EXHIBIT 4.1
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INDENTURE
Dated as of July 13, 1999
Among
METRIS COMPANIES INC., as Issuer,
the GUARANTORS named herein
and
THE BANK OF NEW YORK, as Trustee
__________________
up to $250,000,000
10 1/8% Senior Notes due 2006, Series A
10 1/8% Senior Notes due 2006, Series B
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CROSS-REFERENCE TABLE
Trust Indenture Indenture
Act Section Section
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(S) 310(a)(1)........................................................................ 7.10
(a)(2)........................................................................ 7.10
(a)(3)........................................................................ N.A.
(a)(4)........................................................................ N.A.
(a)(5)........................................................................ 7.08, 7.10.
(b)........................................................................... 7.08; 7.10; 11.02
(c)........................................................................... N.A.
(S) 311(a)........................................................................... 7.11
(b)........................................................................... 7.11
(c)........................................................................... N.A.
(S) 312(a)........................................................................... 2.05
(b)........................................................................... 11.03
(c)........................................................................... 11.03
(S) 313(a)........................................................................... 7.06
(b)(1)........................................................................ N.A.
(b)(2)........................................................................ 7.06
(c)........................................................................... 7.06; 11.02
(d)........................................................................... 7.06
(S) 314(a)........................................................................... 4.10; 4.12; 11.02
(b)........................................................................... N.A.
(c)(1)........................................................................ 11.04
(c)(2)........................................................................ 11.04
(c)(3)........................................................................ N.A.
(d)........................................................................... N.A.
(e)........................................................................... 11.05
(f)........................................................................... N.A.
(S) 315(a)........................................................................... 7.01(b)
(b)........................................................................... 7.05; 11.02
(c)........................................................................... 7.01(a)
(d)........................................................................... 7.01(c)
(e)........................................................................... 6.11
(S) 316(a)(last sentence)............................................................ 2.09
(a)(1)(A)..................................................................... 6.05
(a)(1)(B)..................................................................... 6.04
(a)(2)........................................................................ N.A.
(b)........................................................................... 6.07
(c)........................................................................... 9.04
(S) 317(a)(1)........................................................................ 6.08
(a)(2)........................................................................ 6.09
(b)........................................................................... 2.04
(S) 318(a)........................................................................... 11.01
________________
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
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Page
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.................................................................... 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.............................. 16
SECTION 1.03. Rules of Construction.......................................................... 17
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating................................................................ 17
SECTION 2.02. Execution and Authentication................................................... 18
SECTION 2.03. Registrar and Paying Agent..................................................... 19
SECTION 2.04. Paying Agent To Hold Assets in Trust........................................... 19
SECTION 2.05. Holder Lists................................................................... 19
SECTION 2.06. Transfer and Exchange.......................................................... 20
SECTION 2.07. Replacement Securities......................................................... 20
SECTION 2.08. Outstanding Securities......................................................... 20
SECTION 2.09. Treasury Securities............................................................ 21
SECTION 2.10. Temporary Securities........................................................... 21
SECTION 2.11. Cancellation................................................................... 21
SECTION 2.12. Defaulted Interest............................................................. 22
SECTION 2.13. CUSIP Number................................................................... 22
SECTION 2.14. Deposit of Moneys.............................................................. 22
SECTION 2.15. Book-Entry Provisions for Global Securities.................................... 22
SECTION 2.16. Registration of Transfers and Exchanges........................................ 23
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee............................................................. 27
SECTION 3.02. Selection of Securities To Be Redeemed......................................... 27
SECTION 3.03. Notice of Redemption........................................................... 27
SECTION 3.04. Effect of Notice of Redemption................................................. 28
SECTION 3.05. Deposit of Redemption Price.................................................... 28
SECTION 3.06. Securities Redeemed in Part.................................................... 29
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Termination of Certain Covenants in Event of Investment Grade Rating..................... 29
SECTION 4.02. Payment of Securities.................................................................... 29
SECTION 4.03. Maintenance of Office or Agency.......................................................... 29
SECTION 4.04. Limitations on Transactions with Affiliates.............................................. 29
SECTION 4.05. Limitation on Indebtedness............................................................... 30
SECTION 4.06. Payments for Consent..................................................................... 32
SECTION 4.07. Limitation on Investment Company Status.................................................. 32
SECTION 4.08. Limitation on Asset Sales................................................................ 32
SECTION 4.09. Limitation on Restricted Payments........................................................ 33
SECTION 4.10. Notice of Defaults....................................................................... 35
SECTION 4.11. Limitation on Liens...................................................................... 35
SECTION 4.12. Reports.................................................................................. 36
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.. 36
SECTION 4.14. Additional Subsidiary Guarantees......................................................... 37
SECTION 4.15. Offer to Purchase upon Change of Control................................................. 37
SECTION 4.16. Compliance Certificate................................................................... 38
SECTION 4.17. Corporate Existence...................................................................... 38
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc............................................................. 38
SECTION 5.02. Successor Corporation Substituted........................................................ 39
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default........................................................................ 40
SECTION 6.02. Acceleration............................................................................. 41
SECTION 6.03. Other Remedies........................................................................... 41
SECTION 6.04. Waiver of Past Default................................................................... 42
SECTION 6.05. Control by Majority...................................................................... 42
SECTION 6.06. Limitation on Suits...................................................................... 42
SECTION 6.07. Rights of Holders To Receive Payment..................................................... 43
SECTION 6.08. Collection Suit by Trustee............................................................... 43
SECTION 6.09. Trustee May File Proofs of Claim......................................................... 43
SECTION 6.10. Priorities............................................................................... 43
SECTION 6.11. Undertaking for Costs.................................................................... 44
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.................................................. 44
SECTION 7.02. Rights of Trustee.................................................. 45
SECTION 7.03. Individual Rights of Trustee....................................... 46
SECTION 7.04. Trustee's Disclaimer............................................... 46
SECTION 7.05. Notice of Defaults................................................. 47
SECTION 7.06. Reports by Trustee to Holders...................................... 47
SECTION 7.07. Compensation and Indemnity......................................... 47
SECTION 7.08. Replacement of Trustee............................................. 49
SECTION 7.09. Successor Trustee by Merger, etc................................... 49
SECTION 7.10. Eligibility; Disqualification...................................... 49
SECTION 7.11. Preferential Collection of Claims Against the Company.............. 49
SECTION 7.12. Trustee's Application for Instructions from the Company............ 49
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations........................... 50
SECTION 8.02. Legal Defeasance and Covenant Defeasance........................... 50
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance.............. 51
SECTION 8.04. Application of Trust Money; Trustee Acknowledgment and Indemnity... 52
SECTION 8.05. Repayment to Company............................................... 53
SECTION 8.06. Reinstatement...................................................... 53
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders......................................... 53
SECTION 9.02. With Consent of Holders............................................ 54
SECTION 9.03. Compliance with Trust Indenture Act................................ 55
SECTION 9.04. Record Date for Consents and Effect of Consents.................... 55
SECTION 9.05. Notation on or Exchange of Securities.............................. 55
SECTION 9.06. Trustee To Sign Amendments, etc.................................... 56
ARTICLE TEN
GUARANTEE
SECTION 10.01. Unconditional Guarantee............................................ 56
SECTION 10.02. Severability....................................................... 57
SECTION 10.03. Release of a Guarantor............................................. 57
SECTION 10.04. Limitation of Guarantor's Liability................................ 57
SECTION 10.05. Contribution....................................................... 57
SECTION 10.06. Execution of Security Guarantee.................................... 58
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SECTION 10.07. Subordination of Subrogation and Other Rights........................................ 58
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls......................................................... 58
SECTION 11.02. Notices.............................................................................. 59
SECTION 11.03. Communications by Holders with Other Holders......................................... 59
SECTION 11.04. Certificate and Opinion as to Conditions Precedent................................... 60
SECTION 11.05. Statements Required in Certificate................................................... 60
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar............................................ 60
SECTION 11.07. Governing Law........................................................................ 60
SECTION 11.08. No Recourse Against Others........................................................... 60
SECTION 11.09. Successors........................................................................... 61
SECTION 11.10. Counterpart Originals................................................................ 61
SECTION 11.11. Severability......................................................................... 61
SECTION 11.12. No Adverse Interpretation of Other Agreements........................................ 61
SECTION 11.13. Legal Holidays....................................................................... 61
SIGNATURES............................................................................................ S-1
EXHIBIT A Form of Series A Security.............................................................. A-1
EXHIBIT B Form of Series B Security.............................................................. B-1
EXHIBIT C Form of Legend for Global Securities................................................... C-1
EXHIBIT D Form of Certificate To Be Delivered upon Exchange or Registration
of Transfer Securities................................................................. D-1
EXHIBIT E Form of Transferee Letter of Representations........................................... E-1
EXHIBIT F Form of Certificate To Be Delivered in Connection with Regulation S Transfers.......... F-1
_________________
NOTE: This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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INDENTURE dated as of July 13, 1999, among METRIS COMPANIES INC, a
Delaware corporation (the "Company"), the GUARANTORS named herein and THE BANK
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OF NEW YORK, a New York banking corporation, as trustee (the "Trustee").
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Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person, (i)
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Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
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indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Affiliate Transaction" has the meaning provided in Section 4.04.
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"Agent" means any Registrar, Paying Agent or co-Registrar.
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"Asset Sale" means any direct or indirect sale, conveyance, transfer,
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lease (that has the effect of a disposition) or other disposition (including,
without limitation, any merger, consolidation or sale-leaseback transaction) to
any Person other than the Company or a Wholly-Owned Restricted Subsidiary of the
Company, in one transaction or a series of related transactions, of (i) any
Equity Interest of any Restricted Subsidiary of the Company; (ii) any material
license, franchise or other authorization of the Company or any Restricted
Subsidiary of the Company; (iii) any assets of the Company or any Restricted
Subsidiary of the Company which constitute substantially all of an operating
unit or line of business of the Company or any Restricted Subsidiary of the
Company; or (iv) any other property or asset of the Company or any Restricted
Subsidiary of the Company outside of the ordinary course of business (including
the receipt of proceeds paid on account of the loss of or damage to any property
or asset and awards of compensation for any asset taken by condemnation, eminent
domain or similar proceedings). For the purposes of this definition, the term
"Asset Sale" shall not include (a) any transaction consummated in compliance
with Section 5.01 and the creation of any Lien not prohibited by Section 4.11;
provided, however, that any transaction consummated in compliance with Section
5.01 involving a sale, conveyance, assignment, transfer, lease or other disposal
of less than all of the properties or assets of the Company shall be deemed to
be an Asset Sale with respect to the properties or assets of the Company and the
Restricted Subsidiaries of the Company that are not so sold, conveyed, assigned,
transferred, leased or otherwise
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disposed of in such transaction; (b) sales of property or equipment that has
become worn out, obsolete or damaged or otherwise unsuitable for use in
connection with the business of the Company or any Restricted Subsidiary of the
Company, as the case may be; (c) any transaction consummated in compliance with
Section 4.09; (d) a pledge, or transfer pursuant to a pledge of assets, which
pledge is a Permitted Lien; and (e) sales of Receivables or interests in
Receivables in connection with Securitizations or otherwise in the ordinary
course of business. In addition, solely for purposes of Section 4.08, any sale,
conveyance, transfer, lease or other disposition of any property or asset,
whether in one transaction or a series of related transactions, involving assets
with a Fair Market Value not in excess of $1.0 million in any fiscal year shall
be deemed not to be an Asset Sale.
"Bankruptcy Law" has the meaning provided in Section 6.01.
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"Board of Directors" means the Board of Directors or other governing
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body charged with the ultimate management of any Person, or any duly authorized
committee thereof.
"Board Resolution" means, with respect to any Person, a duly adopted
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resolution of the Board of Directors of such Person or a duly authorized
committee of such Board of Directors.
"Business Day" means any day other than a Saturday, a Sunday or a day
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on which banking institutions in New York, New York are not required to be open.
"Capital Lease Obligation" means, at the time any determination
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thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
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stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means: (a) U.S. dollars; (b) securities issued or
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directly and fully guaranteed or insured by the U.S. government or any agency or
instrumentality thereof having maturities of not more than six months from the
date of acquisition; (c) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million; (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(b) and (c) above entered into with any financial institution meeting the
qualifications specified in clause (c) above; (e) commercial paper rated X-0, X-
0 or the equivalent thereof by Moody's or Standard & Poor's, respectively, and
in each case maturing within six months after the date of acquisition; and (f)
money market funds, the portfolios of which are limited to investments described
in clauses (a) through (c) above.
"Change of Control" means the occurrence of any of the following
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events (whether or not approved by the Board of Directors of the Company): (i)
any Person (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than the Permitted Holders, is or becomes the "beneficial
owner" or "beneficial owners" (as defined in Rule 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all shares that any such Person has
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the right to acquire, whether such right is exercisable immediately or only
after the passage of time, upon the happening of an event or otherwise),
directly or indirectly, of more than 35% of the total voting power of the then
outstanding Voting Stock of the Company; but only in the event that the
Permitted Holders "beneficially own," directly or indirectly, in the aggregate a
lesser percentage of the total voting power of the then outstanding Voting Stock
of the Company than such other Person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Company; (ii) the Company consolidates
with, or merges with or into, another Person (other than the Company or a
Wholly-Owned Restricted Subsidiary of the Company) or the Company or its
Restricted Subsidiaries sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of the assets of the Company and its
Restricted Subsidiaries (determined on a consolidated basis) to any Person
(other than the Company or a Wholly-Owned Restricted Subsidiary of the Company),
other than any such transaction where immediately after such transaction the
Person or Persons that "beneficially owned" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
immediately prior to such transaction, directly or indirectly, the then
outstanding Voting Stock of the Company "beneficially own" (as so determined),
directly or indirectly, a majority of the total voting power of the then
outstanding Voting Stock of the surviving or transferee Person; (iii) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company was approved by a vote of a majority
of the directors of the Company then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office; or (iv) the Company is
required by the holders of its Series C Preferred to redeem the Series C
Preferred upon the occurrence of a Change in Control (as defined in the
Certificate of Designation relating to the Series C Preferred).
"Change of Control Date" has the meaning provided in Section 4.15.
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"Common Stock" means the common stock, par value $0.01 per share, of
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the Company.
"Company" means the Person named as the "Company" in the first
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paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" or "Company Order" means a written request or order
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signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice President or its Treasurer, and by
its Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Indebtedness" means, with respect to any Person as of
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any date of determination, the sum, without duplication, of (i) the total amount
of Indebtedness of such Person and its Restricted Subsidiaries, plus (ii) the
total amount of Indebtedness of any other Person, to the extent that such
Indebtedness has been Guaranteed by the referent Person or one or more of its
Restricted Subsidiaries, plus (iii) the aggregate liquidation value of all
Disqualified Stock of such Person and all preferred stock of Restricted
Subsidiaries of such Person (other than, in the case of the Company, preferred
stock of a Restricted Subsidiary of the Company held by the Company or a
Guarantor), in each case, determined on a consolidated basis in accordance with
GAAP.
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"Consolidated Leverage Ratio" means, with respect to any Person, as of
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any date of determination, the ratio of (i) the Consolidated Indebtedness of
such Person as of such date excluding, however, all Hedging Obligations that
constitute Permitted Debt to (ii) the Consolidated Net Worth of such Person as
of such date.
"Consolidated Net Income" means, with respect to any Person for any
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period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries (for such period, on a consolidated basis, determined in accordance
with GAAP); provided that (i) the Net Income (but not loss) of any Person that
is not a Restricted Subsidiary of such Person or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a Wholly-
Owned Restricted Subsidiary thereof, (ii) the Net Income of any Restricted
Subsidiary of such Person shall be excluded to the extent that the declaration
or payment of dividends or similar distributions by that Restricted Subsidiary
of that Net Income is not at the date of determination permitted without any
prior governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, (iii) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded, and (iv) the
cumulative effect of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
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date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends (other than dividends paid
solely in Equity Interests (other than Disqualified Stock)) unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the Issue Date in the book
value of any asset owned by such Person or a consolidated Restricted Subsidiary
of such Person, (y) all investments as of such date in unconsolidated Restricted
Subsidiaries and in Persons that are not Restricted Subsidiaries, and (z) all
unamortized debt discount and expense and unamortized deferred financing charges
as of such date, all of the foregoing determined in accordance with GAAP.
