EXHIBIT 4.3
IMPERIAL CREDIT INDUSTRIES, INC.
AND
THE SUBSIDIARY GUARANTORS
NAMED HEREIN
$72,165,000
RESETTABLE RATE DEBENTURES, SERIES A
_____________
INDENTURE
DATED AS OF JUNE 9, 1997
_____________
CHASE TRUST COMPANY OF CALIFORNIA
TRUSTEE
TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions 1
Section 1.02 Other Definitions................................ 24
Section 1.03 Incorporation by Reference of Trust Indenture Act 25
Section 1.04 Rules of Construction............................ 26
ARTICLE 2
THE DEBENTURES
Section 2.01 Form and Dating.................................. 26
Section 2.02 Execution and Authentication..................... 28
Section 2.03 Registrar and Paying Agent....................... 29
Section 2.04 Paying Agent to Hold Money in Trust.............. 30
Section 2.05 Holder Lists..................................... 30
Section 2.06 Transfer and Exchange............................ 30
Section 2.07 Replacement Debentures........................... 40
Section 2.08 Outstanding Debentures........................... 41
Section 2.09 Treasury Debentures.............................. 41
Section 2.10 Temporary Debentures............................. 42
Section 2.11 Cancellation..................................... 42
Section 2.12 Defaulted Interest............................... 42
ARTICLE 3
REDEMPTION AND REMARKETING
Section 3.01 Notices to Trustee.............................. 43
Section 3.02 Selection of Debentures to Be Redeemed.......... 43
Section 3.03 Notice of Redemption............................ 43
Section 3.04 Effect of Notice of Redemption.................. 44
Section 3.05 Deposit of Redemption Price..................... 44
Section 3.06 Debentures Redeemed in Part..................... 45
Section 3.07 Optional Redemption............................. 46
Section 3.08 Special Mandatory Redemption.................... 47
Section 3.09 Special Event Redemption; Shortening of Maturity 47
Section 3.10 Tax Opinion Redemption.......................... 48
Section 3.11 Transfer Restricted Security Redemption......... 48
Section 3.12 Remarketing..................................... 49
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ARTICLE 4
COVENANTS
Section 4.01 Payment of Debentures............................... 51
Section 4.02 Maintenance of Office or Agency..................... 53
Section 4.03 Compliance Certificate.............................. 54
Section 4.04 Taxes 55
Section 4.05 Stay, Extension and Usury Laws...................... 55
Section 4.06 Change of Control................................... 55
Section 4.07 Asset Sales 57
Section 4.08 Restricted Payments................................. 59
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred
Stock............................................... 61
Section 4.10 Liens............................................... 63
Section 4.11 Dividend and Other Payment Restrictions Affecting
Subsidiaries........................................ 63
Section 4.12 Transactions with Affiliates........................ 64
Section 4.13 Business Activities................................. 66
Section 4.14 Reports............................................. 66
Section 4.15 Additional Subsidiary Guarantees.................... 66
Section 4.16 Fees and Expenses................................... 66
ARTICLE 5
SUCCESSORS
Section 5.01 Limitations on Merger, Consolidation or Sale of
Substantially All Assets............................ 67
Section 5.02 Successor Corporation Substituted................... 68
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default................................... 68
Section 6.02 Acceleration........................................ 69
Section 6.03 Other Remedies...................................... 70
Section 6.04 Waiver of Past Defaults............................. 71
Section 6.05 Control by Majority................................. 71
Section 6.06 Limitation on Suits................................. 71
Section 6.07 Rights of Holders to Receive Payment................ 72
Section 6.08 Collection Suit by Trustee.......................... 72
Section 6.09 Trustee May File Proofs of Claim.................... 72
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Section 6.10 Priorities......................................... 73
Section 6.11 Undertaking for Costs.............................. 74
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.................................... 74
Section 7.02 Rights of Trustee.................................... 75
Section 7.03 Individual Rights of Trustee......................... 76
Section 7.04 Trustee's Disclaimer................................. 76
Section 7.05 Notice of Defaults................................... 77
Section 7.06 Reports by Trustee to Holders........................ 77
Section 7.07 Compensation and Indemnity........................... 77
Section 7.08 Replacement of Trustee............................... 78
Section 7.09 Successor Trustee by Merger, etc..................... 79
Section 7.10 Eligibility; Disqualification........................ 79
Section 7.11 Preferential Collection of Claims Against the Company 80
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant
Defeasance........................................... 80
Section 8.02. Legal Defeasance and Discharge....................... 80
Section 8.03 Covenant Defeasance.................................. 81
Section 8.04 Conditions to Legal or Covenant Defeasance........... 81
Section 8.05 Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions........ 83
Section 8.06 Repayment to the Company............................. 84
Section 8.07 Reinstatement........................................ 84
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders........................... 85
Section 9.02 With Consent of Holders.............................. 86
Section 9.03 Compliance with Trust Indenture Act.................. 87
Section 9.04 Revocation and Effect of Consents.................... 88
Section 9.05 Notation on or Exchange of Debentures................ 88
Section 9.06 Trustee to Sign Amendments, etc...................... 88
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ARTICLE 10
SUBSIDIARY GUARANTEES
Section 10.01 Subsidiary Guarantees............................... 89
Section 10.02 Execution and Delivery of Subsidiary Guarantees..... 90
Section 10.03 Subsidiary Guarantors May Consolidate, etc., on
Certain Terms....................................... 91
Section 10.04 Releases Following Sale of Assets................... 92
Section 10.05 Limitation of Subsidiary Guarantor's Liability...... 93
Section 10.06 Application of Certain Terms and Provisions to the
Subsidiary Guarantors............................... 93
ARTICLE 11
SUBORDINATION
Section 11.01 Agreement to Subordinate........................... 94
Section 11.02 Liquidation; Dissolution; Bankruptcy............... 94
Section 11.03 Default on Designated Senior Debt.................. 95
Section 11.04 Acceleration of Debentures......................... 96
Section 11.05 When Distribution Must Be Paid Over................ 96
Section 11.06 Notice by Company.................................. 96
Section 11.09 Subrogation........................................ 97
Section 11.08 Relative Rights.................................... 97
Section 11.09 Subordination May Not Be Impaired by Company....... 97
Section 11.10 Distribution or Notice to Representative........... 98
Section 11.11 Rights of Trustee and Paying Agent................. 98
Section 11.12 Authorization to Effect Subordination.............. 98
Section 11.14 Amendments......................................... 99
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls...................... 99
Section 12.02 Notices........................................... 99
Section 12.03 Communication by Holders with Other Holders....... 100
Section 12.04 Certificate and Opinion as to Conditions Precedent 100
Section 12.05 Statements Required in Certificate or Opinion..... 101
Section 12.06 Rules by Trustee and Agents....................... 101
Section 12.07 Legal Holidays.................................... 101
Section 12.08 No Recourse Against Others........................ 102
Section 12.09 Duplicate Originals............................... 102
Section 12.10 Governing Law..................................... 102
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Section 12.11 No Adverse Interpretation of Other Agreements..... 102
Section 12.12 Successors........................................ 102
Section 12.13 Severability...................................... 102
Section 12.14 Counterpart Originals............................. 103
Section 12.15 Table of Contents, Headings, etc.................. 103
SIGNATURES........................................................... 104
EXHIBITS
Exhibit A-1 Form of Debenture
Exhibit A-2 Form of Regulation S Temporary Debenture
Exhibit B-1 Form of Certificate for Exchange or Registration of Transfer
of Rule 144A Global Debenture to Regulation S Global
Debenture
Exhibit B-2 Form of Certificate for Exchange or Registration of Transfer
From Regulation S Global Debenture to Rule 144A Global
Debenture
Exhibit B-3 Form of Certificate for Exchange or Registration of Transfer
of Certificated Debentures
Exhibit B-4 Form of Certificate for Exchange or Registration of Transfer
From Rule 144A Global Debenture or Regulation S Permanent
Global Debenture to Certificated Debenture
Exhibit B-5 Form of Certificate for Exchange or Registration of Transfer
From Certificated Debenture to Rule 144A Global Debenture or
Regulation S Permanent Global Debenture
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INDENTURE, dated as of June 9, 1997, between Imperial Credit Industries,
Inc., a California corporation (the "Company"), the Initial Subsidiary
Guarantors (as defined) and Chase Trust Company of California, a California
corporation, as trustee ("Trustee").
Each party agrees as follows for the benefit of each other and for the
equal and ratable benefit of the Holders of the Resettable Rate Debentures,
Series A (the "Series A Debentures") and the Resettable Rate Debentures, Series
B (the "Series B Debentures" and, together with the Series A Debentures, the
"Debentures"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions
"9 7/8% Senior Notes" means the 9 7/8% Senior Notes due 2007 of the Company
issued under an Indenture dated as of January 23, 1997.
"30-Year Treasury Rate" means the rate per annum equal to the semi-annual
equivalent yield to maturity of the U.S. Treasury security used, in accordance
with customary financial practice, as the benchmark pricing bond in pricing new
issues of corporate debt securities of 30-year maturities on the Scheduled
Remarketing Date.
"Acquired Debt" means, with respect to any specified Person (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Additional Interest" means all of the additional interest owing pursuant
to Section 5 of the Registration Rights Agreement.
"Adjusted Distribution Rate" has the meaning specified in the Declaration.
"Adjusted Interest Rate" has the meaning specified in Section 3.12.
"Adjusted Treasury Rate" means the Treasury Rate plus 0.50%.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, control
(including, with correlative meanings, the terms controlling, controlled by and
under common control with), as used
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with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise; provided that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control. Notwithstanding the
foregoing, no Person (other than the Company or any Restricted Subsidiary of the
Company) in whom a Special Purpose Subsidiary makes an Investment in connection
with a Qualified Securitization Transaction shall be deemed to be an Affiliate
of the Company or any of its Restricted Subsidiaries solely by reason of such
Investment.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or exchange of
beneficial interests in a Global Debenture, the rules and procedures of the
Depositary that are applicable to such transfer or exchange
"Asset Sale" means (a) any sale, lease, transfer or other disposition (or
series of related sales, leases, transfers or dispositions) by the Company or
any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (other than as permitted under Sections
5.01 or 10.03) (each referred to for the purposes of this definition as a
"disposition"), of (i) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary, as the
case may be), (ii) all or substantially all the assets of any division or line
of business of the Company or any Restricted Subsidiary, (iii) any other assets
of the Company or any Restricted Subsidiary outside of the ordinary course of
business of the Company or such Restricted Subsidiary, as the case may be,
including any sale of the stock of a Restricted Subsidiary, or (iv) any
Securitization Related Asset, or (b) any issuance of Capital Stock (other than
non-convertible preferred stock that is not Disqualified Stock) by any of the
Company's Restricted Subsidiaries, except any such issuance to the Company or
any Wholly Owned Restricted Subsidiary that is a Subsidiary Guarantor.
Notwithstanding the foregoing, an "Asset Sale" does not include (a) a
disposition by a Subsidiary to the Company or a Wholly Owned Restricted
Subsidiary or by the Company to a Wholly Owned Restricted Subsidiary, (b) a
disposition that constitutes a Restricted Payment permitted by Section 4.08),
(c) sales of Receivables in Qualified Securitization Transactions for the fair
market value thereof, including cash in an amount at least equal to 75% of the
book value thereof as determined in accordance with GAAP, (d) transfers of
Receivables by a Special Purpose Subsidiary to third parties in a Qualified
Securitization Transaction and (e) any trade or exchange by the Company or any
Restricted Subsidiary of any assets for similar assets of a Related Business
owned
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or held by another Person; provided that (1) the fair market value of the assets
traded or exchanged by the Company or such Restricted Subsidiary (including any
cash or Cash Equivalents to be delivered by the Company or such Restricted
Subsidiary) is reasonably equivalent to the fair market value of the asset or
assets (together with any cash or Cash Equivalents) to be received by the
Company or such Restricted Subsidiary and (2) such exchange is approved by a
majority of the directors of the Company who are not employees of the Company or
its Restricted Subsidiaries.
"Authentication Order" means an Officers' Certificate ordering the Trustee
to authenticate Debentures.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Board Resolution" means a resolution duly adopted by the Board of
Directors of the Company.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capitalized Excess Servicing Fees Receivables" mean, with respect to the
sale of Receivables in a Qualified Securitization Transaction, the present value
of the excess of the weighted average coupon on the Receivables sold over the
sum of (i) the coupon in the pass-through certificates, (ii) a base servicing
fee paid to the loan or lease servicer and (iii) expected losses to be incurred
on the portfolio of Receivables sold, considering prepayment assumptions.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means: (i) United States dollars; (ii) Government
Securities (except that for purpose of this definition, Government Securities
must have a remaining Weighted Average Life to Maturity of not more than one
year from the date of investment therein); (iii) commercial paper or other
short-term corporate obligation that has received a rating of at least A-1 or AA
from Standard & Poor's Corporation
4
("S&P"), P-1 or Aa2 from Moody's Investor Services, Inc. ("Moody's"), F-1 or AA
from Fitch Investor Service, Inc. ("Fitch"), or D-1 or AA from Duff & Phelps
Credit Rating Co., ("Duff"); (iv) time deposits, certificates of deposit, bank
acceptances or bank notes issued by any bank having capital surplus and
undivided profits aggregating at least $500,000,000 (or the foreign currency
equivalent thereof) and at least a high A rating (or the equivalent) from any
two of the following: S&P, Moody's, Thomson Bankwatch, Inc. or IBCA, Inc.; (v)
money market preferred stocks which, at the date of acquisition and at all times
thereafter, are accorded ratings of at least mid AA by any two of the following:
S&P, Moody's, Fitch or Duff; (vi) tax-exempt obligations that are accorded
ratings at the time of investment therein of at least mid AA (or equivalent
short-term ratings) by any two of the following; S&P, Moody's, Fitch or Duff;
(vii) master repurchase agreements with foreign or domestic banks having capital
and surplus of not less than $500,000,000 (or the foreign equivalent thereof) or
primary dealers so long as (a) such bank or dealer has a rating of at least mid
AA from any two of the following: S&P, Moody's, Fitch or Duff; (b) such
agreements are collateralized with obligations of the United States government
or its agencies at a ratio of 102%, or with other collateral rated at least mid
AA from any two of the following: S&P, Moody's, Fitch or Duff, at a rate of 103%
and, in either case marked to market weekly and (c) such securities shall be
held by a third-party agent; (viii) guaranteed investment contracts and/or
agreements of a bank, insurance company or other institution whose unsecured,
uninsured and unguaranteed obligations (or claims-paying ability) are, at the
time of investment therein, rated AAA by any two of the following: S&P, Moody's,
Fitch or Duff; (ix) money market funds, the portfolio of which is limited to
investments described in clauses (i) through (viii); (x) with respect to Non-
Domestic Persons, instruments that are comparable to those described in clauses
(i), (ii), (iv) and (vii) in the country in which such Non-Domestic Person is
organized or has its principal business operations; and (xii) up to $1,000,000
in the aggregate of other financial assets held by Restricted Subsidiaries. In
no event shall any of the Cash Equivalents described in clauses (iii) through
(viii), (x) and (xi) above have a final maturity more than one year from the
date of investment therein.
"Certificated Debentures" means Debentures that are in the form of the
Debentures attached hereto as Exhibit A-1, that do not include the information
called for by footnotes 1 and 2 thereof.
"Change of Control" means the occurrence of one or more of the following
events: (i) a person or entity or group (as that term is used in Section
13(d)(3) of the Exchange Act) of persons or entities shall have become the
beneficial owner of a majority of the securities of the Company ordinarily
having the right to vote in the election of directors; (ii) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any directors
who are members of such Board of Directors of the Company on the date hereof and
any new directors whose election by such Board of Directors of the Company
5
or whose nomination for election by the shareholders of the Company was approved
by a vote of 66 2/3% 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 Board of Directors of the Company then in office; (iii) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of the Company
and its Restricted Subsidiaries, taken as a whole, to any person or entity or
group (as so defined) of persons, or entities (other than to any Wholly Owned
Restricted Subsidiary of the Company); (iv) the merger or consolidation of the
Company with or into another corporation or the merger of another corporation
into the Company with the effect that immediately after such transaction any
person or entity or group (as so defined) of persons or entities shall have
become the beneficial owner of securities of the surviving corporation of such
merger or consolidation representing a majority of the combined voting power of
the outstanding securities of the surviving corporation ordinarily having the
right to vote in the election of directors; or (v) the adoption of a plan
relating to the liquidation or dissolution of the Company.
"Common Trust Securities" means the common securities issued by the Trust.
"Company Guarantee" means the Guarantee Agreement, dated as of June 9,
1997, made by the Company in respect of the Securities and the Common Trust
Securities.
"Comparable Treasury Issue" means with respect to any prepayment date the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after the last day of the
Remaining Life, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.
"Comparable Treasury Price" means (A) the average of five Reference
Treasury Dealer Quotations for such prepayment date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (B) if the Indenture
Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the
average of all such Quotations.
"Consolidated Leverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of all consolidated Indebtedness of the
Company and its Restricted Subsidiaries, excluding Warehouse Indebtedness and
Guarantees thereof
6
permitted to be incurred pursuant to clause (iii) of Section 4.09 to (ii) the
Consolidated Net Worth of the Company.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof that is a Subsidiary Guarantor, (ii) the Net Income of any
Restricted Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Restricted Subsidiary of
that Net Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded, (iv) the cumulative effect of a change in
accounting principles shall be excluded, and (v) the Net Income of any
Unrestricted Subsidiary shall be excluded, whether or not distributed to the
Company or one of its Subsidiaries.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Restricted Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the Issue Date in the book value of any asset
owned by such Person or a consolidated Restricted Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Restricted Subsidiaries and in
Persons that are not Restricted Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 or such other address as the Trustee may give
notice to the Company.
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"Debenture Custodian" means the Trustee, as custodian with respect to the
Global Debentures, or any successor entity thereto.
"Declaration" means the Amended and Restated Declaration of Trust, dated as
of June 9, 1997, by and among the Company, as Sponsor, and Kevin E. Villani,
Irwin L. Gubman and Paul B. Lasiter, as the Regular Trustees, Chase Trust
Company of California, as the Property Trustee and Chase Manhattan Bank
Delaware, a Delaware corporation, as the Delaware Trustee.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Designated Senior Debt" means any Senior Debt permitted under this
Indenture the principal amount of which is $25,000,000 or more and that has been
designated by the Company as "Designated Senior Debt."
"Depositary" means, with respect to the Debentures issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Debentures, until a successor shall have been
appointed and become such Depositary pursuant to the applicable provision of
this Indenture, and, thereafter, "Depositary" shall mean or include such
successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the Stated Maturity of the Debentures.
"Dissolution Event" means an event pursuant to which the Trust is dissolved
in accordance with the Declaration, and the Debentures held by the Property
Trustee are distributed to the holders of the Securities and Common Trust
Securities issued by the Trust pro rata in accordance with the Declaration.
"Dollars" and "$" means lawful money of the United States of America.
"Election Date," with respect to any Scheduled Remarketing Date, means the
second Business Day prior thereto.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
8
"Equity Offering" means an underwritten primary public offering of Equity
Interests (other then Disqualified Stock) of the Company pursuant to an
effective registration statement under the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company pursuant
to the Registration Rights Agreement to exchange Series B Securities for Series
A Securities and Series B Debentures for Series A Debentures.
"Existing Indebtedness" means the Indebtedness of the Company and its
Subsidiaries (other then Indebtedness under the Warehouse Facilities) in
existence on the Issue Date, until such amounts are repaid.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date.
"Global Debentures" means, individually and collectively, the Regulation S
Temporary Global Debenture, the Regulation S Permanent Global Debenture and the
Rule 144A Global Debenture.
"Government Securities" means direct obligations of the United States of
America, or any agency or instrumentality thereof for the payment of which the
full faith and credit of the United States of America is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates, in either case in the ordinary course of business and not for speculative
or investment purposes.
"Holder" means a Person in whose name a Debenture is registered.
9
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable, (ii) all Capital
Lease Obligations of such Person, (iii) all obligations of such Person issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable and expense accruals
arising in the ordinary course of business), (iv) all obligations of such Person
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other than obligations with respect to
letters of credit securing obligations (other than obligations described in (i)
through (iii) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the tenth Business
Day following receipt by such Person of a demand for reimbursement following
payment on the letter of credit), (v) the amount of all obligations of such
Person with respect to the redemption, repayment or other repurchase of any
Disqualified Stock other than Permitted SPTL Preferred Stock (but excluding any
accrued dividends), (vi) all Warehouse Indebtedness, (vii) all obligations of
the type referred to in clauses (i) through (vi) of other Persons and all
dividends of other Persons for the payment of which, in either case, such Person
is responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guaranty, (viii) all obligations of the
type referred to in clauses (i) through (vii) of other Persons secured by any
Lien on any property or asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the obligation
so secured and (ix) to the extent not otherwise included in this definition,
Hedging Obligations of such Person. Except in the case of Warehouse Indebtedness
(the amount of which shall be determined in accordance with the definition
thereof) the amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
Notwithstanding the foregoing, the term "Indebtedness" does not include deposit
liabilities of any Restricted Subsidiary, the deposits of which are insured by
the Federal Deposit Insurance Corporation or any successor agency or
Indebtedness of any Restricted Subsidiary to the Federal Home Loan Bank of San
Francisco or any successor thereto incurred in the ordinary course of business
and secured by qualifying mortgage loans or mortgage-backed securities.
"Indenture" means this Indenture as amended or supplemented from time to
time.
10
"Indenture Default" means any event that is or with the passage of time or
the giving of notice or both would be an Indenture Event of Default.
"Initial Subsidiary Guarantors" means the initial Subsidiary Guarantors as
of the date of this Indenture.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" means the receipt by the Trust of an opinion of
counsel, rendered by a law firm having a recognized national securities
practice, to the effect that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority, the
Trust is or will be considered an "investment company" that is required to be
registered under the Investment Company Act, which change becomes effective on
or after the Issue Date.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any Restricted Subsidiary of the Company such that, after giving
effect to any such sale or disposition, such Person is no longer a Subsidiary of
the Company, the Company shall be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value (as determined as
set forth in the last paragraph under Section 4.08) of the Equity Interests of
such Restricted Subsidiary not sold or disposed of; provided, however, that this
requirement shall not apply if (i) the class of Equity Interests of the
Restricted Subsidiary owned by the Company is registered under Section 12 of the
Exchange Act and is listed on a national securities exchange or quoted on a
national quotations system and (ii) if the Company has entered into an agreement
with the Restricted Subsidiary that provides the Company with the right to
demand (subject to customary restrictions) registration of all of its Equity
Interests under the Securities Act.
"Issue Date" means the date on which the Series A Debentures are originally
issued.
11
"Lien" means, with respect to any Person, any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind on the assets of such Person,
including (i) any conditional sale or other title retention agreement or lease
in the nature thereof, and (ii) any claim (whether direct or indirect through
subordination or other structural encumbrance against any Securitization Related
Asset sold or otherwise transferred by such Person to a buyer, unless such
Person is not liable for any losses thereon).
"Maximum Adjusted Distribution Rate" means the rate per annum, determined
on the Scheduled Remarketing Date by the Remarketing Agent in its discretion,
equal to the greater of (a) the 30-Year Treasury Rate plus 600 basis points and
(b) a nationally-recognized high-yield index rate for similarly-rated issues,
plus 100 basis points.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and after any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), or (b) is directly or indirectly liable (as a guarantor or
otherwise); (ii) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness (other than the Debentures being offered hereby) of the
12
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers" means the Chief Executive Officer, the President, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the principal executive officer, principal financial officer or
principal accounting officer of the Company.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee. Except with respect to any opinion delivered
pursuant to Article 8, the counsel may be an employee of the Company or the
Trustee. The counsel may be counsel to the Company or the Trustee.
