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As filed with the Securities and Exchange Commission on June 14, 1996
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMRESCO, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 59-1781257
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1845 WOODALL RODGERS FREEWAY
SUITE 1700
DALLAS, TEXAS 75201
(214) 953-7700
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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L. KEITH BLACKWELL
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
1845 WOODALL RODGERS FREEWAY
SUITE 1700
DALLAS, TEXAS 75201
(214) 953-7700
FAX: (214) 953-7757
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
MICHAEL M. BOONE PATRICK DELANEY
HAYNES AND BOONE, LLP LINDQUIST & VENNUM P.L.L.P.
SUITE 3100 4200 IDS CENTER
901 MAIN STREET MINNEAPOLIS, MINNESOTA 55402
DALLAS, TEXAS 75202-3789 (612) 371-3211
(214) 651-5000 FAX: (612) 371-3207
FAX: (214) 651-5940
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [x]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
Title of Each Class Proposed Maximum Amount of
of Securities to be Registered Aggregate Offering Price (1) Registration Fee
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities (2)
Preferred Stock, par value $1.00 per share (3) (6) (6)
Common Stock, par value $0.05 per share (4)
Securities Warrants (5)
Total $250,000,000 (7) $86,207
===================================================================================================================================
</TABLE>
(Notes appear on next page)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE> 2
(1) The proposed maximum aggregate offering price has been estimated
solely for the purpose of calculating the registration fee pursuant to
Rule 457(o) under the Securities Act of 1933, as amended (the
"Securities Act"). The proposed maximum offering price per unit will
be determined from time to time by the registrant in connection with
the issuance by the registrant of the securities registered hereunder.
(2) Subject to note (7) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities. If any Debt
Securities are issued at an original issue discount, then the offering
price shall be in such greater principal amount as shall result in an
aggregate initial offering price not to exceed $250,000,000 less the
dollar amount of any securities previously issued hereunder. There
are also being registered hereunder an indeterminate principal amount
of Debt Securities as shall be (a) issuable (i) upon conversion or
exchange of Preferred Stock or other Debt Securities registered
hereunder and (ii) upon exercise of the Securities Warrants registered
hereunder and (b) necessary to adjust the principal amount of Debt
Securities from time to time reserved for issuance upon such exercise
in accordance with the anti-dilution provisions of any convertible or
exchangeable Preferred Stock or other Debt Securities or the
Securities Warrants.
(3) Subject to note (7) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from
time to time, by the registrant. There are also being registered
hereunder an indeterminate number of shares of Preferred Stock as
shall be (a) issuable upon exchange of Debt Securities into Preferred
Stock or exercise of the Securities Warrants registered hereunder and
(b) necessary to adjust the number of shares of Preferred Stock from
time to time reserved for issuance upon such exercise in accordance
with the anti-dilution provisions of the Securities Warrants or
exchangeable Debt Securities.
(4) Subject to note (7) below, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from
time to time, by the registrant. There are also being registered
hereunder an indeterminate number of shares of Common Stock as shall
be (a) issuable (i) upon conversion or redemption of Preferred Stock
or Debt Securities registered hereunder and (ii) upon exercise of
Securities Warrants registered hereunder, (b) necessary to adjust the
number of shares of Common Stock from time to time reserved for
issuance upon such conversion, redemption or exercise in accordance
with the anti-dilution provisions of the Debt Securities, Preferred
Stock or Securities Warrants, respectively, and (c) as a result of a
stock split, stock dividend or other adjustment to or change in the
outstanding shares of Common Stock.
(5) Subject to note (7) below, there is being registered hereunder an
indeterminate number of Securities Warrants as may be sold, from time
to time, by the registrant.
(6) Not applicable pursuant to General Instruction II.D. of Form S-3.
(7) In no event will the aggregate initial offering price of all
securities issued from time to time pursuant to this Registration
Statement exceed $250,000,000 or the equivalent thereof in one or more
foreign currencies, foreign currency units or composite currencies.
The aggregate amount of Common Stock registered hereunder is further
limited to that which is permissible under Rule 415(a)(4) under the
Securities Act. The securities registered hereunder may be sold
separately or as units with other securities registered hereunder.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to completion, dated June 14, 1996
$250,000,000
[LOGO]
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A M R E S C O
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COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES,
SECURITIES WARRANTS AND UNITS
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AMRESCO, INC. (the "Company") may offer from time to time, together
or separately, (i) shares of its common stock, par value $0.05 per share (the
"Common Stock"), (ii) shares of its preferred stock, par value $1.00 per share
(the "Preferred Stock"), (iii) its unsecured debt securities, which may be
either senior (the "Senior Debt Securities") or subordinated (the "Subordinated
Debt Securities" and, together with the Senior Debt Securities, the "Debt
Securities") and (iv) warrants (collectively, the "Securities Warrants") to
purchase Debt Securities (the "Debt Securities Warrants"), Preferred Stock (the
"Preferred Stock Warrants") or Common Stock (the "Common Stock Warrants"), in
amounts, at prices and on terms to be determined at the time of the offering
thereof. The Common Stock, Preferred Stock, Debt Securities and Securities
Warrants (collectively, the "Securities") may be offered independently or
together in any combination ("Units") for sale directly to purchasers or
through dealers, underwriters or agents to be designated. The Subordinated
Debt Securities and Preferred Stock may be convertible or exchangeable into
other series of Debt Securities, Preferred Stock or Common Stock. The
Securities offered pursuant to this Prospectus may be issued in one or more
series or issuances the aggregate offering price of which will not exceed
$250.0 million (or the equivalent thereof if the Debt Securities are
denominated in one or more foreign currencies of foreign currency units).
The specific terms of the Securities in respect of which this
Prospectus is being delivered (the "Offered Securities") will be set forth in
an accompanying supplement to this Prospectus (each, a "Prospectus
Supplement"), including, where applicable, (i) in the case of Common Stock, the
aggregate number of shares offered and by whom offered, (ii) in the case of the
Preferred Stock, the specific designation, the aggregate number of shares
offered, the dividend rate (or method of calculation thereof), the dividend
period and dividend payment dates, whether such dividends will be cumulative or
noncumulative, the liquidation preference, voting rights, if any, any terms for
optional or mandatory redemption, any terms for conversion or exchange into
other series of Debt Securities or Common Stock and any other special terms,
(iii) in the case of Debt Securities, the specific designation, aggregate
principal amount, ranking as Senior Debt Securities or Subordinated Debt
Securities, authorized denominations, maturity, any premium, rate or method of
calculation of interest, if any, and dates for payment thereof, any terms for
optional or mandatory redemption, any sinking fund provisions, any terms for
conversion or exchange into other series of Debt Securities, Preferred Stock or
Common Stock and any other special terms, (iv) the terms of any Securities
Warrants offered, including where applicable, the exercise price,
detachability, duration and other specific terms not described in this
Prospectus and (v) the initial public offering price and the net proceeds to
the Company from and other specific terms relating to the Offered Securities.
The Senior Debt Securities will rank pari passu in right of payment
with all unsubordinated indebtedness of the Company, but, except to the extent
such Senior Debt Securities are secured by collateral, will be effectively
subordinated to the rights of holders of secured and unsubordinated
indebtedness of the Company to the extent of the value of the collateral
securing such indebtedness. The Senior Debt Securities will rank senior to all
subordinated and unsecured indebtedness of the Company. The Subordinated Debt
Securities will be subordinate in right of payment to all existing and future
Senior Debt (as defined herein) of the Company, including any Senior Debt
Securities.
This Prospectus may not be used to consummate sales of Securities
unless accompanied by a Prospectus Supplement.
FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED BY
PROSPECTIVE PURCHASERS OF THE SECURITIES OFFERED HEREBY, SEE "RISK FACTORS"
BEGINNING ON PAGE 6 HEREIN AND "RISK FACTORS" IN THE PROSPECTUS SUPPLEMENT
ACCOMPANYING THIS PROSPECTUS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Company may sell the Securities (i) through underwriting
syndicates represented by managing underwriters or by underwriters without a
syndicate, with such underwriters to be designated at the time of sale, (ii)
through agents designated from time to time or (iii) directly. The names of
any underwriters or agents of the Company involved in the sale of the
Securities, the public offering price or purchase price thereof, any applicable
commissions or discounts, any other terms of the offering of such Securities
and the net proceeds to the Company from such sale will be set forth in the
applicable Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for agents, dealers and underwriters.
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The date of this Prospectus is ______________________, 1996
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
with the Exchange Act, the Company files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). The
reports, proxy statements and other information can be inspected and copied at
the public reference facilities that the Commission maintains at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048,
and Suite 1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of
these materials can be obtained at prescribed rates from the Public Reference
Section of the Commission at the principal offices of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Company's Common Stock is quoted on
the Nasdaq National Market and such reports, proxy statements and other
information may be inspected at the National Association of Securities Dealers,
Inc., 1735 K. Street N.W., Washington, D.C. 20006. The Company's 10% Senior
Subordinated Notes due 2003 are listed for trading on the New York Stock
Exchange. Reports and other information concerning the Company can be
inspected at the offices of such Exchange, 20 Broad Street, New York,
New York 10005.
The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Securities. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all the information set forth in the Registration Statement, certain
items of which are contained in schedules and exhibits to the Registration
Statement as permitted by the rules and regulations of the Commission.
Statements made in the Prospectus concerning the contents of any documents
referred to herein are not necessarily complete. With respect to each such
document filed with the Commission as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description, and each such
statement shall be deemed qualified in its entirety by such reference.
Unless otherwise indicated, currency amounts in this Prospectus and
any Prospectus Supplement are stated in United States dollars ("$," "dollars,"
"U.S. dollars," or "U.S.$").
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference
in this Prospectus: (i) Annual Report on Form 10-K for the year ended December
31, 1995, (ii) Current Report on Form 8-K dated February 2, 1996 and (iii)
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus shall
be deemed to be incorporated by reference herein. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed superseded or modified for purposes of this Prospectus to the extent
that a statement contained herein (or in any other subsequently filed document
which also is incorporated by reference herein) modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the documents incorporated
by reference (other than exhibits to such documents which are not specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to the Company, 1845 Woodall Rodgers Freeway, Suite 1700,
Dallas, Texas 75201, Attention: L. Keith Blackwell, Vice President, General
Counsel and Secretary. Telephone requests may be directed to L. Keith
Blackwell, Vice President, General Counsel and Secretary of the Company, at
(214) 953-7700.
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THE COMPANY
Certain terms used in this Prospectus are defined in the "Glossary"
included herein. Certain terms used in connection with the Debt Securities are
defined under the caption "Description of Securities -- Debt Securities --
Certain Definitions."
The Company is a leading specialty financial services company engaged
in Asset Portfolio acquisition and resolution, commercial mortgage banking,
residential mortgage securitization and institutional investment advisory
services. The Asset Portfolio acquisition and resolution business involves
acquiring at a substantial discount to Face Value and managing and resolving
Asset Portfolios to maximize cash recoveries. The Company manages and resolves
Asset Portfolios acquired by the Company alone, acquired by the Company with
co-investors and owned by third-parties. The commercial mortgage banking
business involves the origination, underwriting, placement, sale and servicing
of commercial real estate mortgages. The Company's residential capital markets
business purchases, warehouses and securitizes portfolios of residential
mortgages of borrowers who do not qualify for conventional loans. The Company's
institutional investment advisory subsidiary provides real estate investment
advice to various institutional investors (primarily pension funds).
HISTORY
The Company is the product of the December 1993 merger of two Asset
Portfolio management and resolution service companies: BEI and Holdings.
Holdings was the former Asset Portfolio management and resolution unit of
NationsBank of Texas, which unit was created in 1988 in connection with
NationsBank Corporation's acquisition from the FDIC of certain assets and
liabilities of the failed First RepublicBank. BEI, a publicly-held company that
was in the real estate and asset management services businesses, began
providing asset management and resolution services to the RTC in 1990. The BEI
Merger created one of the largest Asset Portfolio management and resolution
service companies in the United States. Since 1987, the Company and its
predecessors have managed over $30.0 billion (Face Value) of Asset Portfolios.
ASSET ACQUISITION AND RESOLUTION
The Company manages and resolves Asset Portfolios acquired at a
substantial discount to Face Value by the Company alone and by the Company with
co-investors. The Company also manages and resolves Asset Portfolios owned by
third parties. Management of Asset Portfolios includes both resolving loans and
providing routine accounting services, monitoring collections of interest and
principal (if any), confirming (or advancing) insurance premium and tax
payments due on collateral and generally overseeing and managing, if necessary,
collateral condition and performance. Asset Portfolios generally include
secured loans of varying qualities and collateral types. The majority of the
loans in the Asset Portfolios in which the Company invests are in payment
default at the time of acquisition. Although some Asset Portfolios include
foreclosed real estate and other collateral, the Company generally seeks Asset
Portfolios that do not include such assets. The Company's policy is to not
refinance or renew purchased loans.
COMMERCIAL MORTGAGE BANKING
The Company performs a wide range of commercial mortgage banking
services, including originating, underwriting, placing, selling and servicing
of commercial real estate loans through its Holliday Fenoglio and ACC mortgage
banking units. The Company also engages in the commercial loan servicing
business, serving as a Primary Servicer for whole loans and as a Master
Servicer for securitized pools of commercial mortgages through its AMRESCO
Services unit.
Holliday Fenoglio primarily serves commercial real estate developers
and owners by originating commercial real estate loans through its own
commission-based mortgage bankers. The loans originated by Holliday Fenoglio
generally are funded by institutional lenders, primarily insurance companies,
and Conduit Purchasers, with Holliday Fenoglio retaining the Primary Servicer
rights on more than a quarter of such loans.
ACC is a mortgage banker that originates and underwrites commercial
real estate loans that are funded primarily by Conduit Purchasers. ACC
primarily targets commercial mortgage loans for commercial real estate
properties that are suitable for sale to Conduit Purchasers accumulating loans
for securitization programs. ACC serves its market directly through branch
offices, as well as through a network of independent mortgage brokers. ACC is
an approved Fannie Mae DUS lender, which ACC believes will make it an even more
competitive loan originator and underwriter of multi-family mortgages. ACC is
also an approved lender in the Freddie Mac multi-family sales/servicer program
in the states of Florida, North Carolina and South Carolina.
RESIDENTIAL CAPITAL MARKETS
The Company purchases (in bulk from independent originators),
warehouses and securitizes portfolios of residential mortgages of borrowers who
do not qualify for conventional loans and whose borrowing needs are not met by
traditional residential mortgage lenders. Such borrowers may not satisfy the
more rigid underwriting standards of the traditional residential mortgage
lending market for a number of reasons, such as blemished credit histories
(from past loan delinquencies or bankruptcy), inability to provide income
verification data or lack of established
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credit history. The Company believes that this market is underserved by
traditional lenders, and therefore there is less competition and interest rates
are higher than for more credit-worthy mortgage borrowers.
INSTITUTIONAL INVESTMENT ADVISORY
The Company provides real estate investment advice to various
institutional investors (primarily pension funds). Although the Company is paid
acquisition and disposition fees by some of its clients, its principal source
of revenue is asset management fees, which are based on the cash flow of the
investments under management or are negotiated at the time of the client's
investment in a property.
The Company is a Delaware corporation. The Company's principal
executive offices are located at 1845 Woodall Rodgers Freeway, Suite 1700,
Dallas, Texas 75201 and its telephone number is (214) 953-7700.
