Mercury Finance Company
and
Norwest Bank Minnesota, National Association,
Trustee
First Supplemental Trust Indenture
Dated as of __________, 1999
Supplementing that certain
INDENTURE
Dated as of __________, 1999
Authorizing the Issuance and Delivery of
Senior Secured Securities
consisting of $___________* aggregate principal amount of
10% Senior Secured Notes Due 2001, Series A
* In the execution version, the appropriate amount determined in accordance
with __________________________ of the Plan will be inserted here, in the first
paragraph on page 2 and in Section 1.1(b) hereof.
TABLE OF CONTENTS
Page
RECITALS......................................................................1
[Form of Face of Security]....................................................2
[Form of Reverse of Security].................................................4
ARTICLE I. ISSUANCE OF SENIOR SECURED NOTES..................................7
Section 1.1. Issuance of Senior Secured Notes; Principal Amount;
Maturity................................................7
Section 1.2. Interest on the Senior Secured Notes; Payment of
Interest................................................8
ARTICLE II. CERTAIN DEFINITIONS..............................................8
Section 2.1. Certain Definitions.....................................8
ARTICLE III. CERTAIN COVENANTS..............................................13
Section 3.1. Indebtedness...........................................13
Section 3.2. Liens..................................................13
Section 3.3. Restricted Payments....................................13
Section 3.4. Change of Control......................................14
Section 3.5. Payment Restrictions Affecting Subsidiaries............15
Section 3.6. Issuance of Subsidiary Preferred Stock.................15
Section 3.7. Asset Sales............................................16
Section 3.8. Transactions with Affiliates...........................16
Section 3.9. Change in Business.....................................16
ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT....................................16
ARTICLE V. REDEMPTION OF SECURITIES.........................................17
Section 5.1. Right of Redemption....................................17
Section 5.2. Repurchase.............................................17
ARTICLE VI. MISCELLANEOUS...................................................17
Section 6.1. Reference to and Effect on the Indenture...............17
Section 6.2. Waiver of Certain Covenants............................17
Section 6.3. Supplemental Indenture May be Executed in Counterparts.17
FIRST SUPPLEMENTAL INDENTURE, dated as of __________, 1999 (this "First
Supplemental Indenture"), between Mercury Finance Company, a corporation duly
organized and existing under the laws of the State of Delaware (the "Company"),
and Norwest Bank Minnesota, National Association, a U.S. national banking
association, as Trustee (the "Trustee"), supplementing that certain Indenture,
dated as of __________, 1999, between the Company and the Trustee (the
"Indenture").
RECITALS
A. The Company has duly authorized the execution and delivery of the
Indenture to provide for the issuance from time to time of its senior secured
notes (the "Securities") to be issued in one or more series as provided for in
the Indenture.
B. The Indenture provides that the Securities of each series shall be
in such form as may be established by or pursuant to a Board Resolution or in
one or more indentures supplemental thereto, 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
Securities, as evidenced by their execution thereof.
C. The Company and the Trustee have agreed that the Company shall issue
and deliver, and the Trustee shall authenticate, Securities denominated "10%
Senior Secured Notes Due 2001, Series A" (the "Senior Secured Notes") pursuant
to the terms of this First Supplemental Indenture and substantially in the form
set forth below, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the Indenture
and this First Supplemental Indenture, and with 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 Senior
Secured Notes, as evidenced by their execution thereof.
[Form of Face of Security]
MERCURY FINANCE COMPANY
10% SENIOR SECURED NOTE DUE 2001, SERIES A
No. R-__________ $
CUSIP No.
MERCURY FINANCE COMPANY, a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter called the "Company," which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to [_______________], or registered
assigns, the principal sum of $__________ on [the second anniversary of the
Effective Date], subject to earlier redemption or repurchase as described below,
and to pay interest thereon from _______________, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, at
the rate of 10% per annum, payable quarterly on ___________ of each year,
commencing on __________, 199_, until the principal hereof is paid or made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date shall, as provided in said Indenture,
be computed on the basis of a 360-day year consisting of twelve 30-day months
and paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be ________________________ (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 shall 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 Security (or one or more Predecessor
Securities) 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 Securities of this series not less than 10
calendar 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 Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture.
Payment of the principal of and any such interest on this Security
shall be made at the office or agency of the Company maintained for such purpose
in New York, New York, 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; provided, however, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled thereto as
such address appears in the Security Register.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH ON THE
REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
THOUGH FULLY SET FORTH IN THIS PLACE.
This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication herein has been signed manually by the
Trustee under said Indenture.
IN WITNESS WHEREOF, this instrument has been duly executed in
accordance with the Indenture.
MERCURY FINANCE COMPANY
By:
Name:
Attest: Title:
By:
[Form of Reverse of Security]
MERCURY FINANCE COMPANY
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities") issued and to be issued in one or more
series under an Indenture, dated as of __________, 1999 (herein called the
"Indenture"), between the Company and Norwest Bank Minnesota, National
Association, 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 Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof, limited in aggregate principal
amount to $___________.
On the terms and subject to the conditions set forth in the Company
Security Documents, the payment and performance of the obligations of the
Company under the Securities issued under this Indenture, including this
Security, are secured by the Company Collateral and have the benefit of the
Subsidiaries Guaranty Agreement executed by each Subsidiary of the Company.
Payment and performance of the obligations of the Subsidiaries under the
Subsidiaries Guaranty Agreement are secured by the Subsidiaries Collateral. The
Company Collateral and the Subsidiaries Collateral has been pledged to the
Trustee on the terms and subject to the conditions set forth in the Collateral
Security Documents for the equal and ratable benefit of the Holders of
Securities issued under the Indenture. As set forth in the Indenture, the
Company Pledge Agreement, the Company Security Agreement, the Subsidiaries
Guaranty Agreement and the Subsidiaries Security Agreement, to the extent the
Company or a Subsidiary of the Company enters into a Working Capital Facility,
the rights of any party lending money to the Company or a Subsidiary of the
Company pursuant to such Working Capital Facility with respect to certain assets
comprising a portion of the Company Collateral or the Subsidiaries Collateral
will be senior to those rights of the Holders of Securities issued under the
Indenture.
No sinking fund is provided for the Securities. The Securities are
subject to redemption at the option of the Company, at any time and from time to
time, in whole or in part, in increments of not less than $5.0 million, upon not
more than 60 nor less than 30 days' notice to the Holders prior to the
Redemption Date, at the principal amount thereof, plus accrued and unpaid
interest thereon to the date of redemption.
If less than all of the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed will be selected by such method as
the Trustee may deem fair and appropriate. In the event of the redemption of
this Security in part only, a new Security or Securities of this series and of
like tenor for the portion hereof not so redeemed shall be issued in the name of
the Holder hereof upon the cancellation hereof.
Upon the occurrence of a Change of Control, the Company is required to
repurchase the Securities, at the option of the Holders thereof, at a purchase
price equal to 101% of the outstanding principal amount thereof, plus accrued
and unpaid interest thereon to the Repurchase Date, but interest installments
with a Stated Maturity on or prior to such Repurchase Date shall be payable to
the Holders of such Securities 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 the event of the repurchase of this Security in part only, a
new Security or Securities of this series of like tenor for the portion hereof
not so repurchased shall be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series 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 Securities of each series 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 Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder unless (a) such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities of this series, (b) the Holders of not less than 25% in
principal amount of the Securities of this series at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity,
(c) the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request and (d) the Trustee shall have failed
to institute such proceeding for 60 calendar days after receipt of such notice,
request, and offer of indemnity. However, the foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or interest hereon on or after the respective due
dates therefor expressed herein.
No reference herein to the Indenture and no provision of this Security
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 or
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and integral multiples thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and interest
on this Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
shall be issued to the designated transferee or transferees.
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 Security 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 Security is registered as the owner hereof for all
purposes, whether or not this Security shall 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 Security that are defined in the Indenture shall
have the respective meanings assigned to them in the Indenture. This Security,
the Indenture and the Collateral Security Documents shall be construed in
accordance with the laws of the State of New York without giving effect to
principles of conflict of laws of such State.
