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EXHIBIT 4.1
HAWTHORNE FINANCIAL CORPORATION
AND
UNITED STATES TRUST COMPANY OF NEW YORK
Trustee
______________________________
INDENTURE
Dated as of December 31, 1997
______________________________
$40,000,000
12.50% Notes due 2004
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TABLE OF CONTENTS
ARTICLE ONE
Definitions and Other Provisions of General Application . . . . . . . . . . . . . 1
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Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Compliance Certificates and Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.03. Form of Documents Delivered to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1.04. Acts of Noteholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1.05. Notices, etc., to Trustee and Company. . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 1.06. Notice to Noteholders; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.07. Effect of Headings and Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.08. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.09. Separability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.10. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.11. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.12. Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.13. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.14. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE TWO
Note Forms . . . . . . . . . . . . . . . . . . . . . . . . . 17
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Section 2.01. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.02. Form of Face of Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.03. Form of Reverse of Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.04. Form of Trustee's Certificate of Authentication. . . . . . . . . . . . . . . . . . . . . 24
ARTICLE THREE
The Notes . . . . . . . . . . . . . . . . . . . . . . . . . 24
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Section 3.01. Title and Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.02. Denominations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.03. Execution, Authentication, Delivery and Dating. . . . . . . . . . . . . . . . . . . . . . 26
Section 3.04. Temporary Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.05. Registration; Registration of Transfer and Exchange. . . . . . . . . . . . . . . . . . . 27
Section 3.06. Xxxxxxxxx, Xxxxxxxxx, Lost and Stolen Notes. . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.07. Payment of Interest: Interest Rights Preserved. . . . . . . . . . . . . . . . . . . . . 30
Section 3.08. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.09. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 3.10. Authentication and Delivery of Original Issue. . . . . . . . . . . . . . . . . . . . . . 32
Section 3.11. Computation of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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ARTICLE FOUR
Satisfaction and Discharge . . . . . . . . . . . . . . . . . . . . . 32
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Section 4.01. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.02. Application of Trust Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE FIVE
Events of Default and Remedies . . . . . . . . . . . . . . . . . . . . 34
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Section 5.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.02. Acceleration of Maturity; Rescission and Annulment. . . . . . . . . . . . . . . . . . . . 36
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 5.04. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.05. Trustee May Enforce Claims Without Possession of Notes. . . . . . . . . . . . . . . . . . 39
Section 5.06. Application of Money Collected. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.07 Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.08. Unconditional Right of Noteholders to Receive Principal,
Premium and Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.09. Restoration of Rights and Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.10. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.11. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.12. Control by Noteholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.13. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.14. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 5.15. Waiver of Stay or Extension Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE SIX
The Trustee . . . . . . . . . . . . . . . . . . . . . . . . 43
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Section 6.01. Certain Duties and Responsibilities. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.02. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.03. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.04. Not Responsible for Recitals or Issuance of Notes. . . . . . . . . . . . . . . . . . . . 45
Section 6.05. May Hold Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.06. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.07. Compensation and Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.08. Disqualification; Conflicting Interests. . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.09. Corporate Trustee Required; Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.10. Resignation and Removal; Appointment of Successor. . . . . . . . . . . . . . . . . . . . 47
Section 6.11. Acceptance of Appointment by Successor. . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 6.12. Merger, Conversion, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 6.13. Preferential Collection of Claims Against the Company . . . . . . . . . . . . . . . . . . 49
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ARTICLE SEVEN
Noteholders' Lists and Reporting by Trustee and Company . . . . . . . . . . . . . 49
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Section 7.01. Company to Furnish Trustee Names and Addresses of
Noteholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.02. Preservation of Information; Communications to
Noteholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.03. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.04. Reports by Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.05. Officers' Certificate with Respect to Additional Interest. . . . . . . . . . . . . . . . 50
ARTICLE EIGHT
Consolidation, Xxxxxx, Conveyance, Transfer or Lease . . . . . . . . . . . . . . 50
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Section 8.01. Company May Consolidate, etc., Only on Certain Terms. . . . . . . . . . . . . . . . . . . 50
Section 8.02. Successor Entity Substituted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE NINE
Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 51
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Section 9.01. Supplemental Indentures Without Notice to or Consent of
Noteholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.02. Supplemental Indentures With Consent of Noteholders. . . . . . . . . . . . . . . . . . . 52
Section 9.03. Execution of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.04. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.05. Reference in Notes to Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . 53
Section 9.06. Conformity With Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE TEN
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 54
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Section 10.01. Payment of Principal, Interest and Premium. . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.02. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.03. Money for Note Payments to be Held In Trust. . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.04. Payment of Taxes and Other Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 10.05. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.06. Maintenance of Depository Institution Subsidiary. . . . . . . . . . . . . . . . . . . . . . 56
Section 10.07. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.08. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.09. Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.10. Statements as to Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.11. Limitations on Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.12. Limitations on Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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Section 10.13. Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.14. Restrictions on Issuance and Sale or Disposition of Capital
Stock of Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 10.15. Limitations on Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . 60
Section 10.16. Limitations on Liens and Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 10.17. Provision of Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 10.18. Offer to Purchase Upon a Change of Control . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 10.19. Payments for Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 10.20. Waiver of Certain Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE ELEVEN
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . 64
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Section 11.01. Election to Redeem; Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 11.02. Selection of Notes to be Redeemed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 11.03. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 11.04. Effect of Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 11.05. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 11.06. Notes Payable on Redemption Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 11.07. Notes Redeemed in Part. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 11.08. Optional Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE TWELVE
Defeasance and Covenant Defeasance . . . . . . . . . . . . . . . . . . . 67
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Section 12.01. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 12.02. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 12.03. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 12.04. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . 68
Section 12.05. Deposited Money and U.S. Government Obligations to be Held
in Trust; Other Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . 70
Section 12.06. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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 December 31, 1997, between HAWTHORNE
FINANCIAL CORPORATION, a Delaware corporation, having its principal office at
0000 Xxxxxxxxx Xxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000 (the "Company"), and UNITED
STATES TRUST COMPANY OF NEW YORK, a New York corporation, having its principal
corporate trust office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation, execution and
delivery of its 12.50% Notes due 2004 (the "Notes"), and to provide the terms
and conditions upon which the Notes are to be authenticated, issued and
delivered, the Company has duly authorized the execution of this Indenture.
All acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee as in this
Indenture provided, the legal, valid and binding obligations of the Company,
and to constitute these presents as a valid indenture and agreement according
to its terms, have been done and performed, and the execution of this Indenture
and the issue hereunder of the Notes have in all respects been duly authorized,
and the Company, in the exercise of the legal right and power vested in it,
executes this Indenture and proposes to make, execute and deliver the Notes.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders
of the Notes as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. DEFINITIONS.
For all purposes of this Indenture except as otherwise
expressly provided or unless the context otherwise requires:
(1) All references in this instrument to designated
"Articles," "Sections" and other subdivisions are to the designated articles,
sections and other subdivisions of this instrument as originally executed. The
words "herein," "hereto" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular article, section
or other subdivision;
(2) the terms defined in this Article have the meaning
assigned to them in this Article, and include the plural as well as the
singular;
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(3) all other terms used herein which are defined in the
Trust Indenture Act of 1939, as amended, either directly or by reference
therein, have the meanings assigned to them therein; and
(4) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally accepted
accounting principles, which, with respect to any computation required or
permitted hereunder, shall mean such accounting principles as are generally
accepted at the date or time of such computation.
Certain terms, used principally in Article Six, are defined in
that Article.
"Acquired Indebtedness" means Indebtedness of a person (i)
existing at the time such Person becomes a Subsidiary of or is merged with or
into any other Person or (ii) assumed in connection with the acquisition of
assets from such Person, in each case, other than Indebtedness incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary of
such other Person or such acquisition. Acquired Indebtedness shall be deemed
to be incurred on the date of the related acquisition of assets from such
Person or the date such Person becomes a Subsidiary of or is merged with or
into such other Person.
"Act" when used with respect to any Noteholder has the meaning
specified in Section 1.04.
"Additional Interest" has the meaning set forth in the form of
Note contained in Section 2.02. Unless the context otherwise requires,
references herein to "interest" on the Notes shall include Additional Interest.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
corresponding to the foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee to act on behalf of the Trustee to authenticate Notes.
"Authorized Newspaper" means a newspaper of general
circulation in the relevant geographic area, printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays. Whenever successive weekly publications in an
Authorized Newspaper are required hereunder they may be made, unless otherwise
expressly provided herein, on the same or different days of the week and in the
same or in different Authorized Newspapers.
"Average Life to Stated Maturity" means, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date
of determination to the date or dates of each successive
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scheduled principal payment of such Indebtedness multiplied by (b) the amount
of each such principal payment by (ii) the sum of all such principal payments.
"Bank" means (a) Hawthorne Savings, FSB, until a successor
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Bank" shall mean such successor; and (b) any bank or savings or
depository institution that is or shall become an Affiliate of the Company.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day upon which banking institutions or trust
companies in the city in which the principal corporate trust office of the
Trustee is located are authorized or required by law, regulation or executive
order to remain closed.
"Capital Distribution Requirement" means that the Bank shall
(a) be a Tier 1 association as defined in the OTS regulation regarding capital
distributions, located at 12 C.F.R. Section 563.134 (and any amendment thereof)
or any succeeding regulation, and (b) not be subject to any written agreement,
order, prohibition or directive with or by the OTS or any other supervisory
entity regarding capital distributions.
"Capital Lease Obligation" of any Person means any obligations
of such Person under any capital lease for real or personal property which, in
accordance with GAAP, is required to be recorded as a capitalized lease
obligation; and, for the purpose of this Indenture, the amount of such
obligation at any date shall be the capitalized amount thereof at such date,
determined in accordance with GAAP.
"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents in the equity (however
designated) of such Person and any rights (other than debt securities
convertible into an equity interest), warrants or options to acquire an equity
interest in such Person.
"Change of Control" means the occurrence of any of the
following events: (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 25% of the total Voting Stock of the Company, (ii) the Company
consolidates with, or merges into, another person, or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any person, or any person consolidates with, or merges into, the
Company, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company is changed into
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or exchanged for cash, securities or other property, other than any such
transaction between the Company and a Wholly Owned Subsidiary, or (iii) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Company's Board of Directors (together with any new
directors whose elections by the Company's Board of Directors or whose
nomination for elections by the stockholders of the Company was approved by a
vote of 65% of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors then in office.
"Change of Control Purchase Date" has the meaning specified in
Section 10.18.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Company Consent," "Company Order" and "Company Request" mean,
respectively, a written consent, order or request signed in the name of the
Company by its Chairman of the Board, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Consolidated Net Income (Loss)" of any Person means, for any
period, the consolidated net income (or loss) of such Person and its
consolidated Subsidiaries for such period as determined in accordance with
GAAP, adjusted, to the extent included in calculating such net income (loss),
by excluding, without duplication, (i) all extraordinary gains and losses
(other than those relating to the use of net operating losses of such Person
carried forward), less all fees and expenses relating thereto, net of taxes,
(ii) the portion of net income (or loss) of any other Person (other than any of
such Person's consolidated Subsidiaries) in which such Person or any of its
Subsidiaries has an ownership interest, except to the extent of the amount of
dividends or other distributions actually paid to such Person or its
consolidated Subsidiaries in cash by such other Person during such period,
(iii) net income (or loss) of any Person combined with such Person or any of
its Subsidiaries on a "pooling of interests" basis attributable to any period
prior to the date of combination, (iv) any gain or loss, net of taxes, realized
upon the termination of any employee pension benefit plan or (v) the net income
of any consolidated Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulations applicable to that
Subsidiary or its shareholders; provided that, upon the termination or
expiration of such dividend or distribution restrictions, the portion of net
income (or loss) of such consolidated Subsidiary allocable to such Person and
previously excluded shall be added to the Consolidated Net Income (Loss) of
such Person to the extent of the amount of dividends or other distributions
available to be paid to such Person in cash by such Subsidiary.
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"Consolidated Tangible Net Worth" of any Person and its
Subsidiaries means as of the date of determination all amounts that would be
included under stockholders' equity on a consolidated balance sheet of such
Person and its Subsidiaries determined in accordance with GAAP, less an amount
equal to the consolidated intangible assets (other than capitalized mortgage
servicing rights) of such Person and its Subsidiaries determined in accordance
with GAAP.
"Default" means any event that upon notice or the passage of
time or both would be an Event of Default.
"Defaulted Interest" has the meaning specified in Section
3.07.
"Depositary" means the Person designated to act as Depositary
by the Company in Section 3.01, and any successor Depositary hereunder.
"Disqualified Capital Stock" means any Capital Stock which, by
its terms (or by the terms of any security into which it is convertible or
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the option of the holder thereof, in whole or in part on, or
prior to, or is exchangeable for debt securities of the Company or its
Subsidiaries prior to, the final Stated Maturity of principal of the Notes;
provided that only the amount of such Capital Stock that matures or is
redeemable prior to the Stated Maturity of principal of the Notes shall be
deemed to be Disqualified Capital Stock.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Note" means a Note issued in exchange for a Rule
144A Note or Notes pursuant to an Exchange Offer or otherwise in a transaction
registered under the Securities Act.
"Exchange Offer" shall mean the offer by the Company to the
Holders to exchange all of the Rule 144A Notes for a like principal amount of
Exchange Notes pursuant to the Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of which is under
compulsion to complete the transaction as determined by the Board of Directors
of the Company, acting in good faith, and shall be evidenced by a Board
Resolution delivered to the Trustee.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Funded Indebtedness" means, with respect to any Person as of
the date of determination Indebtedness which by its terms has a Maturity, or is
extendable or renewable at
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the option of such Person to a date, which is more than twelve months after the
date of creation or incurrence of such Indebtedness.
