) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Capital Stock of the Company or any Affiliate
(other than a Wholly-Owned Subsidiary) of the Company, Junior Indebtedness or
Pari Passu Indebtedness in exchange for (including any such exchange pursuant
to the exercise of a conversion right or privilege where, in connection
therewith, cash is paid in lieu of the issuance of fractional shares or
scrip), or out of the Net Cash Proceeds or Fair Market Value of property not
constituting Net Cash Proceeds of, a substantially concurrent issue and sale
(other than to a Subsidiary of the Company or to an employee benefit plan of
the Company or any of its Subsidiaries) of Qualified Capital Stock of the
Company; provided that the Net Cash Proceeds or Fair Market Value of such
property received by the Company from the issuance of such shares of Qualified
Capital Stock, to the extent so utilized, shall be excluded from clause
(d)(iii) of Section 9.12 hereof; and
(b) the repurchase, redemption, defeasance or other acquisition or
retirement for value of any Junior Indebtedness or Pari Passu Indebtedness in
exchange for, or out of the Net Cash Proceeds of, a substantially concurrent
issue and sale (other than to a Subsidiary of the Company) of new Indebtedness
by the Company (such a transaction, a "refinancing"); provided, that any such
new Indebtedness of the Company (i) shall be in a principal amount that does
not exceed an amount equal to the sum of (A) the principal amount of the
Indebtedness so refinanced less any discount from the face amount of such
Indebtedness to be refinanced expected to be deducted from the amount payable
to the holders of such Indebtedness in connection with such refinancing, (B)
the amount of any premium expected to be paid in connection with such
refinancing pursuant to the terms of the Junior Indebtedness or Pari Passu
Indebtedness refinanced or the amount of any premium reasonably determined by
the Company as necessary to accomplish such refinancing by means of a tender
offer, privately negotiated repurchase or otherwise and (C) the amount of
legal, accounting, printing and other similar expenses of the Company incurred
in connection with such refinancing; provided, further, that for purposes of
this clause (i), the principal amount of any Indebtedness shall be deemed to
mean the principal amount thereof or, if such
14
Indebtedness provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration thereof, such lesser
amount as of the date of determination; (ii) (A) if such refinanced
Indebtedness has an Average Life to Stated Maturity shorter than that of the
Notes or a final Stated Maturity earlier than the final Stated Maturity of the
Notes, such new Indebtedness shall have an Average Life to Stated Maturity no
shorter than the Average Life to Stated Maturity of such refinanced
Indebtedness and a final Stated Maturity no earlier than the final Stated
Maturity of such refinanced Indebtedness or (B) in all other cases each Stated
Maturity of principal (or any required repurchase, redemption, defeasance or
sinking fund payments) of such new Indebtedness shall be after the final
Stated Maturity of principal of the Notes; and (iii) is (A) made expressly
subordinated to or pari passu with the Notes to substantially the same extent
as the Indebtedness being refinanced or (B) expressly subordinate to such
refinanced Indebtedness.
"Permitted Repurchase Facilities" includes purchase and sale
facilities pursuant to which the Company or a Subsidiary sells loans, real
estate owned or other financial assets to a financial institution or other
entity and agrees to repurchase such loans, real estate owned or financial
assets.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.
"Place of Payment" means the place or places where the principal of
and any premium and interest on the Notes are payable as specified in Section
9.2.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.7 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Preferred Stock" means, with respect to any Person, any Capital
Stock of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary liquidation or dissolution of such Person, over Capital
Stock of any other class in such Person.
"Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Disqualified Capital Stock.
"Redemption Date", when used with respect to any Note to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
15
"Registrar" means the Trustee or its nominee.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Notes means the __________ or ___________ (whether or not
a Business Day), as the case may be, next preceding such Interest Payment
Date.
"Regulatory Capital Requirements" means the minimum amount of
capital required to meet each of the industry-wide regulatory capital
requirements applicable to the Savings Banks pursuant to 12 U.S.C. Section
1464(t) and 12 C.F.R. Section 567 (and any amendment to either thereof) or
any successor law or regulation, or such higher amount of capital as either
Savings Bank, respectively, is required to maintain in order to meet any
individual minimum capital standard applicable to the Savings Bank pursuant to
12 U.S.C. Section 1464(s) and 12 C.F.R. Section 567.3 or to comply with any
enforcement action, including but not limited to the Cease and Desist Orders
issued October 31, 1996 to each Savings Bank by the OTS, issued pursuant to 12
U.S.C. Section 1818(b) (and any amendment to any of the foregoing) or any
successor law or regulation.
"Responsible Officer", when used with respect to the Trustee shall
mean any officer within the Corporate Trust and Agency Group (or any successor
group of the Trustee) including any vice president, assistant vice president,
assistant secretary or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred at the Trustee's Corporate Trust Office because of
his knowledge of and familiarity with the particular subject.
"Restricted Payment" means
(a) the declaration, payment or setting apart of any funds for the
payment of any dividend on, or making of any distribution to holders of, the
Capital Stock of the Company or any Subsidiary of the Company (other than (i)
dividends or distributions in Qualified Capital Stock of the Company and (ii)
dividends or distributions payable on or in respect of any class or series of
Capital Stock of a Subsidiary of the Company as long as the Company receives
at least its pro rata share of such dividends or distributions in accordance
with its ownership interests in such class or series of Capital Stock);
(b) the purchase, redemption or other acquisition or retirement for
value, directly or indirectly, of any Capital Stock of the Company or any
Affiliate of the Company (other than a Wholly-Owned Subsidiary, and other than
the purchase from a non-Affiliate of the Company of Capital Stock of any joint
venture or other Person which is an Affiliate of the Company solely because of
the Company's direct or indirect ownership of 20% or more of the Voting Stock
of such joint venture or other Person); or
(c) the making of any principal payments on, or repurchase,
redemption, defeasance, retirement or other acquisition for value, directly or
indirectly, of any Junior Indebtedness or Pari Passu Indebtedness, prior to
any Stated Maturity of principal or
16
scheduled redemption or defeasance of, or any scheduled sinking fund payment
on, such Junior Indebtedness or Pari Passu Indebtedness.
"Savings Banks" mean First Bank of Xxxxxxx Hills, F.S.B. and Xxxxxx
Savings Bank, F.S.B.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Entity" means any pooling arrangement or entity
formed or originated for the purpose of holding, and/or issuing securities
representing interests in, one or more pools of mortgages, leases, credit card
receivables, home equity loan receivables, automobile loans, leases or
installment sales contracts, other consumer receivables, real estate owned or
other financial assets of the Company or any Subsidiary, and shall include,
without limitation, any partnership, limited liability company, liquidating
trust, grantor trust, owner trust, real estate mortgage investment conduit,
real estate investment trust or collateralized bond obligation.
"Significant Subsidiary" means, with respect to any Person, any
consolidated Subsidiary of such Person for which the net income of such
Subsidiary was more than 25% of the Consolidated Net Income of such Person in
both of the two prior fiscal years.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.8.
"Stated Maturity" when used with respect to any Indebtedness
(including, without limitation, the Notes) means the dates specified in the
instrument governing such Indebtedness as the fixed dates on which any
principal amount of such Indebtedness is due and payable (including, without
limitation, by reason of any required redemption, purchase, defeasance or
sinking fund payment) and, when used with respect to any installment of
interest on Indebtedness, means the date on which such installment is due and
payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting
power of Voting Stock thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of such
Person or a combination thereof.
"Successor Company" has the meaning specified in Section 10.1.
"Tax Allocation Agreement" means the tax allocation agreement, dated
as of __________, 1996, by and among the Company and its Subsidiaries, without
regard to any amendments, supplements or other modifications thereof after the
date hereof.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable
17
provisions of this Indenture, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Notes shall mean
the Trustee with respect to the Notes.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Unsecured Debt Coverage Ratio" means, with respect to any Person
for any period, the ratio of Consolidated EBITDA of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the Company incurs, assumes, guarantees or redeems any Indebtedness (including
any Indebtedness which constitutes Acquired Indebtedness) subsequent to the
commencement of the period for which the Unsecured Debt Coverage Ratio is
being calculated but prior to the event for which the calculation of the
Unsecured Debt Coverage Ratio is made (the "Calculation Date"), then the
Unsecured Debt Coverage Ratio shall be calculated giving pro forma effect to
such incurrence, assumption, guarantee or redemption of Indebtedness, as if
the same had occurred at the beginning of the applicable four-quarter period,
including an assumption of investment returns at the rate equal to the higher
of the six-month Treasury xxxx rate or six-month LIBOR at the beginning of
such four-quarter period. For purposes of making the computation referred to
above, investments in the equity of, or other acquisitions or dispositions,
which constitute all or substantially all of an operating unit of a business
and discontinued operations (as determined in accordance with GAAP) that have
been made by the Company or any of its Subsidiaries, including all mergers,
consolidations and dispositions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be calculated on a pro forma basis assuming that all such investments,
acquisitions, dispositions, discontinued operations, mergers and
consolidations (and the reduction of any associated fixed charge obligations
and the change in Consolidated EBITDA resulting therefrom) had occurred on the
first day of the four-quarter period. If since the beginning of such period
any Person (that subsequently became a Subsidiary or was merged with or into
the Company or any Subsidiary since the beginning of such period) shall have
made any investment in the equity of, or other acquisition or disposition,
which constitutes all or substantially all of an operating unit of a business,
discontinued operation, merger or consolidation that would have required
adjustment pursuant to this definition, then the Unsecured Debt Coverage Ratio
shall be calculated giving pro forma effect thereto for such period as if such
investment, acquisition, disposition, discontinued operation, merger or
consolidation had occurred at the beginning of the applicable four-quarter
period. For purposes of this definition, whenever pro forma effect is to be
given to a transaction, the pro forma calculations shall be made in good faith
by a responsible financial or accounting officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate
in effect on the Calculation Date had been the applicable rate for the entire
period. Interest on a Capital Lease Obligation shall be deemed to accrue at an
interest rate reasonably determined by a
18
responsible financial or accounting officer of the Company to be the rate of
interest implicit in such Capital Lease Obligation in accordance with GAAP.