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<PAGE> 8
RISK FACTORS
Investors should carefully consider the following matters in
connection with an investment in the Securities in addition to the other
information contained or incorporated by reference in this Prospectus or in the
accompanying Prospectus Supplement. Information contained or incorporated by
reference in this Prospectus or in the accompanying Prospectus Supplement may
contain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, which can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "anticipate,"
"estimate" or "continue" or the negative thereof or other variations thereon or
comparable terminology. The following matters and other factors noted
throughout this Prospectus and any Prospectus Supplement accompanying this
Prospectus, as well as any exhibits and attachments to this Prospectus and such
Prospectus Supplement, constitute cautionary statements identifying important
factors with respect to any such forward-looking statements, including certain
risks and uncertainties that could cause actual results to differ materially
from those reflected in such forward-looking statements.
UNCERTAIN NATURE OF THE ASSET ACQUISITION AND RESOLUTION BUSINESS
The outsourcing of the management and resolution of Asset Portfolios
has grown rapidly since the late 1980s; accordingly, the Asset Portfolio
acquisition and resolution business is relatively young and still evolving.
This business is affected by long-term cycles in the general economy. In
addition, the volume of domestic Asset Portfolios available for purchase by
investors or management by third party servicers such as the Company has
generally declined since 1993. The Company cannot predict what will be a normal
annual volume of Asset Portfolios to be sold or outsourced for management and
resolution. Moreover, there cannot be any assurance that Asset Portfolio
purchasers/owners for whom the Company provides Asset Portfolio management
services will not build their own management and resolution staffs and reduce
or eliminate their outsourcing of these services. In addition, increased
competition for Asset Portfolios will continue to impact the Company's ability
to invest in Asset Portfolios and to obtain management and resolution contracts
from third party buyers. As a result of these factors, it is difficult to
predict the long-term future of this business. See " -- Competition."
DIVERSIFICATION IN BUSINESS LINES AND MANAGEMENT OF GROWTH
In early 1994, the Company made the strategic decision to diversify
its business lines and to reduce the Company's dependence on asset management
and resolution contracts with governmental agencies and certain other entities.
The Company has substantially increased its investments in Asset Portfolios.
The Company also pursues private sector Asset Portfolio management contracts,
generally through co-investing in Asset Portfolios. Since 1993, the Company has
also entered the commercial mortgage banking, residential capital markets and
institutional investment advisory businesses through a combination of
acquisitions and the internal start-ups of new business lines.
As a result, the Company must simultaneously manage (i) a significant
change in its customer mix, (ii) the investment of the Company's own capital in
Asset Portfolios and its commercial mortgage banking and residential capital
markets business lines and (iii) the development of other new business lines in
which the Company has not previously participated. All of these activities will
require the investment of additional capital and the significant involvement of
senior management to achieve a successful outcome. There is no assurance that
the Company will successfully execute this strategic transition.
The rapid entry of the Company into new business lines has resulted in
increased demands on the Company's personnel and systems. The Company must
successfully continue its assimilation of multiple acquired businesses with
differing cultures, systems and managements. The Company's ability to support,
manage and control continued growth is dependent upon, among other things, its
ability to hire, train, supervise and manage its workforce and to continue to
develop the skills necessary for the Company to compete successfully in its new
business lines. There can be no assurance that the Company will successfully
meet all of these challenges.
GENERAL ECONOMIC CONDITIONS
Periods of economic slowdown or recession, rising interest rates or
declining demand for real estate may adversely affect certain segments of the
Company's business. Although such economic conditions may increase the number
of non-performing loans available for sale to or for management by the Company,
such conditions could adversely affect the resolution of Asset Portfolios held
by the Company for its own account or managed for others, lead to a decline in
prices or demand for collateral underlying Asset Portfolios or, in the case of
Asset Portfolios held for the Company's own account, increase the cost of
capital invested by the Company and the length of time that capital is invested
in a particular Asset Portfolio, thereby negatively impacting the rate of
return realized from such Asset Portfolio. Economic downturns and rising
interest rates also may reduce the number of loan originations by the Company's
commercial mortgage banking business and negatively impact its commercial and
residential mortgage securitization activity.
NEED FOR ADDITIONAL FINANCING
The Company's ability to execute its business strategy depends to a
significant degree on its ability to obtain additional indebtedness and equity
capital. Other than as described in this Prospectus or any accompanying
Prospectus Supplement, the Company has no commitments for additional borrowings
or sales of equity capital and
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there can be no assurance that the Company will be successful in consummating
any such future financing transactions on terms satisfactory to the Company, if
at all. Factors which could affect the Company's access to the capital markets,
or the costs of such capital, include changes in interest rates, general
economic conditions and the perception in the capital markets of the Company's
business, results of operations, leverage, financial condition and business
prospects. Each of these factors is to a large extent subject to economic,
financial, competitive and other factors beyond the Company's control. In
addition, covenants under the Company's current and future debt securities and
credit facilities may significantly restrict the Company's ability to incur
additional indebtedness and to issue Preferred Stock. The Company's ability to
repay its outstanding indebtedness, including the Debt Securities, at maturity
may depend on its ability to refinance such indebtedness, which could be
adversely affected if the Company does not have access to the capital markets
for the sale of additional debt or equity securities through public offerings or
private placements on terms reasonably satisfactory to the Company.
The Company's commercial and residential mortgage securitization
businesses depend upon warehouse facilities with financial institutions or
institutional lenders to finance the Company's purchase of loans on a
short-term basis pending sale or securitization. Implementation of the
Company's growth strategy requires continued availability of warehouse
facilities and may require increases in the capacity of warehouse facilities.
There can be no assurance that such financing will be available on terms
reasonably satisfactory to the Company. The inability of the Company to
arrange additional warehouse facilities or to extend or replace existing
facilities when they expire would have a material adverse effect on the
Company's business, financial condition and results of operations and on the
Company's outstanding securities.
SIGNIFICANCE OF SECURITIZATION
The Company currently believes that it will become increasingly
dependent upon its ability to securitize mortgage loans by pooling and
subsequently selling them in the secondary market in order to generate
revenues, earnings and cash flows. Accordingly, adverse changes in the
secondary mortgage market could impair the Company's ability to originate,
purchase and sell mortgage loans on a favorable or timely basis. Any such
impairment could have a material adverse effect upon the Company's business and
results of operations. The Company endeavors to effect public securitizations
of its loans on at least a quarterly basis. However, market and other
considerations, including the conformity of loans to insurance company and
rating agency requirements, could affect the timing of such transactions. Any
delay in the sale of loans beyond a quarter end would delay any expected gain
on sale beyond the given quarter and adversely affect the Company's reported
earnings for such quarter.
IMPORTANCE OF CREDIT ENHANCEMENT
In order to gain access to the secondary market for residential
mortgage-backed securities, the Company may rely on monoline insurance
companies to provide, in exchange for premiums, a guarantee on outstanding
senior interests in the related securitization trusts to enable it to obtain a
"AAA/Aaa" rating for such interests. Any unwillingness of monoline insurance
companies to guarantee the senior interests in the Company's loan pools could
have a material adverse effect on the Company's financial position and results
of operations.
ASSET PERFORMANCE ASSUMPTIONS
The Company's business, financial condition, results of operations and
liquidity depend, to a material extent, on the performance of loans owned
directly or backing securities purchased and sold by the Company. The
carrying value of the Company's principal assets has been determined in part
using estimates of future cash flows based on assumptions concerning future
default and prepayment rates that are consistent with the Company's historical
experience and market conditions and present value discount rates that the
Company believes would be requested by an unrelated purchaser of an identical
stream of estimated cash flows. Management believes that the Company's
estimates of cash flows are reasonable at the time such estimates are made.
However, the actual rates of default and/or prepayment on such assets may
exceed those estimated and consequently may adversely affect anticipated future
cash flows and results of operations. The Company periodically reviews its
prepayment and loss assumptions in relation to current performance of the loans
and market conditions and, if necessary, provides for the impairment of the
respective asset. The Company's business, financial condition and results of
operations could be materially adversely affected by such adjustments in the
future. No assurance can be given that loan losses and prepayments will not
exceed the Company's estimates or that such assets could be sold at their
stated value on the balance sheet, if at all.