D. The Trustee's certificate of authentication shall be in
substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: Norwest Bank Minnesota, National Association,
as Trustee
By:
Authorized Signatory
E. All acts and things necessary to make the Senior Secured Notes, when
the Senior Secured Notes have been executed by the Company and authenticated by
the Trustee and delivered as provided in the Indenture and this First
Supplemental Indenture, the valid, binding and legal obligations of the Company
and to constitute these presents a valid indenture and agreement according to
its terms, have been done and performed, and the execution and delivery by the
Company of the Indenture and this First Supplemental Indenture and the issue
hereunder of the Senior Secured Notes have in all respects been duly authorized;
and the Company, in the exercise of the legal right and power in it vested, has
executed and delivered the Indenture and is executing and delivering this First
Supplemental Indenture and proposes to make, execute, issue and deliver the
Senior Secured Notes.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
In order to declare the terms and conditions upon which the Senior
Secured Notes are authenticated, issued, and delivered, and in consideration of
the premises and of the purchase and acceptance of the Senior Secured Notes by
the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of the respective Holders from time to time of the Senior Secured Notes,
as follows:
ARTICLE I. ISSUANCE OF SENIOR SECURED NOTES.
Section 1.1. Issuance of Senior Secured Notes; Principal Amount; Maturity.
(a) On __________, 1999, the Company shall issue and deliver to the
Trustee, and the Trustee shall authenticate, Senior Secured Notes substantially
in the form set forth above, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
the Indenture and this First Supplemental Indenture, and with 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 Senior Secured Notes, as evidenced by their execution thereof.
(b) The Senior Secured Notes shall be issued in the aggregate principal
amount of $_________ and shall mature on [the second anniversary of the
Effective Date].
Section 1.2. Interest on the Senior Secured Notes; Payment of Interest.
(a) The Senior Secured Notes shall bear interest at the rate of 10% per
annum from [_________________], or, if later, from the most recent Interest
Payment Date to which interest has been paid or duly provided for.
(b) The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date shall, as provided in the Indenture, be paid to the
Person in whose name a Senior Secured Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the ______________ (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 shall forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name the Senior Secured Note (or one or more Predecessor
Securities) 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 the Senior Secured Notes not less than 10
calendar 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 Senior Secured Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture.
(c) Payment of the principal of and any such interest on the Senior
Secured Notes shall be made at the office or agency of the Company maintained
for such purpose in New York, New York, 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; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address appears in the Security Register.
ARTICLE II. CERTAIN DEFINITIONS.
Section 2.1. Certain Definitions.
The terms defined in this Section 2.1 (except as herein otherwise
expressly provided or unless the context of this First Supplemental Indenture
otherwise requires) for all purposes of this First Supplemental Indenture and of
any indenture supplemental hereto have the respective meanings specified in this
Section 2.1. All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP. All other terms used in this First
Supplemental Indenture that are defined in the Indenture or the Trust Indenture
Act, either directly or by reference therein (except as herein otherwise
expressly provided or unless the context of this First Supplemental Indenture
otherwise requires), have the respective meanings assigned to such terms in the
Indenture or the Trust Indenture Act, as the case may be, as in force at the
date of this First Supplemental Indenture as originally executed.
"Affiliate" has the meaning ascribed thereto in Section 3.8.
"Asset Sale" means any sale or other disposition, or series of sales or
other dispositions (including, without limitation, by merger or consolidation
and whether by operation of law or otherwise) of assets by the Company or its
Subsidiaries to any Person except (i) sales of used, worn out or surplus
equipment in the ordinary course of business and (ii) sales, contributions or
transfers of Receivables pursuant to any Working Capital Facility. The
definition of Asset Sale shall include the receipt of funds from any federal or
state income tax refunds.
"Cash Equivalent" means: (a) obligations issued or unconditionally
guaranteed as to principal and interest by the United States of America or by
any agency or authority controlled or supervised by and acting as an
instrumentality of the United States of America which are backed by the full
faith and credit of the United States of America; (b) obligations (including,
but not limited to, demand or time deposits, bankers' acceptances and
certificates of deposit) issued by a depository institution or trust company or
a wholly owned subsidiary or branch office of any depository institution or
trust company, provided that (i) such depository institution or trust company
has, at the time of the Company's or any of its Subsidiaries' investment therein
or contractual commitment providing for such investment, capital, surplus or
undivided profits (as of the date of such institution's most recently published
financial statements) in excess of $100 million and (ii) the commercial paper of
such depository institution or trust company, at the time of the Company's or
any of its Subsidiaries' investment therein or contractual commitment providing
for such investment, is rated at least A1 by S&P or P-1 by Moody's; (c) debt
obligations (including, but not limited to, commercial paper and medium-term
notes) issued or unconditionally guaranteed as to principal and interest by any
corporation, state or municipal government or agency or instrumentality thereof
or foreign sovereignty, if the commercial paper of such corporation, state or
municipal government or foreign sovereignty, at the time of the Company's or any
of its Subsidiaries' investment therein or contractual commitment providing for
such investment, is rated at least A1 by S&P or P-1 by Moody's; (d) repurchase
obligations with a term of not more than seven calendar days for underlying
securities of the type described above entered into with a depository
institution or trust company meeting the qualifications described in clause (b)
above; and (e) Investments in money market or mutual funds that invest
predominantly in Cash Equivalents of the type described in clauses (a), (b), (c)
and (d) above; provided, however, that, in the case of clause (a) above, each
such investment has a maturity of one year or less from the date of acquisition
thereof, and, in the case of clauses (b) and (c) above, each such investment has
a maturity of 270 days or less from the date of acquisition thereof.
"Change of Control" means the occurrence of the following event: any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the voting stock of the Company.
"Effective Date" means ______________, 1999.
"Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition by
such Person of any capital stock, bonds, notes, debentures or other securities
or evidences of Indebtedness issued by any other Person. The amount of any
Investment shall be the original cost thereof, plus the cost of all additions
thereto and minus the amount of all reductions therein in the nature of
repayment of principal or return of capital, without any adjustments for
increases or decreases in value, write-ups, write-downs or write-offs with
respect to such Investment.
"Leverage Ratio" means, at any date of determination, the ratio of the
sum of the Indebtedness and the net worth of the Company and its Subsidiaries to
the Indebtedness of the Company and its Subsidiaries, in each case calculated on
a consolidated basis in accordance with GAAP.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest, or preference, priority, or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including without limitation
any conditional sale, deferred purchase price or other title retention
agreement, the interest of a lessor under a Capital Lease Obligation, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing, under the Uniform Commercial Code or comparable law
of any jurisdiction, of any financing statement naming the owner of the asset to
which such financing statement relates as debtor.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor to
the rating agency business thereof.
"Permitted Indebtedness" means, without duplication: (a) the Series B
Senior Secured Notes and the Senior Subordinated Notes; (b) Indebtedness under
one or more Working Capital Facilities; (c) Indebtedness between or among the
Company and its wholly owned Subsidiaries; (d) to the extent deemed to be
"Indebtedness," obligations under swap agreements, cap agreements, collar
agreements, insurance arrangements, or any similar agreement or arrangement, in
each case designed to provide a bona fide hedge against fluctuations in interest
rates, the cost of currency, or the cost of goods (other than inventory); (e)
other Indebtedness of the Company or its Subsidiaries in outstanding amounts not
to exceed $5 million in the aggregate at any particular time; (f) liabilities
(other than for or in connection with borrowed money) incurred in the operation
of the Finance Business in the ordinary course thereof and not more than six
months overdue, unless contested in good faith by appropriate proceedings; (g)
Indebtedness evidenced by letters of credit that are issued in the ordinary
course of the business of the Company and its Subsidiaries to secure workers'
compensation and other insurance coverages; (h) deferred taxes and other
deferred obligations incurred in the ordinary course of business and not
evidenced by notes, bonds, debentures or other evidences of indebtedness; and
(i) Indebtedness incurred in connection with any extension, renewal,
refinancing, replacement, or refunding (including successive extensions,
renewals, refinancings, replacements, or refundings), in whole or in part, of
any Indebtedness of the Company or its Subsidiaries; provided, however, that the
principal amount of the Indebtedness so incurred does not exceed the sum of the
principal amount of the Indebtedness so extended, renewed, refinanced, replaced,
or refunded, plus all interest accrued thereon and all related fees and
expenses.