"Corporate Trust Office of the Trustee" means the principal office of
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the Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of original execution of this
Indenture is located at 000 Xxxxxxx Xxxxxx - 00X, Xxx Xxxx, XX 00000,
Attention: Corporate Trust Administration.
"Credit Agreement" means the Credit Facility, together with the
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related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring, in whole or in
part (including, without limitation, increasing the amount of available
borrowings thereunder (provided that such increase in borrowings is permitted by
Section 4.05), or adding Restricted Subsidiaries of the Company as additional
borrowers or guarantors thereunder to the extent permitted by this Indenture),
all or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders and whether in the form of a revolving credit facility or a
term loan facility or any combination thereof.
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"Credit Facility" means the Amended and Restated Credit Agreement
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dated as of June 30, 1998 among the Company, the Lenders named therein,
Nationsbank, N.A., as Syndication Agent, Deutsche Bank, as Documentation Agent,
U.S. Bank National Association, as Documentation Agent, Barclays Bank PLC, as
Co-Agent, Bank of America National Trust and Savings Association, as Co-Agent,
and The Chase Manhattan Bank, as Administrative Agent.
"Custodian" has the meaning provided in Section 6.01.
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"Default" means any event that is or with the passage of time or the
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giving of notice or both would be an Event of Default.
"Depository" means, with respect to the Securities issued in the form
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of one or more Global Securities, The Depository Trust Company or another Person
designated as Depository by the Company, which shall be a clearing agency
registered under the Exchange Act.
"Direct Merchants Bank" means Direct Merchants Credit Card Bank, N.A.
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a [national banking association], and a wholly-owned Subsidiary of the Company.
"Disqualified Stock" means any Capital Stock that, either (A) by its
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terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event (other than under
circumstances that would constitute a Change of Control), matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the Holder thereof, in whole or in part, on or
prior to the date that is 91 days after the date on which the Securities mature
or (B) is designated by the Company (in a Board Resolution of the Company
delivered to the Trustee) as Disqualified Stock.
"Equity Interests" means Capital Stock and all warrants, options or
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other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Event of Default" has the meaning provided in Section 6.01.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 10 1/8% Senior Notes due 2006, Series
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B, to be issued in exchange for the Initial Securities pursuant to the
Registration Rights Agreement.
"Expiration Date" has the meaning set forth in the definition of
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"Offer to Purchase."
"Fair Market Value" means, with respect to any asset, the price (after
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taking into account any liabilities relating to such assets) which could be
negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction; provided, however, that the Fair Market
Value of any such asset or assets shall be determined conclusively by the Board
of Directors of the Company acting in good faith, and shall be evidenced by
Board Resolutions of the Company delivered to the Trustee.
"Final Maturity Date" means July 15, 2006.
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"Funding Guarantor" has the meaning provided in Section 10.05.
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"GAAP" means generally accepted accounting principles set forth in the
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opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date and consistently applied.
"Global Securities" means one or more 144A Global Securities,
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Regulation S Global Securities or IAI Global Securities.
"Guarantee" means a guarantee (other than by endorsement of negotiable
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instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means each of (i) Metris Direct, Inc. and (ii) any other
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Restricted Subsidiary of the Company that executes a Subsidiary Guarantee in
accordance with the provisions of this Indenture, and their respective
successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
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obligations of such Person under (i) interest rate or currency swap agreements,
interest rate cap agreements and interest rate or currency collar agreements and
related agreements and (ii) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates, currencies and commodities
in the ordinary course of business.
"Holders" means the registered holders of the Securities.
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"IAI Global Security" means a permanent global security in registered
-------------------
form representing the aggregate principal amount of Securities transferred after
the Issue Date to Institutional Accredited Investors.
"incur" has the meaning set forth in Section 4.05.
-----
"Indebtedness" means, with respect to any Person, any indebtedness of
------------
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all indebtedness of
others secured by a Lien (except Liens on Receivables and other assets
(including spread accounts relating to a Securitization) incurred in connection
with a Securitization) on any asset of such Person (whether or not such
indebtedness is assumed by such Person and the value thereof being the lesser of
the amount of such indebtedness so secured and the Fair Market Value of such
asset that has a Lien placed upon it) and, to the extent not otherwise included,
the Guarantee by such Person of any indebtedness of any other Person.
Notwithstanding the foregoing, the term "Indebtedness" shall not include (i)
obligations pursuant to representations, warranties, covenants and indemnities
or payments to owners of beneficial interests in Receivables, in each case in
connection with a Securitization, (ii) deposit liabilities of any Restricted
Subsidiary of the Company, the deposits of which are insured by the Federal
Deposit Insurance Corporation or any successor thereto or (iii) guarantees
related to the fulfillment of the Company's obligations to bank card
associations in the ordinary
-7-
course of business. The amount of any Indebtedness outstanding as of any date
shall be (i) the accreted value thereof, in the case of any Indebtedness that
does not require current payments of interest, and (ii) the principal amount
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time.
"Initial Purchasers" means Bear, Xxxxxxx & Co. Inc., Chase Securities
------------------
Inc., Xxxxxxx Xxxxx Xxxxxx Inc. and Barclays Capital Inc.
"Initial Securities" means the 10 1/8% Senior Notes due 2006, Series
------------------
A, of the Company.
"Institutional Accredited Investor" means an institution that is an
---------------------------------
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest" means, with respect to the Securities, the sum of any cash
--------
interest and any Liquidated Damages (as defined in the Registration Rights
Agreement) on the Securities.
"Interest Payment Date" means each semiannual interest payment date on
---------------------
January 15 and July 15 of each year, commencing on January 15, 2000.
"Interest Record Date" for the interest payable on any Interest
--------------------
Payment Date (except a date for payment of defaulted interest) means the January
1 or July 1 (whether or not a Business Day), as the case may be, immediately
preceding such Interest Payment Date.
"Investment Grade Rating" means (i) with respect to Standard & Poor's,
-----------------------
any of the categories from and including AAA to and including BBB- (or
equivalent successor categories) and (ii) with respect to Moody's, any of the
categories from and including Aaa to and including Baa3 (or equivalent successor
categories).
"Investments" means, with respect to any Person, all investments by
-----------
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the book value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in the
final paragraph of Section 4.09.
"Issue Date" means July 13, 1999.
----------
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof,
-8-
any option or other agreement to sell or give a security interest in and any
filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
-------
"Net Cash Proceeds" means the aggregate cash proceeds received by the
-----------------
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets that were
the subject of such Asset Sale, a defeasance of a Securitization and any reserve
for adjustment in respect of the sale price of such asset or assets established
in accordance with GAAP.
"Net Income" means, with respect to any Person, the net income (loss)
----------
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Obligations" means any principal, interest, penalties, fees,
-----------
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offer" has the meaning set forth in the definition of "Offer to
-----
Purchase."
"Offer to Purchase" means a written offer (the "Offer") sent by or on
----------------- -----
behalf of the Company by first-class mail, postage prepaid, to each Holder at
his address appearing in the register for the Securities on the date of the
Offer offering to purchase up to the principal amount of Securities specified in
such Offer at the purchase price specified in such Offer (as determined pursuant
to this Indenture). Unless otherwise required by applicable law, the Offer
shall specify an expiration date (the "Expiration Date") of the Offer to
---------------
Purchase, which shall be not less than 20 Business Days nor more than 60 days
after the date of such Offer, and a settlement date (the "Purchase Date") for
-------------
purchase of Securities to occur no later than five Business Days after the
Expiration Date. The Company shall notify the Trustee at least 15 Business Days
(or such shorter period as is acceptable to the Trustee) prior to the mailing of
the Offer of the Company's obligation to make an Offer to Purchase, and the
Offer shall be mailed by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. The Offer shall contain
all the information required by applicable law to be included therein. The
Offer shall also contain information concerning the business of the Company and
its Subsidiaries which the Company in good faith believes will enable such
Holders to make an informed decision with respect to the Offer to Purchase
(which at a minimum will include (i) the most recent annual and quarterly
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the documents required to be
filed with the Trustee pursuant to this Indenture (which requirements may be
satisfied by delivery of such documents together with the Offer), (ii) a
description of material developments in the Company's business subsequent to the
date of the latest of such financial statements referred to in clause (i)
(including a description of the events requiring the Company to make the Offer
to Purchase), (iii) if
-9-
applicable, appropriate pro forma financial information concerning the Offer to
Purchase and the events requiring the Company to make the Offer to Purchase and
(iv) any other information required by applicable law to be included therein).
The Offer shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Offer to Purchase. The Offer shall
also state: (1) the Section of this Indenture pursuant to which the Offer to
Purchase is being made; (2) the Expiration Date and the Purchase Date; (3) the
aggregate principal amount of the outstanding Securities offered to be purchased
by the Company pursuant to the Offer to Purchase (including, if less than 100%,
the manner by which such amount has been determined pursuant to this Section of
this Indenture requiring the Offer to Purchase) (the "Purchase Amount"); (4) the
---------------
purchase price to be paid by the Company for each $1,000 aggregate principal
amount of Securities accepted for payment (as specified pursuant to this
Indenture) (the "Purchase Price"); (5) that the Holder may tender all or any
--------------
portion of the Securities registered in the name of such Holder and that any
portion of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount; (6) the place or places where Securities are to be
surrendered for tender pursuant to the Offer to Purchase; (7) that interest on
any Security not tendered or tendered but not purchased by the Company pursuant
to the Offer to Purchase will continue to accrue; (8) that on the Purchase Date
the Purchase Price will become due and payable upon each Security being accepted
for payment pursuant to the Offer to Purchase and that interest thereon shall
cease to accrue on and after the Purchase Date; (9) that each Holder electing to
tender all or any portion of a Security pursuant to the Offer to Purchase will
be required to surrender such Security at the place or places specified in the
Offer prior to the close of business on the Expiration Date (such Security
being, if the Company or the Trustee so requires, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing); (10) that each Holder will be entitled to withdraw
all or any portion of any Securities tendered by such Holder if the Company (or
its Paying Agent) receives, not later than the close of business on the fifth
Business Day next preceding the Expiration Date, a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of the Security such Holder tendered, the certificate number of the
Security such Holder tendered and a statement that such Holder is withdrawing
all or a portion of his tender; (11) that (a) if Securities in an aggregate
principal amount less than or equal to the Purchase Amount are duly tendered and
not withdrawn pursuant to the Offer to Purchase, the Company shall purchase all
such Securities and (b) if Securities in an aggregate principal amount in excess
of the Purchase Amount are tendered and not withdrawn pursuant to the Offer to
Purchase, the Company shall purchase Securities having an aggregate principal
amount equal to the Purchase Amount on a pro rata basis (with such adjustments
as may be deemed appropriate so that only Securities in denominations of $1,000
principal amount or integral multiples thereof shall be purchased); and (12)
that in the case of any Holder whose Security is purchased only in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities, of
any authorized denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for the unpurchased portion of the
Security so tendered.
An Offer to Purchase shall be governed by and effected in accordance
with the provisions above pertaining to any Offer.
"Officer" means, with respect to the Company or any Guarantor, the
------
Chairman, any Vice Chairman, the President, any Vice President, the Chief
Financial Officer, the Treasurer or the Secretary of the Company or such
Guarantor, as the case may be.
"Officers' Certificate" means a certificate signed by two Officers or
---------------------
by an Officer and an Assistant Treasurer or Assistant Secretary of the Company,
except in the case of the issuance of Initial Securities pursuant to Section
2.02, a certificate signed by one Officer, complying with Sections 11.04 and
11.05 and delivered to the Trustee.
-10-
"144A Global Security" means a permanent global security in registered
--------------------
form representing the aggregate principal amount of Initial Securities sold in
reliance on Rule 144A.
"Opinion of Counsel" means a written opinion from legal counsel. The
------------------
counsel may be an employee of or counsel to the Company or the Trustee.
"Participants" has the meaning provided in Section 2.15.
------------
"Paying Agent" has the meaning provided in Section 2.03.
------------
"Permitted Holder" means the Xxxxxx X. Xxx Company and any of its
----------------
Affiliates.
"Permitted Investments" means (a) any Investment in the Company or in
---------------------
a Wholly-Owned Restricted Subsidiary of the Company; (b) any Investment in Cash
Equivalents; (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (i) such Person
becomes a Wholly-Owned Restricted Subsidiary of the Company or (ii) such Person
is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Wholly-Owned Restricted Subsidiary of the Company; (d) any Restricted Investment
made as a result of the receipt of non-cash consideration from an Asset Sale
that was made pursuant to and in compliance with Section 4.08; (e) any
acquisition of assets solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Company; (f) Investments by the Company
or any of its Restricted Subsidiaries in the ordinary course of business in
connection with or arising out of Securitizations; (g) Hedging Obligations of
the Company and its Restricted Subsidiaries entered into in the ordinary course
of business; and (h) other Investments by the Company or any of its Restricted
Subsidiaries in any Person (other than an Affiliate of the Company that is not
also a Restricted Subsidiary of the Company) that do not exceed $5.0 million in
the aggregate at any one time outstanding (measured as of the date made and
without giving effect to subsequent changes in value).
"Permitted Liens" means (i) Liens existing on the Issue Date; (ii)
---------------
Liens to secure borrowings under the Credit Agreement; (iii) Liens on
Receivables, related contract rights, collections on Receivables and the
proceeds of all such property incurred in connection with Securitizations or
permitted Guarantees thereof; (iv) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company or such Restricted Subsidiary; (v) Liens on property existing at the
time of acquisition thereof by the Company or any Restricted Subsidiary of the
Company; provided that such Liens were in existence prior to the contemplation
of such acquisition; (vi) Liens securing Purchase Money Indebtedness permitted
to be incurred under this Indenture and incurred in the ordinary course of
business; provided, however, that any such Lien may not extend to any other
property owned by the Company or any of its Restricted Subsidiaries at the time
the Lien is incurred, and the Indebtedness secured by the Lien may not be
incurred more than 180 days after the latter of the acquisition or completion of
construction of the property subject to the Lien; provided, further, that the
amount of Indebtedness secured by such Liens does not exceed the Fair Market
Value of the property purchased or constructed with the proceeds of such
Indebtedness; (vii) Liens to secure any Permitted Refinancing Indebtedness
incurred to refinance any Indebtedness secured by any Lien referred to in the
foregoing clauses (i) through (vi); provided, however, that such new Lien shall
be limited to all or part of the same property that secured the original Lien
and the Indebtedness secured by such Lien at such time is not increased to any
amount greater than the outstanding principal amount or, if greater, committed
amount of the Indebtedness described under clauses (i) through (vi), as the case
may be, at the time the original
-11-
Lien became a Permitted Lien; (viii) Liens in favor of the Company or a
Guarantor; (ix) Liens incurred in the ordinary course of business of the Company
or any Restricted Subsidiary of the Company with respect to obligations that do
not exceed $10.0 million in the aggregate at any one time outstanding; (x) Liens
to secure the performance of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in the ordinary
course of business (including, without limitation, lessor Liens on leased
assets); (xi) Liens securing Capital Lease Obligations permitted to be incurred
under this Indenture and incurred in the ordinary course of business; (xii)
Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded; provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP in existence
at such time shall have been made therefor and (xiii) certain Liens consisting
of restrictions on the use of real property which do not materially interfere
with the property's use.