"Permitted Junior Securities" means Equity Interests in the Company or debt
securities that are subordinated to all Senior Debt (and any debt securities
issued in exchange for Senior Debt) to substantially the same extent as, or to a
greater extent than, the Debentures are subordinated to Senior Debt pursuant to
the Indenture.
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary: (i) in a Subsidiary Guarantor or in SPTL or a Person that will, upon
the making of such Investment, become a Subsidiary Guarantor; provided, however,
that the primary business of such Subsidiary Guarantor is a Related Business;
and provided further, that any Investment by the Company in SPTL must be in the
form of Permitted SPTL Preferred Stock or in a security senior to such stock;
(ii) in another Person if as a result of such Investment such other Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Subsidiary Guarantor;
provided, however, that such Person's primary business is a Related Business;
(iii) comprised of Cash Equivalents; (iv) comprised of Receivables owing to the
Company or any Restricted Subsidiary if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; (v) comprised of payroll, travel and similar advances to cover
matters that are expected at the time of such advances ultimately to be treated
as expenses for accounting purposes and that are made
13
in the ordinary course of business; (vi) comprised of stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments; (vii) in any Person to the extent such Investment
represents the non-cash portion of the consideration received for an Asset Sale
as permitted pursuant to Section 4.07; (viii) comprised of Receivables of the
Company or any of its Wholly Owned Restricted Subsidiaries; or (ix) comprised of
Securitization Related Assets arising in a Qualified Securitization Transaction.
"Permitted Liens" means, with respect to any Person: (a) pledges or
deposits by such Person under worker's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government bonds
to secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case Incurred in the ordinary course of business; (b) Liens imposed by law,
such as carriers', warehousemen's and mechanics' Liens, in each case for sums
not yet due or being contested in good faith by appropriate proceedings or other
Liens arising out of judgments or awards against such Person with respect to
which such Person shall then be proceeding with an appeal or other proceedings
for review; (c) Liens for property taxes not yet subject to penalties for non-
payment or which are being contested in good faith and by appropriate
proceedings; (d) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of its business; provided, however, that such letters of credit
do not constitute Indebtedness; (e) minor survey exceptions, minor encumbrances,
easements or reservations of, or rights of others for, licenses, rights of way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real property or
Liens incidental to the conduct of the business of such Person or to the
ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person; (f) Liens securing Indebtedness Incurred to finance the
construction, purchase or lease of, or repairs, improvements or additions to,
property of such Person (but excluding Capital Stock of another Person);
provided, however, that the Lien may not extend to any other property owned by
such Person or any of its Subsidiaries at the time the Lien is Incurred, and the
Indebtedness secured by the Lien may not be Incurred more than 180 days after
the latest of the acquisition, completion of construction, repair, improvement,
addition or commencement of full operation of the property subject to the Lien;
(g) Liens on Receivables owned by the Company or a Restricted Subsidiary, as the
case may be, to secure Indebtedness permitted under clause (ii) of Section 4.09
and Liens to secure Indebtedness under mortgage loan repurchase agreements or
repurchase facilities
14
permitted under clause (iii) of Section 4.09; (h) Liens on Securitization
Related Assets (or on the Capital Stock of any Subsidiary of such Person
substantially all the assets of which are Securitization Related Assets);
provided, however, that, (x) any such Liens may only encumber Securitization
Related Assets in an amount not to exceed 75% of the excess, if any, of (i) the
total amount of Securitization Related Assets, determined on a consolidated
basis in accordance with GAAP, as of the creation of such Lien over (ii) an
amount equal to 150% of all unsecured Senior Indebtedness of the Company and its
Restricted Subsidiaries as of the time of creation of such Lien, and (y) the
balance of Securitization Related Assets, not permitted to be encumbered by the
foregoing proviso (x) shall remain unencumbered by any Lien; (i) Liens on
Receivables and other assets of a Special Purpose Subsidiary incurred in
connection with a Qualified Securitization Transaction; (j) Liens existing on
the Issue Date; (k) Liens on property or shares of Capital Stock of another
Person at the time such other Person becomes a Subsidiary of such Person;
provided, however, that such Liens are not created, incurred or assumed in
connection with, or in contemplation of, such other Person becoming such a
Subsidiary; provided further, however, that such Lien may not extend to any
other property owned by such Person or any of its Subsidiaries; (l) Liens on
property at the time such Person or any of its Subsidiaries acquires the
property, including, any acquisition by means of a merger or consolidation with
or into such Person or a Subsidiary of such Person; provided, however, that such
Liens are not created, incurred or assumed in connection with, or in
contemplation of such acquisition; provided further, however, that the Liens may
not extend to any other property owned by such Person or any of its
Subsidiaries; (m) Liens securing Indebtedness or other obligations of a
Subsidiary of such Person owing to such Person or a Restricted Subsidiary of
such Person; (n) Liens (other than on any Securitization Related Assets)
securing Hedging Obligations; (o) Liens on cash or other assets (other than
Securitization Related Assets) securing Warehouse Indebtedness of the Company or
its Restricted Subsidiaries; (p) Liens to secure any Permitted Refinancing
Indebtedness as a whole, or in part, with any Indebtedness permitted under this
Indenture to be Incurred and secured by any Lien referred to in the foregoing
clauses (f), (j), (k) and (l); provided, however, that (x) such new Lien shall
be limited to all or part of the same property that secured the original Lien
(plus improvements to or on such property) and (y) the Indebtedness secured by
such Lien at such time is not increased to any amount greater than the sum of
(A) the outstanding, principal amount or, if greater, committed amount of the
Indebtedness described under clauses (f), (j), (k) or (l), as the case may be,
at the time the original Lien became a Permitted Lien and (B) an amount
necessary to pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement; (q) Liens securing
deposit liabilities of any Restricted Subsidiary, the deposits of which are
insured by the Federal Deposit Insurance Corporation or any successor agency or
Indebtedness of any Restricted Subsidiary to the Federal Home Loan Bank of San
Francisco or any successor thereto incurred in the ordinary course of business
and secured by qualifying mortgage loans or mortgage-backed securities; and (r)
Liens on assets of Unrestricted Subsidiaries that secure Non-
15
Recourse Debt of Unrestricted Subsidiaries. Notwithstanding the foregoing,
"Permitted Liens" will not include any Lien described in clauses (f), (j) or (k)
above to the extent such Lien applies to any Additional Assets acquired directly
or indirectly from Net Proceeds pursuant to Section 4.07.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Debentures, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Debentures on terms at least as favorable to the
Holders of Debentures as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iv) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (v) such Indebtedness
may not include a Guaranty of Indebtedness of a Person that is not a Subsidiary
of the Company.
"Permitted SPTL Preferred Stock" means nonvoting (except as provided in the
second proviso below), noncumulative, perpetual preferred stock of SPTL which
would qualify as Tier 1 capital or the equivalent thereof on an unrestricted
basis for purposes of the capital requirements contained in 12 C.F.R. Part 325,
Subpart A, or any successor provision; provided that the total liquidation
preference of such preferred stock outstanding at any time shall not exceed 20%
of the Consolidated Net Worth of SPTL (after giving effect to the issuance of
such preferred stock); and provided further, that the holders of such stock may
be granted the right to elect directors constituting less than a majority of the
board of directors of SPTL if dividends on such have not been paid for six
dividend periods, whether consecutive or not, and until such time as SPTL has
paid or declared and set apart for payment dividends for four consecutive
dividend periods.
"Permitted Warehouse Indebtedness" means Warehouse Indebtedness in
connection with a Warehouse Facility; provided, however, that (i) the assets as
to which such Warehouse Indebtedness relates are or, prior to any funding under
the related
16
Warehouse Facility with respect to such assets, were eligible to be recorded as
held for sale on the consolidated balance sheet of the Company in accordance
with GAAP, (ii) such Warehouse Indebtedness will be deemed to be Permitted
Warehouse Indebtedness (a) in the case of a Purchase Facility, only to the
extent the holder of such Warehouse Indebtedness has no contractual recourse to
the Company and its Restricted Subsidiaries to satisfy claims in respect of such
Permitted Warehouse Indebtedness in excess of the realizable value of the
Receivables financed thereby, and (b) in the case of any other Warehouse
Facility, only to the extent of the lesser of (A) the amount advanced by the
lender with respect to the Receivables financed under such Warehouse Facility,
and (B) the principal amount of such Receivables and (iii) any such Indebtedness
has not been outstanding in excess of 364 days.
"Person" means any individual, corporation, limited liability company,
partnership, association, joint stock company, trust or trustee thereof, estate
or executor thereof, unincorporated organization or joint venture.
"Property Trustee" has the meaning specified in the Declaration.
"Purchase Facility" means any Warehouse Facility in the form of a purchase
and sale facility pursuant to which the Company or a Restricted Subsidiary of
the Company sells Receivables to a financial institution and retains a right of
first refusal upon the subsequent resale of such Receivables by such financial
institution.
"Qualified Securitization Transaction" means any transaction or series of
transactions pursuant to which (i) the Company or any of its Restricted
Subsidiaries (other than a Special Purpose Subsidiary) sells, conveys or
otherwise transfers to a Special Purpose Subsidiary or (ii) the Company, any of
its Restricted Subsidiaries or a Special Purpose Subsidiary sells, conveys or
otherwise transfers to a special purpose owner trust or other Person Receivables
(together with any assets related to such Receivables, including, without
limitation, all collateral securing such Receivables, all contracts and all
guarantees or other obligations in respect of such Receivables, proceeds of such
Receivables and other assets which are customarily transferred in connection
with asset securitization transactions involving Receivables) of the Company or
any of its Restricted Subsidiaries in transactions constituting "true sales"
under the Bankruptcy Laws and as "sales" under GAAP, as evidenced by an Opinion
of Counsel to such effect.
"Quotation Agent" means Lehman Brothers Inc. and their respective
successors; provided, however, that if the foregoing shall cease to be a primary
United States Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
17
"Receivables" means consumer, mortgage and commercial loans, equipment or
other lease receivables and receivables purchased or originated by the Company
or any Restricted Subsidiary in the ordinary course of business; provided,
however, that for purposes of determining the amount of a Receivable at any
time, such amount shall be determined in accordance with GAAP, consistently
applied, as of the most recent practicable date.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. New York
City time, on the third business day preceding such prepayment date.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date of this Indenture, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Regular Trustees" has the meaning set forth in the Declaration.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Debenture" means a Regulation S Temporary Global
Debenture or Regulation S Permanent Global Debenture, as appropriate.
"Regulation S Permanent Global Debenture" means a permanent global note
that contains the paragraph referred to in footnote 1 and the additional
schedule referred to in footnote 2 to the form of the Debenture attached hereto
as Exhibit A-1, and that is deposited with and registered in the name of the
Depositary, representing the Debentures sold in reliance on Regulation S.
"Regulation S Temporary Global Debenture" means a single temporary global
note in the form of the Debenture attached hereto as Exhibit A-2 that is
deposited with and registered in the name of the Depositary, representing
Debentures sold in reliance on Regulation S.
"Remarketing" means the operation of the procedures for remarketing
specified in Section 7.5 of the Declaration (or, if a Dissolution Event occurs
prior to a Scheduled Remarketing Date, specified in Section 3.12 hereof).
18
"Remarketing Agent" means such agent or agents as the Company may appoint
from time to time for the purpose of remarketing the Securities (or the
Debentures, pursuant to Article IV hereof), as set forth in the Remarketing
Agreement.
"Remarketing Agreement" means the Remarketing Agreement, dated as of June
9, 1997, among the Trust, the Company and Lehman Brothers Inc., as the same may
be amended, supplemented or modified from time to time.
"Remarketing Settlement Date" means the Scheduled Remarketing Settlement
Date on which purchases and sales of Securities pursuant to a Remarketing are
consummated.
"Related Business" means any consumer or commercial finance business or any
financial advisory or financial service business.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
"Residual Certificates" means, with respect to the sale of Receivables in a
Qualified Securitization Transaction, any certificates representing Receivables
not sold or transferred in such transaction or otherwise retained by or returned
to the Person transferring such Receivables.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Office (or any successor group of the
Trustee) assigned by the Trustee to administer its corporate trust matters.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Retained Interest" means, with respect to the sale of Receivables in a
Qualified Securitization Transaction, the interest and rights retained by the
Person in the Receivables transferred or sold in a Qualified Securitization
Transaction, including any rights to receive cash flow attributable to such
Receivables.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Debenture" means a permanent global note that contains
the paragraph referred to in footnote 1 and the additional schedule referred to
in footnote 2 to the form of the Debenture attached hereto as Exhibit A-1, and
that is deposited with
19
and registered in the name of the Depositary, representing Debentures sold in
reliance on Rule 144A.
"Scheduled Remarketing Date" means the third Business Day prior to any
Scheduled Remarketing Settlement Date.
"Scheduled Remarketing Settlement Date" means June 14, 2002, or such other
date determined pursuant to this definition, unless a Trust Enforcement Event
has occurred and is continuing on the 25th Business Day prior to such Scheduled
Remarketing Settlement Date, in which case the Scheduled Remarketing Settlement
Date will be the 30th Business Day after the date of cure or waiver of such
Trust Enforcement Event; provided that if (x) purchases and sales of Securities
pursuant to a Remarketing are not consummated on any Scheduled Remarketing
Settlement Date for any reason (including the Company's failure to make the
deposit required in the event of a Special Mandatory Redemption) other than the
occurrence and continuance of any other Trust Enforcement Event or if (y) the
Company fails to redeem Debentures in connection with a Tax Opinion Redemption
after cancelling the Remarketing, the next Scheduled Remarketing Settlement Date
will be the 30th Business Day after such Scheduled Remarketing Settlement Date.
"SEC" means the Securities and Exchange Commission.
"Securities" means the $70,000,000 aggregate liquidation amount of
Remarketed Par Securities, Series A of the Trust, representing undivided
beneficial ownership interests in the assets of the Trust or any Remarketed Par
Securities, Series B, of the Trust, issued in exchange therefor pursuant to the
Exchange Offer.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Related Assets" means, with respect to a Qualified
Securitization Transaction: (i) the Capitalized Excess Servicing Fees Receivable
retained by the Person who transfers or sells Receivables in such a transaction;
(ii) the Retained Interest held by such Person in the Receivables sold or
transferred in such transaction; and (iii) Residual Certificates retained by
such Person in such transaction.
"Senior Debt" means all Indebtedness permitted to be incurred by the
Company under the terms of this Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Debentures and all Obligations with
respect to the foregoing. Notwithstanding anything to the contrary in the
foregoing, Senior Debt will not include (i) any liability for federal, state,
local or other taxes owed or owing by the Company,
20
(ii) any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates, (iii) any trade payables or (iv) any Indebtedness that is incurred
in violation of this Indenture.
"Senior Indebtedness" means all Indebtedness of the Company or the
Subsidiary Guarantors that is not, by its terms, subordinated in right of
payment to the Debentures or the Subsidiary Guarantees, respectively.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Special Event" means either an Investment Company Event or a Tax Event.
"Special Purpose Subsidiary" means a Wholly Owned Restricted Subsidiary of
the Company (a) that is designated (as set forth below) as a "Special Purpose
Subsidiary" by the Board of Directors of the Company, (b) that does not engage
in, and whose charter prohibits it from engaging in, any activities other than
Qualified Securitization Transactions, (c) no portion of the Indebtedness or any
other Obligations (contingent or otherwise) of which (i) is guaranteed by the
Company or any other Restricted Subsidiary of the Company, (ii) is recourse to
or obligates the Company or any other Restricted Subsidiary of the Company in
any way other than pursuant to representations, warranties, covenants and
indemnities entered into in the ordinary course of business in connection with a
Qualified Securitization Transaction or (iii) subjects any property or asset of
the Company or any other Restricted Subsidiary of the Company, directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to representations, warranties, covenants and indemnities entered into
in the ordinary course of business in connection with a Qualified Securitization
Transaction, (d) with which neither the Company nor any other Restricted
Subsidiary of the Company has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to the Company or such
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Company and (e) with which neither the Company nor any
other Restricted Subsidiary of the Company has any obligation to maintain or
preserve such Restricted Subsidiary's financial condition or cause such
Restricted Subsidiary to achieve certain levels of operating results. Any such
designation by the Board of Directors of the Company shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the resolution of the
Board of Directors of the Company giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"SPFC" means Southern Pacific Funding Corporation, a California corporation
and a partially owned Subsidiary of the Company.
21
"SPTL" means Southern Pacific Thrift & Loan Association, a California
corporation and a Subsidiary of the Company.
"Stated Maturity" means, with respect to any installment of principal or
interest on any series of Indebtedness, the date on which such payment of
principal or interest was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such principal or interest prior to the date
originally scheduled for the payment thereof.
"Strategic Investor Repurchase Transaction" means the repurchase,
redemption or other retirement for value of any Equity Interests of any
Restricted Subsidiary (a) from a strategic partner or investor owning such
Equity Interests that, except for such Investment, would not be an Affiliate of
the Company or its Restricted Subsidiaries and (b) in a transaction whose terms
comply with the provisions of Section 4.12 hereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof); provided that SPFC and
ICIFC shall not be considered Subsidiaries of the Company unless the Company
owns more than 50% of the total voting power of shares of Capital Stock on or
after March 31, 1997.
"Subsidiary Guarantors" means each of (i) the Restricted Subsidiaries of
the Company other than SPTL and the Special Purpose Subsidiaries and (ii) any
other Subsidiary that executes a Subsidiary Guarantee in accordance with the
provisions of this Indenture, and their respective successors and assigns.
"Tax Event" means the receipt by the Trust of an opinion of independent tax
counsel to the Company, experienced in such matters, to the effect that, as a
result of any amendment to, change in or announced proposed change in the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is adopted or which
propsed change, pronouncement or decision is announced on or after the Issue
Date, there is more than an insubstantial risk that (i) the Trust is, or will be
within 90 days of the date of such opinion, subject to United States federal
income tax with respect to income received or accrued on the Debentures, (ii)
interest payable by the Company
22
on the Debentures is not, or within 90 days of the date of such opinion, will
not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Tax Opinion" means an opinion of an independent tax counsel to the Company
experienced in such matters to the effect that, as a result of (a) any amendment
to, or change (including any announced proposed change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or (b) any official administrative
pronouncement or judicial decision interpreting or applying such laws of
regulations, or which amendment or change is effective or such propsed change,
pronouncement or decision is announced on or after the Issue Date, that it is
more likely than not that (i) the Trust will be, following the Remarketing
Settlement Date, subject to United States federal income tax with respect to
interest accrued or received on the Debentures, (ii) the Trust will be,
following the Remarketing Settlement Date, subject to more than a de minimis
amount of taxes, duties or other governmental charges, or (iii) interest payable
to the Trust on the Debentures, following the Remarketing Settlement Date, will
not be deductible, in whole or in part, by the Company for United States federal
income tax purposes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Transfer Restricted Securities" means securities that bear or are required
to bear the legend set forth in Section 2.06 hereof.
"Treasury Rate" means (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Federal Reserve and which establishes yields on actively
traded United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities", for the maturity corresponding to the
Remaining Life (if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does
not contain such yields, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the
23
Comparable Treasury Price for such prepayment date. The Treasury Rate shall be
calculated on the third business day preceding the prepayment date.
"Trust" means Imperial Credit Capital Trust I, a Delaware statutory
business trust.
"Trust Enforcement Event" has the meaning specified in the Declaration.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Subsidiary" means any Subsidiary that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution;
but only to the extent that such Subsidiary: (a) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Company; (b) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (x) to subscribe for additional Equity Interests or (y) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results; (c) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries; and (d) has at least one
director on its board of directors that is not a director or executive officer
of the Company or any of its Restricted Subsidiaries and has at least one
executive officer that is not a director or executive officer of the Company or
any of its Restricted Subsidiaries. Any such designation by the Board of
Directors shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.08. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09, the Company shall be in default of
such covenant). The Board of Directors of the Company may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under Section 4.09, (ii) such Subsidiary becomes a
24
Subsidiary Guarantor and (iii) no Default or Event of Default would be in
existence following such designation.
"Warehouse Facility" means any funding arrangement, including a Purchase
Facility, with a financial institution or other lender or purchaser, to the
extent (and only to the extent) funding thereunder is used exclusively to
finance or refinance the purchase or origination of Receivables by the Company
or a Restricted Subsidiary of the Company for the purpose of (i) pooling such
Receivables prior to securitization or (ii) sale, in each case in the ordinary
course of business.
"Warehouse Indebtedness" means the greater of (x) the consideration
received by the Company or its Restricted Subsidiaries under a Warehouse
Facility and (y) in the case of a Purchase Facility, the book value of the
Receivables financed under such Warehouse Facility until such time as such
Receivables are (i) securitized, (ii) repurchased by the Company or its
Restricted Subsidiaries or (iii) sold by the counterparty under the Warehouse
Facility to a Person who is not an Affiliate of the Company.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the product
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person and one or more Wholly Owned Subsidiaries of such Person.
Section 1.02 Other Definitions
Defined in
Term Section
- ---- ----------
"Accredited Investor"....................... 2.01
"Applicable Interest Rate".................. 4.01
"Affiliate Transaction"..................... 4.12
"Asset Sale Offer".......................... 4.07
"Asset Sale Offer Period"................... 4.07
25
"Asset Sale Offer Purchase Date"............ 4.07
"Bankruptcy Law"............................ 6.01
"Benefitted Party".......................... 10.01
"Change of Control Offer"................... 4.06
"Change Of Control Offer Period"............ 4.06
"Change of Control Payment"................. 4.06
"Change of Control Purchase Date"........... 4.06
"Custodian"................................. 6.01
"DTC"....................................... 2.03
"Event of Default".......................... 6.01
"Extension Period".......................... 4.01
"incur"..................................... 4.09
"Initial Interest Rate"..................... 4.01
"Legal Holiday"............................. 12.07
"Notice of Election"........................ 3.12
"Paying Agent".............................. 2.03
"Payment Blockage Notice"................... 11.03
"Payment Default"........................... 6.01
"QIB"....................................... 2.01
"Registrar"................................. 2.03
"Restricted Payments"....................... 4.08
"Transfer Restricted Security".............. 2.06
"Transfer Restricted Security Redemption"... 3.11
"Trustee"................................... 8.05
Section 1.03 Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Debentures;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Debentures means the Company or any successor obligor
upon the Debentures.
26
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE DEBENTURES
Section 2.01 Form and Dating
The Debentures and Subsidiary Guarantees and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1, which is part
of this Indenture. The Debentures may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Debenture shall be dated
the date of its authentication. The Debentures shall be issued initially in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Debentures shall constitute, and
are hereby expressly made, a part of this Indenture, and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
(a) Rule 144A Global Debentures. Debentures offered and sold within the
United States to qualified institutional buyers as defined in Rule 144A ("QIBs")
in reliance on Rule 144A shall be issued initially in the form of Rule 144A
Global Debentures, which shall be deposited on behalf of the purchasers of the
Debentures represented thereby with the Depositary at its New York office, and
registered in the
27
name of the Depositary or a nominee of the Depositary, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Rule 144A Global Debentures may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee as hereinafter provided.