"Permitted Investments" means, without duplication: (a) Cash
Equivalents; (b) Investments in another Person, if as a result of such
Investment (i) such other Person becomes a Subsidiary of the Company or (ii)
such other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all of its assets to, the Company or a Subsidiary
of the Company; (c) Investments in any Subsidiary of the Company or Investments
in the Company by a Subsidiary of the Company; (d) commissions and advances to
employees of the Company and its Subsidiaries in the ordinary course of
business; (e) Investments representing notes, securities, or other instruments
or obligations acquired in connection with the sale of assets; (f) Investments
represented by that portion of the proceeds from Asset Sales permitted under
Section 3.7 to the extent such Investments are non-cash proceeds; (g)
Investments representing capital stock or obligations issued to the Company or
any Subsidiary of the Company in settlement of claims against any other Person
by reason of a composition or readjustment of debt or a reorganization of any
debtor of the Company or such Subsidiary; and (h) other Investments, the
aggregate amount of which at any one time does not exceed $5 million.
"Permitted Liens" means, without duplication: (a) Liens arising under
the Collateral Security Documents; (b) Liens on new Receivables securing any
Working Capital Facility; (c) Liens incurred and pledges and deposits made in
the ordinary course of business in connection with liability insurance, workers'
compensation, unemployment insurance, old-age pensions, and other social
security benefits other than in respect of employee benefit plans subject to the
Employee Retirement Income Security Act of 1974, as amended; (d) Liens imposed
by law, such as carriers', warehousemen's, mechanics', materialmen's, and
vendor's Liens, incurred in the ordinary course of business and securing
obligations which are not yet due or which are being contested in good faith by
appropriate proceedings; (e) Liens securing the payment of taxes, assessments,
and governmental charges or levies, either (i) not delinquent or (ii) being
contested in good faith by appropriate legal or administrative proceedings and
as to which adequate reserves shall have been established on the books of the
relevant Person in conformity with GAAP; (f) zoning restrictions, easements,
rights of way, reciprocal easement agreements, operating agreements, covenants,
conditions, or restrictions on the use of any parcel of property that are
routinely granted in real estate transactions or do not interfere in any
material respect with the ordinary conduct of the business of the Company and
its Subsidiaries or the value of such property for the purpose of such business;
(f) Liens on property existing at the time such property is acquired; (g)
purchase money Liens upon or in any property acquired or held in the ordinary
course of business to secure Indebtedness incurred solely for the purpose of
financing the acquisition of such property; (h) Liens on the assets of any
Subsidiary of the Company at the time such Subsidiary is acquired; (i) Liens
with respect to obligations in outstanding amounts not to exceed $5.0 million at
any particular time and that (i) are not incurred in connection with the
borrowing of money or obtaining advances or credit (other than trade credit in
the ordinary course of business) and (ii) do not in the aggregate interfere in
any material respect with the ordinary conduct of the business of the Company
and its Subsidiaries; (j) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of the business of the Company and its
Subsidiaries; (k) Liens resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in respect
of which (i) the Company or a Subsidiary of the Company shall in good faith be
prosecuting an appeal or proceeding for a review, (ii) a stay of execution
pending such appeal or proceeding for review shall be in effect, and (iii) the
Company shall have established on its books adequate reserves in accordance with
GAAP; (l) rights of banks to set off deposits against Indebtedness owed to such
banks whether arising by law or pursuant to deposit, cash collateral or similar
agreements; and (m) any extension, renewal or replacement, in whole or in part,
of any Lien described in the foregoing clauses; provided, however, that any such
extension, renewal or replacement Lien is limited to the property or assets
covered by the Lien extended, renewed or replaced or substitute property or
assets, the value of which is not materially greater than the value of the
property or assets for which the substitute property or assets are substituted.
"Plan" means the Plan of Reorganization of Mercury Finance Company
confirmed by the United States Bankruptcy Court for the District of
_______________ pursuant to an order dated ___________ __, 1999.
"Receivables" means (i) consumer installment sale contracts and loans
evidenced by promissory notes secured by new and used automobiles and light
trucks, (ii) other consumer installment sale contracts or lease contracts and
(iii) loans secured by residential mortgages, in the case of each of the clauses
(i), (ii) and (iii), that are purchased or originated in the ordinary course of
business by the Company or any Subsidiary of the Company. All Receivables shall
be valued in accordance with GAAP.
"Repurchase Date" has the meaning ascribed thereto in Section 3.4(a).
"Repurchase Price" has the meaning described thereto in Section 3.4(a).
"Restricted Payments" has the meaning ascribed thereto in Section 3.3.
"Senior Subordinated Notes" means the Company's 11% Senior Subordinated
Notes Due 2002 issued under the Indenture dated as of ______________ __, 1999
between the Company and the trustee thereunder.
"Series B Senior Secured Notes" means the Company's Senior Secured
Notes Due 2001, Series B issued under the Indenture.
"S&P" means Standard & Poor's Ratings Group, or any successor to the
rating agency business thereof.
"Subordinated Indebtedness" means any Indebtedness of the Company which
is expressly subordinated in right of payment to the senior secured notes issued
or to be issued under this Indenture, including without limitation, the Series B
Senior Secured Notes.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
amended or modified from time to time.
ARTICLE III. CERTAIN COVENANTS.
Section 3.1. Indebtedness.
The Company shall not, nor shall it permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become liable with respect to, any Indebtedness other than Permitted
Indebtedness if immediately after incurring such Indebtedness other than
Permitted Indebtedness, the Company's Leverage Ratio, calculated on a pro forma
basis, would be equal to or greater than 2.00:1.00.
Section 3.2. Liens.
The Company shall not, and shall not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Liens upon any of their respective
assets, other than Permitted Liens.
Section 3.3. Restricted Payments.
The Company shall not, and shall not permit any of its Subsidiaries to,
(a) declare or pay any dividend on, or make any other distribution on account
of, the Company's capital stock; (b) purchase, redeem or otherwise acquire or
retire for value any capital stock (including any option, warrant or right to
purchase capital stock) of the Company owned beneficially by a Person other than
a wholly owned Subsidiary of the Company; (c) purchase, redeem or otherwise
acquire or retire for value the principal of any Subordinated Indebtedness prior
to the scheduled maturity thereof other than pursuant to mandatory scheduled
redemptions or repayments; or (d) make any Investment other than Permitted
Investments (all such dividends, distributions, purchases, redemptions, or
Investments being collectively referred to as "Restricted Payments").
Notwithstanding anything in the foregoing to the contrary, the Company may take
the actions described in Clause (a), (b) or (d) above if, at the time of such
action or after giving effect thereto: (i) no Event of Default shall have
occurred and is continuing; (ii) the Company could incur at least $1.00 of
Indebtedness (other than Permitted Indebtedness) under Section 3.1; and (iii)
the cumulative amount of Restricted Payments made subsequent to the Effective
Date shall not be greater than the sum of: (A) 50% of the Company's cumulative
consolidated net income (or a negative amount equal to 100% of the Company's
cumulative consolidated net loss, if applicable) from the Effective Date through
the end of the Company's fiscal quarter immediately preceding the taking of such
action; and (B) 100% of the aggregate net cash proceeds received by the Company
from the issue or sale of capital stock of the Company (other than redeemable
capital stock), including capital stock issued upon the conversion of
convertible Indebtedness issued on or after the Effective Date, in exchange for
outstanding Indebtedness, or from the exercise of options, warrants, or rights
to purchase capital stock of the Company to any Person other than to a
Subsidiary of the Company subsequent to the Effective Date (with the Company
being deemed, in the case of capital stock issued upon conversion or in exchange
for Indebtedness, to have received net cash proceeds equal to the principal
amount of the Indebtedness so converted or exchanged); provided, however, that
(1) the payment of any dividend within 60 calendar days after the date of
declaration thereof, if such declaration complied with the foregoing redemption
or other acquisition provisions on the date of such declaration, (2) the
purchase, redemption, or other acquisition or retirement for value of any shares
of capital stock of the Company in exchange for, or out of the proceeds of, a
substantially concurrent issue and sale (other than to a Subsidiary of the
Company) of other shares of capital stock (other than redeemable capital stock)
of the Company, and (3) any purchase, redemption or other acquisition or
retirement for value of any capital stock (including any option, warrant, or
right to purchase capital stock) of the Company issued to any employee or
director of the Company pursuant to any employee benefit or similar plan shall
not be deemed to constitute "Restricted Payments" and shall not be prohibited
under this Section.
Section 3.4. Change of Control.