"GAAP" means generally accepted accounting principles.
"Global Note" means a Note that evidences all or part of the
Notes issued to the Depositary in accordance with Section 3.03 and bearing the
legend(s) prescribed in the form of Note contained in Section 2.02.
"Guaranteed Indebtedness" of any Person means, without
duplication, all Indebtedness of any other Person guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly by such person through an agreement (i) to pay or purchase such
Indebtedness or to advance or supply funds for the payment or purchase of such
Indebtedness; (ii) to purchase, sell or lease (as lessee or lessor) property,
or to purchase or sell services, primarily for the purpose of enabling the
debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss; (iii) to supply funds to, or in any other manner
invest in, the debtor (including any agreement to pay for property or services
without requiring that such property be received or such services be rendered);
(iv) to maintain working capital or equity capital of the debtor, or otherwise
to maintain the net worth, solvency or other financial condition of the debtor;
or (v) otherwise to assure a creditor with respect to Indebtedness against
loss; provided that the term "guarantee" shall not include endorsements for
collection or deposit, in the ordinary course of business.
"Holder" when used with respect to any Note means a
Noteholder.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, excluding any trade payables
and other accrued current liabilities arising in the ordinary course of
business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit issued under
letter of credit facilities, and in connection with any agreement by such
Person to purchase, redeem, exchange, convert or otherwise acquire for value
any Capital Stock of such Person now or hereafter outstanding; (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments; (iii) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even if the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade payables arising in
the ordinary course of business; (iv) all obligations under interest rate
agreements of such Person; (v) all Capital Lease Obligations of such Person;
(vi) all Indebtedness referred to in clauses (i) through (v) above of other
Persons and all dividends payable by other Persons, the payment of which is
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien, upon or with respect to
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness (the amount of such obligations being deemed to be
the lesser of the value of such property or asset or the amount of the
obligations so secured); (vii) all guarantees by such Person of Guaranteed
Indebtedness; (viii) all Disqualified Capital Stock (valued at the greater of
book value and voluntary or
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involuntary maximum fixed repurchase price plus accrued and unpaid dividends)
of such Person; and (ix) any amendment, supplement, modification, deferral,
renewal, extension, refunding or refinancing or any liability of the types
referred to in clauses (i) through (viii) above. For purposes hereof, (x) the
"maximum fixed repurchase price" of any Disqualified Capital Stock which does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Capital Stock as if such Disqualified Capital Stock
were purchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such
fair market value is to be determined in good faith by the board of directors
(or any duly authorized committee thereof) of the issuer of such Disqualified
Capital Stock, and (y) Indebtedness is deemed to be incurred pursuant to a
revolving credit facility each time an advance is made thereunder.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Notes.
"Junior Indebtedness" means any Indebtedness of the Company
subordinated in right of payment of either principal, premium (if any) or
interest thereon to the Notes.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable,
now owned or hereafter acquired.
"Maturity" when used with respect to any Note means the date
on which the principal of such Note becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Net Cash Proceeds" means, with respect to any issuance or
sale of Capital Stock, or options, warrants or rights to purchase Capital
Stock, or debt securities or Capital Stock that have been converted into or
exchanged for Capital Stock, or any capital contribution in respect of Capital
Stock, the proceeds of such issuance or sale or capital contribution in the
form of cash or cash equivalents, including payments in respect of deferred
payment obligations when received in the form of, or stock or other assets when
disposed for, cash or cash equivalents (except to the extent that such
obligations are financed or sold with recourse to the Company or any Subsidiary
of the Company), net of attorney's fees, accountant's fees and brokerage,
consulting, underwriting and other fees and expenses actually incurred in
connection with such issuance or sale or capital contribution and net of taxes
paid or payable by the Company as a result thereof.
"Note" means either individually or collectively, as the
context requires, the Rule 144A Notes and the Exchange Notes.
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"Noteholder" means a Person is whose name a Note is registered
in the Note Register.
"Note Register" and "Note Registrar" have the respective
meanings specified in Section 3.05.
"Offer to Purchase" means an offer by the Company to
repurchase Notes, as set forth in Section 10.18 hereof.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President and by the Treasurer,
an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary
or Assistant Secretary of the Company, and delivered to the Trustee. Wherever
this Indenture requires that an Officers' Certificate also be signed by an
accountant or other expert, such accountant or other expert, except as
otherwise expressly provided in this Indenture, may be in the employ of the
Company and shall be acceptable to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may, except as otherwise expressly provided in this Indenture, be counsel for
or an employee of the Company and who shall be acceptable to the Trustee.
"Outstanding" when used with respect to Notes means, as of the
date of determination of Notes Outstanding, all Notes theretofore authenticated
and delivered under this Indenture, except:
(a) Notes theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Notes for whose payment or redemption money in the
necessary amount has been theretofore irrevocably deposited with the Trustee or
any Paying Agent in trust for the Holders of such Notes, provided that, if such
Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee
has been made; and
(c) Notes which have been paid pursuant to Section 3.06
or authenticated and delivered in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture, other than
any such Notes in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Notes are held by a bona fide
purchaser in whose hand such Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Notes Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or Affiliate of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes which the Trustee has actual knowledge to be so
owned shall be so disregarded. Notes so
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owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or Affiliate
of such other obligor.
"OTS" means the Office of Thrift Supervision or any successor
thereto.
"Pari Passu Indebtedness" means any Indebtedness of the
Company that is pari passu in right of payment of principal, premium (if any)
and interest thereon to the Notes.
"Paying Agent" means any Person authorized by the Company to
pay the principal of and premium, if any, or interest on any Notes on behalf of
the Company. Initially, the Paying Agent shall be the Trustee.
"Permitted Payment" means, so long as no Default or Event of
Default is continuing.
(a) the purchase, redemption, defeasance or other
acquisition or retirement for value of any Capital Stock of the Company or any
Affiliate of the Company (other than a Wholly-Owned Subsidiary, which is
unrestricted), Pari Passu Indebtedness or Junior Indebtedness in exchange for
(including any such exchange pursuant to the exercise of a conversion right or
privilege where, in connection therewith, cash is paid in lieu of the issuance
of fractional shares or scrip), or out of the Net Cash Proceeds or Fair Market
Value of property not constituting Net Cash Proceeds of, a substantially
concurrent issue and sale (other than to a Subsidiary of the Company or to an
employee benefit plan of the Company or any of its Subsidiaries) of Qualified
Capital Stock of the Company; provided that the Net Cash Proceeds or Fair
Market Value of such property received by the Company from the issuance of such
shares of Qualified Capital Stock, to the extent so utilized, shall be excluded
from clause (c)(iii) of Section 10.12 hereof; and
(b) the repurchase, redemption, defeasance or other
acquisition or retirement for value of any Pari Passu Indebtedness or Junior
Indebtedness in exchange for, or out of the Net Cash Proceeds of, a
substantially concurrent issue and sale (other than to a Subsidiary of the
Company) of new Indebtedness of the Company (such a transaction, a
"refinancing"); provided, that any such new Indebtedness of the Company (i)
shall be in a principal amount that does not exceed an amount equal to the sum
of (A) the principal amount of the Indebtedness so refinanced less any discount
from the face amount of such Indebtedness to be refinanced expected to be
deducted from the amount payable to the holders of such Indebtedness in
connection with such refinancing, (B) the amount of any premium expected to be
paid in connection with such refinancing pursuant to the terms of any Pari
Passu Indebtedness or Junior Indebtedness refinanced or the amount of any
premium reasonably determined by the Company as necessary to accomplish such
refinancing by means of a tender offer, privately negotiated repurchase or
otherwise and (C) the amount of legal, accounting, printing and other similar
expenses of the Company incurred in connection with such refinancing; provided,
further, that for purposes of this clause (i), the principal amount of any
Indebtedness shall be deemed to mean the principal amount thereof or, if such
Indebtedness provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration thereof, such
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lesser amount as of the date of determination; (ii) (A) if such refinanced
Indebtedness has an Average Life to Stated Maturity shorter than that of the
Notes or a final Stated Maturity earlier than the final Stated Maturity of the
Notes, such new Indebtedness shall have an Average Life to Stated Maturity no
shorter than the Average Life to Stated Maturity of such refinanced
Indebtedness and a final Stated Maturity no earlier than the final Stated
Maturity of such refinanced Indebtedness or (B) in all other cases each Stated
Maturity of principal (or any required repurchase, redemption, defeasance or
sinking fund payments) of such new Indebtedness shall be after the final Stated
Maturity of principal of the Notes then outstanding; and (iii) is (A) made
expressly subordinated to or pari passu with the Notes to substantially the
same extent as the Indebtedness being refinanced or (B) expressly subordinate
to such refinanced Indebtedness.
"Person" means any natural person, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment" means a city or any political subdivision
thereof designated as such in Article Three.
"Predecessor Notes" of any particular Note means every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"Qualified Capital Stock" of any Person means any and all
Capital Stock of such Person other than Disqualified Capital Stock.
"Redemption Date" when used with respect to any Note to be
redeemed means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price" when used with respect to any Note to be
redeemed means the price at which it is to be redeemed pursuant to this
Indenture.
"Registration Rights Agreements" means the Registration Rights
Agreement, dated as of December 31, 1997, between the Company and Friedman,
Billings, Xxxxxx & Co., Inc., as initial purchaser.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the date specified for that purpose in Section 3.07.
"Regulatory Capital Requirements" means (i) the capital
requirements required to be maintained by the Bank in order to be "adequately
capitalized" pursuant to 12 U.S.C. Section 1831o and 12 C.F.R. Part 565 (and
any amendment to either thereof) or any successor law or regulation, (ii) the
minimum amount of capital required to meet each of the industry-wide regulatory
capital requirements applicable to the Bank pursuant to 12 U.S.C. Section
1464(t) and 12 C.F.R. Part 567 (and any amendment to either thereof) or any
successor law or regulation,
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and (iii) such higher amount of capital as the Bank, individually, is required
to maintain in order to meet any individual minimum capital standard applicable
to the Bank pursuant to 12 U.S.C. Section 1464(s) and 12 C.F.R. Section 567.3
(and any amendment to either thereof) or any successor law or regulation.
"Responsible Officer" when used with respect to the Trustee
means any officer of the Trustee with responsibility of the administration of
this Indenture and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Payment" means
(a) the declaration, payment or setting apart of any
funds for the payment of any dividend on, or making of any distribution to
holders of, the Capital Stock of the Company or any Subsidiary of the Company
(other than (i) dividends or distributions in Qualified Capital Stock of the
Company and, and (ii) dividends or distributions payable on or in respect of
any class or series of Capital Stock of a Subsidiary of the Company as long as
the Company receives at least its pro rata share of such dividends or
distributions in accordance with its ownership interests in such class or
series of Capital Stock);
(b) the purchase, redemption or other acquisition or
retirement for value, directly or indirectly, of any Capital Stock of the
Company or any Affiliate of the Company (other than a Wholly-Owned Subsidiary);
or
(c) the making of any principal payments on, or
repurchase, redemption, defeasance, retirement or other acquisition for value,
directly or indirectly, of any Pari Passu Indebtedness or Junior Indebtedness,
prior to the Stated Maturity of principal or scheduled redemption or defeasance
of, or any scheduled sinking fund payment on, such Pari Passu Indebtedness or
Junior Indebtedness.
"Rule 144A Note" means a Note that is not an Exchange Note.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Notes due 2000" means the Company's Senior Notes due
2000.
"Series A Preferred Stock" means the Company's Cumulative
Preferred Stock, Series A.
"Special Record Date" for the payment of any Defaulted
Interest, as defined in Section 3.07, means a date fixed by the Trustee
pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Indebtedness
or any installment of interest thereon means the date specified in the
instrument governing such Indebtedness as the fixed dates on which any
principal amount of such Indebtedness is due and payable (including, without
limitation, by reason of any required redemption, purchase, defeasance or
sinking fund
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payment) and, when used with respect to any installment of interest on
Indebtedness, means the date on which such installment is due and payable.
"Subsidiary" means any corporation of which at least a
majority of the outstanding stock having ordinary voting power to elect a
majority of the directors of such corporation, irrespective of whether or not
at the time stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency, is at
the time directly or indirectly owned by the Company, by one or more
Subsidiaries of the Company, or by the Company and one or more Subsidiaries.
"Tax Sharing Agreement" means any tax allocation agreement as
may be entered into by the Company and some or all of its Subsidiaries.
"Tax Sharing Payments" means any payment made pursuant to the
Tax Sharing Agreement in accordance with the terms thereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this instrument was executed,
except as otherwise provided in Section 9.06.
"Vice President' when used with respect to the Company or the
Trustee means any vice president, whether or not designated by a number or a
word or words before or after the title "vice president."
"Voting Stock" means Capital Stock of any class or classes,
however designated, having ordinary voting power for the election of a majority
of the board of directors, other than stock having such power only by reason of
the occurrence of a contingency.
"Wholly Owned Subsidiary" means a Subsidiary of which all of
the outstanding Capital Stock (other than directors' qualifying shares) is at
the time directly or indirectly owned by the Company, or by one or more Wholly
Owned Subsidiaries or by the Company and one or more Wholly Owned Subsidiaries.
SECTION 1.02. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such certificate or opinion is specifically required by
any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
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Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation as is
necessary to enable him or her to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case in which several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary (except in the case of a natural person) that all such matters be
certified by, or covered by the opinion of, only one representative of such
Person, or that they be so certified or covered by only one document, but one
representative of such Person may certify or give an opinion with respect to
some matters and one or more other representatives of such Person may certify
or give an opinion as to other matters, and any duly authorized representative
of such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations, with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, any officer of the Company
who may sign an Officers' Certificate, stating that the information with
respect to such factual matters is in the possession of the Company, unless
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters is or
are erroneous.