RETAINED RISKS OF LOANS SOLD OR SECURITIZED
In connection with the Company's sale of certain loans or securities,
the Company retains certain risks of loss associated with unrated or higher
default risk loans or assets. In addition, the Company must also make certain
representations and warranties concerning loans originated by the Company and
sold to Conduit Purchasers or Fannie Mae. These representations cover such
matters as title to the property, lien priority, environmental reviews and
certain other matters. In connection with its residential capital markets
business, the Company also makes various representations with respect to the
loans that it pools and securitizes. The Company's representations rely in part
on similar representations made by the originators of such loans to the Company.
The Company would have a claim against the originator in the event of a breach
of any of these representations made by the originators, however, the
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<PAGE> 10
Company's ability to recover on any such claim is dependent on the financial
condition of the originator. There can be no assurance that the Company will
not experience a material loss in respect of any of these contingencies.
RESIDENTIAL MORTGAGE MARKET CONDITIONS
Periods of economic slowdown or recession, whether general, regional
or industry-related, may increase the risk of default on residential mortgage
loans and may have an adverse effect on the Company's business, financial
condition and results of operations. Such periods also may be accompanied by
decreased consumer demand for residential mortgages, resulting in declining
values of homes securing outstanding loans, thereby weakening collateral
coverage and increasing the possibility of losses in the event of default.
Significant increases in homes for sale during recessionary economic periods
may depress the prices at which foreclosed homes may be sold or delay the
timing of such sales. There can be no assurance that the housing markets will
be adequate for the sale of foreclosed homes and any material deterioration of
such markets could reduce recoveries from the sale of repossession inventory.
INTEREST RATES
The Company's earnings and the value of its interest-earning assets
and liabilities may be directly affected by the level of and fluctuations in
interest rates. The Company monitors the interest rate environment and employs
prefunding or other hedging strategies designed to mitigate the impact of
changes in interest rates. However, there can be no assurance that the
profitability of the Company would not be adversely affected during any period
of changes in interest rates. A significant decline in interest rates could
result in increased prepayment of outstanding loans.
FOREIGN OPERATIONS
The Company's asset management and resolution business has entered
into, and intends to continue to enter into, contracts to purchase and to manage
and resolve Asset Portfolios located in Canada and Western Europe and, may in
the future, expand into other foreign countries. Foreign operations are subject
to various special risks, including currency exchange rate fluctuations (which
the Company intends to mitigate with currency hedging arrangements as available
and economical) and exchange controls. Changes in foreign exchange rates may
have an adverse effect on the Company's financial condition and results of
operations. In addition, earnings of foreign operations are subject to foreign
income taxes that reduce cash flow available to meet debt service requirements
and other obligations of the Company, which may be payable even if the Company
has no earnings on a consolidated basis.
RISKS OF HEDGING TRANSACTIONS
The Company has in the past and may in the future enter into interest
rate or foreign currency financial instruments used for hedging purposes. While
intended to reduce the effects of volatility in interest rate or foreign
currency price movements, such transactions could cause the Company to
recognize losses depending on the terms of the instrument and the interest rate
or foreign currency price movement.
COMPETITION
The Asset Portfolio management and resolution and other financial
services industries in which the Company operates are highly competitive. Some
of the Company's principal competitors in certain business lines are
substantially larger and better capitalized than the Company. Because of these
resources, these companies may be better able than the Company to obtain new
customers, to acquire Asset Portfolios, to pursue new business opportunities or
to survive periods of industry consolidation.
The Company believes that its ability to acquire Asset Portfolios for
its own account will be important to its future growth. Acquisitions of Asset
Portfolios are often based on competitive bidding, where there are dangers of
bidding too low (which generates no business), as well as of bidding too high
(which could win the Asset Portfolio at an economically unattractive price). In
addition, the increasing competition in this business line could cause the
Company to experience decreasing profit margins in its Asset Portfolio business
in order to remain a competitive bidder for Asset Portfolios.
The Company also encounters significant competition in its other
business lines. The commercial mortgage banking business is highly fragmented
with certain large national competitors and significant localized competition.
In addition, within the commercial loan origination and residential mortgage
securitization business, access to and the cost of capital are critical to the
Company's ability to compete. The Company must compete with numerous
competitors, many of whom have superior access to capital sources and can
arrange or obtain lower cost capital for customers.
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<PAGE> 11
USE OF PROCEEDS
The net proceeds from the sale of the Offered Securities, together
with internally generated funds, will be used (i) to repay, redeem or
repurchase outstanding indebtedness of the Company, (ii) for general operations
of the Company, including acquisitions, investments, capital expenditures and
working capital requirements and (iii) for such other purposes as may be
specified in the related Prospectus Supplement.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's and its predecessors'
consolidated ratios of earnings to fixed charges and earnings to combined fixed
charges and Preferred Stock dividends for each of the three months ended March
31, 1996 and 1995 and the years ended December 31, 1995, 1994, 1993, 1992 and
1991 on an historical basis.
<TABLE>
<CAPTION>
Three Months
Ended March 31, Year Ended December 31,
--------------- ---------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1) . . 2.5x 13.9x 5.4x 21.2x 58.9x (2) (2)
Ratio of earnings to combined fixed
charges and Preferred Stock
dividends(3) . . . . . . . . . 2.5x 13.9x 5.4x 21.2x 58.9x (2) (2)
</TABLE>
- --------------------------
(1) For purposes of calculating the ratio of earnings to fixed charges,
earnings consist of operating income before income taxes and fixed
charges. Fixed charges consist of interest expense and amortization
of debt issuance costs.
(2) The Company or its predecessors had no or nominal interest expense in
1991 and 1992 and it was not meaningful, therefore, to calculate these
ratios for the years ended December 31, 1992 and 1991.
(3) The Company did not have any Preferred Stock outstanding during any of
these periods.
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<PAGE> 12
DESCRIPTION OF SECURITIES
The following description of the terms of the Securities sets forth
certain general terms and provisions of the Securities to which any Prospectus
Supplement may relate. The particular terms of the Securities offered by any
Prospectus Supplement and the extent, if any, to which such general provisions
may apply to the Securities so offered will be described in the Prospectus
Supplement relating to such Securities.
The Company is authorized to issue 50,000,000 shares of Common Stock,
par value $0.05 per share, and 5,000,000 shares of Preferred Stock, par value
$1.00 per share. As of June 1, 1996, the Company had issued and outstanding
26,847,282 shares of Common Stock and no shares of Preferred Stock. As of such
date, there were approximately 3,000 holders of record of the outstanding
shares of Common Stock.
The following summary of the Company's Common Stock and Preferred
Stock is qualified in its entirety by reference to the Company's Amended and
Restated Certificate of Incorporation (the "Certificate of Incorporation"), its
Amended and Restated Bylaws (the "Bylaws"), and the Delaware General
Corporation Law, as amended (the "DGCL").
COMMON STOCK
General. Subject to such preferential rights as may be granted by the
Board of Directors in connection with any issuances of Preferred Stock, holders
of shares of Common Stock are entitled to receive such dividends as may be
declared by the Board of Directors in its discretion from funds legally
available therefor. From October 1993 through October 1995, the Company paid a
quarterly dividend of $0.05 per share on shares of Common Stock. In October
1995, the Company announced that it would discontinue its policy of paying cash
dividends. The Board of Directors determined to retain all earnings to support
anticipated growth in the current operations of the Company and to finance
future expansion. The Company's Revolving Loan Agreement, the Senior
Subordinated Notes Indenture and the Convertible Subordinated Debenture
Indenture restrict the payment of cash dividends unless certain earnings tests
are satisfied. Additional restrictions on the payment of cash dividends may be
imposed in connection with future issuances of Preferred Stock and indebtedness
by the Company, including issuances of Debt Securities and Preferred Stock
contemplated by this Prospectus. Further declarations and payments of cash
dividends, if any, will also be determined in light of then- current
conditions, including the Company's earnings, operations, capital requirements,
liquidity, financial condition, restrictions in financing agreements and other
factors deemed relevant by the Board of Directors. Upon the liquidation,
dissolution or winding up of the Company, after payment of creditors, the
remaining net assets of the Company will be distributed pro rata to the holders
of Common Stock, subject to any liquidation preference of the holders of
Preferred Stock. There are no preemptive rights, conversion rights, or
redemption or sinking fund provisions with respect to the shares of Common
Stock. All of the outstanding shares of Common Stock are duly and validly
authorized and issued, fully paid and non-assessable.