(a) Right to Require Repurchase. In the event that there shall occur a
Change of Control, then each Holder shall have the right, at such Holder's
option, to require the Company to repurchase all or any designated part of such
Holder's Senior Secured Notes on the date (the "Repurchase Date") selected by
the Company that is not more than 75 days after the date the Company gives
notice of the Change of Control as contemplated in paragraph (b) below at a
price (the "Repurchase Price") equal to 101% of the outstanding principal amount
thereof, plus accrued and unpaid interest to the Repurchase Date. Such right to
require the repurchase of Senior Secured Notes shall continue notwithstanding a
discharge of the Company from its obligations with respect to the Senior Secured
Notes in accordance with the provisions of Article VI or Article XIII of the
Indenture.
(b) Notice; Method of Exercising Repurchase Right. On or before the
fifteenth day after the Company knows that a Change of Control has occurred, the
Company or, at the request of the Company, the Trustee (in the name of and at
the expense of the Company), shall give notice of the occurrence of the Change
of Control and of the repurchase right set forth herein arising as a result
thereof by first-class mail, postage prepaid, to each Holder of the Senior
Secured Notes at such Xxxxxx's address appearing in the Security Register for
the Senior Secured Notes. The Company shall also deliver a copy of such notice
to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and
(4) the instructions a Holder must follow to exercise its
repurchase right.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise its repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred a Change of
Control. To exercise a repurchase right, a Holder shall deliver to the Company
(or to an agent designated by the Company for such purpose in the notice
referred to above) on or before the fifth Business Day prior to the Repurchase
Date (i) written notice of the Holder's exercise of such right, which notice
shall set forth the name of the Holder, the principal amount of the Senior
Secured Note (or portion of the Senior Secured Note) to be repurchased and a
statement that an election to exercise the repurchase right is being made
thereby, and (ii) the Senior Secured Note with respect to which the repurchase
right is being exercised, duly endorsed for transfer to the Company. Such
written notice shall be irrevocable. If the Repurchase Date falls between any
Regular Record Date and the corresponding succeeding Interest Payment Date,
Senior Secured Notes to be repurchased must be accompanied by payment from the
Holder of an amount equal to the interest thereon which the registered Holder
thereof is to receive on such Interest Payment Date. In the event a repurchase
right shall be exercised in accordance with the terms hereof and the
instructions referred to herein, (x) the Company shall on the Repurchase Date
pay or cause to be paid in cash to the Holder thereof the Repurchase Price for
each Senior Secured Note (or any portion thereof) as to which the repurchase
right has been exercised, and (y) the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such Senior
Secured Note without service charge, a new Senior Secured Note or Notes, as
applicable, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for any portion of the
principal of such Senior Secured Note as to which the repurchase right has not
been exercised. Any questions as to the compliance by a Holder of Senior Secured
Notes with the requirements for a valid exercise of a repurchase right
(including the timely delivery of an exercise notice in proper form) shall be
determined by the Company in its sole discretion, which in all events shall be
exercised in good faith.
(c) Deposit of Repurchase Price. On or prior to the Repurchase 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 7.03 of the Indenture) an amount of money sufficient to pay
the Repurchase Price of the Senior Secured Notes which are to be repurchased on
the Repurchase Date.
(d) Senior Secured Notes Not Repurchased on Repurchase Date. If any
Senior Secured Note (or any portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal of such Senior Secured Note
(or such portion thereof) shall, until paid, bear interest from the Repurchase
Date at the rate borne by such Senior Secured Note.
(e) Compliance. The Company shall comply with all tender offer rules,
including but not limited to Section 14(e) of the Exchange Act and Rule 14e-1
thereunder, to the extent applicable to any repurchase of the Senior Secured
Notes under this Section 3.4.
Section 3.5. Payment Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist any
contractual restriction on the ability of any Subsidiary of the Company to (a)
pay any dividend on, or make any other distribution on account of, its capital
stock or pay any Indebtedness owed to the Company or a Subsidiary of the Company
or (b) make loans or advances to the Company or a Subsidiary of the Company.
Section 3.6. Issuance of Subsidiary Preferred Stock.
The Company shall not permit any Subsidiary of the Company to issue any
shares of preferred stock.
Section 3.7. Asset Sales.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, conduct any Asset Sale, except for the sale of the
Company's proprietary credit card receivable portfolio, unless (i) such Asset
Sale is for fair market value (as evidenced by a resolution by the Company's
Board of Directors, certified by an officer of the Company and delivered to the
Trustee) and (ii) at least 85% of the consideration received by the Company in
such Asset Sale is in the form of cash. All net cash proceeds realized from any
Asset Sale (after taxes, reasonable fees and expenses incurred directly
therewith and any Indebtedness secured hereby), including the receipt of funds
from any federal or state income tax refunds, in excess of $40,000,000 in the
aggregate for such Asset Sale or income tax refund and all other Asset Sales or
income tax refunds occurring within the immediately preceding 360 day period
will be paid to the Trustee within 60 days of the receipt of the proceeds to
redeem Securities issued under the Indenture in accordance with the terms of the
Indenture.
Section 3.8. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Subsidiaries to,
engage in any transaction with an Affiliate (other than the Company or a wholly
owned Subsidiary thereof) on terms more favorable to the Affiliate than would
have been obtainable in arm's-length dealing. Solely for purposes of this
Section 3.8, an "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person, or any other Person that has a
relationship with such specified Person whereby either of such Persons holds or
beneficially owns 10% or more of the equity interest in the other or 10% or more
of any class of voting securities of the other. For the purposes of this
definition, "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 the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
Section 3.9. Change in Business.
The Company shall not, and shall not permit any of its Subsidiaries to,
engage in any material line of business substantially different from the Finance
Business.
ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT.
Section 4.1. Immediate Events of Default.
Notwithstanding anything in Section 9.01 of the Indenture to the
contrary, if the Company defaults in the performance of, or breaches any,
covenant set forth in Article III (other than Section 3.8) of this First
Supplemental Indenture or in Section 7.05 of the Indenture, such default or
breach shall immediately constitute an Event of Default, without giving effect
to any passage of time or notice or both.
ARTICLE V. REDEMPTION OF SECURITIES.
Section 5.1. Right of Redemption.
The Senior Secured Notes may be redeemed in accordance with the form of
note set forth herein.
Section 5.2. Repurchase.
The Company may at any time and from time to time purchase Senior
Secured Notes in the open market or otherwise at any price, and any Senior
Secured Notes so purchased shall be promptly surrendered to the Trustee for
cancellation and shall not be reissued.
ARTICLE VI. MISCELLANEOUS.
Section 6.1. Reference to and Effect on the Indenture.
This First Supplemental Indenture shall be construed as supplemental to
the Indenture and all the terms and conditions of this First Supplemental
Indenture shall be deemed to be part of the terms and conditions of the
Indenture. Except as set forth herein, the Indenture heretofore executed and
delivered is hereby (i) incorporated by reference in this First Supplemental
Indenture and (ii) ratified, approved and confirmed.
Section 6.2. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Article III hereof if the Holders of a
majority in principal amount of the Outstanding Senior Secured 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.
Section 6.3. Supplemental Indenture May be Executed in Counterparts.
This instrument may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental 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.
[Seal] MERCURY FINANCE COMPANY
By:
Name:
Title:
Attest:
By:
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:
Name:
Title:
Attest:
By:
Name:
Title:
STATE OF )
) SS:
COUNTY OF )
On this ____ day of , 1999, before me personally came
______________________, to me known, who, being by me duly sworn, did depose and
say that he/she is ___________________ of MERCURY FINANCE COMPANY, one of the
entities described in and which executed the above instrument; that he/she knows
the seal of said entity; that the seal or a facsimile thereof affixed to said
instrument is such seal; that it was so affixed by authority of the Board of
Directors of said entity, and that he/she signed his/her name thereto by like
authority.
Notary Public
In Witness Whereof, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
STATE OF )
) SS.:
COUNTY OF )
On this ____ day of , 1999, before me personally came
______________________, to me known, who, being by me duly sworn, did depose and
say that he/she is ___________________ of NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, one of the entities described in and which executed the above
instrument; that he/she knows the seal of said entity; that the seal or a
facsimile thereof affixed to said instrument is such seal; that it was so
affixed by authority of the Board of Directors of said entity, and that he/she
signed his/her name thereto by like authority.
Notary Public
In Witness Whereof, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
Mercury Finance Company
and
Norwest Bank Minnesota, National Association,
Trustee
Second Supplemental Trust Indenture
Dated as of __________, 1999
Supplementing that certain
INDENTURE
Dated as of __________, 1999
Authorizing the Issuance and Delivery of
Senior Secured Securities
consisting of $___________* aggregate principal amount of
Senior Secured Notes Due 2001, Series B
* In the execution version, the appropriate amount determined in accordance
with __________________________ of the Plan will be inserted here, in the first
paragraph on page 2 and in Section 1.1(b) hereof.