(b) Regulation S Global Debentures. Debentures offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Debenture, which shall be deposited on behalf of the
purchasers of the Debentures represented thereby with the Trustee, at its New
York office, as custodian for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The "40-day restricted
period" (as defined in Regulation S) shall be terminated upon the receipt by the
Trustee of (i) a written certificate from the Depositary certifying that it has
received certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Temporary Global Debenture
(except to the extent of any beneficial owners thereof who acquired an interest
therein pursuant to another exemption from registration under the Securities Act
and who will take delivery of a beneficial ownership interest in a Rule 144A
Global Debenture, all as contemplated by Section 2.06(a)(ii) hereof), and (ii)
an Officers' Certificate from the Company. Following the termination of the 40-
day restricted period, beneficial interests in the Regulation S Temporary Global
Debenture shall be exchanged for beneficial interests in Regulation S Permanent
Global Debentures pursuant to the Applicable Procedures. Simultaneously with
the authentication of Regulation S Permanent Global Debentures, the Trustee
shall cancel the Regulation S Temporary Global Debenture. The aggregate
principal amount of the Regulation S Temporary Global Debenture and the
Regulation S Permanent Global Debentures may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
(c) Global Debentures in General. Each Global Debenture shall represent
such of the outstanding Debentures as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Debentures
from time to time endorsed thereon and that the aggregate amount of outstanding
Debentures represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Debenture to reflect the amount of any increase or decrease in the amount of
outstanding Debentures represented thereby shall be made by the Trustee or the
Debenture Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
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Except as set forth in Section 2.06 hereof, the Global Debentures may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
(d) Book-Entry Provisions. This Section 2.01(d) shall apply only to Rule
144A Global Debentures and the Regulation S Permanent Global Debentures
deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(d) and Section 2.02, authenticate and deliver the Global Debentures
that (i) shall be registered in the name of the Depositary or the nominee of the
Depositary and (ii) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instructions or held by the Trustee as custodian
for the Depositary.
Agent Members shall have no rights either under this Indenture with respect
to any Global Debenture held on their behalf by the Depositary or by the Trustee
as custodian for the Depositary or under such Global Debenture, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Debenture for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices of such Depositary governing the
exercise of the rights of an owner of a beneficial interest in any Global
Debenture.
(e) Certificated Debentures. At any time after the Remarketing Settlement
Date, a Holders may request that its interest in a Global Debenture be exchanged
for Debentures in certificated form substantially in the form of Exhibit A-1
attached hereto (but without including the text referred to in footnotes 1 and 2
thereto).
Section 2.02 Execution and Authentication
Two Officers shall sign the Debentures for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Debentures
and may be in facsimile form.
If an Officer whose signature is on a Debenture no longer holds that office
at the time a Debenture is authenticated, the Debenture shall nevertheless be
valid.
29
A Debenture shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Debenture
has been authenticated under this Indenture.
The Trustee shall, upon delivery of an Authentication Order, authenticate
Debentures for original issue up to the aggregate principal amount stated in
paragraph 4 of the Debentures. The aggregate principal amount of Debentures
outstanding at any time may not exceed such amount except as provided in Section
2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Debentures. An authenticating agent may authenticate Debentures
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
Neither the Company nor the Trustee shall have any responsibility for any
defect in the CUSIP number that appears on any Debenture, check, advice of
payment or redemption notice, and any such document may contain a statement to
the effect that CUSIP numbers have been assigned by an independent service for
convenience of reference and that neither the Company nor the Trustee shall be
liable for any inaccuracy in such numbers.
Section 2.03 Registrar and Paying Agent
The Company shall maintain in the Borough of Manhattan, the City of New
York, State of New York, and in such other locations as it shall determine, (i)
an office or agency where Debentures may be presented for registration of
transfer or for exchange ("Registrar") and (ii) an office or agency where
Debentures may be presented for payment ("Paying Agent"). The Registrar shall
keep a register of the Debentures and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Debentures.
30
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Debenture Custodian with respect to the Global
Debentures. The Company initially appoints the Trustee to act as the Registrar
and Paying Agent with respect to the Certificated Debentures.
Section 2.04 Paying Agent to Hold Money in Trust
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, interest and Additional Interest, if any, on the Debentures,
and shall notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Debentures.
Section 2.05 Holder Lists
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Debentures, and the Company shall otherwise comply with TIA (S) 312(a).
Section 2.06 Transfer and Exchange
(a) Transfer and Exchange of Global Debentures. The transfer and exchange
of Global Debentures or beneficial interests therein shall be effected through
the Depositary, in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Beneficial
interests in a Global Debenture may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Global Debenture in
accordance with the transfer restrictions set forth in the legend in subsection
(g) of this Section 2.06. Transfers of beneficial interests in
31
the Global Debentures to Persons required to take delivery thereof in the form
of an interest in another Global Debenture shall be permitted as follows:
(i) Rule 144A Global Debenture to Regulation S Global Debenture. If,
at any time, an owner of a beneficial interest in a Rule 144A Global
Debenture deposited with the Depositary (or the Trustee as custodian for
the Depositary) wishes to transfer its interest in such Rule 144A Global
Debenture to a Person who is required or permitted to take delivery thereof
in the form of an interest in a Regulation S Global Debenture, such owner
shall, subject to the Applicable Procedures, exchange or cause the exchange
of such interest for an equivalent beneficial interest in a Regulation S
Global Debenture as provided in this Section 2.06(a)(i). Upon receipt by
the Trustee of (1) instructions given in accordance with the Applicable
Procedures from an Agent Member directing the Trustee to credit or cause to
be credited a beneficial interest in the Regulation S Global Debenture in
an amount equal to the beneficial interest in the Rule 144A Global
Debenture to be exchanged, (2) a written order given in accordance with the
Applicable Procedures containing information regarding the participant
account of the Depositary to be credited with such increase and (3) a
certificate in the form of Exhibit B-1 hereto given by the owner of such
beneficial interest stating that the transfer of such interest has been
made in compliance with the transfer restrictions applicable to the Global
Debentures and pursuant to and in accordance with Rule 903 or Rule 904 of
Regulation S, then the Trustee, as Registrar, shall instruct the Depositary
to reduce or cause to be reduced the aggregate principal amount at maturity
of the applicable Rule 144A Global Debenture and to increase or cause to be
increased the aggregate principal amount at maturity of the applicable
Regulation S Global Debenture by the principal amount at maturity of the
beneficial interest in the Rule 144A Global Debenture to be exchanged, to
credit or cause to be credited to the account of the Person specified in
such instructions a beneficial interest in the Regulation S Global
Debenture equal to the reduction in the aggregate principal amount at
maturity of the Rule 144A Global Debenture, and to debit, or cause to be
debited, from the account of the Person making such exchange or transfer
the beneficial interest in the Rule 144A Global Debenture that is being
exchanged or transferred.
(ii) Regulation S Global Debenture to Rule 144A Global Debenture. If,
at any time, an owner of a beneficial interest in a Regulation S Global
Debenture deposited with the Depositary (or with the Trustee as custodian
for the Depositary) wishes to transfer its interest in such Regulation S
Global Debenture to a Person who is required or permitted to take delivery
thereof in the form of an interest in a Rule 144A Global Debenture, such
owner shall, subject to the Applicable Procedures, exchange or cause the
exchange of such interest for an
32
equivalent beneficial interest in a Rule 144A Global Debenture as provided
in this Section 2.06(a)(ii). Upon receipt by the Trustee of (1) written
instructions from the Depositary, directing the Trustee, as Registrar, to
credit or cause to be credited a beneficial interest in the Rule 144A
Global Debenture equal to the beneficial interest in the Regulation S
Global Debenture to be exchanged, such instructions to contain information
regarding the participant account with the Depositary to be credited with
such increase, (2) a written order given in accordance with the Applicable
Procedures containing information regarding the participant account of the
Depositary and (3) a certificate in the form of Exhibit B-2 attached hereto
given by the owner of such beneficial interest stating (A) if the transfer
is pursuant to Rule 144A, that the Person transferring such interest in a
Regulation S Global Debenture reasonably believes that the Person acquiring
such interest in a Rule 144A Global Debenture is a QIB and is obtaining
such beneficial interest in a transaction meeting the requirements of Rule
144A and any applicable blue sky or securities laws of any state of the
United States, (B) that the transfer complies with the requirements of Rule
144 under the Securities Act and any applicable blue sky or securities laws
of any state of the United States or (C) if the transfer is pursuant to any
other exemption from the registration requirements of the Securities Act,
that the transfer of such interest has been made in compliance with the
transfer restrictions applicable to the Global Debentures and pursuant to
and in accordance with the requirements of the exemption claimed, such
statement to be supported by an Opinion of Counsel from the transferee or
the transferor in form reasonably acceptable to the Company and to the
Registrar, then the Trustee, as Registrar, shall instruct the Depositary to
reduce or cause to be reduced the aggregate principal amount at maturity of
such Regulation S Global Debenture and to increase or cause to be increased
the aggregate principal amount at maturity of the applicable Rule 144A
Global Debenture by the principal amount at maturity of the beneficial
interest in the Regulation S Global Debenture to be exchanged, and the
Trustee, as Registrar, shall instruct the Depositary, concurrently with
such reduction, to credit or cause to be credited to the account of the
Person specified in such instructions a beneficial interest in the
applicable Rule 144A Global Debenture equal to the reduction in the
aggregate principal amount at maturity of such Regulation S Global
Debenture and to debit or cause to be debited from the account of the
Person making such transfer the beneficial interest in the Regulation S
Global Debenture that is being transferred.
(b) Transfer and Exchange of Certificated Debentures. After the
Remarketing Settlement Date, when Certificated Debentures are presented by a
Holder to the Registrar with a request:
(x) to register the transfer of the Certificated Debentures; or
33
(y) to exchange such Certificated Debentures for an equal principal
amount of Certificated Debentures of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested;
provided, however, that the Certificated Debentures presented or surrendered for
register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder
or by his attorney, duly authorized in writing; and
(ii) in the case of a Certificated Debenture that is a Transfer
Restricted Security, such request shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered to
the Registrar by a Holder for registration in the name of such Holder,
without transfer, or such Transfer Restricted Security is being
transferred to the Company, a certification to that effect from such
Holder (in substantially the form of Exhibit B-3 hereto);
(B) if such Transfer Restricted Security is being transferred to
a QIB in accordance with Rule 144A under the Securities Act or
pursuant to an exemption from registration in accordance with Rule 144
under the Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to that effect
from such Holder (in substantially the form of Exhibit B-3 hereto); or
(C) if such Transfer Restricted Security is being transferred in
reliance on any other exemption from the registration requirements of
the Securities Act (including Rule 904 thereunder), a certification to
that effect from such Holder (in substantially the form of Exhibit B-3
hereto) and an Opinion of Counsel from such Holder or the transferee
reasonably acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the Securities Act.
(c) Transfer of a Beneficial Interest in a Rule 144A Global Debenture or
Regulation S Permanent Global Debenture for a Certificated Debenture
(i) At any time after the Remarketing Settlement Date, any Person
having a beneficial interest in a Rule 144A Global Debenture or Regulation
S Permanent Global Debenture may upon request, subject to the Applicable
34
Procedures, exchange such beneficial interest for a Certificated Debenture.
Upon receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a beneficial interest in a Rule 144A
Global Debenture or Regulation S Permanent Global Debenture, and, in the
case of a Transfer Restricted Security, the following additional
information and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification to that effect from such Person (in substantially the
form of Exhibit B-4 hereto);
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 144 under the
Securities Act or pursuant to an effective registration statement
under the Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B-4 hereto); or
(C) if such beneficial interest is being transferred in reliance
on any other exemption from the registration requirements of the
Securities Act (including Rule 904 thereunder), a certification to
that effect from the transferor (in substantially the form of Exhibit
B-4 hereto) and an Opinion of Counsel from the transferee or the
transferor reasonably acceptable to the Company and to the Registrar
to the effect that such transfer is in compliance with the Securities
Act,
in which case the Trustee or the Debenture Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and procedures
existing between the Depositary and the Debenture Custodian, cause the aggregate
principal amount of Rule 144A Global Debentures or Regulation S Permanent Global
Debentures, as applicable, to be reduced accordingly and, following such
reduction, the Company shall execute and the Trustee shall authenticate and
deliver to the transferee a Certificated Debenture in the appropriate principal
amount.
(ii) Certificated Debentures issued in exchange for a beneficial
interest in a Rule 144A Global Debenture or Regulation S Permanent Global
Debenture, as applicable, pursuant to this Section 2.06(c) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Certificated Debentures to the Persons
35
in whose names such Debentures are so registered. Following any such
issuance of Certificated Debentures, the Trustee, as Registrar, shall
instruct the Depositary to reduce or cause to be reduced the aggregate
principal amount at maturity of the applicable Global Debenture to reflect
the transfer.
(d) Restrictions on Transfer and Exchange of Global Debentures.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Debenture may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
(e) Transfer and Exchange of a Certificated Debenture for a Beneficial
Interest in a Global Debenture. Holders of Certificated Debentures may offer,
resell, pledge or otherwise transfer such Debentures only pursuant to an
effective registration statement under the Securities Act, inside the United
States to a QIB in a transaction meeting the requirements of Rule 144A, in a
transaction meeting the requirements of Rule 144 under the Securities Act,
outside the United States in a transaction meeting the requirements of Rule 904
under the Securities Act or to the Company, in each case in compliance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction.
When Certificated Debentures are presented by a Holder to the Registrar
with a request (x) to register the transfer of the Certificated Debentures or
(y) to exchange such Certificated Debentures for an equal principal amount of
Certificated Debentures of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transactions are met; provided, however, that the Certificated Debentures
presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder
or by his attorney, duly authorized in writing, which instructions, if
applicable, shall direct the Trustee (A) to cancel any Certificated
Debenture being exchanged for another Certificated Debenture or a
beneficial interest in a Global Debenture in accordance with Section 2.11
hereof, and (B) to make, or to direct the Registrar to make, an endorsement
on the appropriate Global Debenture to reflect an increase in the aggregate
principal amount of the Debentures represented by such Global Debenture;
and
(ii) such request shall be accompanied by the following additional
information and documents, as applicable:
36
(A) if such Certificated Debenture is being delivered to the Registrar
by a Holder for registration in the name of such Holder, without
transfer, a certification to that effect from such Holder (in
substantially the form of Exhibit B-5 hereto); or
(B) if such Certificated Debenture is being transferred to a QIB in
accordance with Rule 144A, pursuant to Rule 144 under the Securities
Act or pursuant to an exemption from registration in accordance with
Rule 904 under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a certification to
that effect from such Holder (in substantially the form of Exhibit B-5
hereto).
(f) Authentication of Certificated Debentures in Absence of Depositary. If
at any time after the Remarketing Settlement Date:
(i) the Depositary for the Debentures notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Global
Debentures and a successor Depositary for the Global Debentures is not
appointed by the Company within 90 days after delivery of such notice; or
(ii) the Company delivers to the Trustee an Officers' Certificate or
an order signed by two Officers of the Company notifying the Trustee that
it elects to cause the issuance of Certificated Debentures under this
Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, authenticate and
deliver, Certificated Debentures in an aggregate principal amount equal to the
principal amount of the Global Debentures in exchange for such Global
Debentures.
(g) Legends
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Debenture certificate evidencing Global Debentures and, after
the Remarketing Settlement Date, Certificated Debentures (and all
Debentures issued in exchange therefor or substitution thereof) shall bear
a legend in substantially the following form (each a "Transfer Restricted
Security"):
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD
37
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Debenture) pursuant to Rule 144 under the Securities Act or pursuant to an
effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Certificated Debenture, the Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Security for a Certificated
Debenture that does not bear the legend set forth in (i) above and
rescind any restriction on the transfer of such Transfer Restricted
Security upon receipt of a certification from the transferring Holder
substantially in the form of Exhibit B-3 hereto; and
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(B) in the case of any Transfer Restricted Security represented
by a Global Debenture, such Transfer Restricted Security shall not be
required to bear the legend set forth in (i) above, but shall continue
to be subject to the provisions of Section 2.06(a) and (b) hereof;
provided, however, that with respect to any request for an exchange of
a Transfer Restricted Security that is represented by a Global
Debenture for a Certificated Debenture that does not bear the legend
set forth in (i) above, which request is made in reliance upon Rule
144, the Holder thereof shall certify in writing to the Registrar that
such request is being made pursuant to Rule 144 (such certification to
be substantially in the form of Exhibit B-4 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Debenture) in reliance on any exemption from the registration requirements
of the Securities Act (other than exemptions pursuant to Rule 144A or Rule
144 under the Securities Act) in which the Holder or the transferee
provides an Opinion of Counsel to the Company and the Registrar in form and
substance reasonably acceptable to the Company and the Registrar (which
Opinion of Counsel shall also state that the transfer restrictions
contained in the legend are no longer applicable):
(A) in the case of any Transfer Restricted Security that is a
Certificated Debenture, the Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Security for a Certificated
Debenture that does not bear the legend set forth in (i) above and
rescind any restriction on the transfer of such Transfer Restricted
Security; and
(B) in the case of any Transfer Restricted Security represented
by a Global Debenture, such Transfer Restricted Security shall not be
required to bear the legend set forth in (i) above, but shall continue
to be subject to the provisions of Section 2.06(a) and (b) hereof.
(iv) Notwithstanding the foregoing, upon consummation of the Exchange
Offer in accordance with the Registration Rights Agreement, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate Series B Debentures in
exchange for Series A Debentures accepted for exchange in the Exchange
Offer, which Series B Debentures shall not bear the legend set forth in (i)
above, and the Registrar shall rescind any restriction on the transfer of
such Series B Debentures, in each case unless the Holder of such Series A
Debentures is either (A) a broker-dealer, (B) a Person participating in the
distribution of the Series
39
A Debentures or (C) a Person who is an affiliate (as defined in Rule 144A)
of the Company.
(h) Cancellation and/or Adjustment of Global Debentures. At such time as
all beneficial interests in Global Debentures have been exchanged for
Certificated Debentures, redeemed, repurchased or cancelled, all Global
Debentures shall be returned to or retained and cancelled by the Trustee in
accordance with Section 2.11 hereof. At any time prior to such cancellation, if
any beneficial interest in a Global Debenture is exchanged for an interest in
another Global Debenture or for Certificated Debentures, redeemed, repurchased
or cancelled, the principal amount of Debentures represented by such Global
Debenture shall be reduced accordingly and an endorsement shall be made on such
Global Debenture, by the Trustee or the Debenture Custodian, at the direction of
the Trustee, to reflect such reduction.
(i) General Provisions Relating to Transfers and Exchanges
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Debentures and,
after the Remarketing Settlement Date, Certificated Debentures, at the
Registrar's request.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Article 3
and Sections 4.06, 4.07 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Debenture selected for redemption in whole or in part,
except the unredeemed portion of any Debenture being redeemed in part.
(iv) All Certificated Debentures and Global Debentures issued upon any
registration of transfer or exchange of Certificated Debentures or Global
Debentures shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Certificated Debentures or Global Debentures surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to exchange
Debentures during a period beginning at the opening of business 15
days
40
before the day of any selection of Debentures for redemption under
Section 3.02 hereof and ending at the close of business on the day of
selection; or
(B) to register the transfer of or to exchange any Debenture so
selected for redemption in whole or in part, except the unredeemed
portion of any Debenture being redeemed in part; or
(C) to register the transfer of or to exchange a Debenture
between a record date and the next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer of
any Debenture, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Debenture is registered as the absolute owner
of such Debenture for the purpose of receiving payment of principal of and
interest and Additional Interest, if any, on such Debentures, and neither
the Trustee, any Agent nor the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Certificated Debentures and
Global Debentures in accordance with the provisions of Section 2.02 hereof.
The Registrar may rely on information set forth in a certificate
substantially in the form of Exhibit B-1, B-2, B-3, B-4 or B-5 hereto, and other
certificates and opinions received pursuant to this Section 2.06 and, in the
absence of receipt of such a certificate or opinion, shall not be deemed to have
knowledge of a transfer of an interest in a Global Security absent actual
knowledge of such transfer.
Section 2.07 Replacement Debentures
If any mutilated Debenture is surrendered to the Trustee, or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Debenture, the Company shall issue and the Trustee, upon the
written order of the Company signed by two Officers of the Company, shall
authenticate a replacement Debenture if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Debenture is replaced. The Company
may charge for its expenses in replacing a Debenture.
41
Every replacement Debenture is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Debentures duly issued hereunder.
Section 2.08 Outstanding Debentures
The Debentures outstanding at any time are all the Debentures authenticated
by the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Debenture effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.09 hereof, a
Debenture does not cease to be outstanding because the Company or an Affiliate
of the Company holds the Debenture.
If a Debenture is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Debenture is held by a bona fide purchaser.
If the principal amount of any Debenture is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest and Additional Interest,
if any, on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay the principal amount of any Debentures due and payable on that date, then
on and after that date such Debentures shall be deemed to be no longer
outstanding and shall cease to accrue interest and Additional Interest.
Section 2.09 Treasury Debentures
In determining whether the Holders of the required principal amount of
Debentures have concurred in any direction, waiver or consent, Debentures owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Debentures that the Trustee knows are so
owned shall be so disregarded.
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Section 2.10 Temporary Debentures
Until Certificated Debentures are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Debentures upon a written
order of the Company signed by two Officers of the Company. Temporary
Debentures shall be substantially in the form of Certificated Debentures but may
have variations that the Company considers appropriate for temporary Debentures
and as shall be reasonably acceptable to the Trustee. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate Certificated
Debentures in exchange for temporary Debentures.
Holders of temporary Debentures shall be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation
The Company at any time may deliver Debentures to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Debentures surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Debentures surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
shall destroy cancelled Debentures (subject to the record retention requirement
of the Exchange Act). Certification of the destruction of all cancelled
Debentures shall be delivered to the Company. The Company may not issue new
Debentures to replace Debentures that it has paid or that have been delivered to
the Trustee for cancellation.
Section 2.12 Defaulted Interest
If the Company defaults in a payment of interest on the Debentures, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Debentures and in Section 4.01 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Debenture and the date of the proposed payment. The Company shall fix or
cause to be fixed each such special record date and payment date; provided that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
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ARTICLE 3
REDEMPTION AND REMARKETING
Section 3.01 Notices to Trustee
If the Company elects to redeem Debentures pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date (unless a
shorter notice shall be satisfactory to the Trustee), an Officers' Certificate
setting forth the Section of this Indenture pursuant to which the redemption
shall occur, the redemption date, the principal amount of Debentures to be
redeemed and the redemption price.
Section 3.02 Selection of Debentures to Be Redeemed
If less than all of the Debentures are to be redeemed, the Trustee shall
select the Debentures to be redeemed among the Holders of the Debentures in
compliance with the requirements of the principal national securities exchange,
if any, on which the Debentures are listed or, if the Debentures are not so
listed, on a pro rata basis, by lot or by such other method as the Trustee shall
deem fair and appropriate. In the event of partial redemption by lot, the
Trustee shall make the selection not less than 30 nor more than 60 days prior to
the redemption date from the outstanding Debentures not previously called for
redemption.
The Trustee shall promptly notify the Company in writing of the Debentures
selected for redemption and, in the case of any Debenture selected for partial
redemption, the portion of the principal amount thereof to be redeemed.
Debentures and portions of them selected to be redeemed shall be in principal
amounts of $1,000 or whole multiples of $1,000; except that if all of the
Debentures of a Holder are to be redeemed, the entire outstanding amount of
Debentures held by such Holder, even if not a multiple of $1,000, shall be
redeemed. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Debentures called for redemption also apply to portions
of Debentures called for redemption.
Section 3.03 Notice of Redemption
At least 30 days but not more than 60 days before a redemption date (other
than a redemption in connection with a Special Mandatory Redemption), the
Company shall mail, by first class mail, a notice of redemption to each Holder
whose Debentures are to be redeemed at its registered address.
The notice shall identify the Debentures to be redeemed and shall state:
44
(1) the redemption date;
(2) the redemption price;
(3) if any Debenture is being redeemed in part, the portion of the
principal amount of such Debenture to be redeemed and that, after the
redemption date, upon surrender of such Debenture, a new Debenture or
Debentures in principal amount equal to the unredeemed portion will be
issued;
(4) the name and address of the Paying Agent;
(5) that Debentures 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 and Additional Interest, if any, on Debentures called for
redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Debentures pursuant to which the Debentures
called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Debentures.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense.
Section 3.04 Effect of Notice of Redemption
Once notice of redemption is mailed, Debentures called for redemption
become irrevocably due and payable on the redemption date at the price set forth
in the Debenture.