Voting Rights. Holders of Common Stock are entitled to one vote per
share of Common Stock held of record on all such matters submitted to a vote of
the stockholders. Holders of the shares of Common Stock do not have cumulative
voting rights. As a result, the holders of a majority of the outstanding shares
of Common Stock voting for the election of directors can elect all the
directors, and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any persons to the Board of Directors.
Delaware Law and Certain Corporate Provisions. The Company is subject
to the provisions of Section 203 of the DGCL. In general, this statute
prohibits a publicly-held Delaware corporation from engaging, under certain
circumstances, in a "business combination" with an "interested stockholder" for
a period of three years after the date of the transaction in which the person
becomes an interested stockholder, unless either (i) prior to the date at which
the stockholder became an interested stockholder the Board of Directors
approved either the business combination or the transaction in which the person
becomes an interested stockholder, (ii) the stockholder acquires more than 85%
of the outstanding voting stock of the corporation (excluding shares held by
directors who are officers or held in certain employee stock plans) upon
consummation of the transaction in which the stockholder becomes an interested
stockholder or (iii) the business combination is approved by the Board of
Directors and by two-thirds of the outstanding voting stock of the corporation
(excluding shares held by the interested stockholder) at a meeting of the
stockholders (and not by written consent) held on or subsequent to the date on
which the person became an "interested stockholder" of the business
combination. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or is an affiliate or associate of the
corporation and, together with affiliates and associates, at any time within
the prior three years did own) 15% or more of the corporation's voting stock.
Section 203 defines a "business combination" to include, without limitation,
mergers, consolidations, stock sales and asset based transactions and other
transactions resulting in a financial benefit to the interested stockholder.
The Company's Certificate of Incorporation and Bylaws contain a number
of provisions relating to corporate governance and to the rights of
stockholders. Certain of these provisions may be deemed to have a potential
"anti- takeover" effect in that such provisions may delay, defer or prevent a
change of control of the Company. These provisions include (i) the
classification of the Board of Directors into three classes, each class serving
for staggered three-year terms; (ii) the authority of the Board of Directors to
determine the size of the Board of Directors, subject to certain minimums and
maximums; (iii) the authority of certain members of the Board of Directors to
fill vacancies on the Board of Directors; (iv) a requirement that special
meetings of stockholders may be called only by the Board of Directors, the
Chairman of the Board or holders of at least one-tenth of all the shares
entitled to vote at the
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<PAGE> 13
meeting; (v) the elimination of stockholder action by written consent; (vi) the
authority of the Board of Directors to issue series of Preferred Stock with
such voting rights and other powers as the Board of Directors may determine;
(vii) the requirement that the Article in the Certificate of Incorporation
creating the staggered board may only be amended by the vote of at least 66
2/3% of the voting securities of the Company; (viii) the prohibition on
amending or rescinding, before December 31, 1996, the Article in the
Certificate of Incorporation related to the filling of vacancies on the Board
of Directors; and (ix) a requirement that any business combination between the
Company and a beneficial owner of more than five percent of any class of an
equity security of the Company must be approved by the holders of a majority of
the Company's securities, excluding those securities held by such beneficial
owner, voted at a meeting called for the purpose of approving such business
combination.
Indemnification and Limited Liability. The Company's Certificate of
Incorporation and Bylaws require the Company to indemnify the directors and
officers of the Company to the fullest extent permitted by law. In addition,
as permitted by the DGCL, the Company's Certificate of Incorporation and Bylaws
provide that no director of the Company will be personally liable to the
Company or its stockholders for monetary damages for such director's breach of
duty as a director. This limitation of liability does not relieve directors
from liability for (i) any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) any
liability under Section 174 of the DGCL for unlawful distributions or (iv) any
transaction from which the director derived an improper personal benefit. This
provision of the Certificate of Incorporation will limit the remedies available
to a stockholder who is dissatisfied with a decision of the Board of Directors
protected by this provision, and such stockholder's only remedy in that
circumstance may be to bring a suit to prevent the action of the Board of
Directors. In many situations, this remedy may not be effective, including
instances when stockholders are not aware of a transaction or an event prior to
action of the Board of Directors in respect of such transaction or event.
Subject to certain limitations, the Company's officers and directors
are insured against losses arising from claims made against them for wrongful
acts which they may become obligated to pay or for which the Company may be
required to indemnify them.
Registration Rights. The Company has entered into an agreement
granting registration rights (the "Registration Rights Agreement") with certain
holders of Common Stock. Pursuant to the Registration Rights Agreement, these
holders may exercise demand or "piggyback" registration rights with respect to
shares of Common Stock held by them. The Company is obligated to register
stock on only two occasions pursuant to the demand registration rights. The
Registration Rights Agreement has a term of three years (ending on December 31,
1996) for demand registration rights and five years (ending on December 31,
1998) for "piggyback" registration rights. These registration rights are
subject to certain conditions and limitations, including the right of
underwriters to restrict the number of shares offered in a registration.
Other Matters. The Common Stock is listed on Nasdaq National Market
under the symbol "AMMB." Sun Trust Bank, Atlanta, Georgia, is the transfer
agent and registrar for the Common Stock.
PREFERRED STOCK
The description of certain provisions of the Preferred Stock set forth
below and in any Prospectus Supplement does not purport to be complete and is
subject to and qualified in its entirety by reference to the Company's
Certificate of Incorporation, and the Certificate of Designation relating to
each series of Preferred Stock, which will be filed with the Secretary of State
of Delaware and the Commission in connection with the offering of such series
of Preferred Stock.
General. The Board of Directors may, without approval of the
Company's stockholders, establish series of Preferred Stock having such voting
powers, and such designations, preferences and relative, participating,
optional and other special rights, and qualifications, limitations or
restrictions thereof, as the Board of Directors may determine.
The Preferred Stock will have the dividend, liquidation and voting
rights set forth below unless otherwise provided in the Prospectus Supplement
relating to a particular series of Preferred Stock. Reference is made to the
Prospectus Supplement relating to the particular series of Preferred Stock
offered thereby for specific terms, including: (i) the designation and stated
value per share of such Preferred Stock and the number of shares offered; (ii)
the amount of liquidation preference per share; (iii) the price at which such
Preferred Stock will be issued; (iv) the dividend rate (or method of
calculation), the dates on which dividends will be payable, whether such
dividends will be cumulative or noncumulative and, if cumulative, the dates
from which dividends will accrue; (v) any redemption or sinking fund
provisions; (vi) any terms by which such series of Preferred Stock may be
convertible into or exchanged for Common Stock or Debt Securities; and (vii)
any additional or other rights, preferences, privileges, limitations and
restrictions relating to such series of Preferred Stock.
The Preferred Stock will be issued in one or more series. The holders
of Preferred Stock will have no preemptive rights. Preferred Stock will be
fully paid and nonassessable upon issuance against full payment of the purchase
price therefor. Unless otherwise specified in the Prospectus Supplement
relating to a particular series of Preferred Stock, each series of Preferred
Stock will, with respect to dividend rights and rights on liquidation,
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<PAGE> 14
dissolution and winding up of the Company, rank prior to the Common Stock (the
"Junior Stock") and on a parity with each other series of Preferred Stock (the
"Parity Stock").