TABLE OF CONTENTS
Page
RECITALS......................................................................1
[Form of Face of Security]....................................................2
[Form of Reverse of Security].................................................4
ARTICLE I. ISSUANCE OF SENIOR SECURED NOTES..................................7
Section 1.1. Issuance of Senior Secured Notes; Principal Amount;
Maturity................................................7
Section 1.2. Interest on the Senior Secured Notes; Payment of
Interest................................................8
ARTICLE II. CERTAIN DEFINITIONS..............................................8
Section 2.1. Certain Definitions.....................................8
ARTICLE III. CERTAIN COVENANTS..............................................13
Section 3.1. Indebtedness...........................................13
Section 3.2. Liens..................................................13
Section 3.3. Restricted Payments....................................13
Section 3.4. Change of Control......................................14
Section 3.5. Payment Restrictions Affecting Subsidiaries............16
Section 3.6. Issuance of Subsidiary Preferred Stock.................16
Section 3.7. Asset Sales............................................16
Section 3.8. Transactions with Affiliates...........................16
Section 3.9. Change in Business.....................................17
ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT....................................17
ARTICLE V. REDEMPTION OF SECURITIES.........................................17
Section 5.1. Right of Redemption....................................17
Section 5.2. Repurchase.............................................17
ARTICLE VI. MISCELLANEOUS...................................................17
Section 6.1. Reference to and Effect on the Indenture...............17
Section 6.2. Waiver of Certain Covenants............................18
Section 6.3. Supplemental Indenture May be Executed in Counterparts.18
SECOND SUPPLEMENTAL INDENTURE, dated as of __________, 1999 (this
"Second Supplemental Indenture"), between Mercury Finance Company, a corporation
duly organized and existing under the laws of the State of Delaware (the
"Company"), and Norwest Bank Minnesota, National Association, a U.S. national
banking association, as Trustee (the "Trustee"), supplementing that certain
Indenture, dated as of __________, 1999, between the Company and the Trustee
(the "Indenture").
RECITALS
A. The Company has duly authorized the execution and delivery of the
Indenture to provide for the issuance from time to time of its senior secured
notes (the "Securities") to be issued in one or more series as provided for in
the Indenture.
B. The Indenture provides that the Securities of each series shall be
in such form as may be established by or pursuant to a Board Resolution or in
one or more indentures supplemental thereto, 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
Securities, as evidenced by their execution thereof.
C. The Company and the Trustee have agreed that the Company shall issue
and deliver, and the Trustee shall authenticate, Securities denominated "Senior
Secured Notes Due 2001, Series B" (the "Senior Secured Notes") pursuant to the
terms of this Second Supplemental Indenture and substantially in the form set
forth below, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the Indenture
and this Second Supplemental Indenture, and with 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 Senior
Secured Notes, as evidenced by their execution thereof.
[Form of Face of Security]
MERCURY FINANCE COMPANY
SENIOR SECURED NOTE DUE 2001, SERIES B No.
R-__________ $
CUSIP No.
MERCURY FINANCE COMPANY, a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter called the "Company," which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to [_______________], or registered
assigns, the principal sum of $__________ on [the second anniversary of the
Effective Date], subject to earlier redemption or repurchase as described below,
and to pay interest thereon from _______________, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, at a
floating rate equal to the London interbank offering rate for three months
quoted in The Wall Street Journal on the later of [Effective Date or 91 days
thereafter] and the most recently occurring Interest Payment Date ("LIBOR") plus
___%1 per annum, payable quarterly on ___________ of each year, commencing on
__________, 199_, until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date shall, as provided in said Indenture, be computed on
the basis of a 360-day year consisting of twelve 30-day months and paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be ________________________ (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 shall 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 Security (or one or more Predecessor Securities) 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 Securities of this series not less than 10 calendar 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 Securities of this series may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and any such interest on this Security shall be made
at the office or agency of the Company maintained for such purpose in New York,
New York, 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;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address appears in the Security Register.
--------
1 * Percentage rate will be equal to 10% minus the percentage rate of LIBOR on
the date of execution of the Indenture minus a percentage rate that represents
the cost to the Company of establishing interest rate protection such that the
effective interest rate to the Company of this offering is 10%.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH ON THE
REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
THOUGH FULLY SET FORTH IN THIS PLACE.
This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication herein has been signed manually by the
Trustee under said Indenture.
IN WITNESS WHEREOF, this instrument has been duly executed in
accordance with the Indenture.
MERCURY FINANCE COMPANY
By:
Name:
Attest: Title:
By:
[Form of Reverse of Security]
MERCURY FINANCE COMPANY
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities") issued and to be issued in one or more
series under an Indenture, dated as of __________, 1999 (herein called the
"Indenture"), between the Company and Norwest Bank Minnesota, National
Association, 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 Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof, limited in aggregate principal
amount to
$-----------.
On the terms and subject to the conditions set forth in the Company
Security Documents, the payment and performance of the obligations of the
Company under the Securities issued under this Indenture, including this
Security, are secured by the Company Collateral and have the benefit of the
Subsidiaries Guaranty Agreement executed by each Subsidiary of the Company.
Payment and performance of the obligations of the Subsidiaries under the
Subsidiaries Guaranty Agreement are secured by the Subsidiaries Collateral. The
Company Collateral and the Subsidiaries Collateral has been pledged to the
Trustee on the terms and subject to the conditions set forth in the Collateral
Security Documents for the equal and ratable benefit of the Holders of
Securities issued under the Indenture. As set forth in the Indenture, the
Company Pledge Agreement, the Company Security Agreement, the Subsidiaries
Guaranty Agreement and the Subsidiaries Security Agreement, to the extent the
Company or a Subsidiary of the Company enters into a Working Capital Facility,
the rights of any party lending money to the Company or a Subsidiary of the
Company pursuant to such Working Capital Facility with respect to certain assets
comprising a portion of the Company Collateral or the Subsidiaries Collateral
will be senior to those rights of the Holders of Securities issued under the
Indenture.
No sinking fund is provided for the Securities. The Securities are
subject to redemption at the option of the Company, at any time and from time to
time, in whole or in part, in increments of not less than $5.0 million, upon not
more than 60 nor less than 30 days' notice to the Holders prior to the
Redemption Date, at the principal amount thereof, plus accrued and unpaid
interest thereon to the date of redemption.
If less than all of the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed will be selected by such method as
the Trustee may deem fair and appropriate. In the event of the redemption of
this Security in part only, a new Security or Securities of this series and of
like tenor for the portion hereof not so redeemed shall be issued in the name of
the Holder hereof upon the cancellation hereof.
Upon the occurrence of a Change of Control, the Company is required to
repurchase the Securities, at the option of the Holders thereof, at a purchase
price equal to 101% of the outstanding principal amount thereof, plus accrued
and unpaid interest thereon to the Repurchase Date, but interest installments
with a Stated Maturity on or prior to such Repurchase Date shall be payable to
the Holders of such Securities 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 the event of the repurchase of this Security in part only, a
new Security or Securities of this series of like tenor for the portion hereof
not so repurchased shall be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series 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 Securities of each series 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 Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder unless (a) such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities of this series, (b) the Holders of not less than 25% in
principal amount of the Securities of this series at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity,
(c) the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request and (d) the Trustee shall have failed
to institute such proceeding for 60 calendar days after receipt of such notice,
request, and offer of indemnity. However, the foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or interest hereon on or after the respective due
dates therefor expressed herein.
No reference herein to the Indenture and no provision of this Security
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 or
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and integral multiples thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and interest
on this Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
shall be issued to the designated transferee or transferees.
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 Security 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 Security is registered as the owner hereof for all
purposes, whether or not this Security shall 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 Security that are defined in the Indenture shall
have the respective meanings assigned to them in the Indenture. This Security,
the Indenture and the Collateral Security Documents shall be construed in
accordance with the laws of the State of New York without giving effect to
principles of conflict of laws of such State.