"Permitted Refinancing Indebtedness" means any Indebtedness or
----------------------------------
Disqualified Stock of the Company or any of its Restricted Subsidiaries issued
in exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease, redeem or refund other Indebtedness or Disqualified
Stock of the Company or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided that: (i) the principal amount (or accreted
value, if applicable) or liquidation value of such Permitted Refinancing
Indebtedness does not exceed the principal amount of (or accreted value, if
applicable) or liquidation value, plus accrued interest or dividends on, the
Indebtedness so extended, refinanced, renewed, replaced, defeased, redeemed or
refunded (plus the amount of reasonable expenses incurred in connection
therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity
date or redemption date, as the case may be, later than the final maturity date
or redemption date, as the case may be, of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased, redeemed
or refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Securities, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of payment
to, the Securities on terms at least as favorable to the holders of Securities
as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness or Disqualified Stock is incurred or issued, as the case may be,
either by the Company or by the Restricted Subsidiary who is the obligor or
issuer, as the case may be, on the Indebtedness or Disqualified Stock being
extended, refinanced, renewed, replaced, defeased, redeemed or refunded.
"Person" means an individual, partnership, corporation, limited
------
liability company, unincorporated organization, trust, joint venture, or a
governmental agency or political subdivision thereof.
"Physical Securities" means one or more certificated Securities in
-------------------
registered form.
"Private Exchange Securities" has the meaning provided in the
---------------------------
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth on the
------------------------
Initial Securities in the form set forth on Exhibit A hereto.
---------
"Public Equity Offering" means an underwritten offering of Common
----------------------
Stock pursuant to a registration statement that has been declared effective by
the Commission pursuant to the Securities Act (other than a registration
statement on Form S-8 or otherwise relating to equity securities issuable under
any employee benefit plan of the Company).
-12-
"Purchase Agreement" means the Purchase Agreement dated as of July 8,
------------------
1999 by and among the Company, the Guarantors and the Initial Purchasers.
"Purchase Amount" has the meaning set forth in the definition of
---------------
"Offer to Purchase."
"Purchase Date" has the meaning set forth in the definition of "Offer
-------------
to Purchase."
"Purchase Money Indebtedness" means Indebtedness of the Company and
---------------------------
its Restricted Subsidiaries incurred in the ordinary course of business for the
purpose of financing all or any part of the purchase price, or the cost of
installation, construction or improvement, of property or equipment.
"Purchase Price" has the meaning set forth in the definition of "Offer
--------------
to Purchase."
"Qualified Institutional Buyer" or "QIB" means a "qualified
----------------------------- ---
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Rating Agencies" means (i) Standard & Poor's and (ii) Xxxxx'x.
---------------
"Receivables" means credit card, consumer or commercial loans that are
-----------
purchased or originated in the ordinary course of business by the Company or any
Subsidiary of the Company.
"Redemption Date," when used with respect to any Security to be
---------------
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"redemption price," when used with respect to any Security to be
----------------
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed hereto as Exhibit A.
---------
"Registrar" has the meaning provided in Section 2.03.
---------
"Registration Rights Agreement" means the Exchange and Registration
-----------------------------
Rights Agreement dated as of the Issue Date by and among the Company, the
Guarantors and the Initial Purchasers or any similar agreement relating to any
additional Initial Securities issued after the Issue Date.
"Registration" means a registered exchange offer for the Securities by
------------
the Company or other registration of the Securities under the Securities Act
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
"Regulation S" means Regulation S under the Securities Act.
------------
"Regulation S Global Security" means a permanent global security in
----------------------------
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S under the Securities Act.
"Restricted Investment" means any Investment other than a Permitted
---------------------
Investment.
"Restricted Payment" has the meaning provided in Section 4.09.
------------------
-13-
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
-------------------
under the Securities Act; provided, however, that the Trustee shall be entitled
to request and conclusively rely upon an Opinion of Counsel with respect to
whether any Security is a Restricted Security.
"Restricted Subsidiary" of a Person means any Subsidiary of the
---------------------
referent Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
---------
"SEC" or "Commission" means the Securities and Exchange Commission.
--- ----------
"Securities" means, collectively, the Initial Securities, the Private
----------
Exchange Securities and the Unrestricted Securities treated as a single class of
securities, as amended or supplemented from time to time in accordance with the
terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated by the SEC thereunder.
"Security Guarantee" means the Form of Security Guarantee of each
------------------
Guarantor to be endorsed on each of the Securities in the form of Exhibit A (in
---------
the case of an Initial Security) or Exhibit B (in the case of an Exchange
Security) hereto.
"Securitization" means any transaction or series of transactions that
--------------
have been or may be entered into by the Company or any of its Subsidiaries in
connection with or reasonably related to a transaction or series of transactions
in which the Company or any of its Subsidiaries may sell, convey or otherwise
transfer, directly or indirectly, to (i) a Securitization Entity or (ii) any
other Person, or may grant a security interest in, any Receivables or any
interests in such Receivables (whether such Receivables are then existing or
arising in the future) and any assets related thereto including, without
limitation, all security interests in any collateral relating thereto, the
proceeds of such Receivables, and other assets which are customarily sold or in
respect of which security interests are customarily granted in connection with
securitization transactions involving such assets.
"Securitization Entity" means any Person (whether or not a Subsidiary
---------------------
of the Company) established and maintained exclusively for one or more of the
following purposes: (i) purchasing or otherwise acquiring Receivables (together
with any assets related to such Receivables, including, without limitation, all
collateral securing such Receivables, all contracts and all Guarantees or other
obligations in respect of such Receivables, proceeds of such Receivables and
other assets which are customarily transferred in connection with asset
securitization transactions involving Receivables) in connection with a
Securitization, (ii) selling such Receivables (and related assets) to a special
purpose owner trust or other Person in connection with a Securitization, (iii)
issuing asset-backed securities, or beneficial interests in Receivables, (iv)
serving as a corporate general partner (or managing member of a limited
liability company) of another Securitization Entity, (v) investing in and
holding Investments in Securitization Entities issuing securities backed by
Receivables, or (vi) engaging in activities that are incidental to and
necessary, suitable or convenient for the accomplishment of the purposes
specified above, provided, however, that the obligations of such Securitization
Entity are without recourse to the Company and any Restricted Subsidiary of the
Company other than such Securitization Entity. For purposes of this definition,
"without recourse" shall mean that the Indebtedness of such Securitization
Entity and none of the other obligations (contingent or otherwise) of a
Securitization Entity (i) is guaranteed by the Company or any other Restricted
Subsidiary of the Company, (ii) obligates the Company or any other Restricted
Subsidiary of the
-14-
Company in any way other than pursuant to representations, warranties, covenants
(including any covenant to deliver Receivables in a pre-funded Securitization)
and indemnities entered into in connection with a Securitization, or (iii)
subjects any property or asset of the Company or any Restricted Subsidiary of
the Company other than such Securitization Entity, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
representations, warranties, covenants and indemnities entered into in
connection with a Securitization. For purposes of the foregoing, a Permitted
Investment in a Securitization Entity shall not be deemed recourse. As of the
Issue Date, each of the Metris Master Trust, Metris Receivables, Inc., Metris
Funding Co. and the Fingerhut Owner Trust and Securitization Entities formed in
connection with any Securitization prior to the Issue Date shall be deemed to
satisfy the requirements of this definition.
"Series C Preferred" means the series C perpetual convertible
------------------
preferred stock, par value $.01 per share, of the Company.
"Significant Subsidiary" means any Restricted Subsidiary of the
----------------------
Company that would be a "significant subsidiary" as defined in Article 1, Rule
1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such
Regulation is in effect on the date hereof.
"Specified Senior Indebtedness" means (i) the Indebtedness of any
-----------------------------
Person, whether outstanding on the Issue Date or thereafter incurred, and (ii)
accrued and unpaid interest (including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization relating to such Person to
the extent post filing interest is allowed in such proceeding) in respect of (A)
Indebtedness of such Person for money borrowed and (B) Indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable unless, in the case of either clause (i) or
(ii), in the instrument creating or evidencing the same pursuant to which the
same is outstanding, it is provided that such obligations are subordinate in
right of payment to the Securities; provided, however, that Specified Senior
Indebtedness shall not include (1) any obligation of such Person to any
Subsidiary of such Person, (2) any liability for Federal, state, local or other
taxes owed or owing by such Person, (3) any accounts payable or other liability
to trade creditors arising in the ordinary course of business (including
Guarantees thereof or instruments evidencing such liabilities), (4) any
obligations in respect of Capital Stock of such Person or (5) that portion of
any Indebtedness which at the time of incurrence is incurred in violation of
this Indenture.
"Standard & Poor's" means Standard & Poor's Rating Services, a
-----------------
division of the XxXxxx-Xxxx Companies, Inc. and its successors.
"Stated Maturity" means with respect to any installment of interest or
---------------
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
----------
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).
-15-
"Subsidiary Guarantees" means the guarantee of the Securities by the
---------------------
Guarantors under Article Ten.
"Surviving Person" means the Person formed by or surviving a
----------------
transaction permitted by Section 5.01 or the Person to which a sale, assignment,
transfer, lease, or conveyance or other disposition is made in a transaction
permitted by Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
---
77aaa-77bbbb), as amended, as in effect on the date of this Indenture (except as
provided in Section 9.03) until such time as this Indenture is qualified under
the TIA, and thereafter as in effect on the date on which this Indenture is
qualified under the TIA.
"Trust Officer" means any officer within the corporate trust
-------------
department (or any successor group of the Trustee) including any vice president,
assistant vice president, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer to
whom such trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"Trustee" means the party named as such in the first paragraph of this
-------
Indenture until a successor replaces it in accordance with the provisions of
this Indenture and thereafter means such successor.
"United States Government Obligations" means direct non-callable
------------------------------------
obligations of the United States of America for the payment of which the full
faith and credit of the United States is pledged.
"Unrestricted Securities" means one or more Securities that do not and
-----------------------
are not required to bear the Private Placement Legend in the form set forth in
Exhibit A hereto, including, without limitation, the Exchange Securities and any
---------
Securities registered under the Securities Act pursuant to and in accordance
with the Registration Rights Agreement.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
-----------------------
is designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary: (a) has not at the time of designation, and does not thereafter,
create, incur, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness pursuant to which the lender thereof has
recourse to any of the assets of the Company or any of its Restricted
Subsidiaries; (b) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; (c) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and (d) has not otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries. Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by filing with the Trustee a certified
copy of the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 4.09. If, at any time, any Unrestricted
Subsidiary would fail to meet the foregoing requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Indenture and any Indebtedness of such Subsidiary shall be
-16-
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
(and, if such Indebtedness is not permitted to be incurred as of such date under
Section 4.05, the Company shall be in default under Section 4.05). The Board of
Directors of the Company may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided that such designation shall be deemed to
be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under
the Consolidated Leverage Ratio test set forth in the first paragraph of Section
4.05, and (ii) no Default or Event of Default would be in existence following
such designation.
"Unutilized Net Cash Proceeds" has the meaning provided in Section
----------------------------
4.08.
"Voting Stock" of any Person as of any date means the Capital Stock of
------------
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
---------------------------------
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly-Owned Restricted Subsidiary" of any Person means a Restricted
----------------------------------
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly-Owned Restricted
Subsidiaries of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" means the Company or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
-17-
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
in effect from time to time, and any other reference in this Indenture to
"generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Initial Securities and the Trustee's certificate of authentication
thereof shall be substantially in the form of Exhibit A hereto, which is hereby
---------
incorporated in and expressly made a part of this Indenture. The Exchange
Securities and the Trustee's certificate of authentication thereof shall be
substantially in the form of Exhibit B hereto, which is hereby incorporated in
---------
and expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of its issuance,
which shall be the date of its authentication. Each Security shall have an
executed Subsidiary Guarantee from each of the Guarantors endorsed thereon
substantially in the form set forth in Exhibits A and B hereto.
---------- -
The terms and provisions contained in the Securities annexed hereto as
Exhibits A and B shall constitute, and are hereby expressly made, a part of this
---------- -
Indenture and, to the extent applicable, the Company, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A and Securities
offered and sold in reliance on Regulation S shall be issued initially in the
form of one or more Global Securities, substantially in the form set forth in
Exhibit A hereto, deposited with the Trustee, as custodian for the Depository,
---------
duly executed by the Company and authenticated by the Trustee as hereinafter
provided and shall bear the legend set forth in Exhibit C hereto. The aggregate
---------
principal amount of the Global Securities may from time to time be increased or
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decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) of the Company or a Guarantor, as the case may be, shall
attest to, the Securities for the Company, and the Subsidiary Guarantees for the
Guarantors, by manual or facsimile signature.
If an Officer whose signature is on a Security or a Subsidiary
Guarantee, as the case may be, was an Officer at the time of such execution but
no longer holds that office at the time the Trustee authenticates the Security
or Subsidiary Guarantee, as the case may be, the Security or Subsidiary
Guarantee, as the case may be, shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Securities for original
issue in an aggregate principal amount not to exceed $250,000,000 in one or more
series, (ii) Private Exchange Securities from time to time only in exchange for
a like principal amount of Initial Securities and (iii) Unrestricted Securities
from time to time only (x) in exchange for (A) a like principal amount of
Initial Securities or (B) a like principal amount of Private Exchange Securities
or (y) in an aggregate principal amount of not more than the excess of
$250,000,000 over the sum of the aggregate amount of (A) Initial Securities then
outstanding, (B) Private Exchange Securities then outstanding and (C)
Unrestricted Securities issued in accordance with (iii)(x) above, in each case
upon a written order of the Company in the form of an Officers' Certificate.
Each such written order shall specify the amount of Securities to be
authenticated and the date on which the Securities are to be authenticated,
whether the Securities are to be Initial Securities, Private Exchange Securities
or Unrestricted Securities and whether the Securities are to be issued as
Physical Securities or Global Securities and such other information as the
Trustee may reasonably request. The aggregate principal amount of Securities
outstanding at any time may not exceed $250,000,000, except as provided in
Sections 2.07 and 2.08.
In the event that the Company shall issue and the Trustee shall
authenticate any Securities issued under this Indenture subsequent to the Issue
Date pursuant to clauses (i) and (iii)(y) of the first sentence of the
immediately preceding paragraph, the Company shall use its reasonable best
efforts to obtain the same "CUSIP" number for such Securities as is printed on
the Securities outstanding at such time; provided, however, that if any series
of Securities issued under this Indenture subsequent to the Issue Date is
determined, pursuant to evidence in form and substance reasonably satisfactory
to the Trustee to be a different class of security than the Securities
outstanding at such time for federal income tax purposes, the Company may obtain
a "CUSIP" number for such Securities that is different than the "CUSIP" number
printed on the Securities then outstanding. Notwithstanding the foregoing, all
Securities issued under this Indenture shall vote and consent together on all
matters (as to which any of such Securities may vote or consent) as one class
and no series of Securities will have the right to vote or consent as a separate
class on any matter.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee
-19-
includes authentication by such agent. An authenticating agent shall have the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency, which may be in the
Borough of Manhattan, The City of New York, where (a) Securities may be
presented or surrendered for registration of transfer or for exchange (the
"Registrar"), (b) Securities may be presented or surrendered for payment (the
---------
"Paying Agent") and (c) notices and demands in respect of the Securities and
------------
this Indenture may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company, upon notice to the
Trustee, may appoint one or more co-Registrars and one or more additional Paying
Agents. The term "Paying Agent" includes any additional Paying Agent. Except
as provided herein, the Company may act as Paying Agent, Registrar or
co-Registrar.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 7.07.
The Company initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Securities, and shall notify the Trustee of
any Default by the Company in making any such payment. The Company at any time
may require a Paying Agent to distribute all assets held by it to the Trustee
and account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent (if
other than the Company), the Paying Agent shall have no further liability for
such assets. If the Company or any of their Affiliates acts as Paying Agent, it
shall, on or before each due date of the principal of or interest on the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee before each Interest Record Date and at such other times as the Trustee
may request in writ-
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ing a list as of such date and in such form as the Trustee may reasonably
require of the names and addresses of Holders, which list may be conclusively
relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar or a co-Registrar with a request to register the
transfer of such Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized denominations of the same
series, the Registrar or co-Registrar shall register the transfer or make the
exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
written request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other governmental charge
payable upon exchanges or transfers pursuant to Section 2.02, 2.10, 3.06, 4.08,
4.15, or 9.05). The Registrar or co-Registrar shall not be required to register
the transfer or exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three
hereof, except the unredeemed portion of any Security being redeemed in part.
Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee and any Agent of the Company shall treat the
person in whose name the Security is registered as the owner thereof for all
purposes whether or not the Security shall be overdue, and none of the Company,
the Trustee or any such Agent shall be affected by notice to the contrary. Any
consent, waiver or actions of a Holder shall be binding upon any subsequent
Holders of such Security or a Security received upon transfer. Any Holder of a
beneficial interest in a Global Security shall, by acceptance of such beneficial
interest in a Global Security, agree that transfers of beneficial interests in
such Global Security may be effected only through a book-entry system maintained
by the Depository (or its agent), and that ownership of a beneficial interest in
a Global Security shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the Trustee's requirements for replacement of Securities are met.
Unless waived by the Company, such Holder must provide an indemnity bond or
other indemnity, sufficient in the judgment of the Company and the Trustee, to
protect the Company, the Trustee and any Agent from any loss which any of them
may suffer if a Security is replaced. The Company may charge such Holder for
their reasonable out-of-pocket expenses in replacing a Security, including
reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those canceled by it, those delivered
to it for cancellation and those described in this Section 2.08
-21-
as not outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any Affiliates of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date, Purchase Date or the Final Maturity Date the
Paying Agent holds money sufficient to pay all of the principal and interest due
on the Securities payable on that date, and is not prohibited from paying such
money to the Holders pursuant to the terms of this Indenture, then on and after
that date such Securities cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, the Guarantors or any of their respective Affiliates shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Trust Officer of the Trustee actually knows are so owned shall
be disregarded.
The Company shall notify the Trustee, in writing, when the Company,
any Guarantor, or any of their respective Affiliates repurchases or otherwise
acquires Securities, of the aggregate principal amount of such Securities so
repurchased or otherwise acquired.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate upon receipt of a written order of the Company
pursuant to Section 2.02 definitive Securities in exchange for temporary
Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of the Company,
dispose of and deliver evidence of such disposal of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Securities to replace Securities that they have paid
or delivered to the Trustee for cancellation. If the Company shall acquire any
of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
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SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time to time
on demand at the rate of interest then borne by the Securities. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Securities.
If the Company default in a payment of interest on the Securities,
they shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day preceding the date
fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(b) shall be paid to
Holders as of the Interest Record Date for the Interest Payment Date for which
interest has not been paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number and
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company
shall promptly notify the Trustee of any changes in CUSIP numbers known to it.
SECTION 2.14. Deposit of Moneys.
Prior to 1:00 p.m. New York City time on each Interest Payment Date,
Redemption Date, Purchase Date and the Final Maturity Date, the Company shall
deposit with the Paying Agent in immediately available funds money sufficient to
make cash payments, if any, due on such Interest Payment Date, Redemption Date,
Purchase Date or Final Maturity Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date, Redemption Date, Purchase Date or Final Maturity Date, as the case
may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit C.
---------
Members of, or participants in, the Depository ("Participants") shall
------------
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Com-
-23-
pany or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Securities, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(c) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through Participants, to take any action which a Holder is entitled to take
under this Indenture or the Securities and the Trustee is entitled to rely upon
any electronic instructions from beneficial owners to the Holder of any Global
Security.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal principal
amount of Physical Securities of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the Physical
Securities presented or surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar or co-
Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
-24-
(II) in the case of Physical Securities the offer and sale of which
have not been registered under the Securities Act, such Physical Securities
shall be accompanied, in the sole discretion of the Company, by the
following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the Registrar or
co-Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect (substantially in the form of Exhibit D hereto); or
---------
(B) if such Physical Security is being transferred to a QIB in
accordance with Rule 144A, a certification to that effect
(substantially in the form of Exhibit D hereto); or
---------
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a certification to
that effect (substantially in the form of Exhibit D hereto) and
---------
a transferee letter of representation (substantially in the form
of Exhibit E hereto) and, at the option of the Company, an
---------
Opinion of Counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with the Securities
Act; or
(D) if such Physical Security is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and a transferor
---------
certificate for Regulation S transfers substantially in the form
of Exhibit F hereto and an Opinion of Counsel reasonably
---------
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
(E) if such Physical Security is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification to
that effect (substantially in the form of Exhibit D hereto) and,
-------
at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
(F) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially in
the form of Exhibit D hereto) and, at the option of the Company,
---------
an Opinion of Counsel reasonably acceptable to the Company to the
effect that such transfer is in compliance with the Securities
Act.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security the offer and sale of which
has not been registered under the Securities Act may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of
a Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) certification, substantially in the form of Exhibit D hereto,
---------
that such Physical Security is being transferred (I) to a QIB,
(II) to an Accredited Investor or (III) in an offshore
transaction in reliance on Regulation S and, with respect to (II)
or (III), at the option of the Company, an Opinion of Counsel
reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act; and
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(B) written instructions directing the Registrar or co-Registrar to
make, or to direct the Depository to make, an endorsement on
the applicable Global Security to reflect an increase in the
aggregate amount of the Securities represented by the Global
Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the principal amount of Securities represented by the applicable
Global Security to be increased accordingly. If no 144A Global Security, IAI
Global Security or Regulation S Global Security, as the case may be, is then
outstanding, the Company shall, unless either of the events in the proviso to
Section 2.15(b) have occurred and are continuing, issue and the Trustee shall,
upon written instructions from the Company in accordance with Section 2.02,
authenticate such a Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or Co-Registrar of written
instructions, or such other instruction as is customary for the Depository, from
the Depository or its nominee, requesting the registration of transfer of an
interest in a 144A Global Security, an IAI Global Security or a Regulation S
Global Security, as the case may be, to another type of Global Security,
together with the applicable Global Securities (or, if the applicable type of
Global Security required to represent the interest as requested to be obtained
is not then outstanding, only the Global Security representing the interest
being transferred), the Registrar or Co-Registrar shall reflect on its books and
records (and the applicable Global Security) the applicable increase and
decrease of the principal amount of Securities represented by such types of
Global Securities, giving effect to such transfer. If the applicable type of
Global Security required to represent the interest as requested to be obtained
is not outstanding at the time of such request, the Company shall issue and the
Trustee shall, upon written instructions from the Company in accordance with
Section 2.02, authenticate a new Global Security of such type in principal
amount equal to the principal amount of the interest requested to be
transferred.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) If the Depository is at any time unwilling or unable to
continue as a depositary for the Global Securities and a successor depositary is
not appointed by the Company within 90 days or if the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of Notes in
definitive form, Physical Securities will be issued in exchange for the Global
Securities. Upon receipt by the Registrar or co-Registrar of written
instructions, or such other form of instructions as is customary for the
Depository, from the Depository or its nominee on behalf of any Person having a
beneficial interest in a Global Security and upon receipt by the Trustee of a
written order or such other form of instructions as is customary for the
Depository or the Person designated by the Depository as having such a
beneficial interest containing registration instructions and, in the case of any
such transfer or exchange of a beneficial interest in Securities the offer and
sale of which have not been registered under the Securities Act, the following
additional information and documents:
(A) if such beneficial interest is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification
to that effect (substantially in the form of Exhibit D hereto)
---------
and, at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(B) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (sub-
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stantially in the form of Exhibit D hereto) and, at the option
---------
of the Company, an Opinion of Counsel reasonably satisfactory
to the Company to the effect that such transfer is in
compliance with the Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository and
the Registrar or co-Registrar, the aggregate principal amount of the
applicable Global Security to be reduced and, following such reduction, the
Company will execute and, upon receipt of an authentication order in the
form of an Officers' Certificate in accordance with Section 2.02, the
Trustee will authenticate and deliver to the transferee a Physical Security
in the appropriate principal amount.
(ii) Securities issued in exchange for a beneficial interest in a
Global Security pursuant to this Section 2.16(d) shall be registered in such
names and in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Registrar or co-Registrar in writing. The Registrar or co-
Registrar shall deliver such Physical Securities to the Persons in whose names
such Physical Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless, and the
Trustee is hereby authorized to deliver Securities without the Private Placement
Legend if, (i) there is delivered to the Trustee an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act;(ii) such
Security has been sold pursuant to an effective registration statement under the
Securities Act (including pursuant to a Registration); or (iii) the date of such
transfer, exchange or replacement is two years after the later of (x) the Issue
Date and (y) the last date that the Company or any affiliate (as defined in Rule
144 under the Securities Act) of the Company was the owner of such Securities
(or any predecessor thereto).
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Participants or
beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
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Xxx Xxxxxxxxx shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable prior written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to paragraph 5 of
the Securities at the applicable redemption price set forth thereon, it shall
notify the Trustee in writing of the Redemption Date and the principal amount of
Securities to be redeemed. The Company shall give such notice to the Trustee at
least 45 days before the Redemption Date (unless a shorter notice shall be
agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
paragraph 5 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not then listed on a national securities exchange, on a pro rata basis, by lot
or in such other manner as the Trustee shall deem fair and appropriate.
Selection of the Securities to be redeemed pursuant to paragraph 6 of the
Securities shall be made by the Trustee only on a pro rata basis or on as nearly
a pro rata basis as is practicable (subject to the procedures of the Depository)
based on the aggregate principal amount of Securities held by each Holder. The
Trustee shall make the selection from the Securities then outstanding, subject
to redemption and not previously called for redemption.
The Trustee may select for redemption pursuant to paragraph 5 or 6 of
the Securities portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail to each Holder
whose Securities are to be redeemed at such Holder's registered address;
provided, however, that notice of a redemption pursuant to paragraph 6 of the
Securities shall be mailed to each Holder whose Securities are to be redeemed no
later than 30 days after the date of the closing of the related Public Equity
Offering of the Company and shall consummate the redemption within 90 days of
the closing of such Public Equity Offering.
Each notice of redemption shall identify the Securities to be redeemed
(including the CUSIP number thereon) and shall state:
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(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date and the only remaining right of the Holders
is to receive payment of the redemption price upon surrender to the Paying
Agent; and
(6) in the case of any redemption pursuant to paragraph 5 or 6 of
the Securities, if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after the
Redemption Date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will
be issued.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon, if any, to the Redemption Date,
but interest installments whose maturity is on or prior to such Redemption Date
shall be payable to the Holders of record at the close of business on the
relevant Interest Record Date.
SECTION 3.05. Deposit of Redemption Price.
At least one Business Day before the Redemption Date, the Company
shall deposit with the Paying Agent (or if the Company is its own Paying Agent,
it shall, on or before the Redemption Date, segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest, if any, on all
Securities to be redeemed on that date other than Securities or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid on the Redemption Date due to the failure of
the Company to deposit with the Paying Agent money sufficient to pay the
redemption price thereof, the principal and accrued and unpaid interest, if any,
thereon shall, until paid or duly provided for, bear interest as provided in
Sections 2.12 and 4.02 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Termination of Certain Covenants in Event of Investment Grade
Rating.
For so long as no Default or Event of Default has occurred and is
continuing, after either of the Rating Agencies assigns to the Securities an
Investment Grade Rating, and notwithstanding that the Securities may later cease
to have an Investment Grade Rating, the Company and its Restricted Subsidiaries
will not be subject to Sections 4.04, 4.05, 4.08, 4.09, 4.13 and clause (d)(iv)
of Section 5.01.
SECTION 4.02. Payment of Securities.
The Company shall pay the principal of and interest on the Securities
in the manner provided in the Securities and the Registration Rights Agreement.
An installment of principal or interest shall be considered paid on the date due
if the Trustee or Paying Agent (other than the Company or any Affiliates of the
Company) holds on that date money designated for and sufficient to pay the
installment in full and is not prohibited from paying such money to the Holders
of the Securities pursuant to the terms of this Indenture.
The Company shall pay cash interest on overdue principal at the same
rate per annum borne by the Securities. The Company shall pay cash interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful, as provided in Section 2.12.
SECTION 4.03. Maintenance of Office or Agency.
The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of any office or agency required by
Section 2.03. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee set forth in Section 11.02.
SECTION 4.04. Limitations on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or Guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
---------------------
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate con-
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sideration in excess of $5.0 million, a Board Resolution of the Company that
such Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors of the Company and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing; provided that with respect to any contracts or agreements, such dollar
amounts shall be with respect to annual consideration under such contracts or
agreements. The foregoing provisions shall not apply to (i) any agreement in
effect on the Issue Date and any amendments thereto; provided that any such
amendment shall be no more disadvantageous to the Holders in any material
respect than the original agreement, (ii) any compensation arrangements entered
into by the Company or any of its Restricted Subsidiaries in the ordinary course
of business and consistent with the past practice of the Company or such
Restricted Subsidiary, (iii) transactions between or among the Company and/or
its Restricted Subsidiaries, (iv) any transaction in connection with a
Securitization and (v) Restricted Payments that are permitted by Section 4.09.
SECTION 4.05. Limitation on Indebtedness.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
-----
Debt), and the Company and the Guarantors shall not issue any Disqualified
Stock, and the Company shall not permit any of its Restricted Subsidiaries (that
are not Guarantors) to issue any shares of preferred stock; provided, however,
that (x) the Company and the Guarantors may incur Indebtedness (including
Acquired Debt) or issue shares of Disqualified Stock or the Company's Restricted
Subsidiaries (that are not Guarantors) may issue shares of preferred stock if
the Consolidated Leverage Ratio of the Company, calculated on a pro forma basis
after giving effect to the incurrence of the additional Indebtedness to be
incurred or the Disqualified Stock or preferred stock to be issued and the
application of the proceeds therefrom, would have been less than 2.0 to 1 and
(y) Direct Merchants Bank may incur Indebtedness or issue shares of Disqualified
Stock if the Consolidated Leverage Ratio of the Company, calculated on a pro
forma basis after giving effect to the incurrence of the additional Indebtedness
to be incurred or the Disqualified Stock to be issued and the application of the
proceeds therefrom, would have been less than 1.5 to 1.
Notwithstanding the preceding paragraph, the Company and its
Restricted Subsidiaries may incur the following Indebtedness (collectively,
"Permitted Debt"):
--------------
(i) Indebtedness of the Company under the Credit Agreement and
Guarantees thereof by the Guarantors in an aggregate amount not to exceed
$300.0 million at any time outstanding;
(ii) the Indebtedness of the Company and its Restricted Subsidiaries
existing on the Issue Date;
(iii) Indebtedness of any Restricted Subsidiary of the Company
represented by a Subsidiary Guarantee;
(iv) Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance, defease, renew or replace,
any Indebtedness (other than intercompany Indebtedness) that was permitted
to be incurred under this Section 4.05 or that was outstanding on the Issue
Date;
(v) intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries; provided, however, that (i) if the Company
or any Guarantor is the obligor on such In-
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debtedness to a Restricted Subsidiary of the Company that is not a
Wholly-Owned Restricted Subsidiary of the Company, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Securities or the Subsidiary Guarantee, as
the case may be, and (ii)(A) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary of the Company and (B)
any sale or other transfer of any such Indebtedness to a Person that is not
either the Company or a Restricted Subsidiary of the Company shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by
the Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (v);
(vi) the issuance by a Restricted Subsidiary of the Company of
preferred stock to the Company or to any of the Guarantors; provided,
however, that any subsequent event or issuance or transfer of any Capital
Stock that results in the owner of such preferred stock, in the case of a
Guarantor, ceasing to be a Restricted Subsidiary of the Company or any
subsequent transfer of such preferred stock to a Person other than the
Company or any of the Guarantors shall be deemed to be an issuance of
preferred stock by such Restricted Subsidiary that was not permitted by
this clause (vi);
(vii) Hedging Obligations that are incurred in the ordinary course
of business;
(viii) Capital Lease Obligations and/or Purchase Money Indebtedness
of the Company or a Restricted Subsidiary of the Company incurred in the
ordinary course of business not to exceed $30.0 million at any time
outstanding;
(ix) the Guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by another provision of this Section 4.05; and
(x) additional Indebtedness of the Company and the Guarantors in
an aggregate principal amount (or accreted value, as applicable) at any
time outstanding, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any other Indebtedness incurred pursuant to
this clause (x), not to exceed $10.0 million at any time outstanding.