Where any Person is required to make, give or execute two or
more applications, request, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.04. ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Noteholders may be embodied
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in and evidenced by one or more instruments of substantially similar tenor
signed by such Noteholders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee,
and, where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as an "Act"of the Noteholders signing such instruments or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose under this
Indenture and, subject to Section 6.01, conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section 1.04.
Without limiting the generality of the foregoing, a
Noteholder, including the Depositary that is a Noteholder of a Global Note, may
make, give or take, by a proxy or proxies, duly appointed in writing, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted in this Indenture to be made, given or taken by
Noteholders, and the Depositary that is a Noteholder of a Global Note may
provide its proxy or proxies to the beneficial owners of interest in any such
Global Note.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be provided in any reasonable manner which
the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Note shall bind
the Holder of every Note issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done or suffered
to be done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 1.05. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other document provided for or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee by any Noteholder or by the Company shall
be sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its principal corporate trust office
specified in the first paragraph of this Indenture or at any other address
furnished in writing to the Noteholders or the Company by the Trustee, or
(2) the Company by the Trustee or by any Noteholder shall
be sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address furnish in writing to the
Trustee by the Company.
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SECTION 1.06. NOTICE TO NOTEHOLDERS; WAIVER.
Where this Indenture provides for notice to Noteholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Noteholder affected by such event, at such Noteholder's address as it
appears in the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Noteholders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Noteholder
shall affect the sufficiency of such notice with respect to other Noteholders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event required to have been described in such notice, and such
wavier shall be the equivalent of such notice. Waivers of notice by
Noteholders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
wavier.
In case, by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impracticable to give such notice
by mail as required by this Indenture, then such notification as shall be made
with the approval of the Trustee shall constitute a sufficient notification for
every purpose hereunder.
In case, by reason of the suspension of publication of any
Authorized Newspaper, or by reason of any other cause, it shall be impossible
to make publication of any notice in an Authorized Newspaper or Authorized
Newspapers as required by this Indenture, then such method of publication or
notification as shall be made with the approval of the Trustee shall constitute
a sufficient publication of such notice.
SECTION 1.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of
Contents hereof are for convenience only and shall not affect the construction
hereof.
SECTION 1.08. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.09. SEPARABILITY.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired.
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SECTION 1.10. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Noteholders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 1.11. GOVERNING LAW.
This Indenture and each Note shall be governed by and
construed in accordance with the laws of the State of New York as applied to
contracts made or investments entered into and, in each case, made and
performed in the State of New York without regard to principles of conflicts of
laws.
SECTION 1.12. COMPLIANCE WITH TRUST INDENTURE ACT.
This Indenture is subject to and shall be governed by the
provisions of the Trust Indenture Act that are required to be a part of this
Indenture. If any provision hereof limits, qualifies or conflicts with another
provision which is required under or deemed to be included in this Indenture by
any of the provisions of the Trust Indenture Act, such required or deemed
provisions shall control.
SECTION 1.13. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Note shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Notes (other than a provision of the Notes which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
SECTION 1.14. NO RECOURSE AGAINST OTHERS.
This Indenture and the Notes are solely corporate obligations
of the Company. No recourse shall be had against, and no personal liability
shall attach to, any director, officer, employee, incorporator, stockholder or
Affiliate, past, present or future, of the Company or any successor thereto, or
any of them, because of the creation of the indebtedness hereby authorized, or
under, upon or by reason of any obligation, covenant or agreement contained in
this Indenture or in any of the Notes or implied therefrom or any claim based
thereon or in respect thereof; it being expressly understood that all such
recourse and personal liability are hereby expressly waived and released as a
condition of, and as consideration for, the execution of this Indenture and the
issuance of such Notes.
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ARTICLE TWO
NOTE FORMS
SECTION 2.01. FORMS GENERALLY.
The Notes and the certificates of authentication thereon shall
be in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange, or as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Notes.
The definitive Notes shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or in such other manner as the Company may deem appropriate, all as
determined by the officers executing such Notes, as evidenced by their
execution of such Notes.
SECTION 2.02. FORM OF FACE OF NOTE.
[If a Global Note to be held by The Depository Trust Company,
then insert -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS EXCHANGED 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.
[If a Global Note, then insert - THIS IS A GLOBAL NOTE WITHIN
THE MEANING OF THE INDENTURE. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL NOTE MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]
[If a Rule 144A Note(s), then insert -- THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER
THIS NOTE NOR ANY INTEREST OR
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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, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS
NOTE) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS NOTE
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) 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) TO AN "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
ACCREDITED INVESTOR, 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 (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE
COMPANY OR THE TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT
TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (ii)
PURSUANT TO CLAUSE (D), TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE COMPANY A
LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING
MEMORANDUM DATED DECEMBER 24, 1997. SUCH XXXXXX FURTHER AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.]
THE NOTES ARE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 AND INTEGRAL
MULTIPLES OF $1,000 FOR ANY AMOUNT IN EXCESS THEREOF. ANY SUCH TRANSFER OF
NOTES IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000
SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER AND ANY TRANSFEREE
OF SUCH BLOCK OF NOTES SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH NOTES FOR
ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF PRINCIPAL, PREMIUM (IF
ANY) OR INTEREST OF SUCH NOTES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN SUCH NOTES.
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THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR (ii) THE ACQUISITION AND HOLDING OF THIS NOTE BY IT IS NOT
PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE U.S. INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR EXEMPT FROM ANY SUCH PROHIBITION.
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HAWTHORNE FINANCIAL CORPORATION
12.50% NOTE DUE 2004
CUSIP No. _____________
$_____________________ No.___________
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR A DEPOSIT AND IS NOT INSURED
BY THE UNITED STATES OR ANY AGENCY OF THE UNITED STATES.
Hawthorne Financial Corporation, a Delaware corporation
(together with any successor corporation that is permitted under the Indenture
hereinafter referred to, herein called the "Company"), for value received,
hereby promises to pay to ________________________, or registered assigns, the
principal sum of ______________ Dollars on December 31, 2004, and to pay
interest thereon at the rate of 12.50% per annum from December 31, 1997 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually, commencing June 30, 1998, and each June 30 and
December 31 thereafter, until the principal hereof is paid or made available
for payment, and (to the extent that the payment of such interest shall be
legally enforceable) at the rate of 12.50% per annum on any overdue principal
(and premium, if any) and on any overdue installment of interest until paid.
[If a Rule 144A Note(s), then insert -- Pursuant to the Registration Rights
Agreement, in certain limited circumstances the Company will be required to pay
Additional Interest (as defined in the Registration Rights Agreement) with
respect to this Note.]
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be
calculated on the basis of a 360-day year of twelve 30-day months, and will be
paid to the Person in whose name this Note (or one or more Predecessor Notes)
is registered at the close of business on the Regular Record Date for such
interest, which shall be each June 15 and December 15 prior to the applicable
Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holder on
such Regular Record Date, and may be paid to the Person in whose name this Note
(or one or more Predecessor Notes) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to the Holders not less than ten
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in said Indenture. Payment of the
principal of and interest on this Note will be made at the office or agency of
the Company maintained for that purpose in New York, New York or at such other
office or agency as may be established by the Company pursuant to the Indenture
(initially the principal corporate trust office of the Trustee in New York, New
York), in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that, at the option of the Company, payment of interest may be made
(subject to collection) by check mailed to the address of the Person entitled
thereto as such address shall appear on the Note Register.
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Reference is hereby made to the further provisions of this
Note set forth on the reverse side hereof and such further provisions shall for
all purposes have the same effect as though fully set forth at this place.
This Note shall not be entitled to any benefit, or be valid or
obligatory for any purpose under the Indenture until the certificate of
authentication hereon shall have been manually signed by the Trustee.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed in its name by the manual or facsimile signature of its Chairman,
President or Vice President and its corporate seal, or a facsimile thereof,
impressed or imprinted hereon, attested by the manual or facsimile signature of
its Secretary or Assistant Secretary.
Date:
HAWTHORNE FINANCIAL CORPORATION
[Corporate Seal]
By: _______________________________________________
Chairman, President or Vice President
Attest:______________________________________________
Secretary or Assistant Secretary
SECTION 2.03. FORM OF REVERSE OF NOTE.
This Note is one of a duly authorized issue of Notes of the
Company designated as its 12.50% Notes due 2004 (herein called the "Notes"),
limited in aggregate principal amount to $40,000,000, issued and to be issued
under an Indenture dated as of December 31, 1997 (herein called the
"Indenture"), between the Company and United States Trust Company of New York,
as Trustee (herein called the "Trustee," which term includes any successor
Trustee under the Indenture), to which the Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Company, the Trustee and the Holders of the Notes, and
the terms upon which the Notes are, and are to be, authenticated and delivered.
Copies of the Indenture and all indentures supplemental thereto will be made
available to the Holders for inspection during normal business hours at the
principal office of the Company, which on the date hereof is located at 0000
Xxxxxxxxx Xxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000, and copies of the Indenture
and all indentures supplemental thereto will be mailed to any Holder by the
Company upon the Company's receipt of the written request of such Holder, sent
to the Company addressed to the attention of the Company's Corporate Secretary
at the principal office of the Company.
The indebtedness of the Company evidenced by the Notes,
including the principal thereof and interest thereon (including post- default
interest), (a) is, to the extent and in the manner set forth in the Indenture,
subordinate and junior in right of payment to the Trustee's
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fees and expenses, and (b) is not secured by any collateral, including the
assets of the Company or any of its Affiliates. Each Holder of a Note, by
acceptance hereof, agrees to and shall be bound by such provisions of the
Indenture and all other provisions of the Indenture.
The Notes may be redeemed in whole or in part at any time, or
from time to time, on or after December 31, 2002, at the Redemption Prices
(expressed in percentages of principal amount) set forth below, plus in each
case an amount equal to accrued interest to (but excluding) the Redemption
Date:
If redeemed during the twelve-month period,
Beginning December 31,
----------------------
2002 . . . . . . . . . . . . . . . . . . . . . . . 106.250%
2003 (and thereafter) . . . . . . . . . . . . . . 103.125
If an Event of Default under the Indenture shall occur and be
continuing, the principal of all the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture. The Indenture
provides that such declaration and its consequences may, in certain events, be
annulled by the Holders of a majority in principal amount of the Notes
Outstanding.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Notes under the
Indenture at any time by the Company with the consent of the Holders of a
majority in aggregate principal amount of the Notes at the time Outstanding, as
determined in accordance with the Indenture. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount
of the Notes at the time Outstanding, on behalf of the Holders of all the
Notes, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by a Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not notation of such consent or waiver is made on
this Note.
Unless the context requires, any Rule 144A Notes and any
Exchange Notes shall constitute one series for all purposes under the
Indenture, including without limitation amendments, waivers, redemptions and
Offers to Purchase.
No references herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, premium, if any,
and interest on this Note at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, this Note is transferable on the Note Register
of the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company to be maintained for that purpose in New York,
New York, or at such other office or agency as may be established by the
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Company for such purpose pursuant to the Indenture (initially the principal
corporate trust office of the Trustee in New York, New York), duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note Registrar duly executed by, the Holder hereof or his or
her attorney duly authorized in writing, and thereupon one or more new Notes,
of authorized denominations and for the same aggregate principal amount, will
be issued to the designated transferee or transferees.
Section 10.18 of the Indenture provides that upon the
occurrence of a Change of Control and subject to further limitations contained
therein, the Company shall make an offer to purchase the Notes in accordance
with the procedures set forth in the Indenture.
All Notes are issuable and transferable only in fully
registered form, without coupons, in denominations of $100,000 or integral
multiples of $1,000 in excess thereof. Any transfer of Notes in a block having
an aggregate principal amount of less than $100,000 shall be deemed to be void
and of no legal effect whatsoever. As provided in the Indenture and subject to
certain limitations therein set forth, Notes are exchangeable for a like
aggregate principal amount of Notes of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
No recourse shall be had for the payment of the principal of
or interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
at law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the consideration
of the issue hereof, expressly waived and released.
Certain capitalized terms used in this Note which are not
defined herein have the meanings set forth in the Indenture and exhibits
thereto.
Subject to Section 3.07 hereof, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name this
Note is registered as the owner hereof for all purposes, whether or not this
Note be overdue, and neither the Company, the Trustee, nor any such agent shall
be affected by notice to the contrary.
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company
pursuant to Section 10.18 of the Indenture, check the box below:
[ ]
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If you wish to have a portion of this Note purchased by the
Company pursuant to Section 10.18 of the Indenture, state the amount:
$_______________
Date: ________________ Your Signature:_______________________________________
(Sign exactly as your name appears on the
other side of this Note)
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed by a member firm of the
New York Stock Exchange or a commercial bank or trust
company)
SECTION 2.04. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned Indenture.
Dated:
________________________________
_______, as Trustee
By:__________________________________
Authorized Signatory
ARTICLE THREE
THE NOTES
SECTION 3.01. TITLE AND TERMS.
The aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is limited to $40,000,000,
except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of other Notes pursuant to Sections 3.04, 3.05,
3.06 and 9.05 or in connection with an Offer to Purchase Notes pursuant to
Section 10.18. The Company may issue Exchange Notes from time to time in
connection with an Exchange Offer pursuant to a Board Resolution, subject to
Section 3.03, included in an Officers' Certificate delivered to the Trustee and
in authorized denominations in exchange for a like principal amount of Rule
144A Notes. Upon any such exchange the Rule 144A Notes shall be cancelled in
accordance with Section 3.09 and shall no longer be deemed Outstanding for any
purpose. In no event shall the aggregate principal amount of Outstanding Rule
144A Notes and Exchange Notes exceed $40,000,000.