Dividend Rights. Holders of the Preferred Stock of each series will
be entitled to receive when, as and if declared by the Board of Directors of
the Company, out of funds legally available therefor, cash dividends at such
rates and on such dates as are set forth in the Prospectus Supplement relating
to such series of Preferred Stock. Such rate may be fixed or variable or both.
Each such dividend will be payable to the holders of record as they appear on
the stock books of the Company on such record dates as will be fixed by the
Board of Directors of the Company. Dividends on any series of the Preferred
Stock may be cumulative or noncumulative, as provided in the Prospectus
Supplement relating thereto. If the Board of Directors of the Company fails to
declare a dividend payable on a dividend payment date on any series of
Preferred Stock for which dividends are noncumulative, then the right to
receive a dividend in respect of the dividend period ending on such dividend
payment date will be lost, and the Company will have no obligation to pay the
dividend accrued for that period, whether or not dividends are declared for any
future period. Dividends on shares of each series of Preferred Stock for which
dividends are cumulative will accrue from the date set forth in the applicable
Prospectus Supplement.
The Preferred Stock of each series will include customary provisions
(i) restricting the payment of dividends or the making of other distributions
on, or the redemption, purchase or other acquisition of, Junior Stock unless
full dividends, including in the case of cumulative Preferred Stock, accruals,
if any, in respect of prior dividend periods, on the shares of such series of
Preferred Stock have been paid and (ii) providing for the pro rata payment of
dividends on such series and other Parity Stock when dividends have not been
paid in full upon such series and other Parity Stock.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of each
series of Preferred Stock will be entitled to receive out of assets of the
Company available for distribution to stockholders, before any distribution of
assets is made to holders of Junior Stock, liquidating distributions in the
amount set forth in the Prospectus Supplement relating to such series of
Preferred Stock plus an amount equal to accrued and unpaid dividends. If, upon
any voluntary or involuntary liquidation, dissolution or winding up of the
Company, the amounts payable with respect to the Preferred Stock of any series
and any Parity Stock are not paid in full, the holders of the Preferred Stock
of such series and of such Parity Stock will share ratably in any such
distribution of assets of the Company in proration to the full respective
preferential amounts (which may include accumulated dividends) to which they
are entitled. After payment of the full amount of the liquidating distribution
to which they are entitled, the holders of such series of Preferred Stock will
have no right or claim to any of the remaining assets of the Company. Neither
the sale of all or a portion of the Company's assets nor the merger or
consolidation of the Company into or with any other corporation shall be deemed
to be a dissolution, liquidation or winding up, voluntarily or involuntarily,
of the Company.
Voting Rights. Except as indicated below or in the Prospectus
Supplement relating to a particular series of the Preferred Stock, or except
as expressly required by the DGCL, the holders of the Preferred Stock will not
be entitled to vote. In the event the Company issues shares of a series of the
preferred Stock, unless otherwise indicated in the Prospectus Supplement
relating to such series, each share will be entitled to one vote on matters
on which holders of such series are entitled to vote. In the case of any
series of Preferred Stock having one vote per share on matters on which
holders of such series are entitled to vote, the voting power of such series,
on matters on which holders of such series and holders of any other series of
Preferred Stock are entitled to vote as a single class, will depend on the
number of shares in such series, not the aggregate stated value, liquidation
preference or initial offering price of the shares of such series of the
Preferred Stock.
DEBT SECURITIES
The following description of the terms of the Debt Securities sets
forth certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. Particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general and specific provisions may apply to the Debt Securities so offered
will be described in the Prospectus Supplement relating to such Debt
Securities. The Debt Securities may be issued either separately, or together
with, or upon conversion of or in exchange for, other Securities.
The Senior Debt Securities and the Subordinated Debt Securities will
be issued under the indentures (the "Senior Indenture" and the "Subordinated
Indenture," respectively) between the Company and the Trustee named in the
applicable Prospectus Supplement. The forms of Senior Indenture and
Subordinated Indenture (collectively, the "Indentures") have been filed as
exhibits to the Registration Statement of which this Prospectus is a part. The
following brief summary of certain provisions of the Indentures does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to all of the provisions of, the Indentures, and is further qualified
by any description contained in the applicable Prospectus Supplement or
Prospectus Supplements. Certain terms capitalized and not otherwise defined
herein are defined in the Indentures. Wherever particular sections or defined
terms of the Indentures are referred to, such sections or defined terms are
incorporated herein by reference.
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<PAGE> 15
General. The Debt Securities may be issued from time to time in one or
more series. The terms of each series of Debt Securities, including without
limitation any restrictive covenants with respect thereto, will be established
by or pursuant to a resolution of the Board of Directors of the Company and set
forth or determined in the manner provided in an Officers' Certificate or by a
supplemental indenture. The particular terms of the Debt Securities offered
pursuant to any Prospectus Supplement or Prospectus Supplements will be
described in such Prospectus Supplement or Prospectus Supplements.
The amount of Debt Securities offered by this Prospectus will be
limited to the amount of Securities set forth on the cover of this Prospectus
that have not been otherwise issued or reserved for issuance. The Indentures
will not limit the aggregate principal amount of Debt Securities that may be
issued thereunder.
The Senior Debt Securities will rank pari passu in right of payment
with all unsubordinated indebtedness of the Company, but, except to the extent
such Senior Debt Securities are secured by collateral, will be effectively
subordinated to the rights of holders of secured and unsubordinated
indebtedness of the Company to the extent of the value of the collateral
securing such indebtedness. The Senior Debt Securities will rank senior to all
subordinated and unsecured indebtedness of the Company. The Subordinated Debt
Securities will be unsecured and will be subordinated in right of payment to
all existing and future Senior Debt of the Company, including the Senior Debt
Securities, as described under "Subordination of Subordinated Debt Securities."
The applicable Prospectus Supplement will indicate the form,
registered or bearer, and denominations in which Debt Securities of any series
may be issued. Debt Securities may be issuable in the form of one or more
Global Securities, as described below under "Global Securities." The Debt
Securities (other than those issued in the form of a Global Security) are
exchangeable or transferable without charge therefor, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith and require the holders to furnish
appropriate endorsements and transfer documents. (Indenture Section 305)
Debt Securities may be issued as original issue discount securities to
be sold at a substantial discount below their principal amount. Special
federal income tax and other considerations applicable thereto and special
federal tax and other considerations applicable to any Debt Securities which
are denominated in a currency other than U. S. dollars will be described in the
Prospectus Supplement or Prospectus Supplements relating thereto.