Notwithstanding anything in this Indenture to the contrary,
consummation of a Securitization shall not be deemed to be the incurrence of
Indebtedness or the issuance of Disqualified Stock or preferred stock by the
Company or a Restricted Subsidiary of the Company.
The Company shall not, and shall not permit any Restricted Subsidiary
of the Company to, incur any Indebtedness that is contractually subordinated to
any Indebtedness of the Company or any such Restricted Subsidiary unless such
Indebtedness is also contractually subordinated to the Securities, or the
Subsidiary Guarantee of such Restricted Subsidiary (as applicable), on
substantially identical terms; provided, however, that no Indebtedness shall be
deemed to be contractually subordinated to any other Indebtedness solely by
virtue of being unsecured or not guaranteed by any Restricted Subsidiary of the
Company.
For purposes of determining compliance with this Section 4.05, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (x) above or is
entitled to be incurred pursuant to the first paragraph of this Section 4.05,
the Company shall, in its sole discretion, classify such item of Indebtedness in
any manner that complies with this Section 4.05 and such item of Indebtedness
will be treated as having been incurred pursuant to only one of such clauses or
pursuant to the first paragraph hereof.
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SECTION 4.06. Payments for Consent.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid or is paid to all Holders of the Securities that consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to such
consent, waiver or agreement.
SECTION 4.07. Limitation on Investment Company Status.
The Company and its Subsidiaries shall not take any action, or
otherwise permit to exist any circumstance, that would require the Company to
register as an "investment company" under the Investment Company Act of 1940, as
amended.
SECTION 4.08. Limitation on Asset Sales.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, make any Asset Sale, unless
(i) the Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets sold or otherwise disposed of and (ii) at least 85% of such
consideration consists of (A) cash or Cash Equivalents, (B) properties and
assets to be used in the business of the Company and its Restricted Subsidiaries
and/or (C) Equity Interests in any Person which thereby becomes a Wholly-Owned
Restricted Subsidiary of the Company. The amount of any (i) Indebtedness (other
than any subordinated Indebtedness) of the Company or any Restricted Subsidiary
of the Company that is actually assumed by the transferee in such Asset Sale and
from which the Company and the Restricted Subsidiaries of the Company are fully
released shall be deemed to be cash for purposes of determining the percentage
of cash consideration received by the Company or any of its Restricted
Subsidiaries and (ii) notes or other similar obligations received by the Company
or any of its Restricted Subsidiaries from such transferee that are immediately
converted, sold or exchanged (or are converted, sold or exchanged within thirty
days of the related Asset Sale) by the Company or any of its Restricted
Subsidiaries into cash shall be deemed to be cash, in an amount equal to the net
cash proceeds realized upon such conversion, sale or exchange, for purposes of
determining the percentage of cash consideration received by the Company or any
of its Restricted Subsidiaries.
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Article Five and as a
result thereof the Company is no longer an obligor on the Securities, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and its Restricted Subsidiaries not so transferred for purposes of
this Section 4.08, and shall comply with the provisions of this Section 4.08
with respect to such deemed sale as if it were an Asset Sale. In addition, the
Fair Market Value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this Section 4.08.
The Company or such Restricted Subsidiary, as the case may be, may (i)
apply the Net Cash Proceeds of any Asset Sale within 365 days of receipt thereof
to repay Specified Senior Indebtedness of the Company or such Restricted
Subsidiary and permanently reduce any related commitment, or (ii) commit in
writing to, or acquire, construct or improve, properties and assets to be used
in the business of the Company and its Restricted Subsidiaries and so apply such
Net Cash Proceeds within 365 days after the receipt thereof.
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To the extent all or part of the Net Cash Proceeds of any Asset Sale
are not applied within 365 days of such Asset Sale as described in clause (i) or
(ii) of the immediately preceding paragraph (such Net Cash Proceeds, the
"Unutilized Net Cash Proceeds"), the Company shall, within 20 days after such
----------------------------
365th day, make an Offer to Purchase all outstanding Securities up to a maximum
principal amount (expressed as a multiple of $1,000) of Securities equal to such
Unutilized Net Cash Proceeds, at a purchase price in cash equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date; provided, however, that the Offer to Purchase may be deferred
until there are aggregate Unutilized Net Cash Proceeds equal to or in excess of
$10.0 million, at which time the entire amount of such Unutilized Net Cash
Proceeds, and not just the amount in excess of $10.0 million, shall be applied
as required pursuant to this paragraph.
With respect to any Offer to Purchase effected pursuant to this
Section 4.08, among the Securities, to the extent the aggregate principal amount
of Securities tendered pursuant to such Offer to Purchase exceeds the Unutilized
Net Cash Proceeds to be applied to the repurchase thereof, such Securities shall
be purchased pro rata based on the aggregate principal amount of such Securities
tendered by each Holder. To the extent the Unutilized Net Cash Proceeds exceed
the aggregate amount of Securities tendered by the Holders of the Securities
pursuant to such Offer to Purchase, the Company may retain and utilize any
portion of the Unutilized Net Cash Proceeds not applied to repurchase the
Securities for any purpose consistent with the other terms of this Indenture.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act, and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed a Default or an Event of Default.
Each Holder shall be entitled to tender all or any portion of the
Securities owned by such Holder pursuant to the Offer to Purchase, subject to
the requirement that any portion of a Security tendered must be tendered in an
integral multiple of $1,000 principal amount and subject to any proration among
tendering Holders as described above.
SECTION 4.09. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company) or to
the direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than (A)
dividends, payments or distributions payable solely in Equity Interests
(other than Disqualified Stock) of the Company and (B) dividends, payments
or distributions payable solely to the Company or its Wholly-Owned
Restricted Subsidiaries);
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company or
any direct or indirect parent of the Company or other Affiliate of the
Company (other than any such Equity Interests owned by the Company or any
Wholly-Owned Restricted Subsidiary of the Company); or
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(iii) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iii)
above being collectively referred to as "Restricted Payments"), unless, at the
-------------------
time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Consolidated
Leverage Ratio test set forth in the first paragraph of Section 4.05; and
(c) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments permitted
by clause (ii) of the next succeeding paragraph), is less than the sum of
(i) 25% of the aggregate cumulative Consolidated Net Income of the Company
for the period (taken as one accounting period) from and after July 1, 1999
to the end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a deficit,
less 100% of such deficit), plus (ii) 100% of the aggregate net cash
proceeds received by the Company from the issue or sale since the Issue
Date of Equity Interests of the Company (other than Disqualified Stock) or
of Disqualified Stock or debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Subsidiary of
the Company and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock), plus (iii) to
the extent that any Restricted Investment that was made after the Issue
Date is sold for cash or otherwise liquidated or repaid for cash, the
lesser of (A) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (B) the initial
amount of such Restricted Investment, plus (iv) $150 million.
The foregoing provisions do not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Subsidiary of the
Company) of, other Equity Interests of the Company (other than Disqualified
Stock); provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement or other acquisition shall be
excluded from clause (c) (ii) of the preceding paragraph; (iii) the payment of
any dividend by a Restricted Subsidiary of the Company to the holders of its
common Equity Interests on a pro rata basis; (iv) the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the Company
or any Restricted Subsidiary of the Company held by any member of the Company's
(or any of its Restricted Subsidiaries') management in connection with
compensation or severance arrangements; provided that the aggregate price paid
for all such repurchased, redeemed, acquired or retired Equity Interests shall
not exceed $1.0 million in any twelve-month period and no Default or Event of
Default shall have occurred and be continuing immediately after such
transaction; (v) payments of withholding taxes due or payments of exercise
prices in connection with exercises of options for common stock of the Company
by any employee or former employee of the Company (or any Affiliate of the
Company) by the tender of common stock owned by such employee or the withholding
of shares of common stock of the Company in connection with such option exercise
as consideration therefor in connection with compensation arrangements; (vi) any
purchase, redemption or other acquisition or retirement for a nominal amount of
Equity Interests issued pursuant to any shareholder rights plan of the Company,
as the same may be adopted or amended from time to time; (vii) payment of cash
in
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lieu of fractional shares of common stock that otherwise would be issuable;
and (viii) if no Default or Event of Default shall have occurred and be
continuing, the payment of dividends on the Common Stock not in excess of $0.02
per share (as adjusted for stock splits, stock dividends, reclassifications and
the like) per fiscal quarter.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under the first paragraph of this Section 4.09. All such
outstanding Investments will be deemed to constitute Investments in an amount
equal to the greater of (y) the net book value of such Investments at the time
of such designation or (z) the Fair Market Value of such Investments at the time
of such designation. Such designation will only be permitted if such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.
The amount of all non-cash Restricted Payments shall be the Fair
Market Value on the date of the Restricted Payment of the assets or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair
Market Value of any non-cash Restricted Payment shall be determined by the Board
of Directors of the Company, whose resolution with respect thereto shall be
delivered to the Trustee, such determination to be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing if such Fair Market Value exceeds $10.0 million. Not later
than 50 days after the end of any fiscal quarter (100 days in the case of the
last fiscal quarter of the fiscal year) during which any Restricted Payment is
made, the Company shall deliver to the Trustee an Officers' Certificate stating
that all Restricted Payments made during such fiscal quarter were permitted and
setting forth the basis upon which the calculations required by this Section
4.09 were computed, together with a copy of any opinion or appraisal required by
this paragraph.
SECTION 4.10. Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any of its
Subsidiaries is declared due and payable before its maturity because of the
occurrence of any default (or any event which, with notice or lapse of time, or
both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(b) Upon becoming aware of any Default or Event of Default, the
Company shall promptly, and in any event within five Business Days, deliver an
Officers' Certificate to the Trustee specifying the Default or Event of Default
and setting forth the action the Company proposes to take with respect thereto.
SECTION 4.11. Limitation on Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under this Indenture and the Securities and, in the case of a Guarantor, its
Subsidiary Guarantee are secured on an equal and ratable basis (or on a senior
basis in the case of subordinated Indebtedness) with the obligations so secured
until such time as such obligations are no longer secured by a Lien.
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SECTION 4.12. Reports.
Whether or not required by the rules and regulations of the SEC, so
long as any Securities are outstanding, the Company shall furnish to the Trustee
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" that describes the financial
condition and results of operations of the Company and its consolidated
Subsidiaries (showing in reasonable detail, either on the face of the financial
statements or in the footnotes thereto and in Management's Discussion and
Analysis of Financial Condition and Results of Operations, the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separately from the financial condition and results of operations
of the Unrestricted Subsidiaries of the Company) and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, the
Company shall file a copy of all such information and reports with the SEC for
public availability (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any Indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) this Indenture,
(b) applicable law, (c) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such Indebtedness
was incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be incurred, (d) by
reason of customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices, (e) purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so acquired, (f) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced, (g) the provisions of any
Securitization that are exclusively applicable to any Securitization Entity, or
(h) in the case of clause (iii) above, restrictions contained in security
agreements securing Indebtedness of Guarantors relating to the properties or
assets of Guarantors
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subject to the Liens created thereby, provided that such Liens were otherwise
permitted to be incurred under Section 4.11.
SECTION 4.14. Additional Subsidiary Guarantees.
The Company shall cause each Restricted Subsidiary which Guarantees
any Indebtedness of the Company to execute and deliver to the Trustee a
Subsidiary Guarantee pursuant to which such Restricted Subsidiary will Guarantee
the Company's payment obligations under the Securities on a senior unsecured
basis, jointly and severally, with any other Guarantors; provided, that the
foregoing shall not apply to Subsidiaries that (i) have properly been designated
as Unrestricted Subsidiaries in accordance with this Indenture for so long as
they continue to constitute Unrestricted Subsidiaries or (ii) qualify as
Securitization Entities for so long as they continue to constitute
Securitization Entities.
SECTION 4.15. Offer to Purchase upon Change of Control.
(a) Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall notify the
----------------------
Holders of the Securities of such occurrence in the manner prescribed by this
Indenture and shall, within 30 days after the Change of Control Date, make an
Offer to Purchase all Securities then outstanding at a purchase price in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Purchase Date (subject to the right of Holders
of record on the relevant Interest Record Date to receive interest due on the
relevant Interest Payment Date). Each Holder shall be entitled to tender all or
any portion of the Securities owned by such Holder pursuant to the Offer to
Purchase, subject to the requirement that any portion of a Security tendered
must be tendered in an integral multiple of $1,000 principal amount.
(b) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04, money sufficient to pay the Purchase Price
of all Securities or portions thereof so accepted and (iii) deliver or cause to
be delivered to the Trustee for cancellation all Securities so accepted together
with an Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company. The Paying Agent (or the Company, if so
acting) shall promptly mail or deliver to Holders of Securities so accepted,
payment in an amount equal to the Purchase Price for such Securities, and the
Trustee shall promptly authenticate and mail or deliver to each Holder of
Securities a new Security or Securities equal in principal amount to any
unpurchased portion of the Security surrendered as requested by the Holder. Any
Security not accepted for payment shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the results
of the Offer on or as soon as practicable after the Purchase Date.
(c) If the Company makes an Offer to Purchase, the Company shall
comply with all applicable tender offer laws and regulations, including, to the
extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act and any
other applicable Federal or State securities laws and regulations and any
applicable requirements of any securities exchange on which the Securities are
listed. To the extent that the provisions of any securities laws, regulations
conflict with the provisions of this Section 4.15, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.15.
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SECTION 4.16. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the
close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officer with a view to determining whether a Default
or Event of Default has occurred and whether or not the signers know of any
Default or Event of Default by the Company that occurred during such fiscal
year. If they do know of such a Default or Event of Default, their status and
the action the Company is taking or proposes to take with respect thereto. The
first certificate to be delivered by the Company pursuant to this Section 4.16
shall be for the fiscal year ending December 31, 1999.
SECTION 4.17. Corporate Existence.
Subject to Article Five, the Company shall do or shall cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
Restricted Subsidiary in accordance with the respective organizational documents
of each such Restricted Subsidiary and the rights (charter and statutory) and
material franchises of the Company and the Restricted Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right or
franchise, or the corporate existence of any Restricted Subsidiary, if the Board
of Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and the
Restricted Subsidiaries, taken as a whole; provided, further, however, that a
determination of the Board of Directors of the Company shall not be required in
the event of a merger of one or more Wholly-Owned Restricted Subsidiaries of the
Company with or into another Wholly-Owned Restricted Subsidiary of the Company
or another Person, if the surviving Person is a Wholly-Owned Restricted
Subsidiary of the Company organized under the laws of the United States or a
State thereof or of the District of Columbia. This Section 4.17 shall not
prohibit the Company from taking any other action otherwise permitted by, and
made in accordance with, the provisions of this Indenture.
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc.
(a) The Company may not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the
Securities and this Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; (iii) immediately before and after such
transaction, no Default or Event of Default exists; and (iv) the Company or the
entity or Person formed by or surviving any such consolidation or merger (if
other than
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the Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (A) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction and (B) would, at the
time of such transaction and after giving pro forma effect thereto, be permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Leverage Ratio test set forth in the first paragraph of Section 4.05.
(b) Notwithstanding paragraph (a) above or paragraph (d) below, any
Wholly-Owned Restricted Subsidiary of the Company may consolidate with or merge
into the Company or any Guarantor; provided that the Company or the Guarantor,
as the case may be, is the surviving corporation, and any Guarantor may
consolidate with or merge into the Company. Notwithstanding anything in this
Indenture to the contrary, consummation of one or more Securitizations shall not
constitute the sale of all or substantially all of the properties or assets of
the Company.