The Notes shall be known and designated as the 12.50% Notes
due 2004 of the Company. The Stated Maturity of the principal thereof shall be
December 31, 2004, and shall
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bear interest from the date and at the rate per annum specified in, and such
interest shall be payable on the dates specified in, the form of Note set forth
in Sections 2.02 and 2.03, until the principal thereof is paid or made
available for payment.
The principal of (and premium, if any) and interest on the
Notes shall be payable at the office or agency of the Company maintained for
such purposes in New York, New York ("Place of Payment"), or at such other
office or agency as may be established by the Company (initially the principal
corporate trust office of the Trustee in New York, New York) pursuant to
Section 10.02, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that, at the option of the Company, payment of interest may
be made (subject to collection) by check mailed to the address of the Person
entitled thereto as such address shall appear on the Note Register.
The Depository for the Rule 144A Notes to be authenticated and
delivered in the form of a Global Note or Notes upon original issuance shall be
The Depository Trust Company ("DTC"). DTC or any successor Depositary must, at
all times while it serves as such Depositary, be a clearing agency registered
under the Exchange Act and any other applicable statute or regulation.
The Notes shall be subject to repurchase by the Company
pursuant to an Offer to Purchase as provided in Section 10.18.
The Notes shall be redeemable as provided in Article Eleven.
The Notes shall be subject to defeasance at the option of the
Company as provided in Article Twelve.
The Notes issued under any provision of this Indenture shall
bear the applicable legends contained in the form of Note set forth in Section
2.02, unless the Company shall have delivered a Company Order to the Trustee
directing that the Note may be issued without such legend(s) thereon.
Unless the context otherwise requires, the Rule 144A Notes and
the Exchange Notes shall constitute one series for all purposes under the
Indenture, including without limitation, amendments, waivers, redemptions and
Offers to Purchase.
SECTION 3.02. DENOMINATIONS.
The Notes shall be issuable and transferable only in
registered form without coupons and only in denominations of $100,000 and any
integral multiple of $1,000 above that amount. Any transfer of Notes in a
block having an aggregate principal amount of less than $100,000 shall be
deemed to be void and of no legal effect whatsoever. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
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SECTION 3.03. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Notes shall be executed on behalf of the Company by its
Chairman, President or one of its Vice Presidents under its corporate seal
reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Notes may be manual
or facsimile.
Notes bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such Notes or
did not hold such offices at the date of such Notes.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Notes executed by the
Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Notes; and the Trustee shall
authenticate and deliver such Notes as in this Indenture provided and not
otherwise.
At any time and from time to time after the execution and
delivery of this Indenture and after the effectiveness of a registration
statement under the Securities Act with respect thereto, the Company may
deliver Exchange Notes in exchange for Outstanding Rule 144A Notes, executed by
the Company, together with a Company Order for the authentication and delivery
of such Notes (as well as for the cancellation of a like principal amount of
Rule 144A Notes in accordance with Section 3.09 of this Indenture) and the
Trustee in accordance with the Company Order shall authenticate and deliver
such Notes.
In authenticating Notes in accordance with any Company Order
as provided in the preceding two paragraphs, the Trustee shall be entitled to
receive, and (subject to Section 6.01) shall be fully protected in relying
upon, an Opinion of Counsel stating,
(a) that such Notes when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to the
conditions specified in such Opinion of Counsel will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles; and
(b) if applicable, that the issuance of the Exchange
Notes in exchange for the Rule 144A Notes has been effected in
compliance with the Securities Act.
No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder.
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The Company shall execute and the Trustee shall authenticate
one or more Global Notes that (i) shall represent an aggregate amount equal to
the aggregate principal amount of such of the Outstanding Notes as the Company
shall have directed the Trustee to authenticate in the form of a Global Note or
Global Notes, (ii) shall be registered in the name of the Depositary or the
nominee of the Depositary, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear a
legend(s) substantially as provided in the form of Note contained in Section
2.02 (or in the form required by the Depositary).
SECTION 3.04. TEMPORARY NOTES.
Pending the preparation of definitive Notes, the Company may
execute and upon Company Order the Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, typewritten, mimeographed or
otherwise produced in any authorized denomination, substantially of the tenor
of the definitive Notes in lieu of which they are issued, but with such
appropriate insertions, omissions, substitutions or other variations as the
officers executing such Notes may determine to be necessary or appropriate, as
evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause
definitive Notes to be prepared without unreasonable delay. After the
preparation of definitive Notes, the temporary Notes shall be exchangeable for
definitive Notes upon surrender of the temporary Notes at the office or agency
of the Company in a Place of Payment, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Notes of authorized denominations. Until
so exchanged the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes.
SECTION 3.05. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at one of its offices or
agencies maintained pursuant to Section 10.02, a register (herein sometimes
referred to as the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. Said office or agency is xxxxxx initially
appointed "Note Registrar" for the purpose of registering Notes and transfers
of Notes as herein provided. Such Note Register shall distinguish between Rule
144A Notes and Exchange Notes.
Upon surrender for registration of transfer of any Note at the
office or agency of the Company in the Place of Payment, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other
Notes of any authorized denominations, of a like aggregate principal amount
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Noteholder making
the exchange is entitled to receive.
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All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Company, evidencing the same
debt, and (subject to the provisions in the Rule 144A Notes regarding payment
of Additional Interest) entitled to the same benefits under this Indenture as
the Notes surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Note
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing. As a condition to the registration of transfer of any Rule 144A
Notes, the Company or the Trustee may require evidence reasonably satisfactory
to it as to compliance with the restrictions set forth in the legend referred
to below.
No service charge shall be made for any registration of
transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Sections 3.04 and 9.05 or in accordance with any Offer to
Purchase pursuant to Section 10.18 not involving any transfer.
The Company shall not be required (i) to issue, transfer or
exchange any Note during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption of Notes selected for
redemption under Section 11.02 and ending at the close of business on the day
of such mailing, or (ii) to transfer or exchange any Note so selected for
redemption in whole or in part.
All Rule 144A Notes issued hereunder shall bear the legend as
provided in the form of Note contained in Section 2.02. All Rule 144A Notes
issued upon transfer or exchange or replacement thereof shall bear such legend
unless the Company shall have delivered to the Trustee (and the Note Registrar,
if other than the Trustee) a Company Order which states that the Note may be
issued without such legend thereon.
Notwithstanding any other provision of this Section, unless
and until it is exchanged in whole or in part for the individual Notes
represented thereby, a Global Note representing all or a portion of the Notes
may not be transferred except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
shall no longer be eligible under Section 3.01, the Company shall appoint a
successor Depositary. If a successor Depositary is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such ineligibility, the Company will execute, and the Trustee, upon receipt
of a Company Order for the authentication and delivery of individual Notes,
will authenticate and deliver individual Notes in an aggregate principal amount
equal to the principal amount of the Global Note or Global Notes representing
Notes in exchange for such Global Note or Global Notes.
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The Company may at any time and in its sole discretion
determine that individual Notes issued in the form of one or more Global Notes
shall in whole or in part no longer be represented by such Global Note or
Global Notes. In such event, or if an Event of Default has occurred and is
continuing, the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of individual Notes, will
authenticate and deliver, individual Notes in an aggregate principal amount
equal to the principal amount of the Global Note or Global Notes to be
exchanged therefor.
The Depositary may surrender a Global Note in exchange in
whole or in part for individual Notes on such terms as are acceptable to the
Company and such Depositary. Thereupon, the Company shall execute, and the
Trustee shall authenticate and deliver, without service charge,
(i) to each Person specified by such Depositary a new
individual Note or Notes of any authorized denomination as requested
by such Person in aggregate principal amount equal to and in exchange
for such Person's beneficial interest in the Global Note; and
(ii) to such Depositary a new Global Note in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Note and the aggregate principal
amount of individual Notes delivered to Holders thereof.
Upon the exchange of a Global Note for individual Notes, such
Global Note shall be cancelled by the Trustee. Individual Notes issued in
exchange for a Global Note pursuant to this Section shall be registered in such
names and in such authorized denominations as the Depositary for such Global
Note, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee and the Company shall not
have any liability for the accuracy of the instructions received from the
Depositary. The Trustee shall deliver such Notes to the Persons in whose names
such Notes are so registered.
Neither the Company nor the Trustee shall have any
responsibility or obligation to any participant in the Depositary, any Person
claiming a beneficial ownership interest in the Notes under or through the
Depositary or any such participant, or any other Person which is not shown on
the Note Register as being a Holder, with respect to (1) the Notes; (2) the
accuracy of any records maintained by the Depositary or any such participant;
(3) the payment by the Depositary or any such participant of any amount in
respect of the principal of or premium or interest on the Notes; (4) any notice
which is permitted or required to be given to Holders of Notes under this
Indenture, (5) the selection by the Depositary or any such participant of any
Person to receive payment in the event of a partial redemption of the Notes; or
(6) any consent given or other action taken by the Depositary as Holder of
Notes.
SECTION 3.06. XXXXXXXXX, DESTROYED, LOST AND STOLEN NOTES.
If (i) any mutilated Note is surrendered to the Trustee, or
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Company and the Trustee such security or indemnity satisfactory to and as may
be required by each of them to hold each of them harmless, then, in the absence
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of prior written notice to the Company or the Trustee that such Note has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a new Note of like tenor
and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Note, pay the Holder of such Note the entire
unpaid principal balance of such Note, together with all accrued but unpaid
interest thereon.
Upon issuance of any new Note under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses, including the fees and expenses of the Trustee, connected therewith.
Every new Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude, to the extent lawful, all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 3.07. PAYMENT OF INTEREST: INTEREST RIGHTS PRESERVED.
Interest on any Note which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Note (or one or more Predecessor Notes) is registered at the
close of business on the Regular Record Date for such interest payment
specified in this Article Three.
Any interest on any Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder; and, except as hereinafter provided, such Defaulted Interest may
be paid by the Company, at its election in each case, as provided in clause (1)
or clause (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of the Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
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payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest, which shall not be more than 15 days nor less than ten days
prior to the date of the proposed payment and not less than ten days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Noteholder at his address as it appears in
the Note Register, not less than ten days prior to such Special Record Date.
The Trustee may, in its discretion, in the name and at the expense of the
Company, cause a similar notice to be published at least once in an Authorized
Newspaper in each Place of Payment, but such publication shall not be a
condition precedent to the establishment of such Special Record Date. Notice
of proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be paid
to the Persons in whose names the Notes (or their respective Predecessor Notes
with respect to transfers between a Special Record Date and the Interest
Payment Date related thereto) are registered on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
The Regular Record Date referred to in this Section for the
payment of interest payable, and punctually paid or duly provided for, on any
Interest Payment Date shall be each June 15 or December 15 prior to the
applicable Interest Payment Date.
All payments of interest on the Notes to the Persons entitled
thereto, whether made by the Company, the Trustee or any Paying Agent, as
authorized pursuant to this Indenture, may be made by check mailed to the
address of the Person entitled thereto, as such address shall appear on the
Note Register.
SECTION 3.08. PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Note is registered as the owner
of such Note for the purpose of receiving payment of principal of and premium,
if any, and (subject to Section 3.07) interest on, such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
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SECTION 3.09. CANCELLATION.
All Notes surrendered for payment, registration of transfer,
exchange or conversion shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and, if not already canceled, shall be
promptly canceled by it. The Company may at any time deliver to the Trustee
for cancellation any Notes previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section, except as expressly permitted by this Indenture. All canceled
Notes held by the Trustee shall be destroyed and a certification of such
destruction shall and delivered to the Company unless by a Company Order the
Company shall direct that canceled Notes be returned to it.
SECTION 3.10. AUTHENTICATION AND DELIVERY OF ORIGINAL ISSUE.
Forthwith upon the execution and delivery of this Indenture,
or from time to time thereafter, Notes up to the aggregate principal amount of
$40,000,000 may be executed by the Company and delivered to the Trustee for
authentication upon original issue, and shall thereupon be authenticated and
delivered by the Trustee upon Company Order, without any further action by the
Company.
SECTION 3.11. COMPUTATION OF INTEREST.
Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as
to any surviving rights of conversion or registration of transfer or exchange
of Notes herein expressly provided for), and the Trustee, on Company Order of
and at the expense of the Company, shall execute the proper instrument
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Notes theretofore authenticated and
delivered, other than (i) Notes which have been destroyed, mutilated, lost or
stolen, and which have been replaced or paid as provided in Section 3.06, and
(ii) Notes 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, as provided in Section 10.03, have been
delivered to the Trustee for cancellation; or
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(B) all such Notes not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the
Stated Maturity of the principal
thereof within one year, or
(iii) 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,
and the Company, in the case of (B)(i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
an amount sufficient to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to the Trustee canceled or for cancellation, for
principal, premium, if any, and interest to the date of such deposit, in the
case of Notes which have become due and payable, or to the Stated Maturity or
Redemption Date of the principal thereof, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 6.07
and, if money shall have been deposited with the Trustee pursuant to subclause
(B) of clause (1) of this Section, the obligations of the Trustee under Section
4.02 and the last paragraph of Section 10.03 shall survive.
SECTION 4.02. APPLICATION OF TRUST MONEY.
All money deposited with the Trustee pursuant to Section 4.01
shall be held in trust and applied by it, in accordance with the provisions of
the Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal,
premium, if any, and interest for whose payment such money has been deposited
with the Trustee; but such money need not be segregated from other funds except
to the extent required by law.