Section 3.05 Deposit of Redemption Price
(a) On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued interest and Additional Interest, if any, on all Debentures to be
redeemed on that 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 and Additional Interest, if any, on all Debentures to be redeemed.
45
(b) If the Company is required to redeem Debentures on the Scheduled
Remarketing Settlement Date as part of a Special Mandatory Redemption, by 12:00
P.M., New York City time, on the Business Day prior to the Scheduled Remarketing
Settlement Date, the Company shall deposit irrevocably, with the Trustee,
sufficient funds to pay the Redemption Price with respect to the Debentures to
be redeemed. Promptly thereafter, and in any event no later than 12:30 P.M.,
New York City time, on such Business Day prior to the Scheduled Remarketing
Settlement Date, the Indenture Trustee shall give notice to the Remarketing
Agent, in writing, of the receipt or non-receipt of such funds.
Interest on the Debentures to be redeemed will cease to accrue on the
applicable redemption date, whether or not such Debentures are presented for
payment, if the Company makes the redemption payment. If any Debenture called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest will be
paid on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Debentures and in Section
4.01 hereof. Section 8.06 shall apply to any Debentures not redeemed within 2
years from the redemption date.
Section 3.06 Debentures Redeemed in Part
Upon surrender of a Debenture that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Debenture equal in principal amount to the unredeemed portion of
the Debenture surrendered.
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Section 3.07 Optional Redemption
The Debentures are redeemable at the option of the Company, in whole or in
part, at any time or from time to time through and including June 15, 2001 at a
redemption price (the "Initial Optional Redemption Price") equal to the greater
of (i) 100% of the principal amount of such Debentures and (ii) as determined by
a Quotation Agent, the sum of the present values of the principal amount of such
Debentures as if redeemed on June 14, 2002, together with scheduled prepayments
of interest from the prepayment date to but excluding June 14, 2002, discounted
to the prepayment date on a semi-annual basis (assuming a 360-day year
consisting of 30-day months) at the Adjusted Treasury Rate, plus, in each case,
accrued and unpaid interest and Additional Interest, if any, to the date of
redemption.
On and after June 15, 2012, the Debentures are redeemable prior to maturity
at the option of the Company, in whole or in part, at any time at the redemption
prices described in the next sentence, plus accrued and unpaid interest and
Additional Interest, if any, to the date of redemption. The redemption price
(expressed as a percentage of principal amount) shall be equal to 100% plus the
product of (x) the Adjusted Distribution Rate and (y) the applicable Factor if
redeemed during the twelve-month period beginning on June 15th of the years
indicated below, the applicable "Factor" shall equal:
YEAR %
---- ---
2012....................... 50%
2013....................... 45%
2014....................... 40%
2015....................... 35%
2016....................... 30%
2017....................... 25%
2018....................... 20%
2019....................... 15%
2020....................... 10%
2021....................... 5%
On and after June 15, 2022, the redemption price will be 100% of the
principal amount of the Debentures to be redeemed, plus accrued and unpaid
interest and Additional Interest, if any, to the date of redemption.
Any redemption pursuant to this Section 3.07 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
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Section 3.08 Special Mandatory Redemption
If, by 4:00 P.M., New York City time, on any Scheduled Remarketing Date,
the Remarketing Agent is unable to remarket, at a price of $1,000 per Security,
all of the Securities tendered or deemed tendered for purchase in the
Remarketing on such Scheduled Remarketing Date, then (i) such unsold Securities
shall be exchanged on the related Scheduled Remarketing Settlement Date with the
Trust for Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of such unsold Securities and such Debentures shall be
immediately redeemed, unless (ii) as a result of such redemption, less than
$25,000,000 principal amount of Debentures would remain outstanding. In such
latter event, the Company shall redeem on such Scheduled Remarketing Settlement
Date all of the Debentures (thereby causing the Trust to redeem all of the
outstanding Securities) and the Remarketing will be cancelled. In either case
of (i) or (ii) above, the redemption price of the Debentures shall be 100% of
the principal amount of the outstanding Debentures so redeemed.
If a Dissolution Event occurs prior to a Scheduled Remarketing Date,
references in this Section 3.08 to Securities shall be deemed to be references
to the Debentures and references to a Remarketing of Securities shall be deemed
to be references to a Remarketing of the Debentures.
Any redemption pursuant to this Section 3.08 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
Section 3.09 Special Event Redemption; Shortening of Maturity
If an Investment Company Event shall occur and be continuing, the Company
has option, after the Remarketing Settlement Date, to redeem the Debentures, in
whole but not in part, at any time within 90 days following the occurrence of
such an Investment Company Event at a redemption price equal to 100% of the
aggregate principal amount thereof, plus accrued and unpaid interest and
Additional Interest, if any, to the date of redemption.
If a Tax Event shall occur and be continuing and in the opinion of
independent tax counsel to the Trust experienced in such matters, there would in
all cases, after effecting the termination of the Trust and the distribution of
the Debentures to the holders of the Trust Securities in exchange therefor upon
liquidation of the Trust, be more than an insubstantial risk that the Tax Event
would continue to exist, then the Company will have the right (a) to shorten the
Stated Maturity of the Debentures to a date not earlier than June 14, 2012 (a
"Maturity Advancement") such that, in the opinion of such independent tax
counsel, after advancing the Stated Maturity of the Debentures, interest paid on
the Debentures will be deductible by the Company for United States federal
48
income tax purposes or (b) after the Scheduled Remarketing Date, to redeem the
Debentures, in whole but not in part, at any time within 90 days following the
occurrence of a Tax Event at a redemption price equal to 100% of the aggregate
principal amount thereof, plus accrued and unpaid interest and Additional
Interest to the date of redemption.
Any redemption pursuant to this Section 3.09 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
Section 3.10 Tax Opinion Redemption
If the Company receives a Tax Opinion at least 35 business days prior to
the Election Date, the Remarketing may be cancelled at the option of the
Company, in which case the Debentures shall be redeemed by the Company on the
Scheduled Remarketing Settlement Date, in whole but not in part, at a redemption
price equal to 100% of the principal amount of such Debentures plus accrued and
unpaid interest and Additional Interest thereon to such Scheduled Remarketing
Settlement Date.
Any redemption pursuant to this Section 3.10 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
Section 3.11 Transfer Restricted Security Redemption
If an Exchange Offer occurs under the Registration Rights Agreement, the
Company shall be required, on the Remarketing Settlement Date, to redeem, in
whole (but not in part), Series A Debentures which were not exchanged pursuant
to the Exchange Offer (a "Transfer Restricted Security Redemption"). As part of
a Transfer Restricted Security Redemption, on the Schedule Remarketing
Settlement Date, Remarketed Par Securities, Series A of the Trust which were not
exchanged pursuant to the Exchange Offer shall be exchanged with the Trust for
Series A Debentures having an aggregate principal amount equal to the aggregate
liquidation of such Securities and such Debentures shall immediately be redeemed
by the Company at a redemption price equal to 100% of the principal amount
thereof plus accrued and unpaid interest and Additional Interest, if any, to the
date of redemption. If the Company is required to redeem Debentures in
connection with a Transfer Restricted Security Redemption, holders of such
Securities shall receive notice of such redemption at or prior to the time that
the Notice of Remarketing is required to be given to the Depository pursuant to
Section 3.12.
Any redemption pursuant to this Section 3.11 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
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Section 3.12 Remarketing
This Section 3.12 shall only become effective upon a Dissolution Event
which occurs prior to the Remarketing of the Securities pursuant to Section 7.5
of the Declaration. Until such Dissolution Event, this Section 3.12 shall have
no force and effect.
(a) If the Company receives a Tax Opinion at least 35 Business Days prior
to an Election Date, the Company shall have the option to cancel the Remarketing
by giving, to the Property Trustee, the Depositary and the Remarketing Agent,
written notice of such cancellation. In such event, all of the Debentures are
subject to a Tax Opinion Redemption in accordance with Section 3.10.
(b) If the Company does not receive such a Tax Opinion or if the Company
does not elect to cancel the Remarketing after receiving such a Tax Opinion, not
less than 20 nor more than 35 Business Days prior to the Election Date, the
Company shall give a Notice of Remarketing of the Debentures to the Depositary,
with copies to the Trustee and the Remarketing Agent, not less than 20 nor more
than 35 Business Days prior to the Election Date.
(c) Not later than 4:00 P.M., New York City time, on the Election Date,
each holder of Debentures may give a Notice of Election ("Notice of Election"),
to the Trustee of its election (i) to retain and not to have all or any portion
of the Debentures owned by it remarketed in the Remarketing to be conducted on
the Scheduled Remarketing Date or (ii) to tender all or any portion of such
Debentures for purchase in such Remarketing (such portion, in either case, shall
be in a principal amount of $1,000 or any integral multiple thereof). Any
Notice of Election given to the Trustee shall be irrevocable and may not be
conditioned upon the level at which the Adjusted Interest Rate is established in
the Remarketing. Promptly after 4:30 P.M., New York City time, on the Election
Date, the Trustee, based on the Notices of Election received by it through the
Depositary prior to such time, shall notify the Company and the Remarketing
Agent of the aggregate principal amount of Debentures to be retained by Holders
and the aggregate principal amount of Debentures tendered for purchase in the
Remarketing.
(d) If any holder of Debentures gives a Notice of Election to tender
Debentures as described in clause (ii) of Section 3.12(b), the Debentures so
subject to such Notice of Election shall be deemed tendered for purchase in the
Remarketing, notwithstanding any failure by such holder of Debentures to deliver
or properly deliver such Debentures to the Remarketing Agent for purchase. If
any holder of Debentures fails timely to deliver a Notice of Election, as
described in Section 3.12(b), such Debentures shall be deemed tendered for
purchase in the Remarketing, notwithstanding
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such failure or the failure by such holder to deliver or properly deliver
Debentures to the Remarketing Agent for purchase.
(e) The right of each holder of Debentures to have Debentures tendered for
purchase shall be limited to the extent that (i) the Remarketing Agent conducts
a remarketing pursuant to the terms of the Remarketing Agreement, (ii)
Debentures tendered have not been called for redemption, (iii) the Remarketing
Agent is able to find a purchaser or purchasers for tendered Debentures at an
Adjusted Interest Rate that does not exceed the Maximum Adjusted Distribution
Rate and (iv) such purchaser or purchasers deliver the purchase price therefor
to the Remarketing Agent.
(f) Prior to 4:00 P.M., New York City time, on the Scheduled Remarketing
Date, the Remarketing Agent shall determine the Adjusted Distribution Rate,
which shall be the rate per annum (rounded to the nearest one-thousandth (0.001)
of one percent per annum) which the Remarketing Agent determines, in its sole
judgment, to be the lowest rate per annum, if any, not exceeding the Maximum
Adjusted Interest Rate that will enable it to remarket all Debentures tendered
or deemed tendered for purchase at a price of 100% of the aggregate principal
amount of such Debentures (the "Adjusted Interest Rate "). Notwithstanding the
foregoing, if the Remarketing Agent is able to remarket some, but is unable to
remarket all, of the Debentures tendered or deemed tendered for purchase in the
Remarketing, the Adjusted Interest Rate shall be the highest rate, not exceeding
the Maximum Adjusted Interest Rate, required to remarket Debentures sold in the
Remarketing . If holders of Securities submit Notices of Election to retain all
of the Securities then outstanding, the Adjusted Distribution Rate will be the
rate determined by the Remarketing Agent in its sole discretion, as the rate
that would have been established had a Remarketing been held on the Scheduled
Remarketing Date. Under Section 4 of the Remarketing Agreement, the Company, in
its capacity as the issuer of Debentures, shall be liable for, and shall pay,
any and all costs and expenses incurred in connection with the Remarketing and
the Trust shall not be liable for any such costs and expenses.
(g) By approximately 4:30 P.M., New York City time, on the Scheduled
Remarketing Date, the Remarketing Agent shall advise, by telephone (i) the
Depositary, the Trustee, the Trust and the Company of the Adjusted Interest Rate
determined in the Remarketing and the aggregate principal amount of Debentures
sold in the Remarketing, (ii) each purchaser (or the Depositary Participant
thereof) of the Adjusted Interest Rate determined in the Remarketing and the
aggregate principal amount of Debenture such purchaser is to purchase and (iii)
each purchaser to give instructions to its Depositary Participant to pay the
purchase price on the Scheduled Remarketing Settlement Date in same day funds
against delivery of the Debentures purchased through the facilities of the
Depositary.
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(h) In accordance with the Depositary's normal procedures, on the
Remarketing Settlement Date, the transactions described above with respect to
the Debentures tendered for purchase and sold in the Remarketing shall be
executed through the Depositary, if the Depositary or its nominee is the holder
of such Debentures, and the accounts of the respective Depositary Participants
shall be debited and credited and such Debentures delivered by book entry as
necessary to effect purchases and sales of such Debentures. The Depositary
shall make payment in accordance with its normal procedures.
(i) If any holder selling Debentures in the Remarketing fails to deliver
such Debentures, the Depositary Participant of such selling holder and of any
other person that was to have purchased Debentures in the Remarketing may
deliver to any such other person an aggregate principal amount of Debentures
that is less than the aggregate principal amount of the Debentures that
otherwise was to be purchased by such person. In such event, the aggregate
principal amount of the Debentures that is to be so delivered shall be
determined by such Depositary Participant, and delivery of such lesser amount of
Debentures shall constitute good delivery.
(j) The Remarketing Agent is not obligated to purchase any Debentures that
would otherwise remain unsold in a Remarketing. Neither the Trust nor any
Trustee nor the Company nor the Remarketing Agent shall be obligated in any case
to provide funds to make payment upon tender of Debentures for Remarketing.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Debentures
(a) The Company shall pay or cause to be paid the principal of, premium, if
any, and interest and Additional Interest, if any, on the Debentures on the
dates and in the manner provided in the Debentures. Principal, premium, if any,
and interest and Additional Interest, if any, shall be considered paid on the
date due if the Paying Agent (other than the Company or a Subsidiary), holds at
least one Business Day before that date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest and Additional Interest, if any, then
due. Such Paying Agent shall return to the Company, no later than five Business
Days following the due date for payment, any money (including accrued interest,
if any) that exceeds such amount of principal, premium, if any, and interest and
Additional Interest, if any, required for payment on the Debentures.
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(b) The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the applicable
interest rate on the Debentures to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the same rate to the extent lawful.
(c) From the Issue Date to but excluding the Remarketing Settlement Date,
the "Applicable Interest Rate" will be 10 1/4% per annum (the "Initial Interest
Rate"). From the Remarketing Settlement Date to but excluding the date of
redemption of the Debentures, the Applicable Interest Rate will equal the
Adjusted Distribution Rate (or, if a Dissolution Event occurs prior to the
Scheduled Remarketing Date, the Adjusted Interest Rate) that results from the
Remarketing consummated on the Remarketing Settlement Date.
The Debentures shall accrue interest at the Applicable Interest Rate, from
the Issue Date or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, as the case may be, and shall be payable,
semi-annually in arrears, on June 15 (June 14 in 2002) and December 15 of each
year, commencing December 15, 1997, and on each Scheduled Remarketing Settlement
Date (each, an "Interest Payment Date"), until the principal thereof is paid or
made available for payment, to the holder of such Debenture on the close of
business on the regular record rate.
Interest that is not paid on an applicable Interest Payment Date, to the
extent permitted by law, will compound semi-annually and will accrue at the
Applicable Interest Rate in effect at the beginning of the related interest
period, including (to the extent permitted by applicable law) during an
extension of an interest payment period as set forth below in Section 4.01(d).
The amount of interest payable for any period will be computed (i) for any
full 180-day semi-annual interest payment period, on the basis of a 360-day year
of twelve 30-day months and (ii) for any period shorter than a full 180-day
semi-annual interest payment period, on the basis of 30-day months and for
periods of less than a month, the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any additional interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the date such payment was originally
payable.
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The term "interest", as used herein, shall include interest payments,
Additional Interest and interest on interest payments not paid on the applicable
Interest Payment Date.
(d) Following the Remarketing Settlement Date, as long as no Event of
Default has occurred and is continuing, the Company shall have the right, at any
time during the term of the Debentures, from time to time, to defer payment of
interest on such Debentures, for a period not to exceed to 10 consecutive semi-
annual periods (an "Extension Period"); provided, that no Extension Period may
extend beyond the Stated Maturity of the Debentures. There may be multiple
Extension Periods of varying lengths during the term of the Debentures. At the
end of each Extension Period, if any, the Company shall pay all interest and
Additional Interest then accrued and unpaid, together with interest thereon,
compounded semi-annually at the Applicable Interest Rate in effect at the
beginning of such Extension Period, to the extent permitted by applicable law.
During any such Extension Period, the Company may not, and may not permit any
Subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank on a parity with or junior in interest to
the Debentures or make any guarantee payments with respect to any guarantee by
the Company of the debt securities of any Subsidiary of the Company if such
guarantee ranks on a parity or junior in interest to the Debentures (other than
(a) dividends or distributions in common stock of the Company, (b) payments
under the Company Guarantee, (c) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, and (d) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans).
Prior to the termination of any such Extension Period, the Company may further
extend the interest payment period, provided that no Extension Period may exceed
10 consecutive semi-annual periods or extend beyond the Stated Maturity of the
Debentures. Upon the termination of any such Extension Period and the payment
of all amounts then due on any Interest Payment Date, the Company may elect to
begin a new Extension Period subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
(e) The Company shall give the Property Trustee, the Regular Trustees and
the Trustee written notice of its election of such Extension Period not less
than one Business Day prior to the record date for the related interest payment.
The Property Trustee shall promptly give notice of the Company's selection of
such Extension Period to the holders of the Securities.
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Section 4.02 Maintenance of Office or Agency
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or Registrar)
where Debentures may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Debentures
and this Indenture may be served. The Company shall give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Debentures 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 the Borough of
Manhattan, The City of New York for such purposes. The Company shall 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.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.
Section 4.03 Compliance Certificate
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether each has kept, observed, performed and fulfilled in all
respects its obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge each
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in any respect in default in the performance or
observance of any of the terms, provisions and conditions hereof or thereof (or,
if such Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge and what action
each is taking or proposes to take with respect thereto).
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the
55
Company's independent public accountants (who shall be a firm of established
national reputation reasonably satisfactory to the Trustee) that in making the
examination necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that either the Company
or any of its Subsidiaries has violated any provisions of Article 4 or Article 5
of this Indenture or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any person for any failure to obtain
knowledge of any such violation.
(c) The Company shall, so long as any of the Debentures are outstanding,
deliver to the Trustee, forthwith upon becoming aware of (i) any Default or
Event of Default or (ii) any event of default under any other mortgage,
indenture or instrument as that term is used in Section 6.01(v) which permits an
acceleration that could become an Event of Default, an Officers' Certificate
specifying such Default, Event of Default or event of default and what action
the Company is taking or proposes to take with respect thereto.
Section 4.04 Taxes
The Company shall, and shall cause each of its Subsidiaries to, pay prior
to delinquency all material taxes, assessments, and governmental levies except
as contested in good faith and by appropriate proceedings.
Section 4.05 Stay, Extension and Usury Laws
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury 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 it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 4.06 Change of Control
Upon the occurrence of a Change of Control on or prior to the Remarketing
Settlement Date, each Holder of Debentures shall have the right to require the
Company to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Debentures pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof
56
plus accrued and unpaid interest and Additional Interest, if any, thereon to the
date of purchase (the "Change of Control Payment"). If at the time of the
Change of Control the Trust is the owner of all of the Debentures, the Trust
shall make the Change of Control Offer for the Securities in accordance with the
procedures set forth in Section 7.15 of the Declaration, and the Company shall
repurchase the Debentures exchanged by the Trust for the Securities as set forth
in the Declaration. In connection with such a Change of Control Offer, on the
Change of Control Purchase Date, the Company shall promptly deposit with the
Trustee an amount equal to the Change of Control Payment in respect of all
Securities or portions thereof so exchanged. The Trustee shall promptly mail to
each holder of Securities so exchanged the Change of Control Payment for such
Securities.
The following procedures apply to a Change of Control Offer when the Trust
is not the owner of all of the Debentures:
Within 10 days following any Change of Control, the Company shall mail a
notice to each Holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase Debentures pursuant to the
procedures required by this Indenture and described in such notice. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Debentures
as a result of a Change of Control.
The Change of Control Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Change of Control Offer
Period"). No later than five Business Days after the termination of the Change
of Control Offer Period (the "Change of Control Purchase Date"), the Company
shall purchase all Debentures tendered in response to the Change of Control
Offer. Payment for any Debentures so purchased shall be made in the same manner
as interest payments are made.
If the Change of Control Purchase Date is on or after an interest record
date and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Debenture is registered at
the close of business on such record date, and no additional interest or
Additional Interest, if any, shall be payable to Holders who tender Debentures
pursuant to the Change of Control Offer.
On the Change of Control Payment Date, the Company shall, to the extent
lawful, (a) accept for payment all Debentures or portions thereof properly
tendered pursuant to the Change of Control Offer, (b) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all
Debentures or portions thereof so tendered and (c) deliver or cause to be
delivered to the Trustee the Debentures so
57
accepted together with an Officers' Certificate stating the aggregate principal
amount of Debentures or portions thereof being purchased by the Company. The
Paying Agent shall promptly mail to each Holder of Debentures so tendered the
Change of Control Payment for such Debentures, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Debenture equal in principal amount to any unpurchased portion of the
Debentures surrendered, if any; provided that each such new Debenture shall be
in a principal amount of $1,000 or an integral multiple thereof. The Company
shall publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.
Section 4.07 Asset Sales
On or prior to the Remarketing Settlement Date, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
in excess of $1,000,000 unless (i) the Company (or the Restricted Subsidiary, as
the case may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value (evidenced by a resolution of the Board of
Directors, except for sales of Securitization Related Assets, which require no
such resolution) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 75% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents; provided that the amount of (x) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet, excluding
contingent liabilities and trade payables), of the Company or any such
Restricted Subsidiary that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability and (y) any securities, notes or
other obligations received by the Company or any such Restricted Subsidiary from
such transferee that are promptly, but in no event more than 30 days after
receipt, converted by the Company or such Restricted Subsidiary into cash (to
the extent of the cash received), shall be deemed to be cash for purposes of
this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company or the Restricted Subsidiary may apply such Net Proceeds, (a) to
permanently reduce Senior Indebtedness (other than the Debentures or the 9 7/8%
Senior Notes or the Subsidiary Guarantees thereof) of the Company or of the
Subsidiary Guarantors, or (b) to an Investment (excluding Guarantees of
Indebtedness or other obligations), the making of a capital expenditure or the
acquisition of other tangible assets, in each case in or with respect to a
Related Business. Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this paragraph shall be deemed to
constitute "Excess Proceeds." If at the time of the Asset Sale Offer the Trust
is the owner of all of the Debentures, the Trust shall make the Asset Sale Offer
for the Securities in accordance with the procedures set forth in Section 7.16
of the Declaration,
58
and the Company shall repurchase the Debentures exchanged by the Trust for the
Securities as set forth in the Declaration. Promptly following such exchange,
the Company shall (but in any case not later than five days after the Asset Sale
Purchase Date) mail or deliver to each tendering holder of Securities an amount
equal to 100% of the principal amount of the Debentures exchanged therefor plus
accrued and unpaid interest thereon, including Additional Interest to the date
of purchase.
The following procedures apply to an Asset Sale Offer when the Trust is not
the owner of all of the Debentures:
When the aggregate amount of Excess Proceeds exceeds $5,000,000, the
Company shall be required to make an offer to all Holders of Debentures and, at
the Company's election, the 9 7/8% Senior Notes (an "Asset Sale Offer") to
purchase the maximum principal amount of Debentures (and, if applicable, the
9 7/8% Senior Notes) that may be purchased out of the Excess Proceeds, at an
offer price in cash in an amount equal to 100% of the principal amount thereof
plus accrued and unpaid interest and Additional Interest, if any, thereon to the
date of purchase, in accordance with the procedures set forth in this Indenture
and in the indenture governing the 9 7/8% Senior Notes.