D. The Trustee's certificate of authentication shall be in
substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: Norwest Bank Minnesota, National
Association, as Trustee
By:
Authorized Signatory
E. All acts and things necessary to make the Senior Secured Notes, when
the Senior Secured Notes have been executed by the Company and authenticated by
the Trustee and delivered as provided in the Indenture and this Second
Supplemental Indenture, the valid, binding and legal obligations of the Company
and to constitute these presents a valid indenture and agreement according to
its terms, have been done and performed, and the execution and delivery by the
Company of the Indenture and this Second Supplemental Indenture and the issue
hereunder of the Senior Secured Notes have in all respects been duly authorized;
and the Company, in the exercise of the legal right and power in it vested, has
executed and delivered the Indenture and is executing and delivering this Second
Supplemental Indenture and proposes to make, execute, issue and deliver the
Senior Secured Notes.
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:
In order to declare the terms and conditions upon which the Senior
Secured Notes are authenticated, issued, and delivered, and in consideration of
the premises and of the purchase and acceptance of the Senior Secured Notes by
the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of the respective Holders from time to time of the Senior Secured Notes,
as follows:
ARTICLE I. ISSUANCE OF SENIOR SECURED NOTES.
Section 1.1. Issuance of Senior Secured Notes; Principal Amount; Maturity.
(a) On __________, 1999, the Company shall issue and deliver to the
Trustee, and the Trustee shall authenticate, Senior Secured Notes substantially
in the form set forth above, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
the Indenture and this Second Supplemental Indenture, and with 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 Senior Secured Notes, as evidenced by their execution thereof.
(b) The Senior Secured Notes shall be issued in the aggregate principal
amount of $_________ and shall mature on [the second anniversary of the
Effective Date].
Section 1.2. Interest on the Senior Secured Notes; Payment of Interest.
(a) The Senior Secured Notes shall bear interest for each period
precedi ng any Interest Payment Date at a floating rate equal to the London
interbank offering rate for three months quoted in The Wall Street Journal on
the later of [Effective Date or 91 days thereafter] and the preceding Interest
Payment Date ("LIBOR") plus ___% per annum from [_________________], or, if
later, from the most recent Interest Payment Date to which interest has been
paid or duly provided for.
(b) The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date shall, as provided in the Indenture, be paid to the
Person in whose name a Senior Secured Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the ______________ (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 shall forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name the Senior Secured Note (or one or more Predecessor
Securities) 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 the Senior Secured Notes not less than 10
calendar 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 Senior Secured Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture.
(c) Payment of the principal of and any such interest on the Senior
Secured Notes shall be made at the office or agency of the Company maintained
for such purpose in New York, New York, 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; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address appears in the Security Register.
ARTICLE II.
CERTAIN DEFINITIONS.
Section 2.1. Certain Definitions.
The terms defined in this Section 2.1 (except as herein otherwise
expressly provided or unless the context of this Second Supplemental Indenture
otherwise requires) for all purposes of this Second Supplemental Indenture and
of any indenture supplemental hereto have the respective meanings specified in
this Section 2.1. All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP. All other terms used in this
Second Supplemental Indenture that are defined in the Indenture or the Trust
Indenture Act, either directly or by reference therein (except as herein
otherwise expressly provided or unless the context of this Second Supplemental
Indenture otherwise requires), have the respective meanings assigned to such
terms in the Indenture or the Trust Indenture Act, as the case may be, as in
force at the date of this Second Supplemental Indenture as originally executed.
"Affiliate" has the meaning ascribed thereto in Section 3.8.
"Asset Sale" means any sale or other disposition, or series of sales or
other dispositions (including, without limitation, by merger or consolidation
and whether by operation of law or otherwise) of assets by the Company or its
Subsidiaries to any Person except (i) sales of used, worn out or surplus
equipment in the ordinary course of business and (ii) sales, contributions or
transfers of Receivables pursuant to any Working Capital Facility. The
definition of Asset Sale shall include the receipt of funds from any federal or
state income tax refunds.
"Cash Equivalent" means: (a) obligations issued or unconditionally
guaranteed as to principal and interest by the United States of America or by
any agency or authority controlled or supervised by and acting as an
instrumentality of the United States of America which are backed by the full
faith and credit of the United States of America; (b) obligations (including,
but not limited to, demand or time deposits, bankers' acceptances and
certificates of deposit) issued by a depository institution or trust company or
a wholly owned subsidiary or branch office of any depository institution or
trust company, provided that (i) such depository institution or trust company
has, at the time of the Company's or any of its Subsidiaries' investment therein
or contractual commitment providing for such investment, capital, surplus or
undivided profits (as of the date of such institution's most recently published
financial statements) in excess of $100 million and (ii) the commercial paper of
such depository institution or trust company, at the time of the Company's or
any of its Subsidiaries' investment therein or contractual commitment providing
for such investment, is rated at least A1 by S&P or P-1 by Moody's; (c) debt
obligations (including, but not limited to, commercial paper and medium-term
notes) issued or unconditionally guaranteed as to principal and interest by any
corporation, state or municipal government or agency or instrumentality thereof
or foreign sovereignty, if the commercial paper of such corporation, state or
municipal government or foreign sovereignty, at the time of the Company's or any
of its Subsidiaries' investment therein or contractual commitment providing for
such investment, is rated at least A1 by S&P or P-1 by Moody's; (d) repurchase
obligations with a term of not more than seven calendar days for underlying
securities of the type described above entered into with a depository
institution or trust company meeting the qualifications described in clause (b)
above; and (e) Investments in money market or mutual funds that invest
predominantly in Cash Equivalents of the type described in clauses (a), (b), (c)
and (d) above; provided, however, that, in the case of clause (a) above, each
such investment has a maturity of one year or less from the date of acquisition
thereof, and, in the case of clauses (b) and (c) above, each such investment has
a maturity of 270 days or less from the date of acquisition thereof.
"Change of Control" means the occurrence of the following event: any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the voting stock of the Company.
"Effective Date" means ______________, 1999.
"Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition by
such Person of any capital stock, bonds, notes, debentures or other securities
or evidences of Indebtedness issued by any other Person. The amount of any
Investment shall be the original cost thereof, plus the cost of all additions
thereto and minus the amount of all reductions therein in the nature of
repayment of principal or return of capital, without any adjustments for
increases or decreases in value, write-ups, write-downs or write-offs with
respect to such Investment.
"Leverage Ratio" means, at any date of determination, the ratio of the
sum of the Indebtedness and the net worth of the Company and its Subsidiaries to
the Indebtedness of the Company and its Subsidiaries, in each case calculated on
a consolidated basis in accordance with GAAP.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest, or preference, priority, or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including without limitation
any conditional sale, deferred purchase price or other title retention
agreement, the interest of a lessor under a Capital Lease Obligation, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing, under the Uniform Commercial Code or comparable law
of any jurisdiction, of any financing statement naming the owner of the asset to
which such financing statement relates as debtor.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor to
the rating agency business thereof.
"Permitted Indebtedness" means, without duplication: (a) the Series A
Senior Secured Notes and the Senior Subordinated Notes; (b) Indebtedness under
one or more Working Capital Facilities; (c) Indebtedness between or among the
Company and its wholly owned Subsidiaries; (d) to the extent deemed to be
"Indebtedness," obligations under swap agreements, cap agreements, collar
agreements, insurance arrangements, or any similar agreement or arrangement, in
each case designed to provide a bona fide hedge against fluctuations in interest
rates, the cost of currency, or the cost of goods (other than inventory); (e)
other Indebtedness of the Company or its Subsidiaries in outstanding amounts not
to exceed $5 million in the aggregate at any particular time; (f) liabilities
(other than for or in connection with borrowed money) incurred in the operation
of the Finance Business in the ordinary course thereof and not more than six
months overdue, unless contested in good faith by appropriate proceedings; (g)
Indebtedness evidenced by letters of credit that are issued in the ordinary
course of the business of the Compa ny and its Subsidiaries to secure workers'
compensation and other insurance coverages; (h) deferred taxes and other
deferred obligations incurred in the ordinary course of business and not
evidenced by notes, bonds, debentures or other evidences of indebtedness; and
(i) Indebtedness incurred in connection with any extension, renewal,
refinancing, replacement, or refunding (including successive extensions,
renewals, refinancings, replacements, or refundings), in whole or in part, of
any Indebtedness of the Company or its Subsidiaries; provided, however, that the
principal amount of the Indebtedness so incurred does not exceed the sum of the
principal amount of the Indebtedness so extended, renewed, refinanced, replaced,
or refunded, plus all interest accrued thereon and all related fees and
expenses.