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ARTICLE FIVE
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.01. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of the principal of or premium, if
any, on any Note at its Maturity; or
(2) default in the payment of any interest upon any Note when
it becomes due and payable, and continuance of such default for a period of 30
days; or
(3) default in the performance, or breach, of Section 8.01; or
(4) default, on the Change of Control Purchase Date, in
the purchase of Notes required to be purchased by the Company pursuant to an
Offer to Purchase which has been made to all Holders; or
(5) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture, other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in this
Section 5.01 specifically dealt with, and continuance of such default or breach
for a period of 30 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Notes, a written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(6) default by the Company or any Subsidiary of the
Company in the payment at stated maturity of any Indebtedness for money
borrowed by the Company or any Subsidiary of the Company with a principal
amount due at maturity which is equal to or greater than 5% of the Company's
Consolidated Tangible Net Worth, provided such default shall continue, without
having been satisfied, cured, waived or consented to, beyond any applicable
period of grace, and after acceleration of such Indebtedness, for 30 days; or
receipt by the Trustee of written notice of the occurrence of an event of
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 Subsidiary of the Company (or the payment of
which is guaranteed by the Company or any Subsidiary of the Company), whether
such Indebtedness or guarantee now exists or shall be created hereafter, and
such default shall continue, without having been satisfied, cured, waived or
consented to, beyond any applicable period of grace, and after acceleration of
such Indebtedness, for 30 days; provided, however, that no such event of
default shall constitute an Event of Default hereunder unless the effect of
such event of default is to cause the acceleration of such Indebtedness prior
to its expressed
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maturity, which together with the principal amount of any such other
Indebtedness so caused to be accelerated, aggregates an amount which is equal
to or greater than 5% of the Company's Consolidated Tangible Net Worth at any
one point in time and such default shall not have been cured or waived and such
acceleration shall not have been rescinded or annulled; or
(7) the entry of a decree or order by a court having
jurisdiction in the premises and adjudging the Company or the Bank a bankrupt
or insolvent, or approving as properly filed a petition seeking reorganization,
adjustment, arrangement, composition of or similar relief for the Company or
the Bank under the Federal Bankruptcy Act, or any other similar applicable law
of any governmental unit, domestic or foreign, and such decree or order shall
have continued undischarged or unstayed for a period of 60 consecutive days; or
a decree or order or other decision of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of the FDIC
or any other Person to act as a receiver or conservator or liquidator or
trustee or assignee in bankruptcy or insolvency of the Company, the Bank or of
a substantial part of either of its property, or for the involuntary winding up
or liquidation of either of its affairs, shall have been entered and such
decree or order shall have remained in force undischarged and unstayed for a
period of 60 consecutive days; or, under the provisions of any insolvency,
bankruptcy, or other law for the relief or aid of creditors or depositors, any
court, or agency or supervisory authority having jurisdiction in the premises
shall assume custody or control of the Company, the Bank or of a substantial
part of either of its property, and such custody and control shall not be
terminated or stayed within 60 days from the date of assumption of such custody
or control; or
(8) the institution of proceedings by either the Company
or the Bank to be adjudicated bankrupt or insolvent, or the consent by it to
the institution of a bankruptcy or insolvency proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization,
adjustment, arrangement, composition, appointment of a receiver or conservator
or similar relief under the Federal Bankruptcy Act, or any other similar
applicable law of any governmental unit, domestic or foreign, or the consent to
the filing of any such petition or the consent to the appointment of a receiver
or conservator or liquidator or trustee or assignee or sequestrator (or similar
official) in insolvency of the Company, the Bank or of a substantial part of
either of its property, or making by either of it of an assignment for the
benefit of creditors, or the admission by either of it in writing of its
inability to pay its debts generally as they become due, or voluntarily
suspending transaction of its business (other than in connection with a labor
dispute), or any corporate action taken by the Company or the Bank in
furtherance of any of the aforesaid purposes; or
(9) one or more final judgments, judicial decrees or
orders by a court having jurisdiction in the premises for the payment of an
amount of money which, individually or in the aggregate, is equal to or greater
than 5% of the Company's Consolidated Tangible Net Worth has been rendered
against the Company or any of its Subsidiaries and any such judgment, decree or
order has continued unsatisfied for a period of 60 consecutive days without a
stay of execution of such judgment, decree or order; or
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(10) failure by the Bank to comply with any of its
Regulatory Capital Requirements; provided, that an Event of Default under this
paragraph (10) shall not be deemed to have occurred (a) during the 45 day
period following the first day on which the Bank fails to comply with any of
its Regulatory Capital Requirements, if within such 45 day period the Bank
files a capital plan with the OTS, (b) during the 60 day period following the
initial submission of a capital plan to the OTS by the Bank (or, if the OTS
notifies the Bank in writing that it needs a longer period of time to determine
whether to approve such capital plan, such longer period as is so specified by
the OTS), unless prior to such date the OTS shall have notified the Bank of its
determination not to approve such capital plan, or (c) during the period that
the Bank is operating in material compliance with a capital plan approved by
the OTS; provided, further, that if the Bank meets the minimum amount of
capital required to meet each of the industry-wide regulatory capital
requirements pursuant to 12 U.S.C. Section 1464(t) and 12 C.F.R. Part 567 (and
any amendment to either thereof) or any successor law or regulation, then
notwithstanding the Bank's failure to meet an individual minimum capital
requirement pursuant to 12 U.S.C. Section 1464(s) and 12.C.F.R. Section 567.3
(and any amendment to either thereof) or any successor law or regulation, no
Event of Default shall have occurred pursuant to this paragraph 10 unless
written notice thereof shall have been given (x) to the Company by the Trustee
or (y) to the Company and the Trustee by the Holders of 25% in aggregate
principal amount of the Outstanding Notes; or
(11) failure by the Bank at any time to meet the Capital
Distribution Requirement, provided that an Event of Default under this
paragraph (11) shall not be deemed to have occurred if, notwithstanding the
foregoing, either (a) the Bank shall be permitted by the OTS and any other
applicable supervisory entity to make capital distributions to the Company in
an aggregate amount equal to the aggregate interest payments scheduled to be
made with respect to the Notes for the next succeeding Interest Payment Date or
(b) the Company shall have delivered to the Trustee an Officers' Certificate
within 10 days after it first proposes to rely on this clause (b) (and shall
continue to deliver such an Officers' Certificate thereafter as of each
Interest Payment Date so long as it proposes to rely on this clause (b)), to
the effect that the Company has liquid assets equal to the aggregate interest
payments scheduled to be made with respect to the Notes for the next succeeding
Interest Payment Date.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default
specified in Section 5.01(7) or (8)) occurs and is continuing, then and in
every such case the Trustee or the Holders of not less than 25% in principal
amount of the Notes Outstanding may declare the principal of all the Notes to
be due and payable immediately, by a notice in writing to the Company, and to
the Trustee if given by Noteholders, and upon any such declaration such
principal and any accrued interest shall become immediately due and payable.
If an Event of Default specified in Section 5.01(7) or (8) occurs, the
principal of and any accrued interest on the Notes then Outstanding shall ipso
facto become immediately due and payable without any declaration or other Act
on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration has been
made but before a judgment or decree for payment of the money due has been
obtained by the Trustee as
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hereinafter in this Article provided, the Holders of a majority in principal
amount of the Notes Outstanding, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue installments of interest on all
Notes,
(B) the principal of and premium, if any, on any
Notes which have become due, otherwise than by such declaration of
acceleration, and, to the extent that payment of such interest is lawful,
interest thereon at the rate borne by the Notes,
(C) to the extent that payment of such interest
is lawful, interest upon overdue interest at the rate borne by the Notes, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non-payment of
the principal of Notes which have become due solely by such acceleration, have
been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(1) default is made in the payment of the principal of or
premium, if any, on any Note at the Maturity thereof or, with respect to any
Note required to have been purchased pursuant to an Offer to Purchase made by
the Company, at the Change of Control Purchase Date, or
(2) default is made in the payment of any installment of
interest on any Note when such interest becomes due and payable and such
default continues for a period of 30 days,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Notes, the whole amount then due and payable on
such Notes for principal, premium, if any, and interest, with interest upon the
overdue principal and premium, if any, and, to the extent that payment of such
interest shall be legally enforceable, upon overdue installments of interest,
at the rate borne by the Notes; and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the
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reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amount forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon the Notes,
wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Noteholders by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.04. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, conservatorship,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or relative to
any other obligor upon the Notes or the property of the Company or of such
other obligor or their creditors, irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee, including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and of the Noteholders allowed in such
judicial proceeding, and
(2) to collect and receive any moneys or securities or
other property payable or deliverable upon the conversion or exchange of the
Notes or upon any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each
Noteholder 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
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof,
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or to authorize the Trustee to vote in respect of the claim of any Noteholder
in any such proceeding.
SECTION 5.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the
Notes may be prosecuted and enforced by the Trustee without the possession of
any of the Notes or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.
SECTION 5.06. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
premium, if any, or interest, upon presentation of the Notes and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.07;
SECOND: In case the principal or premium, if any, of the
Notes shall not have become due, to the payment of interest on the Notes, in
the order of the maturity of the installments of such interest, with interest,
to the extent that such interest has been collected by the Trustee, upon the
overdue installments of interest at the rate borne by the Notes, such payments
to be made ratably to the persons entitled thereto, without discrimination or
preference;
THIRD: In case the principal or premium, if any, of the
Notes shall have become due, by declaration or otherwise, to the payment of the
whole amount then owing and unpaid upon the Notes for principal and interest,
with interest on the overdue principal and, to the extent that such interest
has been collected by the Trustee, upon overdue installments of interest at the
rate borne by the Notes; and in case such monies shall be insufficient to pay
in full the whole amount so due and unpaid upon the Notes, then to the payment
of such principal and interest, without preference or priority of principal
over interest, or of interest over principal, or of any installment of interest
over any other installment of interest, or of any Note over any other Note,
ratably to the aggregate of such principal and accrued and unpaid interest; and
FOURTH: The remainder, if any, shall be paid to the Company,
its successors or assigns, or as a court of competent jurisdiction may direct.
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SECTION 5.07 LIMITATION ON SUITS.
No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate
principal amount of the outstanding Notes shall have made a written request to
the Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Notes;
it being understood and intended that no one or more Holders of Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders, or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all Holders.
SECTION 5.08. UNCONDITIONAL RIGHT OF NOTEHOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional,
to receive payment of the principal of and premium, if any, and, subject to
Section 3.07, interest on such Note on the respective Stated Maturities
expressed in such Note (or, in the case of redemption, on the Redemption Date
or, in the case of an Offer to Purchase made by the Company and required to be
accepted as to such Note, on the Change of Control Purchase Date) and to
institute suit for the enforcement of any such payment, and such right shall
not be impaired or affected without the consent of such Holder.
SECTION 5.09. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Noteholder has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Noteholder, then and in every such case the Company,
the Trustee and the Noteholders shall, subject to any determination in
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such proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee and
the Noteholders shall continue as though no such proceeding had been
instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes in the last paragraph
of Section 3.06, no right or remedy herein conferred upon or reserved to the
Trustee or to the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 5.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Note to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the
Noteholders, as the case may be.
SECTION 5.12. CONTROL BY NOTEHOLDERS.
The Holders of not less than a majority in principal amount of
the Outstanding Notes shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not, as determined by the
Trustee in good faith by a Responsible Officer or Officers of the Trustee, be
in conflict with any rule of law or with this Indenture or expose the Trustee
to personal liability or be unjustly prejudicial to the Holders not joining in
any such direction, and
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.
SECTION 5.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of
the Outstanding Notes may on behalf of the Holders of all the Notes waive any
past default hereunder and its consequences, except a default
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(1) in the payment of the principal of, premium, if any,
or interest on any Note (including any Note which is required to have been
purchased pursuant to an Offer to Purchase which has been made by the Company),
or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Note affected.
Upon such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 5.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any
Note by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.14 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Noteholder, or group of Noteholders,
holding in the aggregate more than 10% in principal amount of the Outstanding
Notes, or to any suit instituted by any Noteholder for the enforcement of the
payment of the principal of or premium, if any, or interest on any Note (or, in
the case of redemption, on or after the Redemption Date or in the case of any
Offer to Purchase which has been made by the Company, on or after the Change of
Control Purchase Date).
SECTION 5.15. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants, to the extent that it may lawfully do
so, that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company, to the extent
that it may lawfully do so, hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 6.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and
(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
furnished to the Trustee and conforming to the requirements of this Indenture;
but 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 be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent individual would exercise or use under the circumstances
in the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to
limit the effect of Subsection (a) of this Section 6.01;
(2) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in principal amount of the
Outstanding Notes relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee hereunder; and
(4) 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 in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
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(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 6.02. NOTICE OF DEFAULTS.
The Trustee shall transmit by mail to all Noteholders, as
their names and addresses appear in the Note Register, notice of such defaults
hereunder known to a Responsible Officer of the Trustee, as and to the extent
provided by the Trust Indenture Act, unless such default shall have been cured
or waived; provided, however, that, except in the case of a default in the
payment of the principal of, premium, if any, or interest on any Note, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Noteholders; and
provided, further, that in the case of any default of the character specified
in Section 5.01(5), no such notice to Noteholders shall be given until at least
30 days after the occurrence thereof. For the purpose of this Section 6.02,
the term "default" means any event which is, or after notice or lapse of time
or both would become, an Event of Default.