To the extent that the aggregate amount of Debentures (and, if applicable,
the 9 7/8% Senior Notes) tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be reset at zero.
An Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Asset Sale Offer Period"). No later
than five Business Days after the termination of the Asset Sale Offer Period
(the "Asset Sale Purchase Date"), the Company shall purchase the principal
amount of Debentures (and, if applicable, the 9 7/8% Senior Notes) required to
be purchased pursuant to this covenant (the "Asset Sale Offer Amount") or, if
less than the Asset Sale Offer Amount has been tendered, all Debentures (and, if
applicable, the 9 7/8% Senior Notes) tendered in response to the Asset Sale
Offer. Payment for any Debentures (and, if applicable, the 9 7/8% Senior Notes)
so purchased shall be made in the same manner as interest payments are made.
If the Asset Sale Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid interest
and Additional Interest, if any, shall be paid to the Person in whose name a
Debenture is registered at the close of business on such record date, and no
additional interest or Additional
59
Interest, if any, shall be payable to Holders who tender Debentures pursuant to
the Asset Sale Offer.
On or before the Asset Sale Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Asset Sale Offer Amount of Debentures (and, if applicable, the 9 7/8% Senior
Notes) or portions thereof tendered pursuant to the Asset Sale Offer, or if less
than the Asset Sale Offer Amount has been tendered (and, if applicable, the
9 7/8% Senior Notes), all Debentures (and, if applicable, the 9 7/8% Senior
Notes) tendered, and shall deliver to the Trustee an Officers' Certificate
stating that such Debentures (and, if applicable, the 9 7/8% Senior Notes) or
portions thereof were accepted for payment by the Company in accordance with the
terms of this covenant. The Company, the Depository or the Paying Agent, as the
case may be, shall promptly (but in any case not later than five days after the
Asset Sale Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Debentures (and, if applicable, the 9 7/8%
Senior Notes) tendered by such Holder and accepted by the Company for purchase.
The Company shall promptly issue a new Debenture, and the Trustee, upon written
request from the Company shall authenticate and mail or deliver such new
Debenture to such Holder, in a principal amount equal to any unpurchased portion
of the Debenture surrendered. Any Debenture not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company shall
publicly announce the results of the Asset Sale Offer on the Asset Sale Purchase
Date.
Section 4.08 Restricted Payments
On or prior to the Remarketing Settlement Date, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or distribution on
account of the Company's or any of its Restricted Subsidiaries' Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to the direct or indirect holders of the
Company's or any of its Subsidiaries' Equity Interests in their capacity as such
(other than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or dividends or distributions payable to the
Company or any Restricted Subsidiary that is a Subsidiary Guarantor or to SPTL);
(ii) purchase, redeem or otherwise acquire or retire for value (including
without limitation in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company or any direct or indirect parent of
the Company or other Affiliate of the Company (other than any such Equity
Interests owned by the Company or any Restricted Subsidiary of the Company that
is a Subsidiary Guarantor or by SPTL); (iii) make any payment on or with respect
to, or purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Debentures (other than Debentures),
except a payment of interest or principal at Stated Maturity; or (iv)
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make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;
(b) at the time of and immediately after giving effect to such Restricted
Payment, the Company would be able to incur at least $1.00 of additional
Indebtedness pursuant to the test in the first sentence of Section 4.09; and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Subsidiaries after the Issue
Date (excluding Restricted Payments permitted by clauses (x) and (y) of the next
succeeding paragraph), is less than the sum of (i) 25% of the Consolidated Net
Income of the Company for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after the Issue Date to the end
of the Company's most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (ii) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale since the Issue Date of Equity Interests (other
than Disqualified Stock) of the Company or of debt securities of the Company
that have been converted into such Equity Interests (other than Equity Interests
(or convertible debt securities) sold to a Subsidiary of the Company and other
than Disqualified Stock or debt securities that have been converted into
Disqualified Stock), (iii) to the extent that any Restricted Investment that was
made after the Issue Date is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (A) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any) and (B) the initial
amount of such Restricted Investment, (iv) 25% of any dividends received by the
Company or a Wholly Owned Restricted Subsidiary that is a Subsidiary Guarantor
or by SPTL after the Issue Date from an Unrestricted Subsidiary of the Company,
plus (v) $15,000,000.
The foregoing provisions shall not prohibit: (v) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (w) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company or any Restricted Subsidiary in exchange
for, or out of the proceeds of, the substantially concurrent sale (other than to
a Subsidiary of the Company) of other Equity Interests of the Company (other
than any Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement or
other acquisition shall be excluded from clause (c)(ii) of the preceding
paragraph; (x) the defeasance, redemption or repurchase of subordinated
Indebtedness with the net cash
61
proceeds from an incurrence of Permitted Refinancing Indebtedness or the
substantially concurrent sale (other than to a Subsidiary of the Company) of
Equity Interests of the Company (other than Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded from
clause (c)(ii) of the preceding paragraph; (y) the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the Company
or any Subsidiary of the Company held by any member of the Company's (or any of
its Subsidiaries') management pursuant to any management equity subscription
agreement or stock option agreement or other management agreement or plan;
provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $500,000 in any twelve-
month period plus the aggregate cash proceeds received by the Company during
such twelve-month period from any reissuance of Equity Interests by the Company
to members of management of the Company and its Subsidiaries; and (z) the
repurchase, redemption or other retirement for value of any Equity Interests of
any Restricted Subsidiary in a Strategic Investor Repurchase Transaction; and no
Default or Event of Default shall have occurred and be continuing immediately
after such transaction.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated shall be deemed to be Restricted Payments at the
time of such designation and shall reduce the amount available for Restricted
Payments under the first paragraph of this covenant. All such outstanding
Investments shall be deemed to constitute Investments in an amount equal to the
greatest of (x) the net book value of such Investments at the time of such
designation, (y) the fair market value of such Investments at the time of such
designation and (z) the original fair market value of such Investments at the
time they were made. Such designation shall only be permitted if such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value (evidenced by a resolution of the Board of Directors set forth in
an Officers' Certificate delivered to the Trustee) on the date of the Restricted
Payment of the asset(s) proposed to be transferred by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. Not later
than the date of making any Restricted Payment, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.08 were computed, which calculations may be based upon the
Company's latest available financial statements.
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Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock
On or prior to the Remarketing Settlement Date, the Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume, guaranty or otherwise become directly or indirectly liable with
respect to (collectively, "incur") any Indebtedness (including Acquired Debt)
and the Company shall not permit any of its Restricted Subsidiaries to issue any
shares of preferred stock; provided, however, that the Company or any Subsidiary
Guarantor may incur Indebtedness (including Acquired Debt) or any Subsidiary
Guarantor may issue preferred stock or SPTL may incur Permitted SPTL Preferred
Stock if, on the date of such incurrence and after giving effect thereto, the
Company's Consolidated Leverage Ratio does not exceed 2.0 to 1.0.
The foregoing provisions shall not apply to:
(i) Indebtedness of the Company existing on the Issue Date;
(ii) the incurrence by the Company of Indebtedness represented by the
Debentures or by the Subsidiary Guarantors of Indebtedness represented by the
Subsidiary Guarantees;
(iii) the incurrence of Permitted Warehouse Indebtedness by the Company or
any of its Restricted Subsidiaries, and any Guarantee by the Company of such
Indebtedness incurred by a Restricted Subsidiary, provided, however, that to the
extent any such Indebtedness of the Company or a Subsidiary Guarantor ceases to
constitute Permitted Warehouse Indebtedness, such Indebtedness shall be deemed
to be incurred at such time by the Company or such Subsidiary Guarantor, as the
case may be;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund, Indebtedness
that was permitted by this Indenture to be incurred or that was outstanding at
the Issue Date;
(v) the incurrence by the Company or a Restricted Subsidiary of Hedging
Obligations directly related to (A) Indebtedness of the Company or a Restricted
Subsidiary incurred in conformity with the provisions of this Indenture, (B)
Receivables held by the Company or its Restricted Subsidiaries pending sale in a
Qualified Securitization Transaction, (C) Receivables of the Company or its
Restricted Subsidiaries that have been sold pursuant to a Warehouse Facility,
(D) Receivables that the Company or the Restricted Subsidiary reasonably expects
to purchase or commit to purchase, finance or accept as collateral, or (E)
Securitization Related Assets and other assets owned or financed by the Company
or its Restricted Subsidiaries in the ordinary course
63
of business; provided, however, that, in the case of each of the foregoing
clauses (A) through (E), such Hedging Obligations are eligible to receive hedge
accounting treatment in accordance with GAAP as applied by the Company and its
Restricted Subsidiaries on the Issue Date; and
(vi) Indebtedness of the Subsidiary Guarantors or of SPTL to the Company or
Permitted SPTL Preferred Stock issued to the Company to the extent that such
Indebtedness or such Permitted SPTL Preferred Stock constitutes a Permitted
Investment of the Company of the type permitted under the definition of
Permitted Investments;
(vii) the incurrence by the Company or any of its Restricted Subsidiaries
other than a Special Purpose Subsidiary of intercompany Indebtedness owing to
the Company or any of its Restricted Subsidiaries other than a Special Purpose
Subsidiary; provided, however, that (i) any subsequent issuance or transfer of
any Capital Stock which results in any such Indebtedness being held by a Person
other than a Restricted Subsidiary and (ii) any sale or transfer of any such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary (other than a Special Purpose Subsidiary) shall be deemed, in each
case, to constitute the incurrence of such Indebtedness by the Company or such
Subsidiary, as the case may be;
(viii) the incurrence by a Special Purpose Subsidiary of Non-Recourse Debt
in a Qualified Securitization Transaction and the incurrence by the Company's
Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any
such Indebtedness ceases to be Non-Recourse Debt of the Special Purpose
Subsidiary or other Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted Subsidiary of the
Company; and
(ix) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness in an aggregate principal amount which, together with the principal
amount of all Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the date of Incurrence (other than Indebtedness permitted by
clauses (ii) through (vii) above, or the first paragraph of this covenant), does
not exceed $10,000,000.
Section 4.10 Liens
On or prior to the Remarketing Settlement Date, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, create, incur or
otherwise cause or suffer to exist or become effective any Lien for the benefit
of any Indebtedness ranking pari passu with or junior to the Debentures, other
than Permitted Liens, upon any property or assets of the Company or any
Restricted Subsidiary of the Company or any shares of stock or debt of any
Restricted Subsidiary of the Company which owns property or assets, now owned or
hereafter acquired, unless (i) if such lien secures Indebtedness
64
which is pari passu with the Debentures, then the Debentures are secured on an
equal and ratable basis or (ii) if such lien secures Indebtedness which is
junior to the Debentures, any such lien shall be junior to a lien granted to the
holders of the Debentures. The Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens.
Section 4.11 Dividend and Other Payment Restrictions Affecting Subsidiaries
On or prior to the Remarketing Settlement Date, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any Restricted Subsidiary to (i)(a) pay
dividends or make any other distributions to the Company or any of its
Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any
other interest or participation in, or measured by, its profits, or (b) pay any
indebtedness owed to the Company or any of its Restricted Subsidiaries, (ii)
make loans or advances to the Company or any of its Restricted Subsidiaries or
(iii) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on the Issue Date,
(b) the Warehouse Facilities as in effect as of the Issue Date, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, additions, replacements or refinancings thereof; provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, additions, replacements or refinancings are no more restrictive with
respect to such dividend and other payment restrictions than those contained in
the Warehouse Facilities as in effect on the Issue Date, (c) Indebtedness or
other contractual requirements of a Special Purpose Subsidiary in connection
with a Qualified Securitization Transaction; provided that such restrictions
apply only to such Special Purpose Subsidiary, (d) this Indenture and the
Debentures, (e) applicable law, (f) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (g) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, (h) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, or (i) Permitted Refinancing
Indebtedness;
65
provided that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive than those contained
in the agreements governing the Indebtedness being refinanced.
Section 4.12 Transactions with Affiliates
On or prior to the Remarketing Settlement Date, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Subsidiary with
an unrelated Person and (ii) the Company delivers to the Trustee (a) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $2,000,000, a resolution of the
Board of Directors set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the disinterested members of the
Board of Directors and (b) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$10,000,000, in addition to such Officers' Certificate, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a financial point of
view issued by an investment banking firm of national standing which is not an
Affiliate of the Company; provided, however, that such fairness opinion shall
not be required with respect to a Qualified Securitization Transaction or other
transaction that is made in the ordinary course of business of the Company or
such Restricted Subsidiary, as the case may be, and is consistent with the past
business practice of the Company or such Restricted Subsidiary. Notwithstanding
the foregoing, the following shall not be deemed Affiliate Transactions: (i) any
employment agreement entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business and consistent with the past
practice of the Company or such Restricted Subsidiary, (ii) any issuance of
securities, or other payments, compensation, benefits, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans approved by the Board of Directors in
the ordinary course of business and consistent with the past practice of the
Company or such Restricted Subsidiary, (iii) the grant of stock options or
similar rights to employees and directors of the Company pursuant to plans
approved by the Board of Directors in the ordinary course of business and
consistent with the past practice of the Company or such Restricted Subsidiary,
(iv) loans or advances to employees in the ordinary course of business in
accordance with the past practices of the Company or its Restricted
Subsidiaries, but in any event not to exceed $500,000 in aggregate principal
amount
66
outstanding at any one time, (v) the payment of reasonable fees to directors of
the Company and its Restricted Subsidiaries who are not employees of the Company
or its Restricted Subsidiaries, (vi) transactions between or among the Company
and/or its Restricted Subsidiaries, (vii) Restricted Payments and Permitted
Investments (other than Strategic Investor Repurchase Transactions) that are
permitted by Section 4.08, and (viii) transactions between a Special Purpose
Subsidiary and any Person in which the Special Purpose Subsidiary has an
Investment.
Section 4.13 Business Activities
On or prior to the Remarketing Settlement Date, the Company shall not, and
shall not permit any Restricted Subsidiary to, engage in any line of business
that is not a Related Business (except as a result of Investments in other
businesses made or acquired in connection with the activities or conduct of the
Related Businesses in the ordinary course of business by the Company and its
Restricted Subsidiaries, including Investments obtained as a result of the
foreclosure of Liens securing amounts lent by the Company or any of its
Restricted Subsidiaries).
Section 4.14 Reports
On or prior to the Remarketing Settlement Date, whether or not required by
the rules and regulations of the SEC, so long as any Debentures are outstanding,
the Company shall furnish to the Holders of Debentures (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the SEC on Forms 10-Q and 10-K even if the Company were not required to
file such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual information
only, a report thereon by the Company's certified independent accountants and
(ii) all current reports that would be required to be filed with the SEC on Form
8-K even if the Company were not required to file such reports. In addition,
whether or not required by the rules and regulations of the SEC, the Company
shall file a copy of all such information and reports with the SEC for public
availability (unless the SEC shall not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. In addition, the Company and the Subsidiary Guarantors have agreed
that, for so long as any Debentures remain outstanding, they shall furnish to
the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Section 4.15 Additional Subsidiary Guarantees
On or prior to the Remarketing Settlement Date, the Company shall not, and
shall not permit any of the Subsidiary Guarantors to, make any Investment in any
Subsidiary
67
that is not a Subsidiary Guarantor unless either (i) such Investment is
permitted by the Section 4.08, or (ii) such Subsidiary executes a Subsidiary
Guarantee and delivers an opinion of counsel in accordance with the provisions
of this Indenture.
Section 4.16 Fees and Expenses
Because the Trust is being formed solely to facilitate an investment in the
Debentures, the Company, as borrower, hereby covenants to pay all debts and
obligations (other than with respect to the Securities) and all costs and
expenses of the Trust (including, but not limited to, all costs and expenses of
the Trustees, all costs and expenses relating to the operation of the Trust, and
all costs and expenses attributable to the Remarketing) and to pay any and all
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed on the Trust by the United States, or any other
taxing authority, so that the net amounts received and retained by the Trust and
the Property Trustee after paying such expenses will be equal to the amounts the
Trust and the Property Trustee would have received had no such costs or expenses
been incurred by or imposed on the Trust. The foregoing obligations of the
Company are for the benefit of, and shall be enforceably by, any person to whom
any such debts, obligations, costs, expenses and taxes are owed (each, a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Company directly against the
Company, and the Company irrevocably waives any right or remedy to require that
any such Creditor take any action against the Trust or any other person before
proceeding against the Company. The Company shall execute such additional
agreements as may be necessary or desirable to give full effect to the
foregoing.
ARTICLE 5
SUCCESSORS
Section 5.01 Limitations on Merger, Consolidation or Sale of Substantially All
Assets
The Company shall not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another Person unless: (i) the Company is
the surviving corporation or the entity or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia, (ii) the entity or Person formed
by or surviving any such consolidation or
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merger (if other than the Company) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Debentures and this
Indenture pursuant to a supplemental Indenture in a form reasonably satisfactory
to the Trustee; (iii) immediately after such transaction no Default or Event of
Default exists; and (iv) except in the case of a merger of the Company with or
into a Wholly Owned Restricted Subsidiary of the Company, the Company or the
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (A) will have Consolidated
Net Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction and
(B) will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the test described in the first sentence of Section
4.09.
The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture if applicable comply with this Indenture. The Trustee shall be
entitled to conclusively rely upon such Officers' Certificate and Opinion of
Counsel.
Section 5.02 Successor Corporation Substituted
Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
referring to the "Company" shall refer instead to the successor corporation and
not to the Company), and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; provided, however, that the Company shall not be released
or discharged from the obligation to pay the principal of or interest on the
Debentures.
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default
On or prior to the Remarketing Settlement Date, the following
constitute "Events of Default": (i) default for 30 days in the payment when due
of interest on any Debenture; (ii) default in payment when due of the principal
of or premium, if any, on any Debenture; (iii) failure by the Company for 30
days to comply with any of Sections 4.06, 4.07, 4.08 or 4.09 of this Indenture;
(iv) failure by the Company for 60 days after notice to comply with any of its
other agreements in this Indenture or the Debentures; (v) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of this
Indenture, which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the expiration of any
grace period provided in such Indebtedness on the date of such default (a
"Payment Default") or (b) results in the acceleration of such Indebtedness prior
to its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $5,000,000 or more; (vi) failure by the Company or
any of its Significant Subsidiaries to pay final judgments aggregating in excess
of $5,000,000, which judgments are not paid, discharged or stayed for a period
of 60 days; (vii) except as permitted by this Indenture or if, at the time
thereof, any Subsidiary Guarantee of a Subsidiary Guarantor that is a
Significant Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect, or any Subsidiary Guarantor, or any Person acting on behalf of any such
Subsidiary Guarantor, shall deny or disaffirm, in writing, its obligation under
its Subsidiary Guarantee; (viii) the Company or any of its Significant
Subsidiaries pursuant to or within the meaning of any Bankruptcy Law (a)
commences a voluntary case, (b) consents to the entry of an order for relief
against it in an involuntary case, (c) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (d) makes a
general assignment for the benefit of its creditors, (e) generally is unable to
pay its debts as the same become due; or (ix) a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that (a) is for relief
against the Company or any of its Significant Subsidiaries in an involuntary
case, (b) appoints a Custodian of the Company or any of its Significant
Subsidiaries or for all or substantially all of their property, (c) orders the
liquidation of the Company or any of its Significant Subsidiaries, and the order
or decree remains unstayed and in effect for 60 days.
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After the Remarketing Settlement Date, only the events described in
subparagraphs (i), (ii), (iv) and (viii) will constitute "Events of Default."
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
Section 6.02 Acceleration
If an Event of Default (other than an Event of Default specified in
clauses (viii) and (ix) of Section 6.01, with respect to the Company or any
Restricted Subsidiary) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the then
outstanding Debentures by written notice to the Company and the Trustee may
declare the unpaid principal of and any accrued interest on all the Debentures
to be due and payable immediately. Upon such declaration the principal and
interest shall be due and payable immediately. If an Event of Default specified
in clause (viii) or (ix) of Section 6.01 occurs with respect to the Company or
any Restricted Subsidiary, such an amount shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder. In the event of a declaration of acceleration of the
Debentures because an Event of Default in Section 6.01(v) hereof has occurred
and is continuing, such declaration of acceleration shall be automatically
annulled if the holders of the Indebtedness described in Section 6.01(v) hereof
have rescinded the declaration of acceleration in respect of such Indebtedness
within 15 Business Days thereof and if (i) the annulment of such acceleration
would not conflict with any judgment or decree of a court of competent
jurisdiction, (ii) all existing Events of Default, except non-payment of
principal or interest which shall have become due solely because of the
acceleration, have been cured or waived and (iii) the Company has delivered an
Officers' Certificate to the Trustee to the effect of clauses (i) and (ii)
above. In accordance with the provisions of Section 6.04, the Holders of a
majority in principal amount of the then outstanding Debentures by written
notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal or interest that has become
due solely because of the acceleration) have been cured or waived.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Debentures pursuant to the
optional redemption provisions of Section 3.07 of this Indenture, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law upon the acceleration of the Debentures. If an Event of
Default occurs prior to June 15, 2000 by reason of any
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willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding the prohibition on redemption of the Debentures
prior to such date, then the premium specified in Section 3.07 for optional
redemptions shall also become immediately due and payable to the extent
permitted by law upon the acceleration of the Debentures.
Section 6.03 Other Remedies
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal or interest on
the Debentures or to enforce the performance of any provision of the Debentures
or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Debentures or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
Section 6.04 Waiver of Past Defaults
(1) Holders of a majority in aggregate principal amount of the
Debentures then outstanding by written notice to the Trustee may on behalf of
the Holders of all of the Debentures waive any existing Default or Event of
Default and its consequences under this Indenture (except a continuing Default
or Event of Default in the payment of interest or premium or Additional Interest
on, or the principal of, any Debenture held by a non-consenting Holder). Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
(2) The Trustee may, without the consent of any Holders of the
Debentures, waive any Event of Default that relates to untimely or incomplete
reports or information if the legal rights of the Holders would not be
materially adversely affected thereby and may waive any other defaults the
effect of which would not materially adversely affect the rights of the Holders
under this Indenture.
Section 6.05 Control by Majority
The Holders of a majority in principal amount of the then outstanding
Debentures may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that
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the Trustee determines may be unduly prejudicial to the rights of other Holders,
or that may involve the Trustee in personal liability.
Section 6.06 Limitation on Suits
A Holder may pursue a remedy with respect to this
Indenture or the Debentures only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Debentures make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) during such 60-day period the Holders of a majority in aggregate
principal amount of the then outstanding Debentures do not give the Trustee
a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
Section 6.07 Rights of Holders to Receive Payment
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Debenture to receive payment of principal, premium, if any, and
interest on the Debenture, on or after the respective due dates expressed in the
Debenture, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or adversely affected without the
consent of the Holder.
Section 6.08 Collection Suit by Trustee
If an Event of Default specified in Section 6.01(i) or (ii) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an
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express trust against the Company for the whole amount of principal and interest
remaining unpaid on the Debentures and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Debentures), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due 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 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders of the
Debentures may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Debentures or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 6.10 Priorities
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
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Second: to Holders for amounts due and unpaid on the Debentures for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Debentures
for principal, premium and interest, respectively;
Third: without duplication, to Holders of Debentures for any other
Obligations owing to the Holders of Debentures under the Debentures or this
Indenture; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders.
Section 6.11 Undertaking for Costs
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07,
or a suit by Holders of more than 10% in principal amount of the then
outstanding Debentures.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee
(1) If 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 man would
exercise or use under the circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of Default:
(a) The duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no
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implied covenants or obligations shall be read into this Indenture against
the Trustee.