"Permitted Investments" means, without duplication: (a) Cash
Equivalents; (b) Investments in another Person, if as a result of such
Investment (i) such other Person becomes a Subsidiary of the Company or (ii)
such other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all of its assets to, the Company or a Subsidiary
of the Company; (c) Investments in any Subsidiary of the Company or Investments
in the Company by a Subsidiary of the Company; (d) commissions and advances to
employees of the Company and its Subsidiaries in the ordinary course of
business; (e) Investments representing notes, securities, or other instruments
or obligations acquired in connection with the sale of assets; (f) Investments
represented by that portion of the proceeds from Asset Sales permitted under
Section 3.7 to the extent such Investments are non-cash proceeds; (g)
Investments representing capital stock or obligations issued to the Company or
any Subsidiary of the Company in settlement of claims against any other Person
by reason of a composition or readjustment of debt or a reorganization of any
debtor of the Company or such Subsidiary; and (h) other Investments, the
aggregate amount of which at any one time does not exceed $5 million.
"Permitted Liens" means, without duplication: (a) Liens arising under
the Collateral Security Documents; (b) Liens on new Receivables securing any
Working Capital Facility; (c) Liens incurred and pledges and deposits made in
the ordinary course of business in connection with liability insurance, workers'
compensation, unemployment insurance, old-age pensions, and other social
security benefits other than in respect of employee benefit plans subject to the
Employee Retirement Income Security Act of 1974, as amended; (d) Liens imposed
by law, such as carriers', warehousemen's, mechanics', materialmen's, and
vendor's Liens, incurred in the ordinary course of business and securing
obligations which are not yet due or which are being contested in good faith by
appropriate proceedings; (e) Liens securing the payment of taxes, assessments,
and governmental charges or levies, either (i) not delinquent or (ii) being
contested in good faith by appropriate legal or administrative proceedings and
as to which adequate reserves shall have been established on the books of the
relevant Person in conformity with GAAP; (f) zoning restrictions, easements,
rights of way, reciprocal easement agreements, operating agreements, covenants,
conditions, or restrictions on the use of any parcel of property that are
routinely granted in real estate transactions or do not interfere in any
material respect with the ordinary conduct of the business of the Company and
its Subsidiaries or the value of such property for the purpose of such business;
(f) Liens on property existing at the time such property is acquired; (g)
purchase money Liens upon or in any property acquired or held in the ordinary
course of business to secure Indebtedness incurred solely for the purpose of
financing the acquisition of such property; (h) Liens on the assets of any
Subsidiary of the Company at the time such Subsidiary is acquired; (i) Liens
with respect to obligations in outstanding amounts not to exceed $5.0 million at
any particular time and that (i) are not incurred in connection with the
borrowing of money or obtaining advances or credit (other than trade credit in
the ordinary course of business) and (ii) do not in the aggregate interfere in
any material respect with the ordinary conduct of the business of the Company
and its Subsidiaries; (j) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of the business of the Company and its
Subsidiaries; (k) Liens resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in respect
of which (i) the Company or a Subsidiary of the Company shall in good faith be
prosecuting an appeal or proceeding for a review, (ii) a stay of execution
pending such appeal or proceeding for review shall be in effect, and (iii) the
Company shall have established on its books adequate reserves in accordance with
GAAP; (l) rights of banks to set off deposits against Indebtedness owed to such
banks whether arising by law or pursuant to deposit, cash collateral or similar
agreement; and (m) any extension, renewal or replacement, in whole or in part,
of any Lien described in the foregoing clauses; provided, however, that any such
extension, renewal or replacement Lien is limited to the property or assets
covered by the Lien extended, renewed or replaced or substitute property or
assets, the value of which is not materially greater than the value of the
property or assets for which the substitute property or assets are substituted.
"Plan" means the Plan of Reorganization of Mercury Finance Company
confirmed by the United States Bankruptcy Court for the District of
_______________ pursuant to an order dated ___________ __, 1999.
"Receivables" means (i) consumer installment sale contracts and loans
evidenced by promissory notes secured by new and used automobiles and light
trucks, (ii) other consumer installment sale contracts or lease contracts and
(iii) loans secured by residential mortgages, in the case of each of the clauses
(i), (ii) and (iii), that are purchased or originated in the ordinary course of
business by the Company or any Subsidiary of the Company. All Receivables shall
be valued in accordance with GAAP.
"Repurchase Date" has the meaning ascribed thereto in Section 3.4(a).
"Repurchase Price" has the meaning described thereto in Section 3.4(a).
"Restricted Payments" has the meaning ascribed thereto in Section 3.3.
"Senior Subordinated Notes" means the Company's 11% Senior Subordinated
Notes Due 2002 issued under the Indenture dated as of ______________ __, 1999
between the Company and the trustee thereunder.
"Series A Senior Secured Notes" means the Company's Senior Secured
Notes Due 2001, Series A issued under the Indenture.
"S&P" means Standard & Poor's Ratings Group, or any successor to the
rating agency business thereof.
"Subordinated Indebtedness" means any Indebtedness of the Company which
is expressly subordinated in right of payment to the senior secured notes issued
or to be issued under this Indenture, including without limitation, the Series B
Senior Secured Notes.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
amended or modified from time to time.
ARTICLE III. CERTAIN COVENANTS.
Section 3.1. Indebtedness.
The Company shall not, nor shall it permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become liable with respect to, any Indebtedness other than Permitted
Indebtedness if immediately after incurring such Indebtedness other than
Permitted Indebtedness, the Company's Leverage Ratio, calculated on a pro forma
basis, would be equal to or greater than 2.00:1.00.
Section 3.2. Liens.
The Company shall not, and shall not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Liens upon any of their respective
assets, other than Permitted Liens.
Section 3.3. Restricted Payments.
The Company shall not, and shall not permit any of its Subsidiaries to,
(a) declare or pay any dividend on, or make any other distribution on account
of, the Company's capital stock; (b) purchase, redeem or otherwise acquire or
retire for value any capital stock (including any option, warrant or right to
purchase capital stock) of the Company owned beneficially by a Person other than
a wholly owned Subsidiary of the Company; (c) purchase, redeem or otherwise
acquire or retire for value the principal of any Subordinated Indebtedness prior
to the scheduled maturity thereof other than pursuant to mandatory scheduled
redemptions or repayments; or (d) make any Investment other than Permitted
Investments (all such dividends, distributions, purchases, redemptions, or
Investments being collectively referred to as "Restricted Payments").
Notwithstanding anything in the foregoing to the contrary, the Company may take
the actions described in Clause (a), (b) or (d) above if, at the time of such
action or after giving effect thereto: (i) no Event of Default shall have
occurred and is continuing; (ii) the Company could incur at least $1.00 of
Indebtedness (other than Permitted Indebtedness) under Section 3.1; and (iii)
the cumulative amount of Restricted Payments made subsequent to the Effective
Date shall not be greater than the sum of: (A) 50% of the Company's cumulative
consolidated net income (or a negative amount equal to 100% of the Company's
cumulative consolidated net loss, if applicable) from the Effective Date through
the end of the Company's fiscal quarter immediately preceding the taking of such
action; and (B) 100% of the aggregate net cash proceeds received by the Company
from the issue or sale of capital stock of the Company (other than redeemable
capital stock), including capital stock issued upon the conversion of
convertible Indebtedness issued on or after the Effective Date, in exchange for
outstanding Indebtedness, or from the exercise of options, warrants, or rights
to purchase capital stock of the Company to any Person other than to a
Subsidiary of the Company subsequent to the Effective Date (with the Company
being deemed, in the case of capital stock issued upon conversion or in exchange
for Indebtedness, to have received net cash proceeds equal to the principal
amount of the Indebtedness so converted or exchanged); provided, however, that
(1) the payment of any dividend within 60 calendar days after the date of
declaration thereof, if such declaration complied with the foregoing redemption
or other acquisition provisions on the date of such declaration, (2) the
purchase, redemption, or other acquisition or retirement for value of any shares
of capital stock of the Company in exchange for, or out of the proceeds of, a
substantially concurrent issue and sale (other than to a Subsidiary of the
Company) of other shares of capital stock (other than redeemable capital stock)
of the Company, and (3) any purchase, redemption or other acquisition or
retirement for value of any capital stock (including any option, warrant, or
right to purchase capital stock) of the Company issued to any employee or
director of the Company pursuant to any employee benefit or similar plan shall
not be deemed to constitute "Restricted Payments" and shall not be prohibited
under this Section.
Section 3.4. Change of Control.