Interest on Indebtedness that may optionally be determined at an interest rate
based upon a factor of a prime or similar rate, a eurocurrency interbank
offered rate, or other rate, shall be deemed to have been based upon the rate
actually chosen, or, if none, then based upon such optional rate chosen as the
Company may designate.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president (but shall not include any assistant vice
president), whether or not designated by a number or a word or words added
before or after the title "vice president".
"Voting Stock" means Capital Stock of the class or classes of which
the holders have (i) in respect of a corporation, the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such corporation (irrespective of whether
or not at the time Capital Stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency) or (ii)
in respect of a partnership, the general voting power under ordinary
circumstances to elect the board of directors or other governing board of such
partnership or of the Person which is a general partner of such partnership.
"Wholly-Owned Subsidiary" means a Subsidiary all of the Capital
Stock of which (other than directors' qualifying shares) is owned by the
Company or another Wholly-Owned Subsidiary.
Section 1.2 Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in
the form of an Officers' Certificate, if to be given by officers of the
Company, or an Opinion of Counsel, if to be given by counsel, and shall comply
with the requirements of the Trust Indenture Act and any other requirements
set forth in this Indenture.
Every certificate or opinion (other than the Officers' Certificate
delivered under Section 9.4 hereof) with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
19
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.4 Acts of Holders, Record Dates.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective upon action by the requisite percentage
20
of Holders when such instrument or instruments are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
Without limiting the generality of the foregoing, a Holder,
including a Depositary that is a Holder of a Global Note, may make, give or
take, by a proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted in this Indenture to be made, given or taken by Holders, and a
Depositary that is a Holder of a Global Note may provide its proxy or proxies
to the beneficial owners of interest in any such Global Note.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining
the Holders of Notes entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote
on any action, authorized or permitted to be given or taken by Holders of
Notes. If not set by the Company prior to the first solicitation of a Holder
of Notes made by any Person in respect of any such action, or, in the case of
any such vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list of
Holders required to be provided pursuant to Section 7.1) prior to such first
solicitation or vote, as the case may be. With regard to any record date for
action to be taken by the Holders Notes, only the Holders of Notes on such
date (or their duly designated proxies) shall be entitled to give or take, or
vote on, the relevant action.
(d) The ownership of Notes shall be proved by the Note Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder
of the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Note.
21
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Note may do so
with regard to all or any part of the principal amount of such Note or by one
or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
Section 1.5 Notices, Etc., to Trustee and Company.
-------------------------------------
Except as otherwise expressly provided herein, any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to
or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
& Agency Group, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to
it at the address of the Company's principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company, Attention: Xxxxxxxx X. Xxxxxxxxxx.
Section 1.6 Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at his address as it appears in the Note
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
22
Section 1.7 Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
Section 1.8 Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.9 Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.10 Separability Clause.
-------------------
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 1.11 Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than (a) the parties hereto and their successors
hereunder and (b) the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 1.12 Governing Law; Choice of Forum.
------------------------------
(A) THIS INDENTURE AND THE NOTES WILL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
(b) THE COMPANY 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 NOTES, AND IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF
THE AFORESAID COURTS. THE
23
COMPANY 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.
(c) The Company hereby irrevocably appoints CT Corporation Systems
(the "Process Agent," which has consented thereto) with offices on the date
-------------
hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as Process Agent to receive
for and on behalf of the Company service of process in the County of New York
relating to this Indenture and the Notes. SERVICE OF PROCESS IN ANY suit,
ACTION OR PROCEEDING AGAINST THE COMPANY MAY BE MADE ON THE PROCESS AGENT BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER METHOD
OF SERVICE PROVIDED FOR UNDER APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW
YORK, AND THE PROCESS AGENT IS HEREBY AUTHORIZED AND DIRECTED TO ACCEPT SUCH
SERVICE FOR AND ON BEHALF OF the company AND TO ADMIT SERVICE WITH RESPECT
THERETO. SUCH SERVICE UPON THE PROCESS AGENT SHALL BE DEEMED EFFECTIVE
PERSONAL SERVICE ON THE COMPANY, SUFFICIENT FOR PERSONAL JURISDICTION, 10 DAYS
AFTER MAILING, AND SHALL BE LEGAL AND BINDING UPON THE COMPANY FOR ALL
PURPOSES, NOTWITHSTANDING ANY FAILURE OF THE PROCESS AGENT TO MAIL COPIES OF
SUCH LEGAL PROCESS TO THE COMPANY OR ANY FAILURE ON THE PART OF THE COMPANY TO
RECEIVE THE SAME. The Company confirms that it has instructed the Process
Agent to mail to the Company, upon service of process being made on the
Process Agent pursuant to this Section, a copy of the summons and complaint or
other legal process served upon it, by registered mail, return receipt
requested, at the Company's address set forth in the first paragraph of this
instrument, or to such other address as the Company may notify the Process
Agent in writing. The Company agrees that it will at all times maintain a
process agent to receive service of process in the County of New York on its
behalf with respect to this Indenture and the Notes. If for any reason the
Process Agent or any successor thereto shall no longer serve as such process
agent or shall have changed its address without notification thereof to the
Trustee, the Company, immediately after gaining knowledge thereof, irrevocably
shall appoint a substitute process agent acceptable to the Trustee in the
County of New York and advise the Trustee thereof or notify the Trustee of the
new address, respectively.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY
HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER
JURISDICTION.
24
Section 1.13 Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Note shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Notes (other than a provision of the Notes which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place
of Payment with the same force and effect as if made on the Interest Payment
Date or Redemption Date, or at the Stated Maturity, provided that no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
NOTE FORMS
Section 2.1 Forms Generally.
---------------
The Notes shall be in substantially the form set forth in this
Article, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes.
The definitive Notes shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing such Notes, as evidenced
by their execution of such Notes.
Section 2.2 Form of Face of Note.
--------------------
THIS NOTE IS NOT A SAVINGS ACCOUNT OR SAVINGS DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, ANY OTHER
GOVERNMENTAL AGENCY OR OTHERWISE.
WILSHIRE FINANCIAL SERVICES GROUP INC.
......% Notes Due 2003
No......... ..........$
Wilshire Financial Services Group Inc., a corporation duly organized
and existing under the laws of Delaware (herein called the "Company", which
term includes any
25
Successor Company under the Indenture hereinafter referred to), for value
received, hereby promises to pay to .........................., or registered
assigns, the principal sum of ....................... Dollars on
..........................., 2003, and to pay interest thereon from
.........., 1996 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually in arrears on
................. and .................. in each year, commencing
................, 1997, at the rate of ......% per annum, until the principal
hereof is paid or made available for payment, and at the rate of 1% over the
rate set forth above per annum on any overdue principal and (to the extent
that the payment of such interest shall be legally enforceable) on any overdue
installment of interest. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular
Record Date for such interest, which shall be the ............... or
................ (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Note (or one or more Predecessor Notes) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be
fixed by the Trustee, notice whereof shall be given to Holders of Notes not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said
Indenture.
All payments of principal (and premium, if any) and interest on this
Notes shall be made by the Company in immediately available funds; provided,
however, that should, in accordance with the terms of the Indenture,
principal, premium, if any, or interest on the Notes not be paid in
immediately available funds, such payment may be paid by check drawn on a bank
in The City of New York and mailed to the address of the Person entitled
thereto as such address shall appear in the Note Register. Payment of the
principal of (and premium, if any) and interest on this Note will be made at
the office or agency of the Company maintained for that purpose in The City of
New York, Borough of Manhattan, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
26
IN WITNESS WHEREOF, the Company has caused this in strument to be
duly executed under its corporate seal.
Dated:
WILSHIRE FINANCIAL SERVICES GROUP INC.
By....................................
Attest:
........................
Section 2.3 Form of Reverse of Note.
-----------------------
This Note is one of a duly authorized issue of the Company (herein
called the "Notes"), issued under an Indenture, dated as of December ___, 1996
(herein called the "Indenture"), between the Company and Bankers Trust
Company, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note is
one of the Notes designated on the face hereof, limited in aggregate principal
amount up to $69,000,000.
The Notes may not be redeemed prior to ................., 2001
except as set forth herein. On or after such date, the Notes may be redeemed
upon not less than 30 days' and not more than 60 days' notice by mail, at any
time on or after ................., 2001, as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed during the 12-month period
beginning .................... of the years indicated,
Redemption
Year Price
---- ----------
2001 .......%
2002 .......%
, together in the case of any such redemption with accrued and unpaid interest
to the Redemption Date, but interest installments whose Stated Maturity is on
or prior to such Redemption Date will be payable to the Holders of such Notes,
or one or more Predecessor
27
Notes, of record at the close of business on the relevant Regular Record Dates
referred to on the face hereof, all as provided in the Indenture.
In addition, the Company may redeem, at its option, up to 35% of the
original aggregate principal amount of the Notes at any time and from time to
time prior to ..............................., 2001, with the Net Cash
Proceeds received by the Company from one or more public or private sales of
Qualified Capital Stock at a Redemption Price of ......% of the principal
amount of the Notes to be redeemed, plus accrued and unpaid interest thereon;
provided, however, that at least 65% of the original aggregate principal
amount of Notes must remain outstanding after each such redemption; and
provided, further, that such redemption must occur within 60 days after the
closing date of any such public or private sale of Qualified Capital Stock.
In the event of redemption of this Note in part only, a new Note or
Notes of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
Upon a Change of Control Event, the Holder of this Note will have
the right to cause the Company to repurchase all or any part of this Note at a
repurchase price equal to 101% of the principal amount of this Note plus
accrued interest to the date of purchase (subject to the right of the Holders
on the relevant Regular Record Date to receive interest due on the relevant
Interest Payment Date) as provided in, and subject to the terms of, the
Indenture.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness evidenced by this Note and (b) certain restrictive
covenants, in each case upon compliance by the Company with certain conditions
set forth therein, which provisions apply to this Note.
If an Event of Default with respect to Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Notes to be affected under
the Indenture at any time by the Company and the Trustee with the consent of
the Holders of a majority in principal amount of the Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Notes at the time
Outstanding, on behalf of the Holders of all Notes, to waive certain past
defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon the Holder of this Note and upon
all future Holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
28
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Note
Register, upon surrender of this Note for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes of
like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
Section 2.4 Form of Legend for Global Notes.