(b) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(3) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(a) This paragraph does not limit the effect of paragraph (2) of this
Section.
(b) The Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(4) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (1),
(2) and (3) of this Section.
(5) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee may refuse to perform
any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(6) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(7) All indemnifications and releases from liability granted herein to the
Trustee shall extend to the directors, officers, employees and agents of the
Trustee and to the Paying Agent and Registrar.
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Section 7.02 Rights of Trustee
(1) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document, but the
Trustee may, in its discretion, 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.
(2) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(3) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(6) The permissive rights of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty unless so specified herein.
Section 7.03 Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the owner or
pledgee of Debentures and may otherwise deal with the Company or an Affiliate
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Sections 7.10 and
7.11. Subject to the provisions of Section 310(b) of the TIA, the Trustee shall
be permitted to engage in transactions with the Company and its Subsidiaries
other than those contemplated by this Indenture.
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Section 7.04 Trustee's Disclaimer
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Debentures, it shall not be
accountable for the Company's use of the proceeds from the Debentures or any
money paid to the Company or upon the Company or upon the Company's direction
under any provision hereof. The Trustee shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee and
it shall not be responsible for any statement or recital herein or any statement
in the Debentures or any other document in connection with the sale of the
Debentures or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05 Notice of Defaults
The Trustee shall not be deemed to have notice of a Default or an Event of
Default unless (i) the Trustee has received written notice thereof from the
Company or any Holder or (ii) a Responsible Officer of the Trustee shall have
actual knowledge thereof. Except as otherwise expressly provided herein, the
Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein, or
of any of the documents executed in connection with the Debentures, or as to the
existence of a Default or Event of Default hereunder.
Subject to Section 6.04(2), if a Default or Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to Holders
a notice of the Default or Event of Default within 90 days after it obtains
knowledge of the existence of such Event of Default. Except in the case of a
Default or Event of Default in payment of principal, premium or interest on any
Debenture, the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice is
in the interests of Holders.
Section 7.06 Reports by Trustee to Holders
Within 60 days after each October 15 beginning with the October 15
following the date of this Indenture, the Trustee shall mail to Holders a brief
report dated as of such reporting date that complies with TIA (S) 313(a) (but if
no event described in TIA (S) 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA (S) 313(b). The Trustee shall also transmit by mail all
reports as required by TIA (S) 313(c).
Commencing at the time this Indenture is qualified under the TIA, a copy of
each report at the time of its mailing to Holders shall be filed with the SEC
and each stock
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exchange on which the Debentures are listed. The Company shall promptly notify
the Trustee when the Debentures are listed on any stock exchange.
Section 7.07 Compensation and Indemnity
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee and its agents, employees, officers
and directors against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, except as set forth in the next paragraph. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through its own negligence or bad faith.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Debentures on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Debentures. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(viii) or (ix) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
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Section 7.08 Replacement of Trustee
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign at any time and be discharged from the trust hereby
created by so notifying the Company. The Holders of a majority in principal
amount of the then outstanding Debentures may remove the Trustee by so notifying
the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Debentures
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee after written request by any Holder who has been a Holder
for at least six months fails to comply with Section 7.10, such Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
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the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification
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 of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, shall be subject to supervision or examination by Federal or
state authority and shall have (or in the case of a corporation included in a
bank holding company system, the related bank holding company shall have) a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1) and 310(a)(5). The Trustee is subject to TIA (S) 310(b).
Section 7.11 Preferential Collection of Claims Against the Company
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, with respect to
the Debentures, elect to have either Section 8.02 or 8.03 be applied to all
outstanding Debentures upon compliance with the conditions set forth below in
this Article Eight.
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Section 8.02. Legal Defeasance and Discharge
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.02, the Company shall be deemed to have been discharged from its
obligations with respect to all outstanding Debentures on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, such Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Debentures, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such
Debentures and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Debentures to receive
solely from the trust fund described in Section 8.04, and as more fully set
forth in such Section, payments in respect of the principal of, premium, if any,
and interest and Additional Interest, if any, on such Debentures when such
payments are due, (b) the Company's obligations with respect to such Debentures
under Sections 2.03, 2.05, 2.06, 2.07, 2.10 and 4.02, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 with respect to the Debentures.
Section 8.03 Covenant Defeasance
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.03, the Company shall be released from its obligations under the
covenants contained in Sections 4.03, 4.04, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11,
4.12, 4.14 and 4.15 and Article Five with respect to the outstanding Debentures
on and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Debentures shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Debentures shall not be deemed
outstanding for accounting purposes). For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Debentures, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document
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and such omission to comply shall not constitute a Default or an Event of
Default under Section 6.01(iii) or (iv), but, except as specified above, the
remainder of this Indenture and such Debentures shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.03, Sections 6.01(iii) through 6.01(vii) shall not
constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance
The following shall be the conditions to the application of either Section
8.02 or Section 8.03 to the outstanding Debentures:
(1) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 who shall agree to comply with the provisions of this
Article Eight applicable to it) 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 Debentures, (a)
cash in U.S. Dollars in an amount, or (b) non-callable Government
Securities which through the scheduled payment of principal and interest
and Additional Interest, if any, in respect thereof in accordance with
their terms will provide, not later than one day before the due date of any
payment, cash in U.S. Dollars in an amount, or (c) a combination thereof,
in such amounts, as will be sufficient, 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 (or other qualifying trustee) to pay
and discharge the principal of, premium, if any, and interest and
Additional Interest, if any, on the outstanding Debentures on the stated
maturity or on the applicable redemption date, as the case may be, and the
Company must specify whether the Debentures are being defeased to maturity
or to a particular redemption date of such principal or installment of
principal, premium, if any, or interest; provided that the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such non-callable Government Securities to said payments with respect to
the Debentures;
(2) In the case of an election under Section 8.02, either (i) (A) the
Debentures will become due and payable at their stated maturity within one
year after the date of such election pursuant to Section 8.02 or, within
one year after the date of such election, the Debentures will be redeemable
at the option of the Company and will be redeemed by the Company pursuant
to irrevocable instructions issued to the Trustee at the time of such
election for the giving of a notice of redemption by the Trustee for such
redemption and (B) the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States
83
reasonably satisfactory to the Trustee to the effect that the Holders of
the outstanding Debentures will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will
be subject to Federal income tax in the same amount, in the same manner and
at the same times as would have been the case if such Legal Defeasance had
not occurred or (ii) the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably satisfactory to the
Trustee confirming that (A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since the
date hereof, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the outstanding Debentures will not
recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance has not occurred;
(3) In the case of an election under Section 8.03, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee to the effect that the Holders of
the outstanding Debentures 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 in the same amount, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(4) No Default or Event of Default with respect to the Debentures
shall have occurred and be continuing on the date of such deposit or, in so
far as Section 6.01(viii) or (ix) is concerned, at any time in the period
ending on the 91st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of
such period);
(5) Such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(6) In the case of an election under either Section 8.02 or 8.03, the
Company shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Company pursuant to its election under
Section 8.02 or 8.03 was not made by the Company with the intent of
preferring the Holders
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over other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and
(7) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating
that all conditions precedent provided for relating to either the Legal
Defeasance under Section 8.02 or the Covenant Defeasance under Section 8.03
(as the case may be) have been complied with as contemplated by this
Section 8.04.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions
Subject to Section 8.06, all money and Government Securities (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 8.05, the "Trustee") pursuant to
Section 8.04 in respect of the outstanding Debentures shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Debentures and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Debentures of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or Government Securities
deposited pursuant to Section 8.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Debentures.
Anything in this Article Eight to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or Government Securities held by it as provided in Section
8.04 which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(1)), are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to the Company
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, premium, if any, or
interest on any Debenture and remaining unclaimed for two years after such
principal, and premium,
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if any, or interest has become due and payable shall be paid to the Company on
its request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Debenture shall thereafter, as a creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 8.07 Reinstatement
If the Trustee or Paying Agent is unable to apply any United States Dollars
or Government Securities in accordance with Section 8.02 or 8.03, as the case
may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture and the Debentures shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.03 until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.02 or 8.03, as the case may
be; provided, however, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Debenture following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Debentures to receive such payment from the money held by the Trustee or
Paying Agent and provided further that if such order or judgment is issued in
connection with the insolvency, receivership or other similar occurrence with
respect to the Trustee, upon the reinstatement of such obligations the Company
shall be released from its obligations under Sections 4.03, 4.04, 4.06, 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.14 and 4.15 and Article 5.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders
Notwithstanding Section 9.02 of this Indenture, the Company and the Trustee
may amend or supplement this Indenture or the Debentures without the consent of
any Holder of a Debenture:
(a) to cure any ambiguity, defect or inconsistency;
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(b) to provide for uncertificated Debentures in addition to or in
place of certificated Debentures;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Debentures in the case of a merger or consolidation pursuant
to Article Five hereof;
(d) to provide for additional Subsidiary Guarantors as set forth in
Section 4.15;
(e) to make any change that would provide any additional rights or
benefits to the Holders of the Debentures or that does not adversely affect
the legal rights hereunder of any Holder of the Debenture; or
(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company, accompanied by a resolution of its Board
of Directors authorizing the execution of any such supplemental indenture, and
upon receipt by the Trustee of the documents described in Section 9.06 hereof,
the Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations which may be therein contained,
but the Trustee shall not be obligated to enter into such supplemental indenture
which affects its own rights, duties or immunities under this Indenture or
otherwise.
For purposes of Section 9.01(e), any amendment or supplement which extends
the period of time during which the Debentures may not be redeemed at the option
of the Company shall not be deemed to adversely affect the legal rights under
the Indenture of any holders.
Section 9.02 With Consent of Holders
The Company and the Trustee may amend or supplement this Indenture or the
Debentures with the written consent of the Holders of at least a majority in
principal amount of the then outstanding Debentures (including consents obtained
in connection with a tender offer or exchange offer for the Debentures) and any
existing Default (including, without limitation, an acceleration of the
Debentures) or compliance with any provision of this Indenture or the Debentures
may be waived with the written consent of the Holders of at least a majority in
principal amount of the then outstanding Debentures (including consents obtained
in connection with a tender offer or exchange offer for the Debentures).
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Upon the request of the Company, accompanied by a resolution of its Board
of Directors authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 9.06 hereof, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment or waiver, but it shall
be sufficient if such consent approves the substance thereof.
After a supplement, amendment or waiver under this Section becomes
effective, the Company shall mail to the Holders of each Debenture affected
thereby a notice briefly describing the supplement, amendment or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture, amendment or waiver. Subject to Sections 6.04(1) and 6.07 hereof,
the Holders of a majority in principal amount of the Debentures then outstanding
may waive compliance in a particular instance by the Company with any provision
of this Indenture or the Debentures. However, without the consent of each
Holder affected, a supplement, amendment or waiver under this Section may not
(with respect to any Debentures held by a non-consenting Holder):
(1) reduce the principal amount of Debentures whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any
Debenture or alter the provisions with respect to redemption of the
Debentures other than pursuant to Sections 4.06 and 4.07 hereof;
(3) reduce the rate of or change the time for payment of interest,
including default interest, or Additional Interest on any Debenture;
(4) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest or Additional Interest on any Debenture
(except a recision of acceleration of the Debentures by the Holders of at
least a majority in aggregate principal amount of the Debentures and a
waiver of the payment default that resulted from such acceleration);
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(5) make any Debenture payable in money other than that stated in the
Debenture;
(6) make any change in Section 6.04(1) or 6.07 hereof or in this
sentence of this Section 9.02 or the rights of Holders of Debentures to
receive payments of principal of or premium, if any, or interest or
Additional Interest on the Debentures;
(7) waive a redemption payment with respect to any Debenture (other
than a payment required by the provisions of Sections 4.06 or 4.07 hereof);
or
(8) make any change in the foregoing amendment and waiver provisions.
Section 9.03 Compliance with Trust Indenture Act
Every amendment to this Indenture or the Debentures shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
Section 9.04 Revocation and Effect of Consents
Until a supplement, amendment or waiver becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder or
portion of a Debenture that evidences the same debt as the consenting Holder's
Debenture, even if notation of the consent is not made on any Debenture.
However, any such Holder or subsequent Holder may revoke the consent as to its
Debenture if the Trustee receives written notice of revocation before the date
the waiver or amendment becomes effective. An amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may fix a record date for determining which Holders must
consent to such amendment or waiver. If the Company fixes a record date, the
record date shall be fixed at (i) the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee prior to such solicitation pursuant to Section 2.05, or
(ii) such other date as the Company shall designate.
Section 9.05 Notation on or Exchange of Debentures
The Trustee may place an appropriate notation about a supplement, amendment
or waiver on any Debenture thereafter authenticated. The Company in exchange
for all Debentures may issue and the Trustee shall authenticate new Debentures
that reflect the supplement, amendment or waiver.
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Failure to make the appropriate notation or issue a new Debenture shall not
affect the validity and effect of such supplement, amendment or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive,
if requested, an indemnity reasonably satisfactory to it and to receive and,
subject to Section 7.01, shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that such amendment
or supplemental indenture is authorized or permitted by this Indenture, that it
is not inconsistent herewith, and that it will be valid and binding upon the
Company in accordance with its terms. The Company may not sign an amendment or
supplemental indenture until the Board of Directors approves it.
ARTICLE 10
SUBSIDIARY GUARANTEES
Section 10.01 Subsidiary Guarantees
Subject to the provisions of this Article 10, each Subsidiary Guarantor,
jointly and severally, hereby unconditionally guarantees to each Holder of a
Debenture authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, that: (a) the principal of, and premium, if any, and
interest on the Debentures shall be duly and punctually paid in full when due,
whether at maturity, by acceleration or otherwise, and interest on overdue
principal, and premium, if any, and (to the extent permitted by law) interest on
any interest, if any, on the Debentures and all other obligations of the Company
to the Holders or the Trustee hereunder or under the Debentures (including fees,
expenses or other) shall be promptly paid in full or performed, all in
accordance with the terms hereof; and (b) in case of any extension of time of
payment or renewal of any Debentures or any of such other obligations, the same
shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. Failing payment when due of any amount so guaranteed or failing
performance of any other obligation of the Company to the Holders, for whatever
reason, each Subsidiary Guarantor shall be obligated to pay, or to perform or to
cause the performance of, the same immediately. An Event of Default under this
Indenture or the Debentures shall constitute an event of default under this
Subsidiary Guarantee, and shall entitle the Trustee or the Holders of Debentures
to accelerate the obligations of each Subsidiary
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Guarantor hereunder in the same manner and to the same extent as the obligations
of the Company. Each Subsidiary Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Debentures or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Debentures with
respect to any thereof, the entry of any judgment against the Company, any
action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each
Subsidiary Guarantor hereby waives and relinquishes: (a) any right to require
the Trustee, the Holders or the Company (each, a "Benefitted Party") to proceed
against the Company, the Subsidiaries or any other Person or to proceed against
or exhaust any security held by a Benefitted Party at any time or to pursue any
other remedy in any secured party's power before proceeding against the
Subsidiary Guarantors; (b) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other Person or
Persons or the failure of a Benefitted Party to file or enforce a claim against
the estate (in administration, bankruptcy or any other proceeding) of any other
Person or Persons; (c) demand, protest and notice of any kind (except as
expressly required by this Indenture), including but not limited to notice of
the existence, creation or incurring of any new or additional Indebtedness or
obligation or of any action or non-action on the part of the Subsidiary
Guarantors, the Company, the Subsidiaries, any Benefitted Party, any creditor of
the Subsidiary Guarantors, the Company or the Subsidiaries or on the part of any
other Person whomsoever in connection with any obligations the performance of
which are hereby guaranteed; (d) any defense based upon an election of remedies
by a Benefitted Party, including but not limited to an election to proceed
against the Subsidiary Guarantors for reimbursement; (e) any defense based upon
any statute or rule of law which provides that the obligation of a surety must
be neither larger in amount nor in other respects more burdensome than that of
the principal; (f) any defense arising because of a Benefitted Party's election,
in any proceeding instituted under the Bankruptcy Law, of the application of
Section 1111(b)(2) of the Bankruptcy Code; and (g) any defense based on any
borrowing or grant of a security interest under Section 364 of the Bankruptcy
Code. The Subsidiary Guarantors hereby covenant that the Subsidiary Guarantees
shall not be discharged except by payment in full of all principal, premium, if
any, and interest on the Debentures and all other costs provided for under this
Indenture, or as provided in Section 8.01.
If any Holder or the Trustee is required by any court or otherwise to
return to either the Company or the Subsidiary Guarantors, or any trustee or
similar official acting in relation to either the Company or the Subsidiary
Guarantors, any amount paid by the Company or the Subsidiary Guarantors to the
Trustee or such Holder, the Subsidiary Guarantees, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each of the
Subsidiary Guarantors agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Subsidiary Guarantor
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agrees that, as between it, on the one hand, and the Holders of Debentures and
the Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 hereof for the purposes
hereof, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article 6
hereof, such obligations (whether or not due and payable) shall forthwith become
due and payable by such Subsidiary Guarantor for the purpose of the Subsidiary
Guarantee.
Section 10.02 Execution and Delivery of Subsidiary Guarantees
To evidence the Subsidiary Guarantees set forth in Section 10.01 hereof,
each of the Subsidiary Guarantors agrees that a notation of the Subsidiary
Guarantees substantially in the form included in Exhibit A-1 hereto shall be
endorsed on each Debenture authenticated and delivered by the Trustee and that
this Indenture shall be executed on behalf of the Subsidiary Guarantors by the
Chairman of the Board, any Vice Chairman, the President or one of the Vice
Presidents or Manager-Members, as applicable, of the Subsidiary Guarantors,
under a facsimile of its seal reproduced on this Indenture and attested to by an
Officer other than the Officer executing this Indenture.
Each of the Subsidiary Guarantors agree that the Subsidiary Guarantees set
forth in this Article 10 will remain in full force and effect and apply to all
the Debentures notwithstanding any failure to endorse on each Debenture a
notation of the Subsidiary Guarantees.
If an Officer whose facsimile signature is on a Debenture no longer holds
that office at the time the Trustee authenticates the Debenture on which the
Subsidiary Guarantees are endorsed, the Subsidiary Guarantees shall be valid
nevertheless.
The delivery of any Debenture by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantees
set forth in this Indenture on behalf of the Subsidiary Guarantors.
Section 10.03 Subsidiary Guarantors May Consolidate, etc., on Certain Terms
(a) Nothing contained in this Indenture or in the Debentures shall prevent
any consolidation or merger of a Subsidiary Guarantor with or into the Company
or another Subsidiary Guarantor, or shall prevent the transfer of all or
substantially all of the assets of a Subsidiary Guarantor to the Company or
another Subsidiary Guarantor. Upon any such consolidation, merger, transfer or
sale, the Subsidiary Guarantee of such Subsidiary Guarantor shall no longer have
any force or effect.
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(b) Each Subsidiary Guarantor shall not, in a single transaction or series
of related transactions, consolidate or merge with or into (whether or not such
Subsidiary Guarantor is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets in one or more related transactions, to another corporation, Person or
entity other than the Company or another Subsidiary Guarantor unless (i) subject
to the provisions of Section 10.04 hereof, the entity or Person formed by or
surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of such Subsidiary Guarantor under its Guarantee and this Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee; (ii) immediately after such transaction no Default or Event of Default
exists; (iii) such Subsidiary Guarantor or the entity or Person formed by or
surviving any such consolidation or merger (if other than Subsidiary Guarantor),
or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made (A) shall have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of such Subsidiary Guarantor immediately preceding the transaction and (B)
shall, at the time of such transaction and after giving pro forma effect thereto
as if such transaction had occurred at the beginning of the applicable four-
quarter period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.10; and (iv) such Subsidiary Guarantor shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
addressed to the Trustee, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or disposition and such supplemental
indenture, if any, comply with this Indenture and that such supplemental
indenture is enforceable. In case of any such consolidation, merger or transfer
of assets and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the Subsidiary Guarantees endorsed upon the Debentures and the due
and punctual performance of all of the covenants and conditions of this
Indenture to be performed by such Guarantor, such successor corporation shall
succeed to and be substituted for such Subsidiary Guarantor with the same effect
as if it had been named herein as a Subsidiary Guarantor. Such successor
corporation thereupon may cause to be signed any or all of the Subsidiary
Guarantees to be endorsed upon all of the Debentures issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Subsidiary Guarantees had been issued at the date of the
execution hereof.
(c) The Trustee, subject to the provisions of Section 10.04 hereof, shall
be entitled to receive an Officers' Certificate and an Opinion of Counsel as
conclusive
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evidence that any such consolidation, merger, sale or conveyance, and any such
assumption of Obligations, comply with the provisions of this Section 10.03.
Such Officers' Certificate and Opinion of Counsel shall comply with the
provisions of Section 12.05.
Section 10.04 Releases Following Sale of Assets
In the event of a sale or other disposition of all or substantially all of
the assets of any Subsidiary Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all (or substantially all) of the
Capital Stock of any Subsidiary Guarantor, which sale or other disposition
otherwise complies with the terms of this Indenture, then such Subsidiary
Guarantor (in the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all or substantially all of the Capital Stock of
such Subsidiary Guarantor) or the corporation acquiring the property (in the
event of a sale or other disposition of all or substantially all of the assets
of such Subsidiary Guarantor) shall be released from and relieved of any
obligations under its Subsidiary Guarantee; provided that the Net Proceeds from
such sale or other disposition are treated in accordance with the provisions of
Section 4.08 hereof. Upon delivery by the Company to the Trustee of an
Officer's Certificate and Opinion of Counsel, to the effect that such sale or
other disposition was made by the Company in accordance with the provisions of
this Indenture, including without limitation Section 4.08 hereof, the Trustee
shall execute any documents reasonably required in order to evidence the release
of any such Subsidiary Guarantor from its obligations under its Subsidiary
Guarantee. Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Debentures and for the other obligations of any Subsidiary
Guarantor under this Indenture as provided in this Article 10.
Section 10.05 Limitation of Subsidiary Guarantor's Liability
Each Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the guarantee by such
Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law. To effectuate the foregoing intention, the
Holders and such Subsidiary Guarantor hereby irrevocably agree that the
obligations of such Subsidiary Guarantor under this Article 10 shall be limited
to the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
this Article 10, result in the
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obligations of such Subsidiary Guarantor under the Subsidiary Guarantee of such
Subsidiary Guarantor not constituting a fraudulent transfer or conveyance.
Section 10.06 Application of Certain Terms and Provisions to the Subsidiary
Guarantors
(a) For purposes of any provision of this Indenture which provides for the
delivery by any Subsidiary Guarantor of an Officers' Certificate and/or an
Opinion of Counsel, the definitions of such terms in Section 1.01 shall apply to
such Subsidiary Guarantor as if references therein to the Company were
references to such Subsidiary Guarantor.
(b) Any request, direction, order or demand which by any provision of this
Indenture is to be made by any Guarantor, shall be sufficient if evidenced as
described in Section 12.02 as if references therein to the Company were
references to such Subsidiary Guarantor.
(c) Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders of
Debentures to or on any Subsidiary Guarantor may be given or served as described
in Section 12.02 as if references therein to the Company were references to such
Subsidiary Guarantor.
(d) Upon any demand, request or application by any Subsidiary Guarantor to
the Trustee to take any action under this Indenture, such Subsidiary Guarantor
shall furnish to the Trustee such certificates and opinions as are required in
Section 12.04 hereof as if all references therein to the Company were references
to such Subsidiary Guarantor.
ARTICLE 11
SUBORDINATION
Notwithstanding anything in this Article 11 to the contrary, from the Issue
Date until the Remarketing Settlement Date, this Article 11 shall not apply to
the Debentures and shall have no effect.