(c) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all the properties and assets of one or
more Restricted Subsidiaries the Equity Interest of which constitutes all or
substantially all the properties and assets of the Company shall be deemed to be
the transfer of all or substantially all the properties and assets of the
Company.
(d) No Guarantor may consolidate with or merge with or into (whether
or not such Guarantor is the surviving Person), another corporation, Person or
entity whether or not affiliated with such Guarantor unless, subject to the
provisions of Section 10.03, (i) the Person formed by or surviving any such
consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor under its Subsidiary Guarantee pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Securities and this Indenture; (ii) immediately after giving
effect to such transaction, no Default or Event of Default exists; (iii) such
Guarantor, or any Person formed by or surviving any such consolidation or
merger, would have Consolidated Net Worth (immediately after giving effect to
such transaction), equal to or greater than the Consolidated Net Worth of such
Guarantor immediately preceding the transaction; and (iv) immediately after
giving effect to such transaction, the Company would have been able to incur at
least $1.00 of additional Indebtedness pursuant to the Consolidated Leverage
Ratio test set forth in the first paragraph of Section 4.05.
SECTION 5.02. Successor Corporation Substituted.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in Section 5.01 in which the Company or a
Guarantor, as the case may be, is not the Surviving Person and the Surviving
Person is to assume all the Obligations of the Company under the Securities,
this Indenture and the Registration Rights Agreement or of such Guarantor under
its Subsidiary Guarantee, this Indenture and the Registration Rights Agreement,
as the case may be, pursuant to a supplemental indenture, such Surviving Person
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company or such Guarantor, as the case may be, and the Company, as the
case may be, shall be discharged from its Obligations under this Indenture and
the Securities or such Guarantor shall be discharged from its Obligations under
this Indenture and its Subsidiary Guarantee, as the case may be.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for purposes of
this Indenture:
(a) default in the payment when due of principal of (or premium, if
any, on) any Security;
(b) default in the payment when due of any interest on, or liquidated
damages with respect to any Security, which default continues for 30 days
or more;
(c) failure by the Company or any of its Restricted Subsidiaries to
comply with its obligations under Section 4.05, Section 4.08, Section 4.13
or Section 4.15;
(d) failure by the Company or any of its Restricted Subsidiaries for
30 days after notice from the Trustee or the Holders of at least 25% in
aggregate principal amount of the Securities then outstanding to comply
with any of the other covenants or agreements in this Indenture;
(e) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries) whether such Indebtedness now exists, or is
created after the Issue Date, which default (a) is caused by a failure to
pay principal of or premium, if any, or interest on such Indebtedness prior
to the expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (b) results in the
---------------
acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been
a Payment Default or the maturity of which has been so accelerated,
aggregates $5.0 million or more;
(f) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of $5.0 million, which judgments
are not paid, discharged or stayed for a period of 60 days;
(g) the Company or any of its Significant Subsidiaries (or one or
more Restricted Subsidiaries that, taken together would constitute a
Significant Subsidiary) pursuant to or within the meaning of any Bankruptcy
Law: (i) admits in writing its inability to pay its debts generally as
they become due; (ii) commences a voluntary case or proceeding; (iii)
consents to the entry of an order for relief against it in an involuntary
case or proceeding; (iv) consents or acquiesces in the institution of a
bankruptcy or insolvency proceeding against it; (v) consents to the
appointment of a Custodian of it or for all or substantially all of its
property; or (vi) makes a general assignment for the benefit of its
creditors, or any of them takes any action to authorize or effect any of
the foregoing;
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (i) is for relief against the Company or any
Significant Subsidiary (or one or more Restricted Subsidiaries that, taken
together would constitute a Significant Subsidiary) of the Company in an
involun-
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tary case or proceeding; (ii) appoints a Custodian of the Company or any
Significant Subsidiary (or one or more Restricted Subsidiaries that, taken
together would constitute a Significant Subsidiary) of the Company for all
or substantially all of its property; or (iii) orders the liquidation of
the Company or any Significant Subsidiary (or one or more Restricted
Subsidiaries that, taken together would constitute a Significant
Subsidiary) of the Company; and in each case the order or decree remains
unstayed and in effect for 60 days; provided, however, that if the entry of
such order or decree is appealed and dismissed on appeal, then the Event of
Default hereunder by reason of the entry of such order or decree shall be
deemed to have been cured; or
(i) except as permitted by this Indenture, any Subsidiary Guarantee
shall be held in a judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or disaffirm
its obligations under its Subsidiary Guarantee.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
--------------
Federal, state or foreign law for the relief of debtors. The term "Custodian"
---------
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other than an
Event of Default specified in clauses (g) or (h) of Section 6.01) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the outstanding Securities, by notice in writing to the Company (and
to the Trustee if given by the Holders) may declare the unpaid principal of (and
premium, if any) and accrued interest to the date of acceleration on all
outstanding Securities to be due and payable immediately and, upon any such
declaration, such principal amount (and premium, if any) and accrued interest,
notwithstanding anything contained in this Indenture or the Securities to the
contrary, shall become immediately due and payable.
If an Event of Default specified in clauses (g) or (h) of Section 6.01
occurs, all unpaid principal of and accrued interest on all outstanding
Securities shall ipso facto become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
Any such declaration with respect to the Securities may be rescinded
and annulled by the Holders of a majority in aggregate principal amount of the
outstanding Securities by written notice to the Trustee if all existing Events
of Default (other than the nonpayment of principal of and interest on the
Securities which has become due solely by virtue of such acceleration) have been
cured or waived and if the rescission would not conflict with any judgment or
decree. No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy maturing
upon an Event of Default shall not impair the right or remedy or constitute a
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waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 9.02, prior to the declaration of
acceleration of the Securities, the Holders of not less than a majority in
aggregate principal amount of the outstanding Securities by written notice to
the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Security as specified in clauses (a), (b) and (c) of Section 6.01 or a Default
in respect of any term or provision of this Indenture that may not be amended or
modified without the consent of each Holder affected as provided in Section
9.02. The Company shall deliver to the Trustee an Officers' Certificate stating
that the requisite percentage of Holders have consented to such waiver and
attaching copies of such consents. In case of any such waiver, the Company, the
Trustee and the Holders shall be restored to their former positions and rights
hereunder and under the Securities, respectively. This paragraph of this
Section 6.04 shall be in lieu of (S) 316(a)(1)(B) of the TIA and such (S)
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Securities, but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal amount
of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of another Holder, it being
understood that the Trustee shall have no duty (subject to Section 7.01) to
ascertain whether or not such actions or forebearances are unduly prejudicial to
such holders, or that may involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction. In the event the Trustee takes
any action or follows any direction pursuant to this Indenture, the Trustee
shall be entitled to indemnification satisfactory to it in its sole discretion
against any loss or expense caused by taking such action or following such
direction. This Section 6.05 shall be in lieu of (S) 316(a)(1)(A) of the TIA,
and such (S) 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or
the Securities unless:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of the
outstanding Securities make a written request to the Trustee to pursue a
remedy;
(iii) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
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(iv) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(v) during such 60-day period the Holders of a majority in principal
amount of the outstanding Securities do not give the Trustee a direction
which, in the opinion of the Trustee, is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of or interest on a Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in Section 6.01(a), (b) or (c) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor on the Securities for the whole amount of principal and
accrued interest remaining unpaid, together with interest overdue on principal
and to the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.07. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and may be
a member of the creditors' committee.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money or property in the following order:
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First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to the Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 shall not apply to a suit by the Trustee, a suit by
a Holder or group of Holders of more than 10% in aggregate principal amount of
the outstanding Securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal or interest on any Securities on or
after the respective due dates expressed in the Security.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the performance
of such duties as are specifically set forth herein; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions conforming to
the requirements of this Indenture; however, in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine such
certificates and opinions to determine whether or not they substantially
conform to the requirements of this Indenture.
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(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may conclusively rely on any document believed by it
to be genuine and to have been signed or presented by the proper person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and/or an Opinion of Counsel, which shall conform
to the provisions of Section 11.05. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through attorneys and agents of its selection
and shall not be responsible for the misconduct or negligence of any agent
or attorney (other than an agent who is an employee of the Trustee)
appointed with due care and appointed with the consent of the Company.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) Before the Trustee acts or refrains from acting, it may consult
with counsel of its own selection and the advice or opinion of such counsel
as to matters of law shall be full and complete
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authorization and protection from liability in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
(f) Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity satisfactory
to it against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction.
(h) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney at the expense of the Company
and shall incur no liability or additional liability of any kind by reason
of such inquiry or investigation.
(i) The Trustee shall not be deemed to have notice of any Event of
Default unless a Trust Officer of the Trustee has actual knowledge thereof
or unless the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee, and such notice references the
Securities and this Indenture.
(j) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(k) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and the Trustee shall not
be answerable for other than its gross negligence or willful misconduct.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or their
Affiliates with the same rights it would have if it were not Trustee, subject to
Section 7.10 hereof. Any Agent may do the same with like rights. However, the
Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
any document issued in connection with the sale of Securities or any statement
in the Securities other than the Trustee's certificate of authentication.
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SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and any
Trust Officer has actual knowledge of such Defaults or Events of Default, the
Trustee shall mail to each Holder notice of the Default or Event of Default
within 30 days after the occurrence thereof. Except in the case of a Default or
an Event of Default in payment of principal of or interest on any Security or a
Default or Event of Default in complying with Section 5.01, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interest of Holders.
This Section 7.05 shall be in lieu of the proviso to (S) 315(b) of the TIA and
such proviso to (S) 315(b) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA (S) 313(a), as amended, within 60 days after each
May 15 beginning with May 15, 2000 the Trustee shall mail to each Holder a
report dated as of such May 15 that complies with TIA (S) 313(a). The Trustee
also shall comply with TIA (S) 313(b), (c) and (d).
A copy of each such report at the time of its mailing to Holders shall
be filed with the SEC and each stock exchange, if any, on which the Securities
are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time, and the
Trustee shall be entitled to, such compensation as the Company and the Trustee
shall from time to time agree in writing for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
disbursements, expenses and advances, including all costs and expenses of
collection (including reasonable fees, disbursements and expenses of its agents
and outside counsel) incurred or made by it in addition to the compensation for
its services except any such disbursements, expenses and advances as may be
attributable to the Trustee's negligence or willful misconduct. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents, accountants, experts and outside counsel and any taxes or
other expenses incurred by a trust created pursuant to Section 8.01 hereof.
The Company shall fully indemnify the Trustee for, and hold it
harmless against any and all loss, damage, claims, liability or expense,
including taxes (other than franchise taxes imposed on the Trustee and taxes
based upon, measured by or determined by the income of the Trustee), arising out
of or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent that
such loss, damage, claim, liability or expense is due to its own negligence or
willful misconduct. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. However, the
failure by the Trustee to so notify the Company of a claim of which a Trust
Officer has actual knowledge shall not relieve the Company of its obligations
hereunder unless the Company has been materially prejudiced thereby. The
Company shall defend the claim and the Trustee shall cooperate in the defense at
the Company's expense, provided that the Company shall not be liable in any
action or for which it has assumed the defense for the expenses of separate
counsel to the Trustee
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unless (1) the employment of separate counsel has been authorized by the
Company, (2) the Trustee has reasonably concluded (based upon advice of counsel
to the Trustee) that there may be legal defenses available to the Trustee that
are different from or in addition to those available to the Company or (3) a
conflict or potential conflict exists (based upon advice of counsel to the
Trustee) between the Trustee and the Company, and provided, further, that in any
such event the Company's reimbursement obligation with respect to separate
counsel of the Trustee will be limited to the reasonable fees and expenses of
such counsel.
The Company need not pay for any settlement made without their written
consent, which consent shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by the
Trustee as a result of its own negligence or willful misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Securities against all money or property
held or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of or interest on particular Securities
or the Purchase Price or redemption price of any Securities to be purchased
pursuant to an Offer to Purchase or redeemed.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) occurs, the expenses (including the
reasonable fees and expenses of its agents and counsel) and the compensation for
the services shall be preferred over the status of the Holders in a proceeding
under any Bankruptcy Law and are intended to constitute expenses of
administration under any Bankruptcy Law. The Company's under this Section 7.07
and any claim arising hereunder shall survive the resignation or removal of any
Trustee, the discharge of the Company's obligations pursuant to Article Eight
and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
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all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee; provided, however, that such corporation shall be otherwise
qualified and eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible to
act as Trustee under TIA (S)(S) 310(a)(1) and 310(a)(2). The Trustee shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. If the Trustee has or shall
acquire any "conflicting interest" within the meaning of TIA (S) 310(b), the
Trustee and the Company shall comply with the provisions of TIA (S) 310(b);
provided, however, that there shall be excluded from the operation of TIA (S)
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.10, the Trustee shall resign
immediately in the manner and with the effect hereinbefore specified in this
Article Seven. The provisions of TIA (S) 310 shall apply to the Company and any
other obligor of the Securities.
SECTION 7.11. Preferential Collection of Claims Against the Company.
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
SECTION 7.12. Trustee's Application for Instructions from the Company.
Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in
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such application on or after the date specified in such application (which date
shall not be less than three Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such action
(or the effective date in the case of an omission), the Trustee shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations.
The Company may terminate its obligations under the Securities and
this Indenture as well as the obligations of the Guarantors under their
respective Subsidiary Guarantees, except those obligations referred to in the
penultimate paragraph of this Section 8.01, if :
(i) either (a) all the Securities theretofore authenticated and
delivered (except lost, stolen or destroyed Securities which have been
replaced or paid and Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or (b) all Securities not
theretofore delivered to the Trustee for cancellation have become due and
payable or have been called for redemption and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the Securities
not theretofore delivered to the Trustee for cancellation, for principal
of, premium, if any, and interest on the Securities to the date of deposit
together with irrevocable instructions from the Company directing the
Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;
(ii) the Company has paid all other sums payable under this Indenture
by the Company; and
(iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that all conditions precedent
under this Indenture relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the first paragraph of this Section 8.01, the
Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 7.07, 8.05 and 8.06
shall survive until the Securities are no longer outstanding pursuant to the
last paragraph of Section 2.08. After the Securities are no longer outstanding,
the Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's and Guarantors'
obligations under the Securities, the Subsidiary Guarantees and this Indenture
except for those surviving obligations specified above.
SECTION 8.02. Legal Defeasance and Covenant Defeasance
(a) The Company may terminate its obligations in respect of the
Securities by delivering all outstanding Securities to the Trustee for
cancellation and paying all sums payable by it on account of principal
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of and interest on all Securities or otherwise. In addition to the foregoing,
the Company may, at its option, at any time elect to have either paragraph (b)
or (c) below be applied to all outstanding Securities, subject in either case to
compliance with the conditions set forth in Section 8.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.03, be deemed to have paid
and discharged the entire indebtedness represented by the outstanding
Securities, except for (i) the rights of Holders to receive payments in respect
of the principal of, premium, if any, and interest and liquidated damages on the
Securities when such payments are due, (ii) the Company's obligations with
respect to the Securities under Sections 2.02 through 2.07, inclusive, 2.10,
2.13, 4.03 and 4.17, (iii) the rights, powers, trust, duties and immunities of
the Trustee under this Indenture and the Company's obligations in connection
therewith and (iv) Article Eight of this Indenture (hereinafter, "Legal
-----
Defeasance"). Subject to compliance with this Article Eight, the Company may
----------
exercise its option under this paragraph (b) notwithstanding the prior exercise
of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.03, be released from its
obligations under the covenants contained in Sections 4.04 through 4.16,
inclusive, and Article Five with respect to the outstanding Securities
(hereinafter, "Covenant Defeasance") and thereafter any omission to comply with
-------------------
such obligations shall not constitute a Default or an Event of Default with
respect to the Securities. In addition, upon the Company's exercise under
paragraph (a) hereof of the option applicable to this paragraph (c), subject to
the satisfaction of the conditions set forth in Section 8.03, any failure or
omission to comply with such obligations shall not constitute a Default or Event
of Default with respect to the Securities.
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance.