-------------------------------
Any Global Note authenticated and delivered hereunder shall bear a
legend in substantially the following form:
"This Note is a Global Note within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Note may not be transferred to, or registered or
exchanged for Notes registered in the name of, any Person other than the
Depositary or a nominee thereof or a successor of such Depositary or a nominee
of such successor and no such transfer may be registered, except in the
limited circumstances described in the Indenture. Every Note authenticated
and delivered upon
29
registration of transfer of, or in exchange for or in lieu of, this Note shall
be a Global Note subject to the foregoing, except in such limited
circumstances."
Section 2.5 Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Notes designated and referred to in the within-
mentioned Indenture.
BANKERS TRUST COMPANY, as Trustee
By
-----------------------------------
Authorized Officer
Section 2.6 Form of Assignment and Election to Purchase. Each Note
-------------------------------------------
shall include the following form of Assignment and Option of Holder to Elect
Purchase:
ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer this Note)
FOR VALUE RECEIVED _________________ hereby sells, assigns and
transfers unto _____________________________________________________.
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE
(Please print name and address of transferee)
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint ___________________ Attorney to transfer
this Note on the Note Register, with full power of substitution.
Dated:
Signature of Holder Signature Guaranteed:
NOTICE: The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Note in every particular, without alteration
or any change whatsoever.
OPTION OF HOLDER TO ELECT PURCHASE
(check as appropriate)
30
[ ] In connection with the Change of Control Purchase Offer made pursuant to
Section 9.16 of the Indenture, the undersigned hereby elects to have the
[ ] entire principal amount
[ ] $ _______________ ($1,000 in principal amount or an integral multiple
thereof) principal amount of this Note repurchased by the Company. The
undersigned hereby directs the Trustee or Paying Agent to pay it an
amount in cash equal to 101% of the principal amount indicated in the
preceding sentence plus accrued and unpaid interest on such principal
amount to the date of purchase.
Dated:
Signature of Holder Signature Guaranteed:
NOTICE: The signature to the foregoing must correspond to the name as written
upon the face of this Note in every particular, without alteration or any
change whatsoever.
ARTICLE THREE
THE NOTES
Section 3.1 Global Note; Depositary.
-----------------------
The Notes will initially be issued in the form of one or more Global
Notes. Each Global Note will be deposited on the Issue Date with The
Depository Trust Company or any successor thereto (the "Depositary"), or the
Trustee on its behalf, and registered in the name of the Depositary's nominee,
as nominee of the Depositary (such nominee being referred to herein as the
"Global Note Holder").
Section 3.2 Amount.
------
The aggregate principal amount of Notes which may be authenticated
and delivered under this Indenture is up to $86,250,000.00 (Eighty-Six Million
Two Hundred Fifty Thousand Dollars and No Cents), except as for Notes
authenticated and delivered pursuant to Section 3.5, 3.6, 3.7, 9.16 or 11.7.
Section 3.3 Denominations.
-------------
The Notes shall be issuable in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
31
Section 3.4 Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Notes shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its
President or one of its Vice Presidents, under its corporate seal, if any,
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Notes may be
manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Notes executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes, and the Trustee in accordance with
the Company Order shall authenticate and deliver such Notes.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or an Authenticating Agent by manual signature of an
authorized officer of the Trustee or an Authenticating Agent, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
Notwithstanding the foregoing, if any Note shall have been authenticated and
delivered hereunder but never issued and sold by the Company, and the Company
shall deliver such Note to the Trustee for cancellation as provided in Section
3.10, for all purposes of this Indenture such Note shall be deemed never to
have been authenticated and delivered hereunder and shall never be entitled to
the benefits of this Indenture.
Section 3.5 Temporary Notes.
---------------
Pending the preparation of definitive Notes, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Notes may determine, as evidenced by their execution
of such Notes.
If temporary Notes are issued, the Company will cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive
Notes upon surrender of the temporary Notes at the
32
office or agency of the Company in a Place of Payment, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Notes of any authorized denominations
and of a like aggregate principal amount and tenor. Until so exchanged the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes of such tenor.
Section 3.6 Capital Registration; Registration of Transfer and
--------------------------------------------------
Exchange.
--------
The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office being herein sometimes
collectively referred to as the "Note Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Trustee is hereby
appointed "Note Registrar" for the purpose of registering Notes and transfers
of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the
office or agency in a Place of Payment, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Notes may be exchanged for other Notes
of any authorized denominations and of a like aggregate principal amount and
tenor, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the Notes which the Holder
making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Note Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 3.5, 9.16 or 11.7 not involving any transfer.
33
The Company shall not be required (i) to issue, register the
transfer of or exchange Notes during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Notes selected for redemption under Section 11.3 and ending at the close of
business on the day of such mailing or (ii) to register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
Section 3.7 Mutilated, Destroyed, Lost and Stolen Notes.
-------------------------------------------
If any mutilated Note is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Note of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Note
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice
to the Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Note, a new Note of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.8 Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Note 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 Note (or one or more Predecessor Notes) is registered at the
close of business on the Regular Record
34
Date for such interest. All payments of interest on any Notes shall be made by
the Company in immediately available funds; provided, however, that should, in
accordance with the terms of the Indenture, interest on the Notes not be paid
in immediately available funds, such payment may be paid by check drawn on a
bank in The City of New York and mailed to the address of the Person entitled
thereto as such address shall appear in the Note Register.
Any interest on any Note which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Note and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 7 days prior
to the date of the proposed payment and not less than 7 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and
at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Notes at its address as it
appears in the Note 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 so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business 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 on the
Notes in any other lawful manner not inconsistent with the requirements of any
securities exchange on which such Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Note.
35
Section 3.9 Persons Deemed Owners.
---------------------
Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Note is registered as the owner of such Note for the
purpose of receiving payment of principal of and any premium and (subject to
Section 3.8) any interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
So long as the Global Note Holder is the registered owner of any
Notes, the Global Note Holder will be considered the sole Holder under this
Indenture of any Notes evidenced by the Global Note for the purposes of
receiving payment on the Notes, receiving notices, and for all other purposes
under this Indenture and the Notes. Beneficial owners of Notes evidenced by
the Global Note will not be considered the owners or Holders thereof under
this Indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the Trustee thereunder. Neither the
Company nor the Trustee will have any responsibility or liability for any
aspect of the records of the Depositary or for maintaining, supervising or
reviewing any records of the Depositary relating to the Notes.
Section 3.10 Cancellation.
------------
All Notes surrendered for payment, redemption or registration of
transfer or exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Notes
previously authenticated hereunder which the Company has not issued and sold,
and all Notes so delivered shall be promptly canceled by the Trustee. No Notes
shall be authenticated in lieu of or in exchange for any Notes canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled Notes held by the Trustee shall be destroyed and the Trustee shall
deliver to the Company a certificate with respect to such destruction.
Section 3.11 Computation of Interest.
-----------------------
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months.
36
ARTICLE FOUR
BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES
Section 4.1 Applicability of Article.
------------------------
Each Global Note shall be subject to this Article Four.
Section 4.2 Book-Entry Provisions For Global Note.
-------------------------------------
(a) Members of, or participants in, the Depositary ("Agent Members")
-------------
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depositary or under the Global Note, and the Depositary
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the Global Note for all purposes whatsoever.
Any Holder of the Global Note shall, by acceptance of such Global Note, agree
that the transfers of beneficial interests in such Global Note may be effected
only through a book-entry system maintained by the Depositary (or its agent),
and that ownership of a beneficial interest in the Global Note shall be
required to be reflected in a book-entry system. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or an agent
of the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Note.
(b) Notwithstanding any other provision of this Section, unless and
until it is exchanged in whole or in part for individual Notes represented
thereby, a Global Note representing all or a portion of the Notes may not be
transferred except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Interests of
beneficial owners in the Global Notes (each an "Interest") may be transferred
--------
to one beneficial owner or to another Agent Member or exchanged for definitive
Notes in accordance with the rules and procedures of the Depositary and the
provisions of this Indenture. In addition, definitive Notes shall be
transferred to all beneficial owners in exchange for their beneficial
interests in Global Notes if (i) the Depositary for the Notes notifies the
Company that the Depositary is unwilling or unable to continue as Depositary
for the Global Notes or is no longer eligible to serve as Depositary pursuant
to the terms of this Indenture and a successor Depositary is not appointed by
the Company within 90 days after delivery of such notice; (ii) the Company, at
its sole discretion, notifies the Trustee in writing that it elects to cause
the issuance of definitive Notes under this Indenture; or (iii) there shall
have occurred and be continuing a Default or an Event of Default with respect
to any Notes represented by the Global Notes; and the Trustee shall, upon
receipt of a Company Order in accordance with Section 3.4, authenticate and
deliver, definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes. If
specified
37
by the Company pursuant to Section 3.4, the Depositary may surrender a Global
Note in exchange in whole or in part for Notes of like tenor and terms and in
definitive form on such terms as are acceptable to the Company, the Trustee
and the Depositary.
(c) In connection with the transfer of Global Notes to beneficial
owners pursuant to the third sentence of paragraph (b) of this Section, the
Global Notes shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute and the Trustee upon receipt of a
Company Order for the authentication and delivery of definitive Notes shall
authenticate and deliver, without service charge:
(i) to the Depositary or to each Person specified by such Depositary
a new Note or Notes of like tenor and terms and of any authorized
denomination as requested by such Person in aggregate principal amount
equal to and in exchange for such Person's beneficial interest in the
Global Note; and
(ii) to such Depositary a new Global Note of like tenor and terms
and in an authorized denomination equal to the difference, if any, between
the principal amount of the surrendered Global Note and the aggregate
principal amount of Notes delivered to Holders thereof.
Notwithstanding any other provision of this Indenture, any Note
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any Global Note shall also be a Global Note and shall bear
the legend specified in Section 2.4 except for any Note authenticated and
delivered in exchange for, or upon registration of transfer of, a Global Note
pursuant to the preceding sentence.
(d) The Holder of any Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
(e) Upon the exchange of a Global Note in its entirety for Notes in
definitive form, such Global Note shall be canceled by the Trustee.