Section 11.01 Agreement to Subordinate
The Company agrees, and each Holder by accepting a Debenture agrees,
that after the Remarketing Settlement Date the Indebtedness evidenced by the
Debenture will be subordinated in right of payment, to the extent and in the
manner provided in this Article, to the prior payment in full of all Senior Debt
(whether outstanding on the date
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thereof or thereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
Section 11.02 Liquidation; Dissolution; Bankruptcy
After the Remarketing Settlement Date, upon any distribution to
creditors of the Company in a liquidation or dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, in an assignment for the benefit of
creditors or any marshalling of the Company's assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive payment in
full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Debt) before Holders shall be entitled
to receive any payment with respect to the Debentures (except that Holders
may receive (i) Permitted Junior Securities and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section
8.01 hereof); and
(2) until all Obligations with respect to Senior Debt (as provided in
subsection (1) above) are paid in full, any distribution to which Holders
would be entitled but for this Article shall be made to holders of Senior
Debt (except that Holders may receive (i) Permitted Junior Securities and
(ii) payments and other distributions made from any defeasance trust
created pursuant to Section [8.01] hereof), as their interests may appear.
Section 11.03 Default on Designated Senior Debt
After the Remarketing Settlement Date, the Company may not make any
payment or distribution to the Trustee or any Holder in respect of Obligations
with respect to the Debentures and may not acquire from the Trustee or any
Holder any Debentures for cash or property (other than (i) Permitted Junior
Securities and (ii) payments and other distributions made from any defeasance
trust created pursuant to Section 8.01 hereof) until all principal and other
Obligations with respect to the Senior Debt have been paid in full if:
(i) a default in the payment of any principal or other Obligations
with respect to Designated Senior Debt occurs and is continuing beyond any
applicable grace period in the agreement, indenture or other document
governing such Designated Senior Debt; or
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(ii) a default, other than a payment default, on Designated Senior
Debt occurs and is continuing that then permits holders of the Designated
Senior Debt to accelerate its maturity and the Trustee receives a notice of
the default (a "Payment Blockage Notice") from a Person who may give it
pursuant to Section 11.11 hereof. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section unless and until (i) at least 360 days shall
have elapsed since the effectiveness of the immediately prior Payment
Blockage Notice and (ii) all scheduled payments of principal, premium, if
any, and interest on the Debentures that have come due have been paid in
full in cash. No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or
be made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Debentures and may acquire them upon the earlier of:
(1) the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section 11.03(ii) hereof,
179 days pass after notice is received if the maturity of such Designated
Senior Debt has not been accelerated,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
Section 11.04 Acceleration of Debentures
After the Remarketing Settlement Date, if payment of the Debentures is
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Debt of the acceleration.
Section 11.05 When Distribution Must Be Paid Over
After the Remarketing Settlement Date, in the event that the Trustee
or any Holder receives any payment of any Obligations with respect to the
Debentures at a time when the Trustee or such Holder, as applicable, has actual
knowledge that such payment is prohibited by Section 11.03 hereof, such payment
shall be held by the Trustee or such Holder, in trust for the benefit of, and
shall be paid forthwith over and delivered, upon written request, to, the
holders of Senior Debt as their interests may appear or their Representative
under the indenture or other agreement (if any) pursuant to which Senior Debt
may have been issued, as their respective interests may appear, for application
to
97
the payment of all Obligations with respect to Senior Debt remaining unpaid to
the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 11, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 11, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
Section 11.06 Notice by Company
After the Remarketing Settlement Date, the Company shall promptly
notify the Trustee and the Paying Agent of any facts known to the Company that
would cause a payment of any Obligations with respect to the Debentures to
violate this Article, but failure to give such notice shall not affect the
subordination of the Debentures to the Senior Debt as provided in this Article.
Section 11.09 Subrogation
After all Senior Debt is paid in full and until the Debentures are
paid in full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Debentures) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of Senior Debt. A distribution made under this Article to holders of Senior
Debt that otherwise would have been made to Holders is not, as between the
Company and Holders, a payment by the Company on the Debentures.
Section 11.08 Relative Rights
This Article defines the relative rights of Holders and holders of
Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and
interest on the Debentures in accordance with their terms;
98
(2) affect the relative rights of Holders and creditors of the Company
other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders.
If the Company fails because of this Article to pay principal of or
interest on a Debenture on the due date, the failure is still a Default or Event
of Default.
Section 11.09 Subordination May Not Be Impaired by Company
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Debentures shall be impaired by any act or
failure to act by the Company or any Holder or by the failure of the Company or
any Holder to comply with this Indenture.
Section 11.10 Distribution or Notice to Representative
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 11.
Section 11.11 Rights of Trustee and Paying Agent
Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Debentures, unless the Trustee shall have received at
its Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Debentures to violate this Article. Only
99
the Company or a Representative may give the notice. Nothing in this Article 11
shall impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may
do the same with like rights.
Section 11.12 Authorization to Effect Subordination
Each Holder of a Debenture by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article 11, and appoints the Trustee to act as the Holder's attorney-in-
fact for any and all such purposes. If the Trustee does not file a proper proof
of claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives of the Designated Senior Debt are hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Debentures.
Section 11.14 Amendments
The provisions of this Article 11 shall not be amended or modified in
a manner materially adverse to the interest of the holders of Senior Debt
without the written consent of the holders of all Designated Senior Debt.
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S)318(c), the duties imposed by TIA (S) 318(c) shall
control.
Section 12.02 Notices
Any notice or communication by the Company, any Subsidiary Guarantor or the
Trustee to the other is duly given if in writing and delivered in Person or
mailed by first-class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the other's address:
100
If to the Company or a Subsidiary Guarantor:
Imperial Credit Industries, Inc.
23550 Hawthorne Boulevard
Building 1, Suite 210
Torrance, CA 90505
Attention: General Counsel
Telecopier No.: (310) 791-8230
If to the Trustee:
Chase Trust Company of California
101 California Street
Suite 2725
San Francisco, CA 94111
Attention: Corporate Trust Department
Telecopier No.: (415) 693-8850
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
101
Section 12.03 Communication by Holders with Other Holders
Holders may communicate pursuant to TIA (S) 312(b) with other Holders with
respect to their rights under this Indenture or the Debentures. The Company,
the Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been complied with.
Section 12.05 Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S) 314(a)(4)) shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
102
Section 12.06 Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 Legal Holidays
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized or
obligated by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
Section 12.08 No Recourse Against Others
No director, officer, manager, member, organizer, employee, incorporator or
shareholder of the Company or any Subsidiary Guarantor, as such, shall have any
liability for any Obligations of the Company or any Subsidiary Guarantor under
the Debentures, this Indenture or any Subsidiary Guarantee or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Holder by accepting a Debenture waives and releases all such liability.
This waiver and release are part of the consideration for issuance of the
Debentures.
Section 12.09 Duplicate Originals
The parties may sign any number of copies of this Indenture. One signed
copy is enough to prove this Indenture.
Section 12.10 Governing Law
The internal law of the State of New York shall govern and be used to
construe this Indenture and the Debentures (without regard to conflicts of law
provisions). Each party hereto irrevocably submits itself to the non-exclusive
jurisdiction of the state and federal courts of New York for purposes of this
Indenture and agrees and consents that service of process may be made upon it in
any legal proceeding relating to this Indenture by any means allowed under
federal or New York law. The parties hereto hereby waive and agree not to
assert, by way of motion, as a defense or otherwise, that any such proceeding is
brought in an inconvenient forum or that the venue thereof is improper.
103
Section 12.11 No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 12.12 Successors
All agreements of the Company in this Indenture, and the Debentures shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successor.
Section 12.13 Severability
In case any provision in this Indenture or the Debentures shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 12.14 Counterpart Originals
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 12.15 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
SIGNATURES
IMPERIAL CREDIT INDUSTRIES, INC.
By: /s/ H. Wayne Snavely
----------------------------------------------------
Name: H. Wayne Snavely
Title: Chairman
Dated as of June 9, 1997
Attest:____________________
IMPERIAL BUSINESS CREDIT, INC.
By: /s/ H. Wayne Snavely
Name: H. Wayne Snavely
Title: Chairman
Dated as of June 9, 1997
Attest:____________________
IMPERIAL CREDIT ADVISORS, INC.
By: /s/ H. Wayne Snavely
----------------------------------------------------
Name: H. Wayne Snavely
Title: Chairman
Dated as of June 9, 1997
Attest:____________________
FRANCHISE MORTGAGE ACCEPTANCE CO. LLC
By: /s/ H. Wayne Snavely
----------------------------------------------------
Name: H. Wayne Snavely
Title: Chairman
Dated as of June 9, 1997
Attest:____________________
AUTO MARKETING NETWORK, INC.
By: /s/ H. Wayne Snavely
----------------------------------------------------
Name: H. Wayne Snavely
Title: Chairman
Dated as of June 9, 1997
Attest:____________________
IMPERIAL CREDIT CAPITAL TRUST I
By: /s/ H. Wayne Snavely
----------------------------------------------------
Name: H. Wayne Snavely
Title: Chairman
Dated as of June 9, 1997
Attest:____________________
CHASE TRUST COMPANY OF CALIFORNIA, as Trustee
By: /s/ Hans H. Helley
----------------------------------------------------
Name: Hans H. Helley
Title: Assistant Vice President
Dated as of: June 9, 1997
Attest:______________________
(Face of Security)
Resettable Rate Debentures, Series A
No. 1 $72,165,000
CUSIP No. 452729 AE6
IMPERIAL CREDIT INDUSTRIES, INC.
promises to pay to Chase Trust Company of California or registered assigns,
the principal sum of Seventy-Two Million One Hundred Sixty-Five Thousand Dollars
on June 15, 2032, or earlier in certain circumstances as described on the
reverse hereof Interest Payment Dates: June 15 (June 14 in 2002) and December
15, commencing December 15, 1997, and on each Scheduled Remarketing Settlement
Date Record Dates: June 1 and December 1 (whether or not a Business Day)
IMPERIAL CREDIT INDUSTRIES, INC.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
TRUSTEE CERTIFICATE OF AUTHENTICATION
Dated: June ___, 1997
This is one of the Debentures
referred to in the within-mentioned
Indenture
CHASE TRUST COMPANY OF CALIFORNIA,
as Trustee
By:
----------------------------------
(Authorized Signature)
A1-2
(Back of Security)
Resettable Rate Debentures, Series A
Unless and until it is exchanged, after the Remarketeing Settlement Date,
in whole or in part for Debentures in definitive form, this Debenture may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary. Unless this certificate is presented by
an authorized representative of The Depository Trust Company (55 Water Street,
New York, New York) ("DTC"), to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be 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.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT
OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
A1-3
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Imperial Credit Industries, Inc., a California corporation
(the "Company"), promises to pay interest on the principal amount of this
Debenture at the rate and in the manner specified below and shall pay the
Additional Interest, if any, payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. Interest on the Debentures will be payable
semi-annually in arrears on each June 15 (June 14 in 2002) and December 15,
commencing on December 15, 1997, and on each Scheduled Remarketing Settlement
Date (each an "Interest Payment Date"), to Holders of record on the immediately
preceding June 1 and December 1, respectively. If any such Interest Payment Date
is not a Business Day, then payment of the interest payable on such date shall
be made on the next succeeding Business Day (and without any additional interest
or other payment in respect of any such delay), except that, if, such Business
Day is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date such payment was originally payable.
Interest will be computed (i) for any full 180-day semi-annual interest
payment period, on the basis of a 360-day year of twelve 30-day months and (ii)
for any period shorter than a full 180-day semi-annual interest payment period
for which interest payments are computed, on the basis of 30-day months and for
periods of less than a month, the actual number of days elapsed per 30-day
month. Interest on the Debentures will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid or duly provided for, from the date of original issuance of the Debentures.
To the extent lawful, the Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
applicable interest rate on the Debentures; it shall pay interest on overdue
installments of interest (without regard to applicable grace periods) at the
same rate, to the extent lawful, (i) if payment is made during the period of
five Business Days following the date on which such interest was due, to the
Persons who were to receive payment on the date such interest was due or (ii) if
payment is made after such period, to the Persons who are Holders on a
subsequent special record date, which date shall be at the earliest practicable
date but in all events at least five Business Days prior to the payment date.
From the Issue Date to but excluding the Remarketing Settlement Date, the
"Applicable Interest Rate" will be 10 1/4% per annum (the "Initial Interest
Rate"). From and after the Remarketing Settlement Date to but excluding the date
of redemption of the Debentures, the Applicable Interest Rate will equal the
Adjusted Distribution Rate (or, if a Dissolution Event occurs prior to a
Scheduled Remarketing Date, the Adjusted Interest Rate) that results from the
Remarketing consummated on the Remarketing Settlement Date.
Following the Remarketing Settlement Date, as long as no Event of Default
has occurred and is continuing, the Company shall have the right, at any time
during the term of the Debentures, from time to time, to defer payment of
interest on such Debentures, for a period not to exceed to 10 consecutive semi-
annual periods (an "Extension
A1-4
Period"); provided, that no Extension Period may extend beyond the Stated
Maturity of the Debentures. There may be multiple Extension Periods of varying
lengths during the term of the Debentures. At the end of each Extension Period,
if any, the Company shall pay all interest and Additional Interest then accrued
and unpaid, together with interest thereon, compounded semi-annually at the
Applicable Interest Rate in effect at the beginning of such Extension Period, to
the extent permitted by applicable law. During any such Extension Period, the
Company may not, and may not permit any Subsidiary of the Company to, (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of the Company's capital
stock or (ii) make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank on a
parity with or junior in interest to the Debentures or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any Subsidiary of the Company if such guarantee ranks on a parity or junior in
interest to the Debentures (other than (a) dividends or distributions in common
stock of the Company, (b) payments under the Company Guarantee, (c) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, and
(d) purchases of common stock related to the issuance of common stock or rights
under any of the Company's benefit plans). Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period,
provided that no Extension Period may exceed 10 consecutive semi-annual periods
or extend beyond the Stated Maturity of the Debentures. Upon the termination of
any such Extension Period and the payment of all amounts then due on any
Interest Payment Date, the Company may elect to begin a new Extension Period
subject to the above requirements. No interest shall be due and payable during
an Extension Period, except at the end thereof.
The Company shall give the Property Trustee, the Regular Trustees and the
Trustee written notice of its election of such Extension Period not less than
one Business Day prior to the record date for the related interest payment. The
Property Trustee shall promptly give notice of the Company's election of such
Extension Period to the holders of the Securities.
2. Maturity Advancement; Tax Event Redemption. If a Tax Event shall occur
and be continuing and in the opinion of independent tax counsel to the Trust
experienced in such matters, there would in all cases, after effecting the
termination of the Trust and the distribution of the Debentures to the holders
of the Trust Securities in exchange therefor upon liquidation of the Trust, be
more than an insubstantial risk that the Tax Event would continue to exist, then
the Company will have the right (a) to shorten the Stated Maturity of the
Debentures to a date not earlier than June 14, 2012 (a "Maturity Advancement")
such that, in the opinion of such independent tax counsel, after advancing the
Stated Maturity of the Debentures, interest paid on the Debentures will be
deductible by the Company for United States federal income tax purposes or (b)
after the Scheduled Remarketing Date, to redeem the Debentures, in whole but not
in part, at any time within 90 days following the occurrence of a Tax Event at a
redemption price equal to 100% of the aggregate principal amount thereof, plus
accrued and unpaid interest and Additional Interest to the date of redemption.
A1-5
3. Method of Payment. The Company will pay interest on the Debentures
(except defaulted interest) and Additional Interest, if any, to the Persons who
are registered Holders of Debentures at the close of business on the record date
next preceding the Interest Payment Date, even if such Debentures are cancelled
after such record date and on or before such Interest Payment Date. Principal,
premium, if any, interest and Additional Interest, if any, on the Debentures
will be payable at the office or agency of the Company maintained for such
purpose within the City and State of New York or, at the option of the Company,
payment of interest and Additional Interest, if any, may be made by check mailed
to the Holders of the Debentures at their respective addresses set forth in the
register of Holders of Debentures; provided that all payments with respect to
Debentures the Holders of which have given wire transfer instructions to the
Company and the Trustee will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof.
The Company will pay principal, premium, if any, and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts.
4. Paying Agent and Registrar. Initially the Trustee under the Indenture
will act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
5. Indenture. The Company issued the Debentures under an Indenture dated
as of June 9, 1997 ("Indenture") among the Company, the Subsidiary Guarantors
and the Trustee. The terms of the Debentures include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) as in effect on the
date of the Indenture. The Debentures are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of such terms. The
terms of the Indenture shall govern any inconsistencies between the Indenture
and the Debentures. Terms not otherwise defined herein shall have the meanings
assigned in the Indenture. The Debentures are general unsecured obligations of
the Company limited to $72,165,000 in aggregate principal amount.
6. Optional Redemption. The Debentures are redeemable at the option of
the Company, in whole or in part, at any time or from time to time through and
including June 15, 2001 at a redemption price (the "Initial Optional Redemption
Price") equal to the greater of (i) 100% of the principal amount of such
Debentures and (ii) as determined by a Quotation Agent, the sum of the present
values of the principal amount of such Debentures as if redeemed on June 14,
2002, together with scheduled prepayments of interest from the prepayment date
to but excluding June 14, 2002, discounted to the prepayment date on a semi-
annual basis (assuming a 360-day year consisting of 30-day months) at the
Adjusted Treasury Rate, plus, in each case, accrued and unpaid interest and
Additional Interest, if any, to the date of redemption.
On and after June 15, 2012, the Debentures are redeemable prior to maturity
at the option of the Company, in whole or in part, at any time at the redemption
prices described in the next sentence, plus accrued and unpaid interest and
Additional Interest, if any, to the date of redemption. The redemption price
(expressed as a percentage of principal amount) shall be equal to 100% plus the
product of (x) the Adjusted
A1-6
Distribution Rate and (y) the applicable Factor if redeemed during the twelve-
month period beginning on June 15th of the years indicated below, the applicable
"Factor" shall equal:
YEAR %
- ---- ---
2012....................................... 50
2013....................................... 45
2014....................................... 40
2015....................................... 35
2016....................................... 30
2017....................................... 25
2018....................................... 20
2019....................................... 15
2020....................................... 10
2021....................................... 5
On and after June 15, 2022, the redemption price will be 100% of the
principal amount of the Debentures to be redeemed, plus accrued and unpaid
interest and Additional Interest, if any, to the date of redemption.
7. Special Mandatory Redemption. If, by 4:00 P.M., New York City time, on
any Scheduled Remarketing Date, the Remarketing Agent is unable to remarket, at
a price of $1,000 per Security, all of the Securities tendered or deemed
tendered for purchase in the Remarketing on such Scheduled Remarketing Date,
then (i) such unsold Securities shall be exchanged on the related Scheduled
Remarketing Settlement Date with the Trust for Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of such unsold
Securities and such Debentures shall be immediately redeemed, unless (ii) as a
result of such redemption, less than $25,000,000 principal amount of Debentures
would remain outstanding. In such latter event, the Company shall redeem on
such Scheduled Remarketing Settlement Date all of the Debentures (thereby
causing the Trust to redeem all of the outstanding Securities) and the
Remarketing will be cancelled. In either case of (i) or (ii) above, the
redemption price of the Debentures shall be 100% of the principal amount of the
outstanding Debentures so redeemed.
8. Investment Company Event Redemption. If an Investment Company Event shall
occur and be continuing, the Company has the option, after the Remarketing
Settlement Date, to redeem the Debentures, in whole but not in part, at any time
within 90 days following the occurrence of such Investment Company Event at a
redemption price equal to 100% of the aggregate principal amount thereof, plus
accrued and unpaid interest and Additional Interest, if any, to the date of
redemption.
A1-7
9. Tax Opinion Redemption. If the Company receives a Tax Opinion at least
35 business days prior to the Election Date, the Remarketing may be cancelled at
the option of the Company, in which case the Debentures shall be redeemed by the
Company on the Scheduled Remarketing Settlement Date, in whole but not in part,
at a redemption price equal to 100% of the principal amount of such Debentures
plus accrued and unpaid interest and Additional Interest thereon to such
Scheduled Remarketing Settlement Date.
10. Transfer Restricted Security Redemption. If an Exchange Offer occurs
under the Registration Rights Agreement, the Company will be required, on the
Remarketing Settlement Date, to redeem, in whole (but not in part), certain
Debentures which were not exchanged pursuant to the Exchange Offer (a "Transfer
Restricted Security Redemption"). As part of a Transfer Restricted Security
Redemption, on the Schedule Remarketing Settlement Date such Securities will be
exchanged with the Trust for Debentures having an aggregate principal amount
equal to the aggregate liquidation of such Securities and such Debentures shall
immediately be redeemed by the Company at a redemption price equal to 100% of
the principal amount thereof plus accrued and unpaid interest and Additional
Interest, if any, to the date of redemption.
11. Remarketing. If the holders of Securities receive Debentures upon the
liquidation or dissolution of the Trust, the Debentures will be subject to
Remarketing procedures as set forth in the Indenture.
12. Change of Control. If there is a Change of Control, the Company shall be
required to offer to purchase all or any part (equal to $1,000 or an integral
multiple thereof) of each Holder's Debentures at a purchase price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase. Holders of Debentures that are
subject to an offer to purchase will receive an offer to purchase from the
Company prior to any related purchase date, and may elect to have such
Debentures purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below. If at the time of the Change of Control the Trust is
the owner of all of the Debentures, the Trust shall make the Change of Control
Offer for the Securities and the Company will repurchase the Debentures
exchanged by the Trust for the Securities as set forth in the Declaration.
13. Asset Sale. If the Company consummates any Asset Sale, the Company will
be required, under certain circumstances, to apply the Excess Proceeds thereof
to an offer to all Holders of Debentures to purchase the maximum principal
amount of Debentures that may be purchased out of the Excess Proceeds at an
offer price in cash equal to 100% of the principal amount of the Debentures plus
accrued and unpaid interest, if any, to the date of purchase, in accordance with
the procedures set forth in the Indenture. Holders of Debentures that are
subject to an offer to purchase will receive an offer to purchase from the
Company prior to any related purchase date, and may elect to have such
Debentures purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below. If at the time of the Asset Sale Offer the Trust is
the owner of all of the Debentures, the Trust shall make the Asset Sale Offer
for the Securities and the Company will repurchase the Debentures exchanged by
the Trust for the Securities as set forth in the Declaration.
A1-8
14. Denominations, Transfer, Exchange. The Debentures are in face
denominations of $1,000 and integral multiples of $1,000. The Debentures may be
transferred and exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Company
need not exchange or register the transfer of any Debenture or portion of a
Debenture selected for redemption.
15. Persons Deemed Owners. Prior to due presentment to the Trustee for
registration of the transfer of this Debenture, the Trustee, any Agent and the
Company may deem and treat the Person in whose name this Debenture is registered
as its absolute owner for the purpose of receiving payment of principal of and
interest on this Debenture and for all other purposes whatsoever, whether or not
this Debenture is overdue, and neither the Trustee, any Agent nor the Company
shall be affected by notice to the contrary. The registered holder of a
Debenture shall be treated as its owner for all purposes.
16. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture and the Debentures may be amended or supplemented with the written
consent of the Holders of at least a majority in principal amount of the then
outstanding Debentures, and any existing Default (except a Default or Event of
Default relating to the payment of principal, premium or interest) or compliance
with any provision of the Indenture or the Debentures may be waived with the
written consent of the Holders of at least a majority in principal amount of the
then outstanding Debentures. Without the consent of any Holder, the Indenture
or the Debentures may be amended or supplemented to cure any ambiguity, defect
or inconsistency, to provide for uncertificated Debentures in addition to or in
place of certificated Debentures, to provide for the assumption of the Company's
obligations to Holders of the Debentures in case of a merger or consolidation,
to provide for additional Subsidiary Guarantors, to make any change that would
provide any additional rights or benefits to the Holders of the Debentures or
that does not materially adversely affect the legal rights of any such Holder
under the Indenture, or to comply with the requirements of the Securities and
Exchange Commission in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act.