In order to exercise either Legal Defeasance pursuant to Section
8.02(b) or Covenant Defeasance pursuant to Section 8.02(c):
(a) the Company shall irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in U.S. dollars or United States
Government Obligations, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any,
and interest and liquidated damages on the outstanding Securities on the
stated maturity date or on the applicable redemption date, as the case may
be, and the Company shall specify whether the Securities are being defeased
to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02(b), the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of this Indenture, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of the outstanding Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;
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(c) in the case of an election under Section 8.02(c), the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of
the outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Sections 6.01(g) and 6.01(h) are concerned, at any
time in the period ending on the 91st day after the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a Default under any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Restricted Subsidiaries is a party or by which the Company or
any of its Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
with the intent of defeating, hindering, delaying or defrauding creditors
of the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, assuming no intervening bankruptcy or
insolvency of the Company and that no Holder is an insider of the Company,
after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (b) above need not be delivered if all Securities not theretofore
delivered to the Trustee for cancellation (x) have become due and payable, (y)
will become due and payable on the Final Maturity Date within one year or (z)
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company.
SECTION 8.04. Application of Trust Money; Trustee Acknowledgment and Indemnity.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 8.03, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of and
interest on the Securities.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
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The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to Section 8.03 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of outstanding Securities.
SECTION 8.05. Repayment to Company.
Subject to Sections 7.07 and 8.04, the Trustee shall promptly pay to
the Company upon written request any excess money held by it at any time. The
Trustee shall pay to the Company upon written request any money held by it for
the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee before being required to make any payment
may at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that, after a date
specified therein which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining shall
be repaid to the Company. After payment to the Company, Holders entitled to
money shall look solely to the Company for payment as general creditors unless
an applicable abandoned property law designates another person and all liability
of the Trustee or Paying Agent with respect to such money shall thereupon cease.
SECTION 8.06. Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 8.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.02 until
such time as the Trustee is permitted to apply all such money or United States
Government Obligations in accordance with Section 8.02; provided, however, that
if the Company has made any payment of interest on or principal of any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or United States Government Obligations held by the
Trustee.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company and the Guarantors, when authorized by a resolution of the
Board of Directors, and the Trustee may amend or supplement this Indenture or
the Securities without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the
rights of any Holder;
(b) to effect the assumption by a successor Person of all obligations
of the Company under the Securities and this Indenture in connection with
any transaction complying with Article Five of this Indenture;
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(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional benefit or
rights to the Holders;
(f) to make any other change that does not adversely affect the legal
rights of any Holder under this Indenture;
(g) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company;
(h) to add a Guarantor in accordance with Section 4.14 or otherwise;
or
(i) to secure the Securities pursuant to the requirements of Section
4.11 or otherwise;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.01.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantors, when
authorized by a Board Resolution, and the Trustee may modify, amend or
supplement, or waive compliance by the Company with any provision of, this
Indenture or the Securities with the written consent of the Holders of at least
a majority in principal amount of the outstanding Securities. However, without
the consent of each Holder affected, no such modification, amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may:
(a) reduce the principal amount of Securities whose Holders shall
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the Stated Maturity of any
Security or alter the provisions with respect to the repurchase or
redemption of the Securities (other than provisions relating to Section
4.08 or 4.15);
(c) reduce the rate of or change the time for payment of interest on
any Security;
(d) make any Security payable in money other than that stated in the
Securities;
(e) make any change in the provisions of this Indenture relating to
waivers of past defaults, or the rights of holders of Securities to receive
payments of principal of or premium, if any, or interest on the Securities;
(f) modify any provisions of Section 6.04 (other than to add sections
of this Indenture or the Securities subject thereto) or 6.07 or this
Section 9.02 (other than to add sections of this Indenture or the
Securities which may not be modified, amended, supplemented or waived
without the consent of each Holder affected);
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(g) reduce the percentage of the principal amount of outstanding
Securities necessary for amendment to or waiver of compliance with any
provision of this Indenture or the Securities or for waiver of any Default
in respect thereof;
(h) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Securities (except a rescission
of acceleration of the Securities by the Holders thereof as provided in
Section 6.02 and a waiver of the payment default that resulted from such
acceleration);
(i) waive a repurchase or redemption payment with respect to any
Security (other than a payment required by Section 4.08 or 4.15); or
(j) modify the ranking or priority of any Security or the Subsidiary
Guarantee in respect thereof of any Guarantor in any manner adverse to the
Holders of the Securities.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 9.04. Record Date for Consents and Effect of Consents.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Securities entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then those persons
who were Holders of Securities at such record date (or their duly designated
proxies), and only those persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date. The Trustee is entitled to rely upon any electronic
instruction from beneficial owners to the Holders of any Global Security.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (a)
through (i) of Section 9.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so
-56-
determine, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or issue a new Security shall not affect the
validity and effect of such amendment, supplement or waiver.
SECTION 9.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions). The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
ARTICLE TEN
GUARANTEE
SECTION 10.01. Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (each, a "Subsidiary Guarantee") to each Holder of a Security
--------------------
authenticated by the Trustee and to the Trustee and its successors and assigns
that: the principal of and interest on the Securities will be promptly paid in
full when due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal and interest on
any overdue interest on the Securities, to the extent lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or under the
Securities will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof. Each Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that the Subsidiary
Guarantee will not be discharged except by complete performance of the
obligations contained in the Securities, this Indenture and this Subsidiary
Guarantee. If any Holder or the Trustee is required by any court or otherwise
to return to the Company, any Guarantor, or any custodian, trustee, liquidator
or other similar official acting in relation to the Company or any Guarantor,
any amount paid by the Company or any Guarantor to the Trustee or such Holder,
this Subsidiary Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purpose of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article Six,
such obligations (whether or not due and payable) shall forth become due and
payable by each Guarantor for the purpose of this Subsidiary Guarantee.
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SECTION 10.02. Severability.
In case any provision of this Subsidiary Guarantee shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.03. Release of a Guarantor.
If the Securities are defeased in accordance with the terms of this
Indenture, or if Section 5.01(b) is complied with, or if, subject to the
requirements of Section 5.01(a), all or substantially all of the assets of any
Guarantor or all of the Equity Interests of any Guarantor are sold (including by
issuance or otherwise) by the Company in a transaction constituting an Asset
Sale and (x) the Net Cash Proceeds from such Asset Sale are used in accordance
with Section 4.08 or (y) the Company delivers to the Trustee an Officers'
Certificate to the effect that the Net Cash Proceeds from such Asset Sale shall
be used in accordance with Section 4.08 and within the time limits specified by
Section 4.08, then each Guarantor (in the case of defeasance) or such Guarantor
(in the case of compliance with Section 5.01(b) or in the event of a sale or
other disposition of all of the Equity Interests of such Guarantor) or the
corporation acquiring such assets (in the event of a sale or other disposition
of all or substantially all of the assets of such Guarantor) shall be released
and discharged from all obligations under this Article Ten without any further
action required on the part of the Trustee or any Holder.
The Trustee shall, at the sole cost and expense of the Company and
upon receipt at the reasonable request of the Trustee of an Opinion of Counsel
that the provisions of this Section 10.03 have been complied with, deliver an
appropriate instrument evidencing such release upon receipt of a request by the
Company accompanied by an Officers' Certificate certifying as to the compliance
with this Section 10.03. Any Guarantor not so released remains liable for the
full amount of principal of and interest on the Securities and the other
obligations of the Company hereunder as provided in this Article Ten.
SECTION 10.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Subsidiary Guarantee not constitute
a fraudulent transfer or conveyance for purposes of title 11 of the United
States Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar U.S. Federal or state or other applicable
law. To effectuate the foregoing intention, the Holders and each Guarantor
hereby irrevocably agree that the obligations of each Guarantor under its
Subsidiary Guarantee shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Guarantor
and after giving effect to any collections from or payments made by or on behalf
of any other Guarantor in respect of the obligations of such other Guarantor
under its Subsidiary Guarantee or pursuant to Section 10.05, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting
such a fraudulent transfer or conveyance under Federal or State law.
SECTION 10.05. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
-----------------
Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution
from all other Guarantors in a pro rata amount, based on the net assets of each
Guarantor (including the Funding Guarantor), determined in accordance with GAAP,
subject to Section 10.04, for all payments, damages and expenses incurred
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by such Funding Guarantor in discharging the Company's obligations with respect
to the Securities or any other Guarantor's obligations with respect to the
Subsidiary Guarantee.
SECTION 10.06. Execution of Security Guarantee.
To further evidence their Subsidiary Guarantee to the Holders, each of
the Guarantors hereby agrees to execute a Security Guarantee to be endorsed on
each Security ordered to be authenticated and delivered by the Trustee. Each
Security Guarantee shall be substantially in the form set forth in Exhibits A
----------
and B hereto. Each Guarantor hereby agrees that its Subsidiary Guarantee set
-----
forth in Section 10.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Security a Security Guarantee. Each such Security
Guarantee shall be signed on behalf of each Guarantor by two Officers prior to
the authentication of the Security on which it is endorsed, and the delivery of
such Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Security Guarantee on behalf of such Guarantor.
Such signature upon the Security Guarantee may be manual or facsimile signature
of such officer and may be imprinted or otherwise reproduced on the Security
Guarantee, and in case such officer who shall have signed the Security Guarantee
shall cease to be such officer before the Security on which such Security
Guarantee is endorsed shall have been authenticated and delivered by the Trustee
or disposed of by the Company, such Security nevertheless may be authenticated
and delivered or disposed of as though the Person who signed the Security
Guarantee had not ceased to be such officer of such Guarantor.
SECTION 10.07. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under its Subsidiary Guarantee or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Securities in accordance
with the provisions provided therefor in this Indenture.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any
TIA provision that may be so modified, such TIA provision shall be deemed to
apply to this Indenture as so modified. If any provision of this Indenture
excludes any TIA provision that may be so excluded, such TIA provision shall be
excluded from this Indenture.
The provisions of TIA (S)(S) 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included unless expressly
excluded by this Indenture) are a part of and govern this Indenture, whether or
not physically contained herein.
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SECTION 11.02. Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person, by facsimile and confirmed by overnight courier, or
mailed by first-class mail addressed as follows:
if to the Company:
Metris Companies Inc.
000 Xxxxx Xxxxxxx 000
Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xx, Xxxxx Xxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx - 00X
Xxx Xxxx, X.X. 00000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid, to a
Holder including any notice delivered in connection with TIA (S) 310(b), TIA (S)
313(c), TIA (S) 314(a) and TIA (S) 315(b), shall be mailed to him at his address
as set forth on the Security Register and shall be sufficiently given to him if
so mailed within the time prescribed. To the extent required by the TIA, any
notice or communication shall also be mailed to any Person described in TIA (S)
313(c).
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except for a
notice to the Trustee, which is deemed given only when received, if a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 11.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and any other person shall have the
protection of TIA (S) 312(c).
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SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance satisfactory to
the Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel in form and substance satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an Officers' Certificate
or certificates of public officials.
SECTION 11.05. Statements Required in Certificate.
Each certificate with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate has read such
covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements contained in such certificate
are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 11.07. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE, THE
SECURITIES AND THE SUBSIDIARY GUARANTEES WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 11.08. No Recourse Against Others.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Securities or the
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Subsidiary Guarantees, as the case may be, or this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Securities and the Subsidiary Guarantees.
SECTION 11.09. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of each Guarantor in this Indenture
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 11.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.11. Severability.
In case any provision in this Indenture, in the Securities or in the
Subsidiary Guarantees shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a Holder shall have no claim therefor against
any party hereto.
SECTION 11.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.13. Legal Holidays.
If a payment date is not a Business Day at a place of payment, payment
may be made at that place on the next succeeding Business Day.
[Signature Pages Follow]
S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
METRIS COMPANIES INC.
By: _____________________________
Name:
Title:
METRIS DIRECT, INC., as a Guarantor
By: _____________________________
Name:
Title:
X-0
XXX XXXX XX XXX XXXX, as Trustee
By: _____________________________
Name:
Title:
EXHIBIT A
---------
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS' AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND, IN THE CASE OF THE
FOREGOING CLAUSE (D), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
ISSUERS AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
A-1
THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF
SECTION 1271 et. seq. OF THE INTERNAL REVENUE CODE. FOR EACH $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THIS SECURITY, THE ISSUE PRICE IS $958.00. THIS ISSUE
DATE OF THIS SECURITY IS AND THE YIELD TO MATURITY IS %
METRIS COMPANIES INC.
10 1/8% Senior Note due 2006, Series A
CUSIP No.:
No. $
METRIS COMPANIES INC., a Delaware corporation (the "Company", which
-------
term includes any successor corporation), for value received, promise to pay to
Cede & Co. or registered assigns the principal sum of Dollars,
on July 15, 2006.
Interest Payment Dates: January 15 and July 15, commencing on January
15, 2000.
Interest Record Dates: January 1 and July 1.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
METRIS COMPANIES INC.
By: _____________________________
Name:
Title:
By: _____________________________
Name:
Title:
Dated:
A-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10 1/8% Senior Notes due 2006, Series A, described
in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By: _____________________________
Authorized Signatory
A-3
(REVERSE OF SECURITY)
METRIS COMPANIES INC.
10 1/8% Senior Note due 2006, Series A
1. Interest.
--------
METRIS COMPANIES INC. promises to pay interest on the principal amount
of this Security at the rate per annum shown above. Cash interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from July 13, 1999. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing on
January 15, 2000. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal from time to time
on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities
2. Method of Payment.
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to
a Paying Agent to collect principal payments. The Company shall pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
-----------------
the Company may pay principal and interest by wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to
the Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
--------------------------
Initially, The Bank of New York (the "Trustee") will act as Paying
-------
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to the Holders. The Company may, subject to certain exceptions,
act as Registrar.
4. Indenture.
---------
The Company issued the Securities under an Indenture, dated as of July
13, 1999 (the "Indenture"), by and among the Company, the Guarantors named
---------
therein and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. This Security is one of a duly
authorized issue of Securities of the Company designated as its 10 1/8% Senior
Notes due 2006, Series A (the "Initial Securities"), limited in aggregate
------------------
principal amount to $250,000,000, which may be issued under the Indenture. The
Securities include the Initial Securities, the Private Exchange Securities (as
defined in the Indenture) and the Unrestricted Securities (as defined in the
Indenture). All Securities issued under the Indenture are treated as a single
class of securities under the Indenture. The terms of the Securities include
those stated in the Indenture
A-4
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of
---
the Indenture (except as otherwise indicated in the Indenture) until such time
as the Indenture is qualified under the TIA, and thereafter as in effect on the
date on which the Indenture is qualified under the TIA. Notwithstanding anything
to the contrary herein, the Securities are subject to all such terms, and
holders of Securities are referred to the Indenture and the TIA for a statement
of them. The Securities are general unsecured obligations of the Company.
Payment on the Securities is guaranteed (each, a "Guarantee") on a
---------
senior basis, jointly and severally, by Metris Direct, Inc. and each Restricted
Subsidiary of the Company which guarantees the Securities (each, a "Guarantor")
---------
pursuant to Article Ten of the Indenture. In certain circumstances, the
Guarantees may be released.
5. Optional Redemption.
-------------------
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after July 15, 2003, at the redemption
prices (expressed as a percentage of principal amount) set forth below, plus
accrued and unpaid interest thereon, if any, to the Redemption Date (subject to
the right of holders of record on the relevant Interest Record Date to receive
interest due on the relevant Interest Payment Date) if redeemed during the 12-
month period commencing on July 15 of the years indicated below:
Year Percentage
---- ----------
2003 105.062%
2004 102.531%
2005 100.000%
6. Optional Redemption Upon Public Equity Offerings.
---------------------------------------------------
At any time on or prior to July 15, 2002, the Company may on any one
or more occasions redeem up to 35% of the Securities theretofore issued under
the Indenture at a redemption price of 110.125% of the aggregate principal
amount of the Securities, plus accrued and unpaid interest to the redemption
date, with the net cash proceeds (but only to the extent such proceeds consist
of cash or Cash Equivalents (as defined in the Indenture)) of one or more Public
Equity Offerings (as defined in the Indenture); provided that at least 65% of
the aggregate principal amount of the Securities theretofore issued remains
outstanding immediately after the occurrence of such redemption (excluding
Securities held by the Company and its Subsidiaries). The Company must mail a
notice of redemption no later than 30 days after the related Public Equity
Offering and consummate the redemption within 90 days after the closing of such
Public Equity Offering.