(f) Notwithstanding anything herein to the contrary, if at any time
the Depositary for the Notes notifies the Company that it is unwilling or
unable to continue as a Depositary for the Notes or if at any time the
Depositary for the Notes shall no longer be registered or in good standing
under the Exchange Act, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to the Notes. If a
successor Depositary for the Notes is not appointed by the Company within 90
days after the Company receives such notice or becomes aware of such
condition, the Company will execute, and the Trustee, upon Company Request,
will authenticate and deliver Notes in definitive form in an aggregate
principal amount equal to the principal amount of the Global Note or Global
Notes representing Notes in exchange for such Global Note or Global Notes.
38
ARTICLE FIVE
REMEDIES
Section 5.1 Events of Default.
-----------------
An "Event of Default" as used herein is any one of the following:
(a) failure by the Company to pay interest on any Note when due and
payable, if such failure continues for a period of 30 days;
(b) failure by the Company to pay principal on any Note when due and
payable at Stated Maturity or upon redemption, acceleration or otherwise;
(c) failure by the Company to comply with any other agreement or
covenant contained in this Indenture (other than a default specified in clause
(a) or (b) above) if such failure continues for a period of 30 days after
notice to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Notes then Outstanding;
(d) Indebtedness of the Company or any Subsidiary of the Company is
not paid within any applicable grace period after final maturity or in the
event that final maturity is accelerated because of a default and, in either
case where the aggregate principal amount of such Indebtedness so unpaid or
accelerated is equal to or greater than 5% of the Company's Consolidated Net
Worth at the quarter end preceding the end of such grace period or such
acceleration;
(e) failure by, as the case may be, either or both of the Savings
Banks to comply with any of their Regulatory Capital Requirements; provided,
that an Event of Default under this clause (e) shall not be deemed to have
occurred (i) during the 60 day period following the first day on which either
or both of the Savings Banks, as the case may be, fails or fail to comply with
any of their Regulatory Capital Requirements, if within such 60 day period the
Savings Bank or the Savings Banks files or file a capital plan or plans with
the OTS, (ii) during the 90 day period following the initial submission of a
capital plan or plans to the OTS by either or both of the Savings Banks, as
the case may be, (or, if the OTS notifies the Savings Bank or Savings Banks in
writing that it needs a longer period of time to determine whether to approve
such capital plan or plans, such longer period as is so specified by the OTS),
unless prior to such date the OTS shall have notified the Savings Bank or
Savings Banks of its determination not to approve such capital plan or plans,
or (iii) during the period that the Savings Bank is, or the Savings Banks are,
as the case may be, operating in material compliance with a capital plan or
plans approved by the OTS;
(f) existence of one or more judgments against the Company or either
of the Savings Banks or any of their Subsidiaries, which remain undischarged
60 days after all rights to directly review such judgment, whether by appeal
or writ, have been exhausted or
39
have expired, in excess, either individually or in the aggregate, of 5% of the
Company's Consolidated Net Worth as of the quarter end preceding the end of
such 60-day period,; or
(g) a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or other similar official) shall take possession of
the Company or any Significant Subsidiary or any substantial part of the
property of the Company or any Significant Subsidiary without the consent of
the Company or such Significant Subsidiary, respectively, or a court having
jurisdiction in the premises shall enter a decree or order for relief in
respect of the Company or such Significant Subsidiary in an involuntary case
under any applicable bankruptcy, insolvency, receivership, conservatorship or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, trustee, custodian, conservator, sequestrator (or other
similar official) of the Company or the Significant Subsidiary or for any
substantial part of the property of the Company or the Significant Subsidiary,
or ordering the winding-up or liquidation of the affairs of the Company or the
Subsidiary, and such decree or order shall continue unstayed and in effect for
a period of 60 consecutive days, or the Company or the Significant Subsidiary
shall commence a voluntary case under any applicable bankruptcy, insolvency,
receivership, conservatorship or other similar law now or hereafter in effect,
or shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
conservator, sequestrator (or other similar official) of the Company or the
Significant Subsidiary or of any substantial part of the property of the
Company or the Significant Subsidiary, or shall make any general assignment
for the benefit of creditors, or shall take any corporate action in
furtherance of any of the foregoing.
Section 5.2 Acceleration of Maturity;
-------------------------
Rescission and Annulment.
------------------------
If an Event of Default (other than an Event of Default specified in
clause (g) of Section 5.1) occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Notes may declare the principal amount of all of the Notes to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount shall become immediately due and payable. If any Event of Default
specified in clause (g) of Section 5.1 occurs, the principal amount of all of
the Notes shall automatically become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration with respect to
Notes has been made and before a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter in this Article provided,
the Holders of a majority in principal amount of the Outstanding Notes, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
40
(A) all overdue interest on all Notes,
(B) the principal of (and premium, if any, on) any Notes which have
become due otherwise than by such declaration of acceleration and any interest
thereon at the rate or rates prescribed therefor in such Notes,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in such Notes,
and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable, expenses, disbursements and advances of the Trustee's agents and
counsel;
and
(2) all Events of Default with respect to Notes, other than the non-
payment of the principal of Notes which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Section 5.3 Collection of Indebtedness and Suits
------------------------------------
for Enforcement by Trustee.
--------------------------
The Company covenants that if
(1) default is made in the payment of any interest on any Note when
such interest becomes due and payable and such default continues for a period
of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Note at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Notes, the whole amount then due and payable on
such Notes for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Notes, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable expenses, disbursements and advances of the Trustee's
agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may (or, at
the direction of Holders of not less than 25% of the Outstanding Notes shall),
in addition to any other remedies available to it, institute a judicial
proceeding for the collection of the sums so due and unpaid and may prosecute
such proceeding to judgment or final decree, and may enforce the same against
the Company or any other obligor upon the Notes and collect the moneys
41
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 Notes, wherever
situated.
If an Event of Default with respect to Notes occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Notes by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
Section 5.4 Trustee May File Proofs of Claim.
--------------------------------
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Notes), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture
Act in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; 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 the reasonable expenses,
disbursements and advances of the Trustee's agents and counsel, and any other
amounts due the Trustee under Section 6.7.
No provision of this Indenture 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 Notes or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, the Trustee may vote on behalf of the Holders for the election of a
trustee in bankruptcy or similar official and may be a member of a creditors'
or other similar committee.
Section 5.5 Trustee May Enforce Claims Without
----------------------------------
Possession of Notes.
-------------------
All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Notes or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable expenses, disbursements and
advances of the Trustee's agents and counsel, be for the ratable benefit of
the Holders of the Notes in respect of which such judgment has been recovered.
42
Section 5.6 Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any
premium or interest, upon presentation of the Notes and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully
paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.7; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Notes 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 Notes for principal and any premium and interest, respectively.
Section 5.7 Limitation on Suits.
-------------------
No Holder of any Note shall have any right 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
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Notes;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Notes;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all of such Holders.
43
Section 5.8 Unconditional Right of Holders to
---------------------------------
Receive Principal, Premium and Interest.
---------------------------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 3.8) any
interest on such Note on the Stated Maturity or maturities expressed in such
Note (or, in the case of redemption, on the Redemption Date), and to institute
suit for the enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
Section 5.9 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 such case, subject to any
determination in such proceeding, the Company, 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.
Section 5.10 Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 3.7, 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 5.11 Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Notes to
exercise any right or remedy accruing upon any Default shall impair any such
right or remedy or constitute a waiver of any such Default or an acquiescence
therein. Every right and remedy given by this Article 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.
Section 5.12 Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding
Notes shall have the right to direct the time, method and place of conducting
any proceeding for any
44
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Notes, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability.
Section 5.13 Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Notes may on behalf of the Holders of all the Notes waive any past
default hereunder and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Note, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Note 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 any right consequent thereon.
Section 5.14 Undertaking for Costs.
---------------------
The parties to this Indenture agree, and each Holder of any Notes by
his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
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
principal amount of the Outstanding Notes, or to any suit instituted by any
Holder for the enforcement of the payment of the principal of (or premium, if
any) or interest on any Notes
45
on or after the Stated Maturity or maturities expressed in such Notes (or, in
the case of redemption, on or after the Redemption Date).
Section 5.15 Waiver of Usury, Stay or Extension Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE SIX
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as provided
by the Trust Indenture Act. Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section. If an Event of Default occurs (and is not cured),
the Trustee, in the exercise of its power, must use the degree of care of a
prudent man in the conduct of his own affairs. Subject to the requirement in
the foregoing sentence, the Trustee is under no obligation to exercise any of
its rights or powers under this Indenture at the request of any Holder, unless
such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense and then only to the
extent required by the terms of this Indenture.
Except during the continuance of an Event of Default, (i) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and (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.
The Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts. The
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders or a
majority in principal amount of the Outstanding Notes relating to the time,
46
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust power conferred upon the Trustee, under this
Indenture.
Section 6.2 Notice of Defaults.
------------------
If a Default occurs and is continuing and is known to a Responsible
Officer of the Trustee, the Trustee shall mail to each Holder notice of the
Default as to and to the extent provided in the Trust Indenture Act. Except in
the case of a Default in the payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee determines that withholding notice
is in the interest of the Holders.
Section 6.3 Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or
47
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligent action, negligent omission or its
willful misconduct; and
(i) the Trustee shall not be charged with knowledge of any Event of
Default under Section 5 (other than an Event of Default under Section 5.1(a)
or (b) if the Trustee is also the Paying Agent with respect to the Notes)
hereof unless either (1) a Responsible Officer of the Trustee shall have
actual knowledge thereof or (2) the Trustee shall have received notice thereof
in accordance with Section 1.5 hereof from the Company or a Holder.
Section 6.4 Not Responsible for Recitals or Issuance of Notes.
-------------------------------------------------
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee or any Authenticating Agent assumes no responsibility
for their correctness. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Notes. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by
the Company of Notes or the proceeds thereof.
Section 6.5 May Hold Notes.
--------------
The Trustee, any Authenticating Agent, any Paying Agent, any Note
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Notes and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent, Note
Registrar or such other agent.
Section 6.6 Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except
as otherwise agreed with the Company.
48
Section 6.7 Compensation and Reimbursement.