17. Defaults and Remedies. On or prior to the Remarketing Settlement Date,
Events of Default include: (i) a default for 30 days in the payment when due of
interest on any Debenture; (ii) a default in payment when due of the principal
of or premium, if any, on any Debenture; (iii) failure by the Company for 30
days to comply with any of Sections 4.06, 4.07, 4.08 or 4.09 of the Indenture;
(iv) failure by the Company for 60 days after notice to comply with any of its
other agreements in the Indenture or the Debentures; (v) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the expiration of any
grace period provided in such Indebtedness on the date of such default (a
"Payment Default") or (b) results in the
A1-9
acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $5,000,000
or more; (vi) failure by the Company or any of its Significant Subsidiaries to
pay final judgments aggregating in excess of $5,000,000, which judgments are not
paid, discharged or stayed for a period of 60 days; (vii) except as permitted by
the Indenture or if, at the time thereof, any Subsidiary Guarantee of a
Subsidiary Guarantor that is a Significant Subsidiary shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Subsidiary Guarantor that is a Significant
Subsidiary, or any Person acting on behalf of any such Subsidiary Guarantor,
shall deny or disaffirm, in writing, its obligation under its Subsidiary
Guarantee; or (viii) certain events of bankruptcy or insolvency with respect to
the Company or any Restricted Subsidiary. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Debentures may declare all the Debentures to be due and
payable immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, with respect to
the Company or any Restricted Subsidiary, all outstanding Debentures will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Debentures except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Debentures. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Debentures may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of the Debentures
notice of any continuing Default or Event of Default (except a Default or Event
of Default relating to the payment of principal, premium or interest) if it
determines that withholding notice is in their interest. The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.
After the Remarketing Settlement Date, only the events described in
subparagraphs (i), (ii), (iv) and (viii) will constitute "Events of Default."
18. Ranking. Until the Remarketing Settlement Date, the Debentures will be
general unsecured obligations of the Company ranking on a parity with all
Indebtedness of the Company, if any, that is not subordinated to the Debentures
and senior to any Indebtedness of the Company that is subordinated to the
Debentures. Until the Remarketing Settlement Date, when the Subsidiary
Guarantees will be released, the Subsidiary Guarantees will rank on a parity
with all future Indebtedness of the Subsidiary Guarantors, if any, that is not
subordinated to the Subsidiary Guarantees and senior to any Indebtedness of the
Subsidiary Guarantors that is subordinated to the Subsidiary Guarantees. After
the Remarketing Settlement Date, the Debentures will be subordinated and junior
in right of payment to all Senior Debt (as defined in the Indenture) of the
Company. After the Remarketing Settlement Date, the Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the Company,
whether under the Indenture or any existing or other indenture that the Company
may enter into in the future or otherwise.
A1-10
19. Trustee Dealings with the Company. Subject to the provisions of the
Indenture, the Trustee in its individual or any other capacity may become the
owner or pledgee of Debentures and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Subject to
the provisions of Section 310(b) of the Trust Indenture Act, the Trustee shall
be permitted to engage in transactions with the Company and its Subsidiaries
other than those contemplated by the Indenture.
20. No Recourse Against Others. No director, officer, employee,
incorporator, organizer, manager, member or shareholder of the Company or any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Company or any Subsidiary Guarantor under the Debentures, the Indenture or
any Subsidiary Guarantee or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Debentures, by accepting
a Debenture waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Debentures.
21. Authentication. This Debenture shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
22. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. Additional Rights of Holders of Transfer Restricted Securities. In
addition to the rights provided to Holders of Debentures under the Indenture,
Holders of Transferred Restricted Securities shall have all the rights set forth
in the Registration Rights Agreement dated as of the date of the Indenture,
between the Company and the parties named on the signature pages thereof (the
"Registration Rights Agreement").
24. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Debentures and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Debentures
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Imperial Credit Industries, Inc.
23550 Hawthorne Boulevard
Building 1, Suite 210
Torrance, CA 90505
A1-11
Attention: General Counsel
Telecopier No.: (310) 791-8230
A1-12
SUBSIDIARY GUARANTEE
The Subsidiary Guarantors listed below (hereinafter referred to as the
"Subsidiary Guarantors," which term includes any successors or assigns under the
Indenture (the "Indenture") and any additional Subsidiary Guarantors), have
jointly and severally irrevocably and unconditionally guaranteed (i) the due and
punctual payment of the principal of, premium, if any, and interest on the
Resettable Rate Debentures, Series A (the "Debentures"), of Imperial Credit
Industries, Inc., a California corporation (the "Company"), whether at stated
maturity, by acceleration or otherwise, the due and punctual payment of interest
on the overdue principal, and premium if any, and (to the extent permitted by
law) interest on any interest, if any, on the Debentures, and the due and
punctual performance of all other obligations of the Company, to the Holders or
the Trustee all in accordance with the terms set forth in Article 10 of the
Indenture, (ii) in case of any extension of time of payment or renewal of any
Debentures or any such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise, and (iii) the
payment of any and all costs and expenses (including reasonable attorneys' fees)
incurred by the Trustee or any Holder in enforcing any rights under this
Subsidiary Guarantee.
The obligations of each Subsidiary Guarantor to the Holder and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture and reference is hereby made to such
Indenture for the precise terms of this Guarantee.
No shareholder, officer, director, manager, member, organizer or
incorporator, as such, past, present or future of each Subsidiary Guarantor
shall have any liability under this Subsidiary Guarantee by reason of his or its
status as such shareholder, officer, director, member, manager, organizer or
incorporator.
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon each Subsidiary Guarantor and its successors
and assigns until the Scheduled Remarketing Settlement Date and shall inure to
the benefit of the successors and assigns of the Trustee and the Holders, and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. This is a Guarantee of payment and
not of collectibility.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Debenture upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
A1-13
The Obligations of each Subsidiary Guarantor under this Subsidiary
Guarantee shall be limited to the extent necessary to insure that it does not
constitute a fraudulent conveyance or fraudulent transfer under applicable law.
THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
IMPERIAL BUSINESS CREDIT, INC.
By:
----------------------------------------------------
Name:
Title:
Dated as of _______________, 1997
Attest:____________________
IMPERIAL CREDIT ADVISORS, INC.
By:
----------------------------------------------------
Name:
Title:
Dated as of _______________, 1997
Attest:____________________
FRANCHISE MORTGAGE ACCEPTANCE CO. LLC
By:
----------------------------------------------------
Name:
Title:
Dated as of _______________, 1997
Attest:____________________
A1-14
AUTO MARKETING NETWORK, INC.
By:
----------------------------------------------------
Name:
Title:
Dated as of _______________, 1997
Attest:____________________
IMPERIAL CREDIT CAPITAL TRUST I
By:
----------------------------------------------------
Name:
Title:
Dated as of _______________, 1997
Attest:____________________
A1-15
Assignment Form
To assign this Debenture, fill in the form below: (I) or (we) assign and
transfer this Debenture to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
----------------------------------------------------
agent to transfer this Debenture on the books of the Company. The agent may
substitute another to act for him.
Date:
-------------------
Your Signature:
------------------------
(Sign exactly as your name appears on the face of this Debenture)
Signature Guarantee./*/
- -------------------
/*/ Signature(s) must be guaranteed by an eligible guarantor institution
(banks, stock brokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program) pursuant to
Securities and Exchange Commission Rule 17 Ad-15.
A-16
Option of Holder to Elect Purchase
If you want to elect to have all or any part of this Debenture purchased by
the Company pursuant to Section 4.06 or 4.07 of the Indenture, check the box
below:
[_] Section 4.06 [_] Section 4.07
If you want to elect to have only part of the Debenture purchased by the
Company pursuant to Section 4.06 or 4.07 of the Indenture, state the amount you
elect to have purchased (if all, write "ALL"): $___________
Date: Your Signature:
-------------------------- ------------------------------
(Sign exactly as your name appears on the face of this Debenture)
Tax Identification No.:____________________
_____
Signature Guarantee./*/
__________________________________
/*/ Signature(s) must be guaranteed by an eligible guarantor institution
(banks, stock brokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program) pursuant to
Securities and Exchange Commission Rule 17 Ad-15.
A-17
SCHEDULE OF EXCHANGES FOR CERTIFICATED DEBENTURES/2/
The following exchanges of a part of this Global Debenture for Certificated
Debentures have been made:
Principal Amount of
this Signature of
Amount of decrease in Amount of increase in Global Debenture authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Debenture
Date of Exchange this Global Debenture this Global Debenture (or increase) Custodian
- ------------------------------------------------------------------------------------------------------------------------
- --------------------------
2. To be included only if the Note is issued in global form.
A2-1
Exhibit A-2
(Face of Regulation S Temporary Global Security)
Resettable Rate Debentures, Series A
No. 1 $__________
CUSIP No.
IMPERIAL CREDIT INDUSTRIES, INC.
promises to pay to _______________________________________
or registered assigns, the principal sum of ___________________
Dollars on June 15, 2032, or earlier in certain circumstances as described on
the reverse.
Interest Payment Dates: June 15 (June 14 in 2001) and December 15, commencing
December 15, 1997, and on each Scheduled Remarketing Settlement Date
Record Dates: June 1 and December 1 (whether or not a Business Day)
A2-1
IMPERIAL CREDIT INDUSTRIES, INC.
By:
-----------------------------------------------
Name:
Title:
By:
-----------------------------------------------
Name:
Title:
TRUSTEE CERTIFICATE OF AUTHENTICATION
Dated: _________________
This is one of the Debentures
referred to in the within-mentioned
Indenture
CHASE TRUST COMPANY OF CALIFORNIA,
as Trustee
By:
------------------------
(Authorized Signature)
A2-2
(Back of Security)
Resettable Rate Debentures, Series A
Unless and until it is exchanged in whole or in part for Debentures in
definitive form, this Debenture may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be 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.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT
OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL DEBENTURE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED DEBENTURES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
A2-3
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
GLOBAL DEBENTURE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST THEREON.
Subject to the provisions hereof, Imperial Credit Industries, Inc., a
California corporation (the "Company"), promises to pay to ______ the principal
sum of ______________ UNITED STATES DOLLARS (U.S. $_________) on June 15, 2032,
or earlier in certain circumstances as defined in the Indenture, and to pay
interest on the principal amount of this Debenture at the Applicable Interest
Rate. Interest on the Debentures will be payable semi-annually in arrears on
each June 15 (June 14 in 2002) and December 15, commencing on December 15, 1997,
and on each Scheduled Remarketing Settlement Date (each an "Interest Payment
Date"). If any such Interest Payment Date is not a Business Day, then payment
of the interest payable on such date shall be made on the next succeeding
Business Day (and without any additional interest or other payment in respect of
any such delay), except that, if, such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date such
payment was originally payable.Interest will be computed (i) for any full 180-
day semi-annual interest payment period, on the basis of a 360-day year of
twelve 30-day months and (ii) for any period shorter than a full 180-day semi-
annual interest payment period for which interest payments are computed, on the
basis of 30-day months and for periods of less than a month, the actual number
of days elapsed per 30-day month. Interest on the Debentures will accrue from
the most recent date to which interest has been paid or duly provided for or, if
no interest has been paid or duly provided for, from the date of the original
issuance of this Debenture.
This Regulation S Temporary Global Debenture is issued in respect of an
issue of Resettable Rate Debentures, Series A (the "Debentures") of the Company,
limited to the aggregate principal amount of U.S. $_____________ issued pursuant
to an Indenture (the "Indenture") dated as of June 9, 1997, among the Company
and Chase Trust Company of California, as trustee (the "Trustee"), and is
governed by the terms and conditions of the Indenture, which terms and
conditions are incorporated herein by reference and, except as otherwise
provided herein, shall be binding on the Company and the Holder hereof as if
fully set forth herein. Unless the context otherwise requires, the terms used
herein shall have the meanings specified in the Indenture.
Until this Regulation S Temporary Global Debenture is exchanged for
Regulation S Permanent Global Debentures, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Debenture shall in all other respects be
entitled to the same benefits as other Debentures under the Indenture.
This Regulation S Temporary Global Debenture is exchangeable in whole or in
part for one or more Regulation S Permanent Global Debentures or Rule 144A
Global Debentures only (i) on or after the termination of the 40-day restricted
period (as defined in Regulation S) and (ii) upon presentation of certificates
(accompanied by an Opinion of Counsel, if applicable) required by Article 2 of
the Indenture. Upon exchange of all interest in this Regulation S Temporary
Global Debenture for one or more Regulation S Permanent Global Debentures or
Rule 144A Global Debentures, the Trustee shall cancel this Regulation S
Temporary Global Debenture.
This Regulation S Temporary Global Debenture shall not become valid or
obligatory until the certificate of authentication hereon shall have been duly
manually signed by the Trustee in accordance with the Indenture. This Regulation
S Temporary Global Debenture shall be governed by and construed
A2-4
in accordance with the laws of the State of the New York. All references to
"$," "Dollars," "dollars" or "U.S. $" are to such coin or currency of the United
States of America as at the time shall be legal tender for the payment of public
and private debts therein.
A2-5
SCHEDULE OF EXCHANGES FOR GLOBAL Debentures
The following exchanges of a part of this Regulation S Temporary
Global Debenture for other Global Debentures have been made:
Amount of decrease Principal Amount of this Signature of
in Amount of increase in Global Debenture authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Debenture
Date of Exchange this Global Debenture this Global Debenture (or increase) Custodian
- -----------------------------------------------------------------------------------------------------------------------
A2-6
Exhibit B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL DEBENTURE TO REGULATION S GLOBAL DEBENTURE
(Pursuant to Section 2.06(a)(i) of the Indenture)
Chase Trust Company of California
101 California Street
Suite 2725
San Francisco, CA 94111
Attention: Corporate Trust Department
Re: Resettable Rate Debentures, Series A of Imperial Credit Industries, Inc.
Reference is hereby made to the Indenture, dated as of June 9, 1997 (the
"Indenture"), among Imperial Credit Industries, Inc., as issuer (the "Company"),
the Subsidiary Guarantors and Chase Trust Company of California, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $_______ principal amount of Debentures which are
evidenced by one or more Rule 144A Global Debentures (CUSIP No. U45021AB5) and
held with the Depositary in the name of ____________________________ (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Debentures to a Person who will take delivery thereof in the
form of an equal principal amount of Debentures evidenced by one or more
Regulation S Global Debentures (CUSIP No. U452729AE6), which amount, immediately
after such transfer, is to be held with the Depositary.
In connection with such request and in respect of such Debentures, the
Transferor hereby certifies that such transfer has been effected in compliance
with the transfer restrictions applicable to the Global Debentures and pursuant
to and in accordance with Rule 903 or Rule 904 under the United States
Securities Act of 1933, as amended (the "Securities Act"), and accordingly the
Transferor hereby further certifies that:
(1) The offer of the Debentures was not made to a person in the United States;
(2) either:
(a) at the time the buy order was originated, the transferee was outside
the United States or the Transferor and any person acting on its behalf
reasonably believed and believes that the transferee was outside the
United States; or
(b) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the Transferor nor
any person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S;
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(4) the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depositary.
Upon giving effect to this request to exchange a beneficial interest in a
Rule 144A Global Debenture for a beneficial interest in a Regulation S Global
Debenture, the resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Regulation S Global Debentures pursuant
to the Indenture and the Securities Act and, if such transfer occurs prior to
the end of the 40-day restricted period associated with the initial offering of
Debentures, the additional restrictions applicable to transfers of interest in
the Regulation S Temporary Global Debenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Lehman Brothers Inc., Montgomery
Securities and Dabney/Resnick/Imperial, LLC, the initial purchasers of such
Debentures being transferred. Terms used in this certificate and not otherwise
defined in the Indenture have the meanings set forth in Regulation S under the
Securities Act.
__________________________
[Insert Name of Transferor]
By: ______________________
Name:
Title:
Dated: ____________________, ____
cc: Imperial Credit Industries, Inc.
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Exhibit B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL DEBENTURE TO RULE 144A GLOBAL DEBENTURE
(Pursuant to Section 2.06(a)(ii) of the Indenture)
Chase Trust Company of California
101 California Street
Suite 2725
San Francisco, CA 94111
Attention: Corporate Trust Department
Re: Resettable Rate Debentures, Series A of Imperial Credit Industries, Inc.
Reference is hereby made to the Indenture, dated as of June 9, 1997 (the
"Indenture"), among Imperial Credit Industries, Inc., as issuer (the "Company"),
the Subsidiary Guarantors and Chase Trust Company of California, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $_______ principal amount of Debentures which are
evidenced by one or more Regulation S Global Debentures (CUSIP No. U452729AE6)
and held with the Depositary in the name of __________________ (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Debentures to a Person who will take delivery thereof in the
form of an equal principal amount of Debentures evidenced by one or more Rule
144A Global Debentures (CUSIP No. 45021AE6), to be held with the Depositary.
In connection with such request and in respect of such Debentures, the
Transferor hereby certifies that:
[CHECK ONE]
[_] such transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Debentures are being transferred to a Person that the
Transferor reasonably believes is purchasing the Debentures for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A;
or
[_] such transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act;
or
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[_] such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
or
[_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Debentures
are being transferred in compliance with the transfer restrictions
applicable to the Global Debentures and in accordance with the requirements
of the exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and such Debentures are being transferred in compliance with any applicable blue
sky securities laws of any state of the United States.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Debentures for a beneficial interest in Rule 144A Global
Debentures, the resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Rule 144A Global Debentures pursuant to
the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Lehman Brothers Inc., Montgomery
Securities and Dabney/Resnick/Imperial, LLC, the initial purchasers of such
Debentures being transferred. Terms used in this certificate and not otherwise
defined in the Indenture have the meanings set forth in Regulation S under the
Securities Act.
__________________________
[Insert Name of Transferor]
By:
----------------------------
Name:
Title:
Dated: _____________, _____
cc: Imperial Credit Industries, Inc.
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Exhibit B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF CERTIFICATED DEBENTURES
(Pursuant to Section 2.06(b) of the Indenture)
Chase Trust Company of California
101 California Street
Suite 2725
San Francisco, CA 94111
Attention: Corporate Trust Department
Re: Resettable Rate Debentures, Series A of Imperial Credit Industries,
Inc.
Reference is hereby made to the Indenture, dated as of June 9, 1997 (the
"Indenture"), among Imperial Credit Industries, Inc., as issuer (the "Company"),
the Subsidiary Guarantors and Chase Trust Company of California, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
In connection with such request and in respect of the Debentures surrendered
to the Trustee herewith for exchange (the "Surrendered Debentures"), the Holder
of such Surrendered Debentures hereby certifies that:
[CHECK ONE]
[_] the Surrendered Debentures are being acquired for the Transferor's own
account, without transfer;
or
[_] the Surrendered Debentures are being transferred to the Company;
or
[_] the Surrendered Debentures are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Debentures are being transferred to
a Person that the Transferor reasonably believes is purchasing the
Surrendered Debentures for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
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[_] the Surrendered Debentures are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
[_] the Surrendered Debentures are being transferred pursuant to an effective
registration statement under the Securities Act;
or
[_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Debentures
are being transferred in compliance with the transfer restrictions
applicable to the Global Debentures and in accordance with the requirements
of the exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and the Surrendered Debentures are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Lehman Brothers Inc., the initial
purchaser of such Debentures being transferred. Terms used in this certificate
and not otherwise defined in the Indenture have the meanings set forth in
Regulation S under the Securities Act.
__________________________
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
Dated: _____________, _____
cc: Imperial Credit Industries, Inc.
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Exhibit B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL DEBENTURE OR REGULATION S PERMANENT GLOBAL DEBENTURE
TO CERTIFICATED DEBENTURE
(Pursuant to Section 2.06(c) of the Indenture)
Chase Trust Company of California
101 California Street
Suite 2725
San Francisco, CA 94111
Attention: Corporate Trust Department
Re: Resettable Rate Debentures, Series A of Imperial Credit Industries,
Inc.
Reference is hereby made to the Indenture, dated as of June 9, 1997 (the
"Indenture"), among Imperial Credit Industries, Inc., as issuer (the "Company"),
the Subsidiary Guarantors and Chase Trust Company of California, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $_______ principal amount of Debentures which are
evidenced by one or more [Rule 144A Global Debentures (CUSIP No. 452729AE6)]
[Regulation S Permanent Global Debenture (CUSIP No. U45021AB5)] and held with
the Depositary in the name of ____________________________ (the "Transferor").
The Transferor has requested a transfer of such beneficial interest in the
Debentures to a Person who will take delivery thereof in the form of an equal
principal amount of Debentures evidenced by one or more Certificated Debentures
(CUSIP No. 452729AC0), which Debentures, immediately after such transfer, are to
be delivered to the transferor at the address set forth below.
In connection with such request and in respect of the Debentures surrendered
to the Trustee herewith for exchange (the "Surrendered Debentures"), the Holder
of such Surrendered Debentures hereby certifies that:
[CHECK ONE]
[_] the Surrendered Debentures are being transferred to the beneficial owner of
such Debentures;
or
[_] the Surrendered Debentures are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Debentures are being transferred to
a Person that the Transferor reasonably believes is purchasing the
Surrendered Debentures for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified
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institutional buyer" within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144A;
or
[_] the Surrendered Debentures are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
[_] the Surrendered Debentures are being transferred pursuant to an effective
registration statement under the Securities Act;
or
[_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Debentures
are being transferred in compliance with the transfer restrictions
applicable to the Global Debentures and in accordance with the requirements
of the exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and the Surrendered Debentures are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Lehman Brothers Inc., the initial
purchasers of such Debentures being transferred. Terms used in this certificate
and not otherwise defined in the Indenture have the meanings set forth in
Regulation S under the Securities Act.
__________________________
[Insert Name of Transferor]
By:
-------------------------------------
Name:
Title:
Dated: _____________, _____
__________________________
[Address of Transferor]
__________________________
cc: Imperial Credit Industries, Inc.
B4-2
Exhibit B-5
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM CERTIFICATED DEBENTURE TO RULE 144A GLOBAL DEBENTURE OR
REGULATION S PERMANENT GLOBAL DEBENTURE
(Pursuant to Section 2.06(e) of the Indenture)
Chase Trust Company of California
101 California Street
Suite 2725
San Francisco, CA 94111
Attention: Corporate Trust Department
Re: Resettable Rate Debentures, Series A of Imperial Credit Industries,
Inc.
Reference is hereby made to the Indenture, dated as of June 9, 1997 (the
"Indenture"), among Imperial Credit Industries, Inc., as issuer (the "Company"),
the Subsidiary Guarantors and Chase Trust Company of California, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
In connection with such request and in respect of the Debentures surrendered
to the Trustee herewith for exchange (the "Surrendered Debentures"), the Holder
of such Surrendered Debentures hereby certifies that:
[CHECK ONE]
[_] the Surrendered Debentures are being transferred to the beneficial owner of
such Debentures;
or
[_] the Surrendered Debentures are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Debentures are being transferred to
a Person that the Transferor reasonably believes is purchasing the
Surrendered Debentures for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
[_] the Surrendered Debentures are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
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or
[_] the Surrendered Debentures are being transferred in a transaction permitted
by Rule 904 under the Securities Act;
or
[_] the Surrendered Debentures are being transferred pursuant to an effective
registration statement under the Securities Act;
or
[_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Debentures
are being transferred in compliance with the transfer restrictions
applicable to the Global Debentures and in accordance with the requirements
of the exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and the Surrendered Debentures are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Lehman Brothers Inc., the initial
purchasers of such Debentures being transferred. Terms used in this certificate
and not otherwise defined in the Indenture have the meanings set forth in Rule
144 or Regulation S under the Securities Act.
__________________________
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated: _____________, _____
cc: Imperial Credit Industries, Inc.
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