SECTION 6.03. CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
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(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note 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;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be charged with knowledge of
any Event of Default with respect to the Notes unless either (1) a Responsible
Officer of the Trustee assigned to the Corporate Trust Department of the
Trustee (or any successor division or department of the Trustee) shall have
actual knowledge of the Event of Default or (2) written notice of such Event of
Default shall have been given to a Responsible Officer of the Trustee by the
Company or any other obligor on the Notes or by any Noteholder.
SECTION 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.
The recitals contained herein and in the Notes, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Notes and
perform its obligations hereunder and that the statements made by it in any
Statement of Eligibility and Qualification on Form T-1 supplied to the Company
are true and accurate, subject to the qualifications set forth therein. The
Trustee shall not be accountable for the use or application by the Company of
the Notes or the proceeds thereof.
SECTION 6.05. MAY HOLD NOTES.
The Trustee, any Paying Agent, the Note Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Notes and, subject to Sections 6.08 and 6.13, if operative,
may otherwise deal with the Company with the same rights it would have if it
were not a Trustee, Paying Agent, Note Registrar or such other agent.
SECTION 6.06. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
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SECTION 6.07. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel), except any
such expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of enforcing
this Indenture (including Section 6.07) against the Company and of defending
itself against any claim or liability (whether asserted by any Noteholder or
the Company) in connection with the exercise or performance of any of its
powers or duties hereunder.
As security for the performance of the obligations of the
Company under this Section 6.07, the Trustee shall have a lien prior to the
Notes upon all property and funds held or collected by the Trustee as such,
except funds expressly designated and held in trust for the payment of
principal of, premium, if any, or interest on Notes. The Trustee's right to
receive payment of any amounts due under this Section 6.07 shall not be
subordinate to any other liability or indebtedness of the Company.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(7), the expenses
and the compensation for the services are intended to constitute expenses of
administration under any bankruptcy law.
The Company's obligations under this Section 6.07 and any lien
arising hereunder shall survive the resignation or removal of any Trustee, the
discharge of the Company's obligations pursuant to Article Four of this
Indenture and/or the termination of this Indenture.
SECTION 6.08. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
a corporation organized and doing business under the laws of the United States
or of any state, authorized
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under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 6.09,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section 6.09, it shall resign in the
manner and with the effect hereinafter specified in this Article Six.
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 6.11.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If any instrument of acceptance by a successor
trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Notes, delivered
to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with
Section 6.08 after written request therefor by the
Company or any Noteholder who has been a bona fide
Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible
under Section 6.09 and shall fail to resign after
written request therefor by the Company or by any
such Noteholder, or
(3) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent
or a receiver or conservator of the Trustee or of its
property shall be appointed or any public officer
shall take charge or control of the Trustee or of its
property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee or (ii) subject to Section 5.14, any Noteholder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
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(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Noteholders and accepted appointment in the manner
hereinafter provided, any Noteholder who has been a bona fide Holder of a Note
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such event within 30 days of the date thereof by
first-class mail, postage prepaid, to the Holders of Notes as their names and
addresses appear in the Note Register. Each notice shall include the name of
the successor Trustee and the address of its principal corporate trust office.
SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on request of
the Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee,
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 6.07. Upon request
of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article Six.
SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or
conveyed or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article Six, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Notes shall
have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such
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authenticating Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.
SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Notes), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
ARTICLE SEVEN
NOTEHOLDERS' LISTS AND REPORTING BY TRUSTEE AND COMPANY
SECTION 7.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF NOTEHOLDERS.
The Company will furnish or cause to be furnished to the
Trustee (a) semi-annually, not more than three days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date, (b) at such other
times as the Trustee may request in writing, within 30 days after the receipt
by the Company of any such request, a list of similar form and content as of a
date not more than 15 days prior to the time such list is furnished; provided,
however, that during such time as the Trustee is the Note Registrar, no such
list shall be required to be furnished.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 7.01 and the
names and addresses of Holders received by the Trustee in its capacity as Note
Registrar (if so acting). The Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other
Holders with respect to their rights under this Indenture or under the Notes,
and the corresponding rights and duties of the Trustee, shall be as provided in
the Trust Indenture Act.
(c) Every Holder of Notes, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of information as to the names and addresses of the Holders in
accordance with the Trust Indenture Act.
(d) Unless the Trustee deems it inappropriate under the
circumstances, the Trustee will promptly provide the Company with copies of any
forms of notice or other communication sent to Holders.
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SECTION 7.03. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. To the extent that any such report is required by the Trust
Indenture Act with respect to any 12-month period, such report shall cover the
12-month period ending May 15 and shall be transmitted by the next succeeding
May 15.
(b) A copy of each such report shall, at the time of such
transmission to Noteholders, be filed by the Trustee with the Commission, any
stock exchange upon which the Notes are listed, and also with the Company. The
Company will notify the Trustee when the Notes are listed on, or delisted from,
any stock exchange.
SECTION 7.04. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
SECTION 7.05. OFFICERS' CERTIFICATE WITH RESPECT TO ADDITIONAL INTEREST.
Within five Business Days after any event specified in the
Registration Rights Agreement which would require the payment of Additional
Interest or the cessation of any such payment, the Company shall deliver an
Officers' Certificate to the Trustee stating the new interest rate on the Notes
and the date on which it became effective.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not, in a single transaction or a series of
transactions, consolidate or merge with or into or transfer, sell, lease or
convey all or substantially all of its assets to another Person unless:
(1) either the Company shall be the entity surviving such
merger or consolidation or the corporation formed by or surviving such
consolidation or merger, or the Person to which such transfer, sale,
lease or conveyance shall have been made, shall be a corporation duly
organized and existing under the laws of the United States, any state
thereof or the District of Columbia and shall unconditionally
expressly assume by a supplemental indenture hereto, executed and
delivered to the Trustee, in form
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satisfactory to the Trustee, all the obligations of the Company under
the Notes and the Indenture; and
(2) immediately before and immediately after giving
effect to the transaction or series of transactions, no Default or
Event of Default shall have occurred and be continuing; and
(3) immediately after giving effect to the transaction or
series of transactions, the Company or the surviving entity, as
applicable, and their respective banking and thrift subsidiaries, as
applicable, shall be in compliance with all applicable regulatory
capital requirements; and
(4) immediately after giving effect to the transaction or
series of transactions, the Company or the surviving entity, as
applicable, could incur at least $1.00 of additional Funded
Indebtedness without violating Section 10.11(b) hereof; and
(5) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, business combination, transfer, sale, lease or
conveyance and such supplemental indenture complies with this Article
and that all conditions precedent herein relating to such transaction
have been complied with.
SECTION 8.02. SUCCESSOR ENTITY SUBSTITUTED.
Upon any consolidation, merger of the Company into another
entity, business combination or transfer, conveyance, sale or lease of all or
substantially all of the properties and assets of the Company as an entirety in
accordance with Section 8.01, the successor entity formed by such consolidation
or business combination or into which the Company is merged or to which such
transfer, conveyance, sale or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor entity had been named
as the Company herein.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT NOTICE TO OR CONSENT OF
NOTEHOLDERS.
Without notice to or the consent of the Holders of any Notes,
the Company, when authorized by a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to the extent permitted under Article Eight hereof,
to evidence the succession of another entity to the Company, and the
assumption by any such successor of the covenants of the Company
herein and in the Notes; or
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(2) 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; or
(3) to secure the Notes or to add a guarantor; or
(4) to comply with any requirements of the Commission in
order to effect and maintain the qualification of this Indenture under
Trust Indenture Act; or
(5) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture, provided such
action pursuant to this clause (5) shall not adversely affect the
interests of the Holders in any material respect.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Notes, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby,
(1) change the Stated Maturity of the principal of, or
any installment of interest on, any Note, or reduce the principal
amount thereof or the interest thereon or change any Place of Payment
where, or the coin or currency in which, any Note or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date or, in the case of an Offer to Purchase which has been made, on
or after the Change of Control Purchase Date), or
(2) reduce the percentage in principal amount of the
Outstanding Notes, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences
provided for in this Indenture, or
(3) modify any of the provisions of this Section 9.02,
Section 5.13 or Section 10.20, except to increase any such percentage
of Holders whose consent is required under any such Section or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Note affected thereby.
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It shall not be necessary for any Act of Noteholders under this Section 9.02 to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and, subject to Section 6.01, shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution and delivery of
such supplemental indenture by the Company and the Trustee have been complied
with. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article Nine, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 9.05. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any such supplemental indenture may be prepared
and executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Notes.
SECTION 9.06. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
shall conform with the requirements of the Trust Indenture Act as then in
effect if this Indenture shall then be qualified under the Trust Indenture Act.
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ARTICLE TEN
COVENANTS
SECTION 10.01. PAYMENT OF PRINCIPAL, INTEREST AND PREMIUM.
The Company will duly and punctually pay, or cause to be paid,
the principal of (and premium, if any) and interest on the Notes in accordance
with the terms of the Notes and this Indenture and will take any and all action
which may enable it to lawfully pay the principal of (and premium, if any) and
interest on any of the Notes when the same shall become due, whether at the
Maturity thereof, upon redemption, by declaration as authorized by this
Indenture, or otherwise.
SECTION 10.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain an office or agency in each Place of
Payment where Notes may be presented or surrendered for payment, where Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Notes and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and of any change in the location, of such office or agency. If
at any time the Company shall fail to maintain such 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 principal
corporate trust office of the Trustee, and the Company hereby appoints the
Trustee its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.
SECTION 10.03. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of and premium, if any, or
interest on any of the Notes, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal and premium,
if any, 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. As provided in Section 5.04,
upon any bankruptcy or reorganization proceeding relative to the Company, the
Trustee shall serve as the Paying Agent and conversion agent (if any) for the
Notes.
Whenever the Company shall have one or more Paying Agents, it
will, on or prior to each due date of the principal of, premium, if any, of or
interest on, any Notes, deposit with a Paying Agent a sum sufficient to pay the
principal and premium, if any, or interest so
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becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal or interest, and unless such Paying Agent is the
Trustee, the Paying Agent will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will
(1) hold all sums held by it for the payment of principal
of, premium, if any, or interest on the Notes in trust for the benefit
of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the
Company, or any other obligor upon the Notes, in the making of any
such payment of principal and premium, if any, or interest; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by Paying Agent to the
Trustee such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of and
premium, if any, or interest on any Note and remaining unclaimed for more than
two years after such principal and premium, if any, or interest has become due
and payable shall, subject to applicable law, be paid to the Company on Company
Request, or, if then held by the Company, shall be discharged from such trust;
and the Holder of such Note shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be mailed or published once, in an
Authorized Newspaper in each Place of Payment or mail to each such Holder or
both, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, an unclaimed balance of such money then remaining will be repaid to
the Company.
SECTION 10.04. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or
discharged, and will cause each Subsidiary to pay or discharge or cause to be
paid or discharged, before the same
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shall become delinquent, (1) all taxes, assessments and governmental charges
levied or imposed upon the Company or such Subsidiary or upon the income,
profits or property of the Company or such Subsidiary and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or such Subsidiary; provided, however, that
the Company or such Subsidiary shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings or any such tax, assessment, charge or claim if not
disadvantageous in any material respect to the Noteholders.
SECTION 10.05. CORPORATE EXISTENCE.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect the
corporate existence, rights (charter and statutory) and franchises of the
Company and its Subsidiaries, and will comply in all material respects with all
statutes, rules, regulations and orders of and restrictions imposed by
governmental and administrative authorities and agencies applicable to the
Company and its Subsidiaries, a failure to comply with which would have a
material adverse effect on the Company and its Subsidiaries considered as a
single enterprise; provided, however, that the Company shall not be required to
preserve any right or franchise of the Company or its Subsidiaries if the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business the Company or its Subsidiaries and the loss
thereof is not disadvantageous in any material respect to the Noteholders.
SECTION 10.06. MAINTENANCE OF DEPOSITORY INSTITUTION SUBSIDIARY.
Subject to Section 8.01, the Company shall maintain at all
times as a Wholly-Owned Subsidiary an entity that is a bank or thrift or
substantially similar institution subject to regulation by federal or state
authorities and do all things necessary to ensure that savings accounts of the
Bank or such other institution are insured by the FDIC or any successor
organization up to the maximum amount permitted by the Federal Deposit
Insurance Act and regulations thereunder or any succeeding federal law
hereinafter enacted.
SECTION 10.07. MAINTENANCE OF PROPERTIES.
The Company will:
(a) cause all its properties and the properties of its
Subsidiaries used or useful in the conduct of the business of the Company and
its Subsidiaries to be maintained and kept in good condition, repair and
working order and supplied with all necessary facilities and equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided; however, that nothing in this
subsection shall prevent the Company or a Subsidiary from discontinuing the
operation and maintenance of any of its properties if such discontinuance is,
in the judgment of the Company, desirable in the conduct of its business and
not disadvantageous in any material respect to the Holders; and
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(b) take all appropriate steps to maintain the licenses
and permits used in the conduct of the business of the Company and its
subsidiaries; provided, however, that nothing in this subsection shall prevent
the Company or a Subsidiary from selling, abandoning or otherwise disposing of
any such license or permit if such sale, abandonment or disposition is, in the
judgment of the Company, desirable in the conduct of its business and not
disadvantageous in any material respect to the Holders.
SECTION 10.08. INSURANCE.
The Company will at all times maintain and will cause each of
its Subsidiaries to maintain (either in the name of the Company or in such
Subsidiary's own name) with financially sound and reputable insurers, insurance
on all its properties in such amounts as management of the Company reasonably
determines is appropriate under the circumstances.
SECTION 10.09. BOOKS AND RECORDS.