------------------------------
The Company agrees:
(1) to pay to the Trustee reasonable compensation as from time to
time agreed with the Trustee for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder;
(4) to secure the Company's obligations under this Section, the
Trustee shall have a lien prior to the Notes upon all money or property held
or collected by the Trustee in its capacity as Trustee, except for such money
and property which is held in trust to pay principal (and premium, if any) or
interest on particular Notes;
(5) when the Trustee incurs any expenses or renders any services
after the occurrence of an Event of Default specified in Section 5.1(g), such
expenses and the compensation for such services are intended to constitute
expenses of administration under the Bankruptcy Code or any similar federal or
state law for the relief of debtors; and
(6) that the provisions of this Section 6.7 shall survive the
appointment of a successor trustee.
Section 6.8 Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate
such interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 6.9 Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least
49
annually, pursuant to law or to the requirements of its supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
Section 6.10 Resignation and Removal;
------------------------
Appointment of Successor.
------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the Notes by
giving written notice thereof to the Company. If the instrument of acceptance
by a successor Trustee required by Section 6.11 shall not have been delivered
to the Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Notes.
(c) The Trustee may be removed at any time with respect to the Notes
by Act of the Holders of a majority in principal amount of the Outstanding
Notes, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the Company or by any
such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Notes, or (ii) subject to Section 5.14, any Holder
who has been a bona fide Holder of a Note for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all
Notes and the appointment of a successor Trustee or Trustees.
50
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee
and shall comply with the applicable requirements of Section 6.11. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of
a majority in principal amount of the Outstanding Notes delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Trustee and to
that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the Holders
and accepted appointment in the manner required by Section 6.11, any Holder
who has been a bona fide Holder of a Note for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders of Notes in the manner provided in Section 1.6. Each notice shall
include the name of the successor Trustee and the address of its Corporate
Trust Office.
Section 6.11 Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee,
every such successor Trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument in writing
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument in writing transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) of this Section.
(c) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be eligible under this
Article.
51
Section 6.12 Merger, Conversion, Consolidation
---------------------------------
or Succession to Business.
-------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as
if such successor Trustee had itself authenticated such Notes.
Section 6.13 Preferential Collection of Claims
---------------------------------
Against Company.
---------------
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Notes), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
Section 6.14 Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents (which may
be an affiliate of the Company) with respect to the Notes which shall be
authorized to act on behalf of the Trustee to authenticate Notes issued upon
exchange, registration of transfer or partial redemption thereof (but not upon
original issuance or pursuant to Section 3.7), and Notes so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and
delivery of Notes by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and shall
at all times be a corporation organized and doing business under the laws of
the United States of America, any state thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
52
Section, such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Notes with respect to which such Authenticating Agent will serve, as their
names and addresses appear in the Note Register. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with
all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions
of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Notes may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
53
This is one of the Notes designated and referred to in the within-
mentioned Indenture.
BANKERS TRUST COMPANY
as Trustee
By
-------------------------------
As Authenticating Agent
By
-------------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 Company to Furnish Trustee Names
--------------------------------
and Addresses of Holders; Trustee to Furnish Note
-------------------------------------------------
Register.
--------
(a) The Company will furnish or cause to be furnished to the
Trustee:
(i) semi-annually, not later than five Business Days after each
Regular Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Notes as of such
Regular Record Date, and
(ii) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in
its capacity as Note Registrar.
(b) The Trustee shall furnish to the Company a copy of the list
maintained as the Note Register from time to time as requested by the Company
in writing.
54
Section 7.2 Preservation of Information;
----------------------------
Communications to Holders.
-------------------------
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 7.1 and the
names and addresses of Holders received by the Trustee in its capacity as Note
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Notes, and the
corresponding rights and privileges of the Trustee, shall be as provided by
the Trust Indenture Act.
(c) Every Holder of Notes, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.
Section 7.3 Reports by Trustee.
------------------
(a) The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided pursuant
thereto. To the extent that any such report is required by the Trust
Indenture Act with respect to any 12-month period, such report shall cover the
12-month period ending March 15 and shall be transmitted by the next
succeeding May 15.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each securities exchange
upon which any Notes are listed, with the SEC and with the Company. The
Company will notify the Trustee when any Notes are listed on any securities
exchange.
Section 7.4 Reports by Company.
------------------
The Company shall file with the SEC and shall furnish to the Trustee
and the Holders, within 15 days after it files them with the SEC, copies of
its annual report and the information, documents and other reports which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act. Notwithstanding that the Company may not be required to
remain subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall continue to file with the SEC and to provide
to the Trustee and the Holders the annual reports and the information,
documents and other reports which are specified in Section 13 or 15(d) of the
Exchange Act and applicable to a US corporation subject to such sections, such
information, documents and other reports to be filed and provided at the times
specified for the filing of such information, documents and
55
reports under such section. The Company also shall comply with the other
provisions of Section 314(a) of the Trust Indenture Act.
ARTICLE EIGHT
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.1 Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Notes;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes (provided, that such uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of
the Code);
(c) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power conferred upon the Company
hereunder and under the Notes;
(d) to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision herein
or in the Notes, or to make any other provisions with respect to matters or
questions arising under this Indenture or under the Notes that shall not be
inconsistent with the provisions of this Indenture; provided that, in each
case, such provisions shall not adversely affect the interests of the Holders;
(e) to evidence, and provide for the acceptance of, the appointment
of a successor Trustee hereunder;
(f) to add any additional Events of Default;
(g) to secure the Notes or add a Guarantor; or
(h) to comply with any requirement of the SEC or state securities
regulators in connection with the qualification of this Indenture under the
Trust Indenture Act or any registration or qualification of the Notes under
the Securities Act or state securities laws.
56
Section 8.2 Supplemental Indentures with Consent of Holders.
-----------------------------------------------
(a) Except as otherwise provided in Section 8.2(b), with the written
consent of the Holders of a majority in principal amount of the Outstanding
Notes, by Act of such Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating or waiving any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby,
(A) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount thereof,
premium, if any, or the rate of interest thereon,, or change the coin or
currency in which the principal of any Note or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement
of any such payment after the Stated Maturity;
(B) reduce the percentage in principal amount of the Outstanding
Notes the consent of whose Holders is required for any such amendment or
modification, or the consent of whose Holders is required for any waiver (of
compliance with the provisions of this Indenture or Defaults hereunder and
their consequences) provided for in this Indenture;
(C) modify any provision of Section 11.2 or the definitions used
therein if the effect of such modification or waiver is to decrease the amount
of any payment required to be made by the Company thereunder or extend the
maturity date of such payment;
(D) modify any of the provisions of this Section 8.2 or Section 5.13
relating to supplemental indentures requiring the consent of Holders or
relating to the waiver of past defaults or relating to the waiver of certain
covenants, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Note affected thereby;
(E) except as otherwise permitted under the provisions of Article
Ten, consent to the assignment or transfer by the Company of any of its rights
and obligations under this Indenture; or
(F) waive a default in payment with respect to the Notes (other than
a default in payment that is due solely because of the acceleration of the
Maturity of the Notes).
(b) It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act and such notice shall approve the
substance thereof.
57
Section 8.3 Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Eight or the modifications
thereby of the trusts created by this Indenture, the Trustee shall receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 8.4 Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby and entitled to the benefits
thereof.
Section 8.5 Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article Eight
shall conform to the requirements of the Trust Indenture Act as then in
effect.
Section 8.6 Reference in Notes to Supplemental Indentures.
---------------------------------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Eight may, and shall if
required by the Trustee, bear a notation in form acceptable to the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Notes so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Notes.
Section 8.7 Notice of Supplemental Indenture.
--------------------------------
After an supplemental indenture hereunder becomes effective, the
Company shall mail to Holders a notice briefly describing such supplemental
indenture; provided, that the failure to give such notice to all Holders, or
any defect therein, will not impair or affect the validity of the supplemental
indenture.
58
ARTICLE NINE
COVENANTS
Section 9.1 Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of the Holders that
it will duly and punctually pay the principal of (and premium, if any, on) and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
The Notes shall be included in the Same-Day Funds Settlement System
or equivalent system of The Depository Trust Company until maturity to the
extent such systems are available. Each Global Note will be paid in
accordance with the provisions of Section 4.2 hereof.
Section 9.2 Maintenance of Office or Agency.
-------------------------------
The Company will maintain in the Borough of Manhattan, The City of
New York, State of New York, an office or agency where Notes may be presented
or surrendered for payment (a "Place of Payment") and where Notes may be
surrendered for registration of transfer or exchange. Initially, the Company
hereby designates the Corporate Trust Office for all such purposes. The
Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations and
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Trustee as its agent to receive
all such presentations and surrenders.
The Company may also from time to time designate one or more other
offices or agencies where the Notes 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 of its obligation to maintain an office or agency in each
Place of Payment for Notes for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
Section 9.3 Money for Notes Payments to Be Held in Trust.
--------------------------------------------
If the Company shall at any time act as its own Paying Agent with
respect to the Notes, it will, on or before each due date of the principal of
or any premium or interest on any of the Notes, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal and any premium and interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure to act.
59
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, prior to each due date of the principal of or any premium or
interest on any Notes, deposit with a Paying Agent, in immediately available
funds, a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section that
such Paying Agent will:
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any such payment of
principal (and premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or any
premium or interest on any Note and remaining unclaimed for two years after
such principal, premium or interest has become due and payable shall be paid
to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of
60
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 9.4 Statement by Officers as to Default.
-----------------------------------
(a) The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate (one of the signers of which shall be the principal
executive officer, principal financial officer or principal accounting officer
of the Company), stating whether or not to the best knowledge of the signers
thereof the Company is, or was during the preceding year, in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be or shall have been in
default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Subsidiary gives notice or takes any other
action with respect to a claimed default (other than with respect to
Indebtedness in the principal amount of less than 5% of the Company's
Consolidated Net Worth at the quarter end preceding the giving of such notice
or taking of such action with respect to a claimed default), or if the Company
fails to comply with any of its Regulatory Capital Requirements, the Company
shall deliver to the Trustee by registered or certified mail, or by facsimile
transmission, confirmed by delivery of the original, an Officers' Certificate
specifying such event, notice or other action within five Business Days of its
occurrence.
Section 9.5 Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not 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 adequate reserves (in the good faith
judgment of the Board of Directors) have been made.
Section 9.6 Maintenance of Properties.