(a) Right to Require Repurchase. In the event that there shall occur a
Change of Control, then each Holder shall have the right, at such Holder's
option, to require the Company to repurchase all or any designated part of such
Holder's Senior Secured Notes on the date (the "Repurchase Date") selected by
the Company that is not more than 75 days after the date the Company gives
notice of the Change of Control as contemplated in paragraph (b) below at a
price (the "Repurchase Price") equal to 101% of the outstanding principal amount
thereof, plus accrued and unpaid interest to the Repurchase Date. Such right to
require the repurchase of Senior Secured Notes shall continue notwithstanding a
discharge of the Company from its obligations with respect to the Senior Secured
Notes in accordance with the provisions of Article VI or Article XIII of the
Indenture.
(b) Notice; Method of Exercising Repurchase Right. On or before the
fifteenth day after the Company knows that a Change of Control has occurred, the
Company or, at the request of the Company, the Trustee (in the name of and at
the expense of the Company), shall give notice of the occurrence of the Change
of Control and of the repurchase right set forth herein arising as a result
thereof by first-class mail, postage prepaid, to each Holder of the Senior
Secured Notes at such Xxxxxx's address appearing in the Security Register for
the Senior Secured Notes. The Company shall also deliver a copy of such notice
to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and
(4) the instructions a Holder must follow to exercise its
repurchase right.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise its repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred a Change of
Control. To exercise a repurchase right, a Holder shall deliver to the Company
(or to an agent designated by the Company for such purpose in the notice
referred to above) on or before the fifth Business Day prior to the Repurchase
Date (i) written notice of the Holder's exercise of such right, which notice
shall set forth the name of the Holder, the principal amount of the Senior
Secured Note (or portion of the Senior Secured Note) to be repurchased and a
statement that an election to exercise the repurchase right is being made
thereby, and (ii) the Senior Secured Note with respect to which the repurchase
right is being exercised, duly endorsed for transfer to the Company. Such
written notice shall be irrevocable. If the Repurchase Date falls between any
Regular Record Date and the corresponding succeeding Interest Payment Date,
Senior Secured Notes to be repurchased must be accompanied by payment from the
Holder of an amount equal to the interest thereon which the registered Holder
thereof is to receive on such Interest Payment Date. In the event a repurchase
right shall be exercised in accordance with the terms hereof and the
instructions referred to herein, (x) the Company shall on the Repurchase Date
pay or cause to be paid in cash to the Holder thereof the Repurchase Price for
each Senior Secured Note (or any portion thereof) as to which the repurchase
right has been exercised, and (y) the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such Senior
Secured Note without service charge, a new Senior Secured Note or Notes, as
applicable, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for any portion of the
principal of such Senior Secured Note as to which the repurchase right has not
been exercised. Any questions as to the compliance by a Holder of Senior Secured
Notes with the requirements for a valid exercise of a repurchase right
(including the timely delivery of an exercise notice in proper form) shall be
determined by the Company in its sole discretion, which in all events shall be
exercised in good faith.
(c) Deposit of Repurchase Price. On or prior to the Repurchase 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 7.03 of the Indenture) an amount of money sufficient to pay
the Repurchase Price of the Senior Secured Notes which are to be repurchased on
the Repurchase Date.
(d) Senior Secured Notes Not Repurchased on Repurchase Date. If any
Senior Secured Note (or any portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal of such Senior Secured Note
(or such portion thereof) shall, until paid, bear interest from the Repurchase
Date at the rate borne by such Senior Secured Note.
(e) Compliance. The Company shall comply with all tender offer rules,
including but not limited to Section 14(e) of the Exchange Act and Rule 14e-1
thereunder, to the extent applicable to any repurchase of the Senior Secured
Notes under this Section 3.4.
Section 3.5. Payment Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist any
contractual restriction on the ability of any Subsidiary of the Company to (a)
pay any dividend on, or make any other distribution on account of, its capital
stock or pay any Indebtedness owed to the Company or a Subsidiary of the Company
or (b) make loans or advances to the Company or a Subsidiary of the Company.
Section 3.6. Issuance of Subsidiary Preferred Stock.
The Company shall not permit any Subsidiary of the Company to issue any
shares of preferred stock.
Section 3.7. Asset Sales.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, conduct any Asset Sale, except for the sale of the
Company's proprietary credit card receivable portfolio, unless (i) such Asset
Sale is for fair market value (as evidenced by a resolution by the Company's
Board of Directors, certified by an officer of the Company and delivered to the
Trustee) and (ii) at least 85% of the consideration received by the Company in
such Asset Sale is in the form of cash. All net cash proceeds realized from any
Asset Sale (after taxes, reasonable fees and expenses incurred directly
therewith and any Indebtedness secured hereby), including the receipt of funds
from any federal or state income tax refund, in excess of $40,000,000 in the
aggregate for such Asset Sale or income tax refunds and all other Asset Sales or
income tax refunds occurring within the immediately preceding 360 day period
will be paid to the Trustee within 60 days of the receipt of the proceeds to
redeem Securities issued under the Indenture in accordance with the terms of the
Indenture.
Section 3.8. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Subsidiaries to,
engage in any transaction with an Affiliate (other than the Company or a wholly
owned Subsidiary thereof) on terms more favorable to the Affiliate than would
have been obtainable in arm's-length dealing. Solely for purposes of this
Section 3.8, an "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person, or any other Person that has a
relationship with such specified Person whereby either of such Persons holds or
beneficially owns 10% or more of the equity interest in the other or 10% or more
of any class of voting securities of the other. For the purposes of this
definition, "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 the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
Section 3.9. Change in Business.
The Company shall not, and shall not permit any of its Subsidiaries to,
engage in any material line of business substantially different from the Finance
Business.
ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT.
Section 4.1. Immediate Events of Default.
Notwithstanding anything in Section 9.01 of the Indenture to the
contrary, if the Company defaults in the performance of, or breaches any,
covenant set forth in Article III (other than Section 3.8) of this Second
Supplemental Indenture or in Section 7.05 of the Indenture, such default or
breach shall immediately constitute an Event of Default, without giving effect
to any passage of time or notice or both.
ARTICLE V. REDEMPTION OF SECURITIES.
Section 5.1. Right of Redemption.
The Senior Secured Notes may be redeemed in accordance with the form of
note set forth herein.
Section 5.2. Repurchase.
The Company may at any time and from time to time purchase Senior
Secured Notes in the open market or otherwise at any price, and any Senior
Secured Notes so purchased shall be promptly surrendered to the Trustee for
cancellation and shall not be reissued.
ARTICLE VI. MISCELLANEOUS.
Section 6.1. Reference to and Effect on the Indenture.
This Second Supplemental Indenture shall be construed as supplemental
to the Indenture and all the terms and conditions of this Second Supplemental
Indenture shall be deemed to be part of the terms and conditions of the
Indenture. Except as set forth herein, the Indenture heretofore executed and
delivered is hereby (i) incorporated by reference in this Second Supplemental
Indenture and (ii) ratified, approved and confirmed.
Section 6.2. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Article III hereof if the Holders of a
majority in principal amount of the Outstanding Senior Secured 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.
Section 6.3. Supplemental Indenture May be Executed in Counterparts.
This instrument may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental 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.
[Seal] MERCURY FINANCE COMPANY
By:
Name:
Title:
Attest:
By:
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:
Name:
Title:
Attest:
By:
Name:
Title:
STATE OF )
) SS:
COUNTY OF )
On this ____ day of , 1999, before me personally came
______________________, to me known, who, being by me duly sworn, did depose and
say that he/she is ___________________ of MERCURY FINANCE COMPANY, one of the
entities described in and which executed the above instrument; that he/she knows
the seal of said entity; that the seal or a facsimile thereof affixed to said
instrument is such seal; that it was so affixed by authority of the Board of
Directors of said entity, and that he/she signed his/her name thereto by like
authority.
Notary Public
In Witness Whereof, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
STATE OF )
) SS.:
COUNTY OF )
On this ____ day of , 1999, before me personally came
______________________, to me known, who, being by me duly sworn, did depose and
say that he/she is ___________________ of NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, one of the entities described in and which executed the above
instrument; that he/she knows the seal of said entity; that the seal or a
facsimile thereof affixed to said instrument is such seal; that it was so
affixed by authority of the Board of Directors of said entity, and that he/she
signed his/her name thereto by like authority.
Notary Public
In Witness Whereof, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