The Company shall, and shall cause each Subsidiary to, at all
times keep proper books of record and account in which proper entries shall be
made in accordance with generally accepted accounting principles and, to the
extent applicable, regulatory accounting principles.
SECTION 10.10. STATEMENTS AS TO COMPLIANCE.
(a) The Company will deliver to the Trustee, within 90
days after the end of each fiscal year, a certificate signed by the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company stating, as to each signer thereof, that
(1) a review of the activities of the Company
during such year and of performance under this Indenture has been made
under his or her supervision; and
(2) to the best of his or her knowledge, based on
such review, the Company has fulfilled all its obligations under this
Indenture throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known
to him or her and the nature and status thereof.
(b) The Company shall deliver to the Trustee, as soon as
possible and in any event within 10 days after the Company becomes aware or
should reasonably become aware of the occurrence of a Default or an Event of
Default, an Officers' Certificate setting forth the details of such Default or
Event of Default and the action which the Company proposes to take with respect
thereto.
SECTION 10.11. LIMITATIONS ON INDEBTEDNESS.
(a) The Company will not create, incur, issue, assume,
guarantee or otherwise in any manner become directly or indirectly liable for
or with respect to, or otherwise permit to exist any Junior Indebtedness (other
than Acquired Indebtedness) unless the Stated Maturity of principal (or any
required repurchase, redemption, defeasance or sinking fund payments) of such
Junior Indebtedness is after the final Stated Maturity of principal of the
Notes.
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(b) The Company will not create, incur, assume, guarantee
or otherwise in any manner become directly or indirectly liable for or with
respect to, or otherwise permit to exist, any Funded Indebtedness (including
any Funded Indebtedness assumed in connection with the acquisition of assets
from another Person but excluding the Notes) unless at the time of such event
the principal amount of total Funded Indebtedness of the Company (including the
Notes) would not exceed 100% of the Company's Consolidated Tangible Net Worth,
provided that for purposes of this requirement Funded Indebtedness shall be net
of any fund or interest reserve account which has been established to fund the
payment of principal and/or interest on Funded Indebtedness.
(c) The Company will not permit the Bank to create or
incur, and will not permit any of the Bank's Subsidiaries to create or incur,
any Indebtedness that would qualify as regulatory capital for the Bank under 12
C.F.R. Part 567 (or any successor regulation) unless (i) the aggregate
principal amount thereof does not exceed 50% of the Bank's tangible common
equity and (ii) upon creation or incurrence thereof the Bank would meet any of
the capital requirements under 12 C.F.R. Part 565 (or any successor regulation)
which are necessary to enable the Bank to qualify as a "well capitalized"
institution under such regulations.
SECTION 10.12. LIMITATIONS ON RESTRICTED PAYMENTS.
The Company will not, and will not permit any Subsidiary to,
directly or indirectly, make any Restricted Payment if, at the time of such
Restricted Payment or after giving effect thereto,
(a) a Default or Event of Default shall have occurred and
be continuing or would occur as a result thereof; or
(b) the Bank would fail to meet any of the applicable
capital requirements under 12 C.F.R. Part 565 (or any other successor
provision) which are necessary to enable the Bank to qualify as a
"well capitalized" institution under such regulations; or
(c) the aggregate amount of all Restricted Payments (the
amount of such payments, if other than in cash, having been determined
in good faith by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution filed with the Trustee)
declared and made after the issue date of the Notes would exceed the
sum of
(i) 33 1/3% of the aggregate Consolidated Net
Income (or, if such Consolidated Net Income is a deficit, 100%
of such deficit) of the Company accrued on a cumulative basis
during the period beginning on the first day of the fiscal
quarter during which the issue date of the initial series of
Notes issued under this Indenture occurred and ending on the
last day of the Company's last fiscal quarter ending prior to
the date of such proposed Restricted Payment, plus
(ii) the aggregate Net Cash Proceeds received by
the Company as capital contributions (other than from a
Subsidiary) after the issue date of the Notes issued under
this Indenture, plus
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(iii) the aggregate Net Cash Proceeds and the Fair
Market Value of property not constituting Net Cash Proceeds
received by the Company from the issuance or sale (other than
to a Subsidiary) of Qualified Capital Stock after the issue
date of the initial series of Notes issued under this
Indenture (except, in each case, to the extent such proceeds
are used to purchase, redeem, defease, make sinking fund
payments on or otherwise acquire or retire for value Junior
Indebtedness as set forth in clause (a) of the definition of
Permitted Payment herein), plus
(iv) 100% of the amount of any Indebtedness of the
Company or a Subsidiary that is converted into or exchanged
for Qualified Capital Stock of the Company after the issue
date of the Notes issued under this Indenture;
provided, however, that the foregoing provisions will not prevent (v) the
payment of a dividend within 60 days after the date of its declaration if at
the date of declaration such payment was permitted by the foregoing provisions,
(w) any Permitted Payment, (x) Tax Sharing Payments by the Company pursuant to
any Tax Sharing Agreement among the Company and its Subsidiaries which is in
accordance with applicable OTS requirements, (y) the prepayment of the Senior
Notes due 2000 outstanding as of the date of this Indenture in accordance with
their terms within 30 days after issuance of the Notes or (z) the redemption of
the 270 shares of Series A Preferred Stock outstanding as of the date of this
Indenture in accordance with their terms within 30 days after issuance of the
Notes.
SECTION 10.13. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company will not, and will not permit any of its
Subsidiaries to, create, assume or otherwise cause or suffer to exist or to
become effective any consensual encumbrance or restriction on the ability of
any such Subsidiary to:
(a) pay any dividends or make any other distribution on
its Capital Stock;
(b) make payments in respect of any Indebtedness owed to
the Company or any other Subsidiary; or
(c) make loans or advances to the Company or any
Subsidiary or to guarantee Indebtedness of the Company or any other Subsidiary;
other than, in the case of (a), (b) and (c),
(1) restrictions imposed by applicable laws and
regulations;
(2) restrictions existing under agreements in effect
on the date of this Indenture;
(3) consensual encumbrances or restrictions binding
upon any Person at the time such Person becomes a Subsidiary of the Company so
long as such encumbrances or
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restrictions are not created, incurred or assumed in contemplation of such
Person becoming a Subsidiary;
(4) restrictions on the transfer of assets which are
subject to Liens;
(5) restrictions existing under agreements
evidencing Indebtedness which is incurred after the date of this Indenture in
accordance with Section 10.11 hereof, provided that the terms and conditions of
any such restrictions are no more restrictive than those contained in this
Indenture; and
(6) restrictions existing under any agreement which
refinances or replaces any of the agreements containing the restrictions in
clauses (2), (3) and (5); provided that the terms and conditions of any such
restrictions are not less favorable to the Holders than those under the
agreement evidencing or relating to the Indebtedness refinanced.
SECTION 10.14. RESTRICTIONS ON ISSUANCE AND SALE OR DISPOSITION OF CAPITAL
STOCK OF SUBSIDIARIES.
The Company shall not sell, transfer or otherwise dispose of
shares of Capital Stock of the Bank or permit the Bank to issue, sell or
otherwise dispose of shares of its Capital Stock unless, in either case, the
Bank remains a Wholly Owned Subsidiary of the Company. The Company shall not
permit the Bank to merge or consolidate into or with any other Person (other
than the Company or another Wholly Owned Subsidiary of the Company) unless the
surviving entity is the Company or a Wholly Owned Subsidiary of the Company, or
permit the Bank to convey or transfer its properties and assets substantially
as an entirety to any Person except to the Company or to any Wholly Owned
Subsidiary of the Company. Upon any merger or consolidation of the Bank or
transfer of the properties and assets of the Bank substantially as an entirety
in accordance with this Section 10.14, the surviving entity shall thereafter be
deemed to be, and shall be substituted for, the Bank for all purposes under
this Indenture.
SECTION 10.15. LIMITATIONS ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any Subsidiary of
the Company to, directly or indirectly enter into any transaction (including,
without limitation, the purchase, sale, lease or exchange of property, the
rendering of any service or the making of any loan or advance, but excluding
transactions between the Company and Wholly Owned Subsidiaries of the Company)
with any Affiliate, unless
(i) such transaction is on terms no less favorable to the
Company or such Subsidiary than those that could be obtained in a
comparable arm's length transaction with an entity that is not an
Affiliate,
(ii) with respect to a transaction or series of
transactions involving aggregate value in excess of $1,000,000, the
Company delivers an Officers' Certificate to the Trustee certifying
that such transaction or series of transactions complies with clause
(i) above and has been approved by a majority of the Board of
Directors of the Company and evidenced by a Board Resolution and
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(iii) with respect to a transaction or series of
transactions involving aggregate value in excess of $5,000,000, the
Company delivers to the Trustee an opinion of a nationally recognized
investment banking firm stating that the transaction or series of
transactions is fair (from a financial point of view) to the Company.
The limitations set forth in this paragraph shall not apply to
(i) transactions entered into pursuant to any agreement already in effect on
the date of this Indenture, (ii) any employment agreements, stock option,
employee benefit, indemnification, compensation, business expense reimbursement
or other employment-related agreement, arrangement or plan entered into by the
Company or any of its Subsidiaries either (A) in the ordinary course of
business and consistent with the past practice of the Company or such
Subsidiary or (B) which agreement, arrangement or plan was adopted by the Board
of Directors of the Company or such Subsidiary, as the case may be, (iii)
residential mortgage, credit card and other consumer loans to an Affiliate who
is an officer, director or employee of the Company or any of its Subsidiaries
and which comply with the applicable provisions of 12 U.S.C. Section 1468(b)
and any rules and regulations of the OTS thereunder, (iv) any Restricted
Payments or (v) any transaction or series of transactions in which the total
amount involved does not exceed $250,000.
SECTION 10.16. LIMITATIONS ON LIENS AND GUARANTEES.
(a) The Company shall not create, assume, incur or suffer
to exist any Lien upon (i) the Capital Stock of the Bank as security for
Indebtedness or (ii) any of the Company's property or assets (other than the
Capital Stock of the Bank) as security for Indebtedness of the Company having a
contractual time to maturity greater than one year or prior to the maturity of
the Notes without, in the case of either (i) or (ii), effectively providing
that the Notes will be equally and ratably secured with (or prior to) such
Indebtedness; provided that if such Indebtedness is Junior Indebtedness any
such security interest with respect to such Junior Indebtedness shall be
subordinated to the security interest with respect to the Notes to the same
extent as such Junior Indebtedness is subordinated to the Notes.
(b) The Company will not permit any Subsidiary of the
Company, directly or indirectly, to guarantee or assume, or subject any of its
assets to a Lien to secure, any Pari Passu Indebtedness or Junior Indebtedness
unless (i) such Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a guarantee of, or pledge of assets
to secure, the Notes by such Subsidiary on terms at least as favorable to the
Holders of the Notes as such guarantee or security interest in such assets is
to the holders of such Pari Passu Indebtedness or Junior Indebtedness, except
that in the event of a guarantee or security interest in such assets with
respect to (x) Pari Passu Indebtedness, the guarantee or security interest in
such assets under the supplemental indenture shall be made pari passu to the
guarantee or security interest in such assets with respect to Pari Passu
Indebtedeness or (y) Junior Indebtedness, any such guarantee or security
interest in such assets with respect to such Junior Indebtedness shall be
subordinated to such Subsidiary's guarantee or security interest in such assets
with respect to the Notes to the same extent as such Junior Indebtedness is
subordinated to the Notes and (ii) such Subsidiary waives, and agrees in
writing that it will not in any manner whatsoever claim, or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any
other rights against the Company or any other Subsidiary of the Company as a
result of any payment by such Subsidiary under its guarantees.
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SECTION 10.17. PROVISION OF FINANCIAL INFORMATION.
Whether or not the Company is subject to Section 13(a), 14 or
15(d) of the Exchange Act, or any successor provision thereto, the Company
shall prepare the annual reports, quarterly reports, proxy statements and other
documents which the Company would have been required to file with the
Commission pursuant to such Section 13(a), 14 or 15(d) or any successor
provision thereto if the Company were so required, and, unless such filing is
not permitted under the Exchange Act, file such reports and other documents
with the Commission on or prior to the respective dates (the "Required Filing
Dates") by which the Company would have been required so to file such documents
if the Company were so required. The Company shall also in any event within
five days of each Required Filing Date (i) transmit by mail to all Holders, as
their names and addresses appear in the Note Register, without cost to such
Holders and (ii) file with the Trustee copies of such annual reports, quarterly
reports, proxy statements and other documents.
SECTION 10.18. OFFER TO PURCHASE UPON A CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, the Company shall
be obligated to make an offer to purchase (an "Offer to Purchase"), and shall,
subject to the provisions described below, purchase, on a Business Day (the
"Change of Control Purchase Date") not more than 60 nor less than 30 days
following the occurrence of the Change of Control, all of the then outstanding
Notes at a purchase price (the "Change of Control Purchase Price") equal to
101% of the principal amount thereof, plus accrued and unpaid interest, if any,
to (but excluding) the Change of Control Purchase Date. The Company shall,
subject to the provisions described below, be required to purchase all Notes
properly tendered in the Offer to Purchase and not withdrawn. Prior to the
mailing of the notice to Holders provided for below, the Company shall (i)
offer to repay in full all Indebtedness which by its terms requires repayment
by the Company prior to any repurchase by the Company of the Notes and repay
the Indebtedness of each lender who has accepted such offer or (ii) obtain the
requisite consent under such Indebtedness to permit the repurchase of the Notes
as provided for under this Section 10.18. If a notice has been mailed when
such condition precedent has not been satisfied, the Company shall have no
obligation to (and shall not) effect the purchase of Notes until such time as
such condition precedent is satisfied. Failure to mail the notice on the date
specified below or to have satisfied the foregoing condition precedent by the
date that the Notice is required to be mailed shall in any event constitute a
covenant Default under clause (5) of Section 5.01.