-------------------------
The Company will cause all properties owned by the Company or any
Restricted Subsidiary or used or held for use in the conduct of its business
or the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary
61
repairs, renewals, replacements, betterments and improvements thereof, all as
in the judgment of the Company may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this Section shall prevent the
Company or any Subsidiary from discontinuing the operation or maintenance of
any of such properties if such discontinuance is, in the judgment of its Board
of Directors, desirable in the conduct of its business or the business of the
Company or such Subsidiary and not disadvantageous in any material respect to
the Holders.
Section 9.7 Corporate Existence; Keeping of Books.
-------------------------------------
Subject to Article Ten, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the existence,
rights (charter and statutory) and franchises of the Company and its
Subsidiaries; provided, however, that the existence of any Subsidiary and any
such right or franchise of the Company or any Subsidiary may be terminated if
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries and that the loss thereof is not and is not reasonably likely to
be disadvantageous in any material respect to the Holders.
The Company shall keep, and cause each Subsidiary to keep, proper
books and records, in which full and correct entries shall be made of all
financial transactions and the assets, liabilities and business of the Company
and its Subsidiaries, in each case in accordance with GAAP.
Section 9.8 Insurance.
---------
The Company will at all times maintain and will cause each of its
Subsidiaries to maintain (either in the name of the Company or in such
Subsidiary's own name) with financially sound and reputable insurers,
insurance on all its properties in such amounts as management of the Company
reasonably determines is appropriate under the circumstances.
Section 9.9 Net Worth Maintenance.
---------------------
On the Issue Date, and at all times thereafter determined at the end
of each fiscal quarter, the Company shall maintain Consolidated Net Worth
equal to (i) $40 million plus (ii) the cumulative amount equal to twenty-five
percent (25%) of the Consolidated Net Income (but not loss), if any, of the
Company and its Subsidiaries for each fiscal quarter commencing with the
quarter ending March 31, 1997.
Section 9.10 Limitations on Indebtedness.
---------------------------
(a) The Company shall not incur, directly or indirectly, any
Indebtedness or issue any Disqualified Capital Stock; provided, however, that
the Company may incur Indebtedness or Disqualified Capital Stock if, on the
date of such incurrence and after giving
62
effect thereto, (i) no Default or Event of Default has occurred and is
continuing or would result therefrom and (ii) the Leverage Ratio does not
exceed 2.0 to 1.0.
(b) The Company will not create, incur, issue, assume, guarantee or
otherwise in any manner become directly or indirectly liable for or with
respect to, or otherwise permit to exist, any Junior Indebtedness (other than
Acquired Indebtedness) unless the Stated Maturity of principal (or any
required repurchase, redemption, defeasance or sinking fund payments) of such
Junior Indebtedness is after the final Stated Maturity of principal of the
Notes.
(c) The Savings Banks will not, and will not permit any of their
Subsidiaries to, create or incur any Indebtedness or issue any Preferred Stock
that in either case would qualify as regulatory capital for the Savings Banks
under 12 C.F.R. Part 567 or any successor regulation, except to the Company or
its Subsidiaries or to the extent that after giving effect to the creation or
incurrence of such Indebtedness or the issuance of such Preferred Stock the
total of the Savings Banks' aggregate Indebtedness and Preferred Stock that
qualifies as capital under 12 C.F.R. Part 567 does not exceed 65% of the
Savings Banks' aggregate tangible common equity.
(d) The Company will not permit any Subsidiary to, directly or
indirectly, incur any Indebtedness or issue any Disqualified Capital Stock.
(e) The foregoing provisions shall not apply to:
(1) Permitted Acquisition Indebtedness of the Company and its
Subsidiaries;
(2) Permitted Repurchase Facilities of the Company and its
Subsidiaries;
(3) Guarantees by the Company of (1) and (2);
(4) Intercompany Indebtedness between the Company and any of its
Subsidiaries;
(5) Incurrence by the Company of its obligations under the Notes;
(6) Non-Recourse Indebtedness of the Company and its Subsidiaries;
(7) Securities issued in a securitization by a Securitization Entity
formed by or on behalf of the Company or its Subsidiaries, regardless of
whether such securities are treated as indebtedness for tax purposes,
provided that neither the Company nor any Subsidiary (other than the
Securitization Entity formed solely for the purpose of such
securitization) is directly or indirectly liable as a guarantor or
63
otherwise (excluding the provision of Credit Support) for such securities
or obligations of the Securitization Entity;
(8) Deposit liabilities of any insured depository Subsidiary;
(9) Unsecured Indebtedness of the Savings Banks having an initial
term to maturity in excess of one year, provided, however, that such
Indebtedness shall be considered to be Indebtedness of the Company for the
purpose of the Leverage Ratio;
(10) Unsecured working capital loans of Subsidiaries, not to exceed
$5.0 million in the aggregate, provided, however, that such Indebtedness
shall be considered to be Indebtedness of the Company for the purpose of
the Leverage Ratio;
(11) Acquired Indebtedness of Subsidiaries, provided, however, that
such Acquired Indebtedness shall be considered to be Indebtedness of the
Company for the purpose of the Leverage Ratio;
(12) Indebtedness secured by Permitted Liens; or
(13) Hedging Obligations directly related to: (i) Indebtedness
permitted to be incurred by the Company or its Subsidiaries pursuant to
this Indenture; (ii) loans held by the Company or its Subsidiaries pending
sale; or (iii) loans with respect to which the Company or any Subsidiary
has an outstanding purchase offer or commitment, financing commitment or
security interest.
(f) For purposes of determining compliance with the foregoing
covenant: (i) in the event that an item of Indebtedness meets the criteria of
more than one of the types of Indebtedness described above, the Company, in
good faith, will classify such item of Indebtedness and be required to include
the amount and type of such Indebtedness in one of the above clauses; and (ii)
an item of Indebtedness may be divided and classified in more than one of the
types of Indebtedness described above.
Section 9.11 Liquidity Maintenance.
---------------------
The Company shall, at all times when the Notes are not rated in an
investment grade category by one or more nationally recognized statistical
rating organizations, maintain Liquid Assets with a value equal to at least
100% of the required interest payments due on the Notes on the next two
succeeding semi-annual Interest Payment Dates. Liquid Assets of a Subsidiary
(other than the Savings Banks or other depository institution Subsidiary) may
be included in such calculation only to the extent that such Liquid Assets may
at such time be distributed to the Company without restriction or notice to
any Person. Such Liquid Assets shall not be the subject of any pledge, Lien,
encumbrance or charge of any kind and shall not be used as collateral or
security for Indebtedness for borrowed money or otherwise of the
64
Company or its Subsidiaries nor may such Liquid Assets be used as reserves for
any self-insurance maintained by the Company.
Section 9.12 Limitations on Restricted Payments.
----------------------------------
The Company will not, and will not permit any Subsidiary to,
directly or indirectly, make any Restricted Payment if, at the time of such
Restricted Payment or after giving effect thereto,
(a) a Default or Event of Default shall have occurred and be
continuing; or
(b) either Savings Bank would fail to meet any of the Regulatory
Capital Requirements; or
(c) the Company would fail to maintain sufficient Liquid Assets to
comply with the terms of the covenant set forth in Section 9.11 hereof; or
(d) the aggregate amount of all Restricted Payments (the amount of
such payments, if other than in cash, having been determined in good faith by
the relevant Board of Directors, whose determination shall be conclusive and
evidenced by a Board Resolution) declared and made after the Issue Date would
exceed the sum of
(i) 25% of the aggregate Consolidated Net Income (or, if
such Consolidated Net Income is a deficit, 100% of such deficit) of the
Company accrued on a cumulative basis during the period beginning on the
first day of the fiscal quarter during which the Issue Date occurred and
ending on the last day of the Company's last fiscal quarter ending prior
to the date of such proposed Restricted Payment; plus
(ii) the aggregate Net Cash Proceeds received by the Company
as capital contributions (other than from a Subsidiary) after the Issue Date;
plus
(iii) the aggregate Net Cash Proceeds and the Fair Market
Value of property not constituting Net Cash Proceeds received by the Company
from the issuance or sale (other than to a Subsidiary) of Qualified Capital
Stock after the issue date of the Notes; plus .
(iv) 100% of the amount of any Indebtedness of the Company or
a Subsidiary that is issued after the issue date of the Notes that is
thereafter converted into or exchanged for Qualified Capital Stock of the
Company; or
(e) the Unsecured Debt Coverage Ratio for the Company for the most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date of such Restricted
Payment is less than 2.00 to 1.00, determined after giving effect to such
Restricted Payment; provided, however, that the foregoing provisions will not
prevent (x) the payment of a dividend within 60 days after the date of its
declaration if at the date of declaration such payment was permitted by the
65
foregoing provisions, or (y) any Permitted Payment, or (z) tax sharing
payments by the Company or any of its Subsidiaries pursuant to the existing
Tax Allocation Agreement (or any subsequently adopted tax allocation agreement
the terms of which are not materially less favorable in the aggregate to the
Company than the terms of Tax Allocation Agreement).
Section 9.13 Limitations on Dividends and Other Payment
------------------------------------------
Restrictions Affecting Subsidiaries.
-----------------------------------
The Company will not, and will not permit any of its Subsidiaries
(other than a Securitization Entity) to, create, assume or otherwise cause or
suffer to exist or to become effective any consensual encumbrance or
restriction on the ability of any such Subsidiary to
(a) pay any dividends or make any other distribution on its Capital
Stock;
(b) make payments in respect of any Indebtedness owed to the Company
or any other Subsidiary; or
(c) make loans or advances to the Company or any Subsidiary or to
guarantee Indebtedness of the Company or any other Subsidiary;
other than, in the case of (a), (b) and (c),
(1) restrictions imposed by Applicable Law or regulation or by the
OTS or FDIC;
(2) restrictions existing under agreements in effect on the date of
this Indenture;
(3) consensual encumbrances or restrictions binding upon any Person
at the time such Person becomes a Subsidiary of the Company so long as
such encumbrances or restrictions are not created, incurred or assumed in
contemplation of such Person becoming a Subsidiary;
(4) restrictions with respect to a Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially
all the assets (which term may include the Capital Stock) of such
Subsidiary;
(5) restrictions on the transfer of assets which are subject to
Liens;
(6) restrictions existing under agreements evidencing Permitted
Acquisition Indebtedness or Permitted Repurchase Facilities of any
Subsidiary that is formed for the sole purpose of acquiring or holding a
portfolio of assets, if such Indebtedness (i) is made without recourse to,
and with no cross-collateralization (which shall not include Guarantees),
against the assets of, the Company or any other Subsidiary, and (ii) upon
complete or partial liquidation of which the Indebtedness must be
correspondingly repaid in whole or in part, as the case may be; and
66
(7) restrictions existing under any agreement that refinances or
replaces any of the agreements containing the restrictions in clauses (2),
(3) and (6); provided that the terms and conditions of any such
restrictions are not less favorable to the Holders than those under the
agreement evidencing or relating to the Indebtedness refinanced.