Principal of and any premium and interest on the Debt Securities will
be payable, and the transfer of the Debt Securities will be registrable at the
office or agency maintained for such purpose. Interest on any Debt Security
that is payable will be paid to the Person in whose name that Debt Security is
registered in the Security Register. In addition, payment of interest may be
made at the option of the Company by check mailed to the address of the Person
entitled thereto as it appears on the Security Register or by wire transfer to
an account maintained by the Person entitled to such interest. (Indenture
Sections 301 and 307)
The applicable Prospectus Supplement or Prospectus Supplements will
describe the terms of the Debt Securities offered thereby, including the
following: (i) the title of the offered Debt Securities and whether the offered
Debt Securities are Senior Debt Securities or Subordinated Debt Securities;
(ii) any limit on the aggregate principal amount of the offered Debt
Securities; (iii) the Person to whom any interest on the offered Debt
Securities will be payable, if other than the Person in whose name they are
registered on the regular record date for such interest; (iv) the date or
dates, or the method by which such date or dates are determined or extended, on
which the principal or installments of principal and premium, if any, of the
offered Debt Securities is or are payable; (v) the rate or rates (which may be
fixed or variable) at which the offered Debt Securities will bear interest, if
any, or the method by which such rate or rates shall be determined, the date
from which any such interest will accrue, the dates on which such interest on
the offered Debt Securities will be payable and the regular record dates
therefor, the circumstances, if any, in which the Company may defer interest
payments and the basis for calculating interest if other than a 360-day year of
twelve 30-day months; (vi) the place or places where the principal of and
premium, if any, and interest on the offered Debt Securities will be payable
and the offered Debt Securities may be surrendered for registration of transfer
or exchange if other than those provided for in the Senior Indenture or the
Subordinated Indenture; (vii) if applicable, the period or periods within
which, the price or prices at which and the terms and conditions upon which the
offered Debt Securities may be redeemed, in whole or in part, at the option of
the Company; (viii) the obligation, if any, of the Company to redeem or
purchase Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof and the period or
periods within which, the price or prices at which and the terms and conditions
upon which Debt Securities of the series shall be redeemed or purchased in
whole or in part pursuant to such obligation; (ix) whether the Debt Securities
of the series will be convertible into shares of Common Stock and/or
exchangeable for other securities, and if so, the terms and conditions upon
which such Debt Securities will be so convertible or exchangeable and any
deletions from or modifications or additions to the applicable Indenture to
permit or to facilitate the issuance of such convertible or exchangeable Debt
Securities or the administration thereof; (x) the identity of each Security
Registrar and Paying Agent if other than or in addition to the Trustee; (xi) if
the amount of principal of or any premium or interest on the offered Debt
Securities may be determined by reference to an index or pursuant to a formula,
the manner in which such amounts shall be determined; (xii) the applicability
of, and any addition to or change in the covenants and definitions set forth in
the applicable Indenture; (xiii) the denominations in which any offered Debt
Securities will be issuable, if other than denominations of $1,000 or any
amount in excess thereof which is an integral multiple of $1,000; (xiv) if
other than U.S. dollars the currency or currencies for the payment of principal
of and any premium and interest on the offered Debt Securities and the manner
of determining the U.S. dollar equivalent of the principal amount thereof for
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<PAGE> 16
purposes of the definition of "outstanding" and, if the principal of or any
premium or interest on the offered Debt Securities is to be payable, at the
election of the Company or the holder thereof, in one or more currencies other
than that or those in which the offered Debt Securities are stated to be
payable, the currency, currencies or currency units in which payment of the
principal of and any premium and interest on such offered Debt Securities of
such series as to which such election is made shall be payable, and the periods
within which and the terms and conditions upon which such election is to be
made; (xv) any other event or events of default applicable with respect to the
offered Debt Securities in addition to or in lieu of those described below
under "Events of Default" and any change in the right of the Trustee or the
holders to declare the principal of or any premium or interest on the offered
Debt Securities due and payable; (xvi) if less than the principal amount
thereof, the portion of the principal payable upon acceleration of such Debt
Securities following an Event of Default; (xvii) whether such Debt Securities
are to be issued in whole or in part in the form of one or more Global
Securities and, if so, the identity of the depositary for such Global Security
or Securities, and any circumstances under which any such Global Security may
be exchanged for Debt Securities registered in the name of, and any transfer of
such Global Security may be registered to, a Person other than such depositary
or its nominee, if other than those described in the applicable Indenture (see
"Global Securities"); (xviii) if applicable, that the offered Debt Securities,
in whole or in any specified part, are not defeasible; and (xix) any other
terms of the offered Debt Securities not inconsistent with the provisions of
the applicable Indenture. (Indenture Section 301)
If the purchase price of any Debt Securities is payable in a currency
other than U.S. dollars or if principal of or premium, if any, or interest, if
any, on any of the Debt Securities is payable in any currency other than U.S.
dollars, the specific terms and other information with respect to such Debt
Securities and such foreign currency, including any material foreign currency
risks, will be specified in the Prospectus Supplement or Prospectus Supplements
relating thereto.
Under the Indentures, the terms of the Debt Securities of any series
may differ, and the Company, without the consent of the holders of the Debt
Securities of any series, may reopen a previous series of Debt Securities and
issue additional Debt Securities of such series or establish additional terms
of such series.
Redemption. Except as set forth in the Prospectus Supplement with
respect to any offered Debt Securities or series thereof, the Company is not
required to make mandatory redemption or sinking fund payments with respect to
the Debt Securities. The Prospectus Supplement relating to any offered Debt
Securities or series thereof will specify the provisions, if any, regarding
sinking fund provisions related to such Debt Securities or series thereof. The
Indentures provide that the Company may deliver outstanding Debt Securities of
like tenor of a series (other than any previously called for redemption) and
may apply as a credit Debt Securities of like tenor of a series which have been
redeemed either at the election of the Company pursuant to the terms of such
Debt Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Debt Securities of like tenor of such series required to be made pursuant to
the terms of such Securities as provided for by the terms of such series.
(Indenture Sections 1202 and 1203)
The Indentures provide that, if less than all of the Debt Securities
of any series are to be redeemed at any time, selection of Debt Securities for
redemption will be made by the Trustee by such method as the Trustee shall deem
fair and appropriate, and portions of the Debt Securities selected for
redemption shall be in amounts equal to the minimum authorized denomination for
Debt Securities of like tenor of that series or any integral multiple thereof
of principal amount of Debt Securities of such series of a denomination larger
than the minimum authorized denomination for Debt Securities of that series.
Notices of redemption shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each Holder of Debt Securities
to be redeemed at its registered address. If any Debt Security is to be
redeemed in part only, the notice of redemption that relates to such Debt
Security shall state the portion of the principal amount thereof to be
redeemed. A new Debt Security in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Debt Security. On and after the redemption date,
interest ceases to accrue on Debt Securities or portions of them called for
redemption. (Indenture Sections 1103, 1104, 1106 and 1107)
Repurchase at the Option of Holders. Except as set forth in the
Prospectus Supplement with respect to any offered Debt Securities or any series
thereof, the Indentures do not contain provisions that permit the Holders of
the Debt Securities to require that the Company repurchase or redeem the Debt
Securities in the event of a sale of assets or a takeover, recapitalization or
similar restructuring, nor does the Indenture contain covenants specifically
designed to protect holders in the event of a highly leveraged transaction
involving the Company. The Indenture provides that, if repurchase rights are
provided for in a Prospectus Supplement and amounts deposited in connection
with all such repurchase rights are insufficient to pay the repurchase price of
all Debt Securities having such repurchase rights, the Trustee shall select
Debt Securities to be repurchased on a pro rata basis among all holders of such
series of Debt Securities having such repurchase rights and exercising the
option to elect repurchase. (Indenture Sections 1401 and 1203)
Covenants. The Indentures will contain certain covenants relating to
the Company and its operations, including covenants requiring the Company to
(i) punctually pay interest and principal of Debt Securities, (ii) maintain of
an office or agency in each place of payment in respect of the Debt Securities,
(iii) hold in trust money for payment of interest or principal on Debt
Securities, (iv) preserve the corporate existence, rights and franchises of the
Company and its Material Subsidiaries (as defined in the Indentures), (v)
generally maintain its
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properties and trademarks and to comply with applicable statutes, laws,
ordinances and regulations, (vi) maintain adequate insurance, (vii) timely pay
or discharge material tax obligations and claims for labor, material and
supplies, which, if unpaid, might become a lien upon the property of the
Company or any Subsidiary, (viii) keep proper books of record and account and
(ix) provide to the Trustee quarterly statements of compliance with the
Indentures and notice of any event which after notice or lapse of time or both
would become an Event of Default or the occurrence of any Repurchase Event.
Certain of these covenants are subject to various exceptions and qualifications
as set forth in the Indentures.
Certain additional covenants in respect of the Company may be set
forth in the Prospectus Supplement accompanying this Prospectus.