Notice of an Offer to Purchase shall be mailed by the Company
not later than the 30th day after the Change of Control to the Holders of Notes
at their last registered addresses with a copy to the Trustee and the Paying
Agent. The Offer to Purchase shall remain open from the time of mailing for at
least 20 Business Days and until 5:00 p.m., New York City time, on the Change
of Control Purchase Date. The notice, which shall govern the terms of the
Offer to Purchase, shall include such disclosures as are required by law and
shall state:
(a) that a Change of Control has occurred and an
Offer to Purchase is being made, and that, although Holders
are not required to tender their Notes, all Notes that are
timely tendered will be accepted for payment;
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(b) the purchase price (including the amount of
accrued interest, if any) for each Note and the Change of
Control Purchase Date, which will be no earlier than 30 days
nor later than 60 days from the date such notice is mailed;
(c) that any Note not tendered for payment will
continue to accrue interest in accordance with the terms
thereof;
(d) that any Note accepted for payment pursuant
to the Offer to Purchase will cease to accrue interest on and
after the Change of Control Purchase Date;
(e) the instructions that Holders must follow in
order to have such Holders' Notes repurchased;
(f) that Holders will be entitled to withdraw
their election not later than the close of business on the
third Business Day preceding the Change of Control Purchase
Date and the instructions that Holders must follow in order to
withdraw such election; and
(g) any other information necessary to enable
Holders to tender their Notes and to have such Notes
repurchased.
On the Change of Control Purchase Date, the Company shall (i)
accept for payment Notes or portions thereof validly tendered pursuant to the
Offer to Purchase, (ii) deposit with the Paying Agent money, in immediately
available funds, sufficient to pay the purchase price of all Notes or portions
thereof so tendered and accepted and (iii) deliver to the Trustee all Notes so
accepted together with an Officers' Certificate stating the principal amount of
Notes tendered to and accepted for payment by the Company. The Paying Agent
shall promptly mail or deliver to the Holders of Notes so accepted payment in
an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note equal in principal
amount to any unpurchased portion of the Note surrendered. The Notes not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Offer to
Purchase on or as soon as practicable after the Change of Control Purchase
Date.
If any Note accepted for payment is not so paid pursuant to
the provisions of this covenant, then, from the Change of Control Purchase Date
until the principal and interest on such Note is paid, the Company shall pay
interest on the unpaid principal and, to the extent permitted by law, on any
accrued but unpaid interest thereon, in each case, at the rate or rates
prescribed therefor in the Notes.
The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to an Offer
to Purchase.
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SECTION 10.19. PAYMENTS FOR CONSENT.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes unless such consideration is paid to
all Holders that provide such consent or so waive or agree to amend.
SECTION 10.20. WAIVER OF CERTAIN COVENANTS.
Without limiting the rights of the Holders and the Company
with respect to waivers and amendments set forth in Sections 5.13 and 9.02, the
Company may omit in any particular instance to comply with any covenant or
condition set forth in Sections 10.04 through 10.19, if before or after the
time for such compliance the Holders of at least a majority in principal amount
of the Notes at the time Outstanding shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
ARTICLE ELEVEN
REDEMPTION
SECTION 11.01. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Note shall be
evidenced by a Board Resolution.
If the Company elects to redeem less than all of the Notes
pursuant to the optional redemption provisions of Section 11.08 hereof, it
shall notify the Trustee in writing, at least 45 days (unless a shorter period
shall be acceptable to the Trustee) before a Redemption Date fixed by the
Company, of the Redemption Date, the principal amount of Notes to be redeemed
and the Redemption Price.
SECTION 11.02. SELECTION OF NOTES TO BE REDEEMED.
If the Company elects to redeem less than all of the Notes
pursuant to the optional redemption provisions of Section 11.08 hereof, the
Trustee shall select the particular Notes to be redeemed pro rata or by lot or
in accordance with any other method the Trustee considers fair and appropriate
(and in such manner as complies with applicable legal and stock exchange
requirements, if any), provided that in the event that a Holder would be
required to hold Notes with an aggregate principal amount of less than $100,000
but more than an aggregate principal amount of zero as a result of a redemption
of the Notes in part, the Company shall redeem Notes of each such Holder so
that after such redemption such Holder shall hold Notes
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either with an aggregate principal amount of at least $100,000 or such Holder
no longer holds any Notes, and provided, further, that any such proration may
be made on the basis of the aggregate principal amount of Notes held by each
Holder thereof and may be made by making such adjustments as the Company deems
fair and appropriate in order that only Notes in denominations of $1,000 or
integral multiples thereof shall be redeemed. The Trustee shall make the
selection not less than 30 days before the Redemption Date from Notes
Outstanding not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in the amount of $1,000 or whole multiples thereof.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Notes shall relate, in the case of any
Note redeemed or to be redeemed only in part, to the portion of the principal
of such Note which has been or is to be redeemed.
SECTION 11.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 11.08 hereof, at least
30 days but not more than 60 days before a Redemption Date the Company shall
mail, or cause to be mailed, a notice of redemption by first-class mail,
postage prepaid, to each Holder whose Notes are to be redeemed, at his address
appearing in the Note Register.
The notices of redemption shall identify the Notes to be
redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued;
(4) the name and addresses of the Paying Agent;
(5) that Notes called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;
(6) that, unless the Company defaults in making such
redemption payment, interest on each such Note called for redemption
shall cease to accrue on and after the Redemption Date; and
(7) the CUSIP number, if any, of the Notes to be redeemed.
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Notice of redemption of Notes to be redeemed at the election
of the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company.
SECTION 11.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Notes called for
redemption become due and payable on the Redemption Date at the Redemption
Price set forth in the Note.
SECTION 11.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall
deposit with the Trustee or with the Paying Agent (or, if the Company is acting
as its own Paying Agent, segregated and held in trust as provided in Section
10.03) money in funds immediately available on such Redemption Date sufficient
to pay the Redemption Price of and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest on all Notes to (but excluding) the
Redemption Date. The Trustee or the Paying Agent shall return to the Company
any money deposited with the Trustee or the Paying Agent by the Company in
excess of the amounts necessary to pay the Redemption Price of, and accrued
interest on, all Notes to be redeemed.
SECTION 11.06. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the
Notes so to be redeemed shall, on the Redemption Date, become due and payable
at the Redemption Price therein specified and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest) such Notes shall cease to bear interest. Upon surrender of such
Notes for redemption in accordance with said notice, such Notes shall be paid
by the Company at the Redemption Price, together with accrued interest to (but
excluding) the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Notes, or one or more Predecessor Notes,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 3.07.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate provided for by the Note.
SECTION 11.07. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part at a Place
of Payment (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by the Holder thereof or his or her attorney duly
authorized in writing), the Company shall execute and the Trustee shall
authenticate and deliver to such Noteholder at the expense of the Company a new
Note or Notes of any authorized denomination as requested by such Holder in an
aggregate principal
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amount equal to and in exchange for the unredeemed portion of the principal of
the Note surrendered.
SECTION 11.08. OPTIONAL REDEMPTION.
The Company may redeem all or any portion of the Notes at
any time, or from time to time, on or after December 31, 2002 at the Redemption
Prices (expressed in percentages of principal amount) set forth below, plus in
each case an amount equal to accrued interest to (but excluding) the Redemption
Date:
If redeemed during the twelve-month period
Beginning December 31, Redemption Price
---------------------- ----------------
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.250%
2003 (and thereafter) . . . . . . . . . . . . . . . . . . . 103.125
Any redemption of Notes pursuant to this Section 11.08 shall be made in
accordance with the provisions of this Article Eleven.
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 12.01. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE
OR COVENANT DEFEASANCE.
The Company may at its option by Board Resolution, at any
time, elect to have either Section 12.02 (if applicable) or Section 12.03 (if
applicable) applied to the Outstanding Notes upon compliance with the
conditions set forth below in this Article Twelve.
SECTION 12.02. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of the above option provided in
Section 12.01 applicable to this Section 12.02, the Company shall be deemed to
have been discharged from its obligations with respect to the Outstanding Notes
on and after the date the conditions precedent set forth below are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Notes and to have satisfied all its other
obligations under such Notes and this Indenture, insofar as such Notes are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following, which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of Outstanding Notes to receive, solely from the trust fund described
in Section 12.04, as more fully set forth in such Section, payments of the
principal of (and premium, if any) and interest on such Notes when such
payments are due, (B) the Company's obligations with respect to such Notes
under Sections 3.04, 3.05, 3.06, 10.02 and 10.03 and
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such obligations as shall be ancillary thereto, (C) the rights, powers, trusts,
duties, immunities and other provisions in respect of the Trustee hereunder and
(D) this Article Twelve. Subject to compliance with this Article Twelve, the
Company may exercise its option under this Section 12.02 notwithstanding the
prior exercise of its option under Section 12.03 with respect to the Notes.
Following a defeasance, payment of the Notes may not be accelerated because of
an Event of Default.
SECTION 12.03. COVENANT DEFEASANCE.
Upon the Company's exercise of the option provided in Section
12.01 applicable to this Section 12.03, (i) the Company shall be released from
its obligations under Section 10.04, Sections 10.06 through 10.16, inclusive
(subject, in the case of Section 10.10, to any requirement of the Trust
Indenture Act), and Sections 10.18 and 10.19 and clauses (2), (3) and (4) of
Section 8.01, and (ii) the occurrence of an event specified in Sections 5.01(3)
(with respect to clauses (2), (3) or (4) of Section 8.01), 5.01(4), 5.01(5)
(with respect to any of Section 10.04, Sections 10.06 through 10.16, inclusive
(subject, in the case of Section 10.10, to any requirement of the Trust
Indenture Act), and Section 10.18), 5.01(6), 5.01(9), 5.01(10) and 5.01(11)
shall not be deemed to be an Event of Default with respect to the Outstanding
Notes on and after the date the conditions set forth below are satisfied
(hereinafter "covenant defeasance"). For this purpose, such covenant
defeasance means that, with respect to the Outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or Clause, whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or Clause or by reason of any reference in any such Section or Clause
to any other provision herein or in any other document, but the remainder of
this Indenture and such Notes shall be unaffected thereby.
SECTION 12.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions precedent to application
of either Section 12.02 or Section 12.03 to the then Outstanding Notes:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such
Notes, (A) money in United States Dollars in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof, sufficient,
without reinvestment, in the opinion of a nationally-recognized firm
of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee to pay and discharge, the principal of
(and premium, if any) and interest on the Outstanding Notes on the
Stated Maturity of such principal, premium, if any, or interest in
accordance with the terms of this Indenture and of the Notes. For
this purpose, "U.S. Government Obligations" means securities that are
(x) direct obligations of the
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United States of America for the payment of which its full faith and
credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America,
which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any such U.S. Government Obligation or a
specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the
holder of such depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
(2) No Event of Default or event which with notice or lapse
of time or both would become an Event of Default with respect to the
Notes shall have occurred and be continuing (A) on the date of such
deposit and after giving effect thereto or (B) insofar as subsections
5.01(7) and (8) are concerned, at any time during the period ending on
the 123rd day after the date of such deposit or, if longer, ending on
the day following the expiration of the longest preference period
applicable to the Company in respect of such deposit (it being
understood that the condition in this Clause (B) shall not be deemed
satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not (A)
cause the Trustee for the Notes to have a conflicting interest as
defined in Section 6.08 for purposes of the Trust Indenture Act with
respect to any securities of the Company or (B) result in the trust
arising from such deposit to constitute, unless it is qualified as, a
regulated investment company under the Investment Company Act of 1940,
as amended.
(4) Such defeasance or covenant defeasance shall not result
in a breach or violation of, or constitute a default under, this
Indenture or any other agreement or instrument to which the Company is
a party or by which it is bound.
(5) Such defeasance or covenant defeasance shall not cause
any Notes then listed on any registered national securities exchange
under the Exchange Act to be delisted.
(6) In the case of an election under Section 12.02, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (y) 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
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thereon such opinion shall confirm that, the Holders will not
recognize income, gain or loss for Federal income tax purposes as a
result of such 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 defeasance had not occurred.
(7) In the case of an election under Section 12.03, the
Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders 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.
(8) The Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that 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 under any applicable U.S. federal or state law, and that the
Trustee has a perfected security interest in such trust funds for the
ratable benefit of the Holders.
(9) 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 the other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any creditors of the Company or others.
(10) No event or condition shall exist that would prevent
the Company from making payments of the principal of, premium, if any,
and interest on the Notes on the date of such deposit.
(11) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the defeasance
under Section 12.02 or the covenant defeasance under Section 12.03 (as
the case may be) have been complied with.
SECTION 12.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section
10.03, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 12.04 in respect of the
Outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (but not including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Notes, of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
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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 money or U.S.
Government Obligations deposited pursuant to Section 12.04 or the principal and
interest received in respect thereof.
Anything herein to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 12.04
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance.
SECTION 12.06. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 12.05 by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Twelve until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 12.05; provided, however,
that if the Company makes any payment of principal of (and premium, if any) or
interest on any such Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or the Paying Agent.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and the seal of the Company to be hereunto affixed and
attested, all as of the day and year first above written.
HAWTHORNE FINANCIAL CORPORATION
[Company Seal] By:
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief
Executive Officer
Attest:
-----------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
and Secretary
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:
--------------------------------------
Name:
Title:
Attest:
-------------------------------------
Name:
Title:
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