Section 9.14 Limitations on Transactions with Affiliates.
-------------------------------------------
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, enter into any transaction or series of related
transactions (including without limitation, the sale, purchase, exchange or
lease of assets, property or services) with any Affiliate of the Company
(except that the Company and any of its Subsidiaries may enter into any
transaction or series of related transactions with any Subsidiary of the
Company without limitation under this covenant) unless: (i) such transactions
or series of related transactions is on terms that are no less favorable to
the Company or such Subsidiary, as the case may be, than would be available in
a comparable transaction in an arm's length dealing with a Person that is not
such an Affiliate or, in the absence of such a comparable transaction, on
terms that the relevant Board of Directors determines in good faith would be
offered to a Person that is not an Affiliate; (ii) with respect to any
transaction or series of related transactions involving aggregate payments in
excess of $500,000, the Company delivers an Officers' Certificate to the
Trustee certifying that such transaction or series of transactions complies
with clause (i) above and has been approved by a majority of the Disinterested
Directors of the relevant Board of Directors of the Company or such
Subsidiary, as the case may be; and (iii) with respect to any transaction or
series of related transaction involving aggregate payments in excess of
$2,500,000, or in the event that no members of the Board of Directors are
Disinterested Directors with respect to any transaction or series of
transactions included in clause (ii), (x) in the case of a transaction
involving real property, the aggregate rental or sale price of such real
property shall be the fair market sale or rental value of such real property
as determined in a written opinion by a nationally recognized expert with
experience in appraising the terms and conditions of the type of transaction
or series of transactions for which approval is required and (y) in all other
cases, the Company delivers to the Trustee a written opinion of a nationally
recognized expert with experience in appraising the terms and conditions of
the type of transaction or series of transactions for which approval is
required to the effect that the transaction or series of transactions are fair
to the Company or such Subsidiary from a financial point of view. The
limitations set forth in this paragraph will not apply to (i) transactions
entered into pursuant to any agreement already in effect on the Issue Date and
any renewals or extensions thereof not involving modifications materially
adverse to the Company or any Subsidiary, (ii) normal banking relationships
with an Affiliate on an arms' length basis, (iii) any employment agreement,
stock option, employee benefit, indemnification, compensation, business
expense reimbursement or other employment-related agreement, arrangement or
plan entered into by the Company or any of its Subsidiaries which agreement,
arrangement or plan was adopted by the Board of Directors of the Company or
such Subsidiary (including a majority of the Disinterested Directors), as the
case may be, (iv) residential mortgage, credit card and other consumer loans
to an Affiliate who is an officer,
67
director or employee of the Company or any of its Subsidiaries and which
comply with the applicable provisions of 12 U.S.C. Section 1468(b) and any
rules and regulations of the OTS thereunder, (v) any Restricted Payment or
Permitted Payment, (vi) any transaction or series of transactions in which the
total amount involved does not exceed $125,000, (vii) purchases on or before
March 31, 1997 of loan portfolios acquired by an Affiliate after July 31, 1996
where the purchase price does not exceed the lower of two current independent
bids for the loan portfolios or (viii) services rendered and obligations
incurred by the Company or any of its Subsidiaries pursuant to existing
agreements or agreements between the Company and/or any of its Subsidiaries
and Wilshire Credit Corporation, a Nevada corporation ("WCC"), and/or
Affiliates of WCC entered into on the Issue Date.
Section 9.15 Limitations on Liens and Guarantees.
-----------------------------------
The Company will not create, assume, incur or suffer to exist any
Lien (other than a Permitted Lien) upon any of the Company's assets (including
the Capital Stock of any Subsidiary) as security for Indebtedness, without
effectively providing that the Notes will be equally and ratably secured with
(or prior to) such Indebtedness.
In addition, the Company will not permit any Subsidiary of the
Company, directly or indirectly, to guarantee or assume, or subject any of its
assets to a Lien (other than a Permitted Lien) to secure, any Pari Passu
Indebtedness or Junior Indebtedness unless (i) such Subsidiary simultaneously
executes and delivers a supplemental indenture to this Indenture providing for
a guarantee of, or pledge of assets to secure, the Notes by such Subsidiary on
terms at least as favorable to the Holders of the Notes as such guarantee or
security interest in such assets is to the holders of such Pari Passu
Indebtedness or Junior Indebtedness, except that in the event of a guarantee
or security interest in such assets with respect to (x) Pari Passu
Indebtedness, the guarantee or security interest in such assets under the
supplemental indenture shall be made pari passu to the guarantee or security
interest in such assets with respect to such Pari Passu Indebtedness or (y)
Junior Indebtedness, any such guarantee or security interest in such assets
with respect to such Junior Indebtedness shall be subordinated to such
Subsidiary's guarantee or security interest in such assets with respect to the
Notes to the same extent as such Junior Indebtedness is subordinated to the
Notes and (ii) such Subsidiary waives and will not in any manner whatsoever
claim, or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Company or any other
Subsidiary of the Company as a result of any payment by such Subsidiary under
its guarantees.
Section 9.16 Offer to Purchase upon a Change of Control Event.
------------------------------------------------
(a) Upon the occurrence of a Change of Control Event, the Company
will offer to repurchase (the "Change of Control Purchase Offer") all Notes
from the Holders, and each Holder will have the right to require that the
Company repurchase such Holder's Notes, at a purchase price in cash equal to
101% of the principal amount thereof (the "Change of Control Purchase Price")
plus accrued and unpaid interest, if any, to the Change of Control
68
Purchase Date (subject to the right of Holders on the relevant Regular Record
Date to receive interest due on an Interest Payment Date occurring prior to
such Change of Control Purchase Date), in accordance with the provisions of
this Section 9.16.
(b) Within 30 days following any Change of Control Event, the
Company shall mail a notice to each Holder with a copy to the Trustee (a
"Change of Control Purchase Notice") stating:
(i) that a Change of Control Event has occurred and that
such Holder has the right to require the Company to purchase such Holder's
Notes at a Change of Control Purchase Price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the
Change of Control Purchase Date (subject to the right of Holders on the
relevant Regular Record Date to receive interest on an Interest Payment
Date occurring prior to the Change of Control Purchase Date);
(ii) the circumstances and relevant facts regarding such
Change of Control Event (including, in the case of any merger,
consolidation or sale of all or substantially all assets, information with
respect to pro forma results of operations, cash flow and capitalization
after giving effect to such Change of Control Event);
(iii) the Change of Control Purchase Date (which shall be no
earlier than 30 days nor later than 60 days from the date such Change of
Control Purchase Notice is mailed);
(iv) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Change of Control
Purchase Offer shall cease to accrue interest after the Change of Control
Purchase Date;
(v) that Holders electing to have a Note purchased pursuant
to any Change of Control Purchase Offer shall be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note 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 Business Days before
the Change of Control Purchase Date; and
(vi) 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 last Business Day prior to the Change
of Control Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Note (and identification number) the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased.
(c) Holders electing to have a Note purchased will be required to
surrender the Note, with the form entitled "Option of Holder to Elect
Purchase" duly completed, to the
69
Company at the address specified in the notice at least three Business Days
prior to the Change of Control Purchase Date. Holders will be entitled to
withdraw their election if the Trustee or the Company receives not later than
one Business Day prior to the Change of Control Purchase Date, a telegram,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note (and identification number) which was delivered
by the Holder for purchase by the Company and a statement that such Holder is
withdrawing his election to have such Note purchased.
(d) On the Change of Control Purchase Date, all Notes purchased by
the Company in a Change of Control Purchase Offer shall be delivered to the
Trustee for cancellation, and the Company shall pay the Change of Control
Purchase Price plus accrued and unpaid interest, if any, to the Holders
entitled thereto.
(e) On or before the Change of Control Purchase Date, the Company
will deliver to the Trustee an Officers' Certificate stating that the Notes
purchased in the Change of Control Purchase Offer are accepted for payment by
the Company in accordance with the terms of this Section. The Company, the
Depositary or the Paying Agent, as the case may be, will promptly (but in any
case not later than five days after the Change of Control Purchase Date) pay
to each tendering Holder an amount equal to the Change of Control Purchase
Price of the Notes tendered by such Holder plus interest accrued thereon
(subject to the right of Holders on the relevant Regular Record Date to
receive interest due on the relevant Interest Payment Date). The Company will
publicly announce the results of the Change of Control Purchase Offer on the
Change of Control Purchase Date.
(f) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other applicable
securities laws or regulations in connection with the repurchase of Notes
pursuant to this Section 9.16. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
9.16, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this
Section 9.16 by virtue thereof.
Section 9.17 Payments for Consent.
--------------------
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration, whether
by way of interest, fee or otherwise, to any Holder as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is paid to all Holders that
provide such consent or so waive or agree to amend.
Section 9.18 Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 9.5 to 9.16, inclusive,
with respect to the Notes if before the time of compliance the Holders of a
majority in principal amount of the
70
Outstanding Notes shall, by act of such Holders, either waive such compliance
in such instance or generally waive compliance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision
or condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company and the duties of the
Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
ARTICLE TEN
MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
Section 10.1 Merger, Consolidation or Transfer of Assets of the
--------------------------------------------------
Company.
-------
The Company shall not consolidate with or merge with or into, or
sell, assign, convey, transfer, lease or otherwise dispose of, in one
transaction or a series of transactions, all or substantially all its assets
to, any Person, unless: (i) the resulting, surviving or transferee Person
(the "Successor Company") shall be a Person organized and existing under the
laws of the United States of America or any state thereof or the District of
Columbia and the Successor Company (if not the Company) shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all of the Company's
obligations under the Notes and this Indenture; (ii) immediately after giving
effect to such transaction (and treating any Indebtedness that becomes an
obligation of the Successor Company or any Subsidiary as a result of such
transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default or Event of Default
shall have occurred and be continuing; (iii) immediately after giving effect
to such transaction, the Successor Company would be able to incur an
additional $1.00 of Indebtedness without violating Section 9.10(a) hereof; and
(iv) the Company shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
transfer, sale, assignment, conveyance, lease or other disposition and such
supplemental indenture (if any) comply with this Indenture and all conditions
precedent provided for herein relating to such transaction have been complied
with.