7. Notice of Redemption.
--------------------
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal
A-5
amount equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Security. On and after the
Redemption Date, interest will cease to accrue on Securities or portions thereof
called for redemption so long as the Company has deposited with the Paying Agent
for the Securities funds in satisfaction of the redemption price pursuant to the
Indenture and the Paying Agent is not prohibited from paying such funds to the
Holders pursuant to the terms of the Indenture.
8. Change of Control Offer.
-----------------------
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 30
----------------------
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
9. Limitation on Disposition of Assets.
-----------------------------------
The Company is, subject to certain conditions and certain exceptions,
obligated to make an Offer to Purchase Securities at a purchase price equal to
100% of the principal amount thereof, plus accrued and unpaid interest thereon,
if any, to the Purchase Date (subject to the right of Holders of record on the
Interest Relevant Record Date to receive interest due on the relevant Interest
Payment Date) with the proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
---------------------
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
---------------
If funds for the payment of principal or interest remain unclaimed for
two years, the Trustee and the Paying Agent will repay the funds to the Company
at their written request. After that, all liability of the Trustee and such
Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
----------------------------------------
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guarantees, except for
certain provisions thereof, and may be discharged from obli-
A-6
gations to comply with certain covenants contained in the Indenture, the
Securities and the Guarantees, in each case upon satisfaction of certain
conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture, the Securities and the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture, the Securities and the Guarantees to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not materially adversely
affect the rights of any Holder of a Security.
15. Restrictive Covenants.
---------------------
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets and to engage in transactions with affiliates. The limitations are
subject to a number of important qualifications and exceptions. The Company
must report annually to the Trustee on compliance with such limitations.
16. Defaults and Remedies.
---------------------
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guarantees except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding
notice is in their interest.
17. Trustee Dealings with Company and Guarantors.
--------------------------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their respective Subsidiaries or their
respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
--------------------------
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Securities or the Guarantees, as the
case may be, or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Securities and the Guarantees.
A-7
19. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
-------------------------------
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Registration Rights.
-------------------
Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will be obligated to consummate an exchange offer pursuant to which
the Holder of this Security shall have the right to exchange this Security for a
10 1/8% Senior Subordinated Note due 2006, Series B, of the Company which has
been registered under the Securities Act, in like principal amount and having
terms identical in all material respects to the Initial Securities. The Holders
shall be entitled to receive certain liquidated damages payments in the event
such exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
23. Governing Law.
-------------
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee thereof without regard to principles of conflicts of
laws to the extent that the application of the laws of another jurisdiction
would be required thereby.
A-8
[FORM OF SECURITY GUARANTEE]
SENIOR GUARANTEE
For value received, the undersigned Guarantor (as defined in the
Indenture referred to in the Security upon which this notation is endorsed)
hereby unconditionally guarantees on a senior basis (such Guarantee by the
Guarantor being referred to herein as the "Guarantee") the due and punctual
---------
payment of the principal of, premium, if any, and interest on the Securities,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal, premium and interest on the Securities,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee, all in accordance with the terms set forth in
Article Ten of the Indenture (as defined below). This Guarantee will become
effective in accordance with Article Ten of the Indenture and its terms shall be
evidenced therein. The validity and enforceability of any Guarantee shall not
be affected by the fact that it is not affixed to any particular Security.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Indenture dated as of July 13, 1999, among Metris
Companies Inc., each of the Guarantors named therein and The Bank of New York,
as trustee, as amended or supplemented (the "Indenture").
---------
The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set forth
in Article Ten of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Security Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Security Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Security Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
This Security Guarantee is subject to release upon the terms set forth
in the Indenture.
METRIS DIRECT, INC.
By: ____________________________
Name:
Title:
A-9
ASSIGNMENT FORM
I or we assign and transfer this Security to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:___________________ Signed: ___________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: __________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.08 or Section 4.15 of the Indenture, check the appropriate
box:
Section 4.08 [ ] Section 4.15 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.08 or Section 4.15 of the Indenture, state the
amount: $_____________
Dated:______________ Your Signature: ________________________________
(Signed exactly as name appears on
the other side of this Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
EXHIBIT B
---------
[FORM OF SERIES B SECURITY]
THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF
SECTION 1271 et. seq. OF THE INTERNAL REVENUE CODE. FOR EACH $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THIS SECURITY, THE ISSUE PRICE IS $958.00. THIS ISSUE
DATE OF THIS SECURITY IS AND THE YIELD TO MATURITY IS %
METRIS COMPANIES INC.
10 1/8% Senior Note due 2006, Series B
CUSIP No.:
No. $
METRIS COMPANIES INC., a Delaware corporation (the "Company", which
-------
term includes any successor corporation), for value received, promise to pay to
Cede & Co. or registered assigns the principal sum of Dollars,
on July 15, 2006.
Interest Payment Dates: January 15 and July 15, commencing on January
15, 2000.
Interest Record Dates: January 1 and July 1.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
METRIS COMPANIES INC.
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
Dated:
B-1
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10 1/8% Senior Notes due 2006, Series B, described
in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By: ___________________________
Authorized Signatory
B-2
(REVERSE OF SECURITY)
METRIS COMPANIES INC.
10 1/8% Senior Note due 2006, Series B
1. Interest.
--------
METRIS COMPANIES INC. promises to pay interest on the principal amount
of this Security at the rate per annum shown above. Cash interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from July 13, 1999. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing on
January 15, 2000. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal from time to time
on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities
2. Method of Payment.
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to
a Paying Agent to collect principal payments. The Company shall pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
-----------------
the Company may pay principal and interest by wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to
the Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
--------------------------
Initially, The Bank of New York (the "Trustee") will act as Paying
-------
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to the Holders. The Company may, subject to certain exceptions,
act as Registrar.
4. Indenture.
---------
The Company issued the Securities under an Indenture, dated as of July
13, 1999 (the "Indenture"), by and among the Company, the Guarantors named
---------
therein and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. This Security is one of a duly
authorized issue of Securities of the Company designated as its 10 1/8% Senior
Notes due 2006, Series B limited in aggregate principal amount to $250,000,000,
which may be issued under the Indenture. The Securities include the Initial
Securities (as defined in the Indenture), the Private Exchange Securities (as
defined in the Indenture) and the Unrestricted Securities (as defined in the
Indenture). All Securities issued under the Indenture are treated as a single
class of securities under the Indenture. The terms of the Securities include
those stated in the Indenture
B-3
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of
---
the Indenture (except as otherwise indicated in the Indenture) until such time
as the Indenture is qualified under the TIA, and thereafter as in effect on the
date on which the Indenture is qualified under the TIA. Notwithstanding anything
to the contrary herein, the Securities are subject to all such terms, and
holders of Securities are referred to the Indenture and the TIA for a statement
of them. The Securities are general unsecured obligations of the Company.
Payment on the Securities is guaranteed (each, a "Guarantee") on a
---------
senior basis, jointly and severally, by Metris Direct, Inc. and each Restricted
Subsidiary of the Company which guarantees the Securities (each, a "Guarantor")
---------
pursuant to Article Ten of the Indenture. In certain circumstances, the
Guarantees may be released.
5. Optional Redemption.
-------------------
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after July 15, 2003, at the redemption
prices (expressed as a percentage of principal amount) set forth below, plus
accrued and unpaid interest thereon, if any, to the Redemption Date (subject to
the right of holders of record on the relevant Interest Record Date to receive
interest due on the relevant Interest Payment Date) if redeemed during the 12-
month period commencing on July 15 of the years indicated below:
Year Percentage
---- ----------
2003 105.062%
2004 102.531%
2005 100.000%
6. Optional Redemption Upon Public Equity Offerings.
---------------------------------------------------
At any time on or prior to July 15, 2002, the Company may on any one
or more occasions redeem up to 35% of the Securities theretofore issued under
the Indenture at a redemption price of 110.125% of the aggregate principal
amount of the Securities, plus accrued and unpaid interest to the redemption
date, with the net cash proceeds (but only to the extent such proceeds consist
of cash or Cash Equivalents (as defined in the Indenture)) of one or more Public
Equity Offerings (as defined in the Indenture); provided that at least 65% of
the aggregate principal amount of the Securities theretofore issued remains
outstanding immediately after the occurrence of such redemption (excluding
Securities held by the Company and its Subsidiaries). The Company must mail a
notice of redemption no later than 30 days after the related Public Equity
Offering and consummate the redemption within 90 days after the closing of such
Public Equity Offering.
7. Notice of Redemption.
--------------------
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancella-
B-4
tion of the original Security. On and after the Redemption Date, interest will
cease to accrue on Securities or portions thereof called for redemption so long
as the Company has deposited with the Paying Agent for the Securities funds in
satisfaction of the redemption price pursuant to the Indenture and the Paying
Agent is not prohibited from paying such funds to the Holders pursuant to the
terms of the Indenture.
8. Change of Control Offer.
-----------------------
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 30
----------------------
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
9. Limitation on Disposition of Assets.
-----------------------------------
The Company is, subject to certain conditions and certain exceptions,
obligated to make an Offer to Purchase Securities at a purchase price equal to
100% of the principal amount thereof, plus accrued and unpaid interest thereon,
if any, to the Purchase Date (subject to the right of Holders of record on the
Interest Relevant Record Date to receive interest due on the relevant Interest
Payment Date) with the proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
---------------------
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
---------------
If funds for the payment of principal or interest remain unclaimed for
two years, the Trustee and the Paying Agent will repay the funds to the Company
at their written request. After that, all liability of the Trustee and such
Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
----------------------------------------
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guarantees, except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guarantees, in each case upon satisfaction of certain conditions specified in
the Indenture.
B-5
14. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture, the Securities and the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture, the Securities and the Guarantees to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not materially adversely
affect the rights of any Holder of a Security.
15. Restrictive Covenants.
---------------------
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets and to engage in transactions with affiliates. The limitations are
subject to a number of important qualifications and exceptions. The Company
must report annually to the Trustee on compliance with such limitations.
16. Defaults and Remedies.
---------------------
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guarantees except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding
notice is in their interest.
17. Trustee Dealings with Company and Guarantors.
--------------------------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their respective Subsidiaries or their
respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
--------------------------
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Securities or the Guarantees, as the
case may be, or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Securities and the Guarantees.
B-6
19. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
-------------------------------
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Governing Law.
-------------
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee thereof without regard to principles of conflicts of
laws to the extent that the application of the laws of another jurisdiction
would be required thereby.
B-7
[FORM OF SECURITY GUARANTEE]
SENIOR GUARANTEE
For value received, the undersigned Guarantor (as defined in the
Indenture referred to in the Security upon which this notation is endorsed)
hereby unconditionally guarantees on a senior basis (such Guarantee by the
Guarantor being referred to herein as the "Guarantee") the due and punctual
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payment of the principal of, premium, if any, and interest on the Securities,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal, premium and interest on the Securities,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee, all in accordance with the terms set forth in
Article Ten of the Indenture (as defined below). This Guarantee will become
effective in accordance with Article Ten of the Indenture and its terms shall be
evidenced therein. The validity and enforceability of any Guarantee shall not
be affected by the fact that it is not affixed to any particular Security.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Indenture dated as of July 13, 1999, among Metris
Companies Inc., each of the Guarantors named therein and The Bank of New York,
as trustee, as amended or supplemented (the "Indenture").
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The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set forth
in Article Ten of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Security Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Security Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Security Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
This Security Guarantee is subject to release upon the terms set forth
in the Indenture.
METRIS DIRECT, INC.
By: ____________________________
Name:
Title:
B-8
ASSIGNMENT FORM
I or we assign and transfer this Security to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:______________ Signed: _______________________________________
(Signed exactly as name appears on the
other side of this Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.08 or Section 4.15 of the Indenture, check the appropriate
box:
Section 4.08 [ ] Section 4.15 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.08 or Section 4.15 of the Indenture, state the
amount: $_____________
Dated:________________ Your Signature: __________________________________
(Signed exactly as name appears on
the other side of this Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
EXHIBIT C
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FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUERS
OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN SECTION 2.16 OF THE INDENTURE.
C-1
EXHIBIT D
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FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 10 1/8% Senior Notes due 2006
(the "Securities") of Metris Companies Inc.
-------------------------------------------
This Certificate relates to $_______ principal amount of Securities
held in the form of* ___ a beneficial interest in a Global Security or* _______
Physical Securities by ______ (the "Transferor").
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The Transferor:*
[_] has requested by written order that the Registrar deliver in exchange
for its beneficial interest in the Global Security held by the Depositary a
Physical Security or Physical Securities in definitive, registered form of
authorized denominations and an aggregate number equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
[_] has requested that the Registrar by written order exchange or register
the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such Security,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Securities and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Securities does not require registration under the Securities
Act of 1933, as amended (the "Act"), because*:
---
[_] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
[_] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
[_] Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act) which delivers a certificate to the Trustee in the form of
Exhibit E to the Indenture.
---------
[_] Such Security is being transferred in reliance on Rule 144 under the
Act.
[_] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 under the Act to a person other than an institutional
"accredited investor." [An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
certification.]
_______________________________________
[INSERT NAME OF TRANSFEROR]
By: ___________________________________
[Authorized Signatory]
Date: ______________________
*Check applicable box.
D-1
EXHIBIT E
---------
Form of Transferee Letter of Representation
-------------------------------------------
Metris Companies Inc.
x/x Xxx Xxxx xx Xxx Xxxx
000 Xxxxxxx Xxxxxx -00X
Xxx Xxxx, X. Y. 10286
Dear Sirs:
This certificate is delivered to request a transfer of $________
principal amount of the 10 1/8% Senior Notes due 2006 (the "Notes") of Metris
-----
Companies Inc. (the "Company"). Upon transfer, the Notes would be registered in
-------
the name of the new beneficial owner as follows:
Name: ___________________________
Address: ________________________
Taxpayer ID Number: _____________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the "Securities
----------
Act")) purchasing for our own account or for the account of such an
---
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Notes and we
invest in or purchase securities similar to the Notes in the normal course of
our business. We and any accounts for which we are acting are each able to bear
the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Notes to offer, sell or otherwise
transfer such Notes prior to the date which is two years after the later of the
date of original issue and the last date on which the Company or any affiliate
of the Company was the owner of such Notes (or any predecessor thereto) (the
"Resale Restriction Termination Date") only (a) to the Company, (b) pursuant to
-----------------------------------
a registration statement which has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
---
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) to an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount of Notes of
$250,000, (e) pursuant to offers and sales that occur outside the United States
within the meaning of Regulation S under the Securities Act or (f) pursuant to
any other available exemption from the registration requirements of the
Securities Act, subject in each of the foregoing cases to any requirement of law
that the disposition
E-1
of our property or the property of such investor account or accounts be at all
times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Notes is proposed to be made pursuant to clause (d) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Notes for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Company and the Trustee reserve the right
prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Notes pursuant to clause (d), (e) or (f) above to
require the delivery of an opinion of counsel, certificates and/or other
information satisfactory to the Company and the Trustee.
Dated: ______________________ TRANSFEREE: ___________________________
By: ___________________________________
E-2
EXHIBIT F
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Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
_______________, ____
The Bank of New York
000 Xxxxxxx Xxxxxx - 00X
Xxx Xxxx, X. Y. 10286
Attention: Corporate Trust Administration
Re: Metris Companies Inc. (the "Company")
10 1/8% Senior Notes due 2006, Series A, and
10 1/8% Senior Notes due 2006, Series B (the "Securities")
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $____________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
--------------
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
F-1
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By: _________________________
[Authorized Signatory]
F-2