Section 10.2 Successor Substituted.
---------------------
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any sale, assignment, conveyance, transfer, lease or
other disposition of the properties and assets of the Company substantially as
an entirety in accordance with Section 10.1, the Successor Company shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such Successor
Company herein, and in the event of any such sale, assignment, conveyance,
transfer or other disposition, the Company (which term shall for this purpose
mean the
71
Successor Company), except in the case of a lease, shall be discharged of all
obligations and covenants under this Indenture and the Notes and may be
dissolved and liquidated.
Section 10.3 Notes to Be Secured in Certain Events.
-------------------------------------
If, upon any such consolidation of the Company with or merger of the
Company into any other corporation, or upon any sale, assignment, conveyance,
transfer, lease or other disposition of the property of the Company
substantially as an entirety to any other Person, any property or assets of
the Company would thereupon become subject to any Lien to secure Pari Passu
Indebtedness or Junior Indebtedness, then unless such Lien could be created
pursuant to Section 9.15 without equally and ratably securing the Notes, the
Company, prior to or simultaneously with such consolidation, merger, sale,
assignment, conveyance, transfer, lease or other disposition, will as to such
property or assets, secure the Notes Outstanding (together with, if the
Company shall so determine, any other Indebtedness of the Company now existing
or hereinafter created which is not subordinate in right of payment to the
Notes) equally and ratably with the Pari Passu Indebtedness or prior to the
Junior Indebtedness which upon such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition is to become secured as to
such property or assets by such Lien.
ARTICLE ELEVEN
REDEMPTION OF NOTES
Section 11.1 Applicability of Article.
------------------------
Any redemption of Notes before their Stated Maturity shall be in
accordance with their terms and in accordance with this Article.
Section 11.2 Optional Redemption.
-------------------
The Notes will not be redeemable prior to ____________, 2001, except
as provided on the reverse of the Form of Note set forth in Section 2.3.
Section 11.3 Election to Redeem; Selection by Trustee of Notes
-------------------------------------------------
to Be Redeemed.
--------------
Any election to redeem Notes shall be evidenced by a Board
Resolution. In case of any redemption at the election of the Company of less
than all the Notes, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date
and of the principal amount of Notes to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select
the Notes to be redeemed pursuant to this Section 11.3.
72
If less than all the Notes are to be redeemed, the particular Notes
to be redeemed shall be selected not more than 60 days prior to the Redemption
Date by the Trustee, from the Outstanding Notes not previously called for
redemption, by such method as the Trustee in its sole discretion shall deem
fair and appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Notes or any
integral multiple thereof) of the principal amount of Notes of a denomination
larger than the minimum authorized denomination for Notes.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Notes redeemed or to be redeemed only in part, to the portion
of the principal amount of such Notes which has been or is to be redeemed.
Section 11.4 Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Notes to be redeemed, at his address appearing in the
Note Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and accrued interest, if any,
(3) if less than all the Outstanding Notes are to be
redeemed, the identification (and, in the case of partial redemption of
any Notes, the principal amounts) of the particular Notes to be redeemed,
(4) that on the Redemption Date the Redemption Price and
accrued interest, if any, will become due and payable upon each such Note
to be redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date, and
(5) the place or places where such Notes are to be
surrendered for payment of the Redemption Price and accrued interest, if
any.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request, by
the Trustee in the name and at the expense of the Company and shall be
irrevocable.
73
Section 11.5 Deposit of Redemption Price.
---------------------------
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 9.3) an amount of
money in immediately available funds sufficient to pay the Redemption Price
of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Notes which are to be redeemed on that date.
Section 11.6 Notes Payable on Redemption Date.
--------------------------------
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Notes shall cease to bear interest. Upon surrender of any such
Note for redemption in accordance with said notice, such Note shall be paid by
the Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that, installments of interest whose
stated maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Notes, or one or more Predecessor Notes, registered as such at
the close of business on the relevant Regular Record Dates according to their
terms and the provisions of Section 3.8.
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall subject
to Section 1.13 hereof, until paid, bear interest from the Redemption Date at
the rate prescribed therefor in the Note.
Section 11.7 Notes Redeemed in Part.
----------------------
Any Note which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Note without service charge, a new Note or Notes of like tenor, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Note so surrendered.
74
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
Section 12.1 Option to Effect Legal Defeasance or Covenant
---------------------------------------------
Defeasance.
----------
The Company may, at the option of its Board of Directors evidenced
by a Board Resolution, at any time, elect to have either Section 12.2 or 12.3
be applied to all Outstanding Notes upon compliance with the conditions set
forth below in this Article.
Section 12.2 Legal Defeasance and Discharge.
------------------------------
Upon the Company's exercise under Section 12.1 hereof the option
applicable to this Section 12.2, the Company shall, subject to the
satisfaction of the conditions set forth in Section 12.4, be deemed to have
been discharged from its obligations with respect to all Outstanding Notes on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall
be deemed to have paid and discharged the entire Indebtedness represented by
the Outstanding Notes, which shall thereafter be deemed to be "Outstanding"
only for the purposes of Section 12.5 and the other Sections of this Indenture
referred to in (a) and (b) below, and the Company shall be deemed to have
satisfied all its other obligations under the Notes and this Indenture (and
the Trustee, on written demand of and at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
provisions which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Outstanding Notes to receive solely
from the trust fund described in Section 12.4, and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest on such Notes as and when such payments are due, (b) the Company's
obligations with respect to such Notes under Sections 3.5, 3.6, 3.7, 9.2, 9.3
and 9.5, (c) the rights, powers, trusts, duties and immunities of the Trustee
and any Authenticating Agent hereunder and the Company's obligations in
connection therewith and (d) this Article. Subject to compliance with this
Article, the Company may exercise its option under this Section 12.2
notwithstanding the prior exercise of its option under Section 12.3.
Section 12.3 Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 12.1 of the option
applicable to this Section 12.3, the Company shall, subject to the
satisfaction of the conditions set forth in Section 12.4, be released from its
obligations under the covenants contained in Article Nine (except Sections
9.1, 9.2, 9.5 and 9.7) with respect to the Outstanding Notes on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes 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
75
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that,
with respect to the Outstanding Notes, the Company may omit to comply with and
shall have no 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
and such omission to comply shall not constitute a Default or an Event of
Default under Section 5.1, but, except as specified above, the remainder of
this Indenture and such Notes shall be unaffected thereby.
Section 12.4 Conditions to Legal or Covenant Defeasance.
------------------------------------------
The following shall be the conditions precedent to the effectiveness
of any Legal Defeasance or Covenant Defeasance:
(a) the Company shall (i) irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, unencumbered cash in United States
dollars, unencumbered U.S. Government Obligations, or a combination thereof,
in such amounts as will be sufficient, in a written opinion of a nationally
recognized firm of independent public accountants delivered to the Trustee, to
pay the principal of, premium, if any, and interest on the outstanding Notes
on the stated date for payment thereof or on the applicable Redemption Date,
as the case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular Redemption Date, and (ii) irrevocably
instruct the Trustee to apply such cash and U.S. Government Obligations to
such payments with respect to the Notes;
(b) in the case of an election under Section 12.2, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
confirming that (A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders of the Outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
Legal Defeasance had not occurred;
(c) in the case of an election under Section 12.3 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States confirming that the Holders of the Outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance has not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing (i) on the date of such deposit (other than a Default or Event of
Default resulting from the Incurrence of Indebtedness all or a portion of the
proceeds of which will be used to defease
76
the Notes pursuant to this Article concurrently with such Incurrence) and (ii)
insofar as Section 5.1(g) hereof is concerned, at any time during the period
ending on the 91st day after the date of deposit (such condition not being
satisfied until such 91st day) ;
(e) 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) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that on 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;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 12.5 Deposited Money and U.S. Government Obligations To
--------------------------------------------------
Be Held in Trust; Other Miscellaneous Provisions.
------------------------------------------------
Subject to Section 12.6, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee pursuant to
Section 12.4 in respect of the Outstanding Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(excluding the Company acting as Paying Agent) as the Trustee may determine,
to the Holders of such Notes 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 cash or U.S. Government
Obligations deposited pursuant to Section 12.4 or the principal and interest
received in respect thereof.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or U.S. Government Obligations held by it as provided
in Section 12.4 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under
77
Section 12.4), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 12.6 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 12.2 or 12.3, as the case
may be, by reason of any order or judgment of any court or Governmental
Authority enjoining, restraining or otherwise prohibiting such application,
then the Company's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
12.2 or 12.3 until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 12.2 or 12.3, as the case may
be; provided, however, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.1. No Recourse Against Others.
--------------------------
A director, officer, employee, stockholder or incorporator, as such,
of the Company shall not have any liability for any obligations of the Company
under the Notes 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
Note waives and releases all such liability.
Section 13.2. Execution in Counterparts.
-------------------------
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
* * * * *
78
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
WILSHIRE FINANCIAL SERVICES GROUP INC.
By:
--------------------------------
Name:
Title:
Attest:
By:
-----------------------------
Title:
BANKERS TRUST COMPANY, as Trustee
By:
--------------------------------
Name:
Title:
Attest:
By:
-----------------------------
Title:
79
STATE OF [____________] )
) ss.:
COUNTY OF [________] )
On the _____ day of _______________, 1996 before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he is __________________________ of Wilshire Financial
Services Group Inc., one of the corporations described in and which executed
the foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that he signed
his name thereto by like authority.
-----------------------------
Notary Public
80
STATE OF [____________] )
) ss.:
COUNTY OF [________] )
On the ____ day of ____________ 1996 before me personally came
__________________ to me known, who, being by me duly sworn, did depose and
say that he is ______________________________ of Bankers Trust Company, one of
the corporations described in and which executed the foregoing instrument,
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
-------------------------------
Notary Public
81