Consolidation, Merger or Transfer. The Indentures provide that the
Company may not consolidate with, merge with, or transfer all or substantially
all of its assets to another entity where the Company is not the surviving
corporation unless (i) such other entity assumes the Company's obligations
under the applicable Indenture, and (ii) after giving effect thereto, no event
shall have occurred and be continuing which, after notice or lapse of time,
would become an Event of Default. (Indenture Section 801)
Events of Default. The Indentures provide that each of the following
constitutes an Event of Default with respect to the Debt Securities of any
series issued pursuant to the Indentures: (i) failure to pay the principal on
the Debt Securities of that series when due; (ii) failure for 30 days (for Debt
Securities that pay interest less frequently than monthly) or 10 days (for Debt
Securities that pay interest monthly) to pay when due any interest on the Debt
Securities of that series; (iii) failure to deposit any sinking fund payment,
when and as due, in respect of the Debt Securities of that series; (iv) failure
to perform, or a breach of, any covenant or warranty set forth in the Indenture
for 30 days after receipt of written notice from the Trustee or Holders of at
least 25% in principal amount of the outstanding Debt Securities specifying the
default and requiring the Company to remedy such default; (v) default in the
payment at stated maturity of indebtedness of the Company or any Subsidiary for
money borrowed having an outstanding principal amount due at stated maturity
greater than $1.0 million and such default having continued for a period of 30
days beyond any applicable grace period; (v) an event of default as defined in
any mortgage, indenture or instrument of the Company shall have happened and
resulted in acceleration of indebtedness which, together with the principal
amount of any other indebtedness so accelerated, exceeds $1.0 million or more
at any time, and such default shall not be cured or waived and such
acceleration shall not have been rescinded or annulled, (vi) certain events of
insolvency, receivership or reorganization of the Company or any Material
Subsidiary and (vii) entry of a final judgment, decree or order against the
Company or any Material Subsidiary for the payment of money in excess of $5.0
million and such judgment, decree or order continues unsatisfied for 30 days
without a stay of execution. (Section 501)
If any Event of Default occurs and is continuing with respect to any
series of Debt Securities, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Debt Securities of such
series may declare the unpaid principal amount (or, if any of the Debt
Securities of' that series are Original Issue Discount Debt Securities, such
lesser portion of the principal amount of such Debt Securities as may be
specified in the terms thereof), premium, if any, and any accrued and unpaid
interest on all the Debt Securities of such series 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 Material Subsidiary of the Company, all principal, premium, if
any and interest on outstanding Debt Securities will become due and payable
without further action or notice. Holders of the Debt Securities may not
enforce the respective Indentures or the Debt Securities except as provided in
the Indentures. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Debt Securities of any series may
direct the Trustee in its exercise of any trust or power with respect to such
series of Debt Securities. The Trustee may withhold from Holders of the Debt
Securities of any series notice of any continuing Default or Event of Default
(except a Default or Event of Default in payment on any Debt Security of any
series or in the payment of any sinking fund installment with respect to such
series) if it in good faith determines that withholding notice is in their
interest. (Indenture Sections 502, 507, 512 and 602)
The Holders of a majority in aggregate principal amount of the Debt
Securities of any series then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Debt Securities of such series waive any
existing Default or Event of Default with respect to such series of Debt
Securities and its consequences under the applicable Indenture except a
continuing Default or Event of Default with respect to such series in the
payment of interest on, or the principal of, or premium, if any, on the Debt
Securities of such series. (Indenture Section 513)
The Holders of a majority in principal amount of the outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee, subject to certain exceptions. (Indenture Section 512) The Indentures
provide that in case an Event of Default shall occur and be continuing, the
Trustee will be required, in the exercise of its power, to use the degree of
care of a prudent person in the conduct of such person's own affairs. Subject
to such provisions, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture unless the Trustee receives reasonable
security or indemnity against any loss, liability or expense. (Indenture
Sections 601 and 603)
The Company is required to deliver to the Trustee quarterly a
statement regarding compliance with the Indentures, and the Company is required
upon becoming aware of any Default or Event of Default with respect to a series
of Debt Securities, or any event of default under any other mortgage, indenture
or instrument to deliver to
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the Trustee a statement specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
(Indenture Section 703)
Defeasance Provisions. The Company will be discharged from any and
all obligations in respect of the Debt Securities of any series (except for
certain obligations to register the transfer or exchange of Debt Securities, to
replace destroyed, stolen, lost or mutilated Debt Securities, to maintain
paying agencies and to hold moneys for payment in trust) on the 91st day after
the date of deposit with the Trustee, in trust, of money, U.S. Government
Obligations which through the payment of interest and principal thereof in
accordance with their terms will provide money, or a combination thereof, in an
amount sufficient to pay any installment of principal of (and premium, if any)
and interest on and any mandatory sinking fund payments in respect of the Debt
Securities of such series on the dates on which such payments are due and
payable in accordance with the terms of the applicable Indenture and such Debt
Securities. Any such discharge is also subject to certain other conditions,
including the limitation that such discharge may only occur if there has been a
change in applicable federal law, or the Company has received from, or there
has been published by, the United States Internal Revenue Service a ruling to
the effect that such a discharge will not cause the holders of such series of
Debt Securities to recognize income, gain or loss for federal income tax
purposes and that such holders will be subject to federal income tax on the
same amount and in the same manner and at the same times as would have been the
case had such deposit, defeasance and discharge not occurred, and that such
discharge will not cause any outstanding Debt Securities then listed on any
securities exchange to be de-listed as a result thereof. (Indenture Section
403)
The Company may omit to comply with certain restrictive covenants with
respect to the Debt Securities of any series. If the Company elects not to
comply with any term, provision or condition in any such covenant, the Company
must deposit with the Trustee money, U.S. Government Obligations which through
the payment of interest and principal thereof in accordance with their terms
will provide money, or a combination thereof, in an amount sufficient to pay
any installment of principal of (and premium, if any) and interest on and any
mandatory sinking fund payments in respect of the Debt Securities of such
series on the dates on which such payments are due and payable in accordance
with the terms of the applicable Indenture and such Debt Securities. Any such
covenant defeasance is also subject to certain other conditions, including the
delivery to the Trustee of an opinion of counsel to the effect that the deposit
and related covenant defeasance will not cause the holders of the Debt
Securities to recognize income, gain or loss for federal income tax purposes
and that such holders will be subject to federal income tax on the same amount
and in the same manner and at the same times as would have been the case had
such deposit and defeasance not occurred. (Indenture Section 1009)
In the event the Company omits compliance with certain covenants of
the Indenture and the Debt Securities issued pursuant thereto are declared due
and payable because of the occurrence of any event of default, although the
amount of money and U.S. Government Obligations on deposit with the Trustee
will be sufficient to pay amounts due on the Debt Securities at the time of
their stated maturity, it may not be sufficient to pay amounts due on the Debt
Securities at the time of the acceleration resulting from such event of
default. In such event, the Company shall remain liable for all such payments.
Subordination of Subordinated Debt Securities. The Subordinated Debt
Securities will be subordinate and subject in right of payment, to the extent
and in the manner set forth in the Subordinated Indenture, to the prior payment
in full of all Senior Debt. Upon any distribution to creditors in a
liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshaling of assets and liabilities or any bankruptcy,
insolvency or similar proceeding involving the Company, the holders of Senior
Debt will be entitled to receive payment in full in cash of all Obligations (as
defined in the Subordinated Indenture) due on or to become due on or in respect
of all Senior Debt, before the holders of Subordinated Debt Securities are
entitled to receive any payment or distribution of any kind, whether in cash,
property or securities, by set off or otherwise on account of the principal of
(and premium, if any) or interest on the Subordinated Debt Securities or on
account of any purchase, redemption or other acquisition of Subordinated Debt
Securities by the Company, any Subsidiary of the Company, the Trustee or any
Paying Agent or on account of any other obligation of the Company in respect of
any Subordinated Debt Securities (excluding (i) shares of stock or securities
of the Company or another corporation provided for by a plan of reorganization
or readjustment that are subordinated in right of payment to all then
outstanding Senior Debt to substantially the same extent as, or to a greater
extent than, the Subordinated Debt Securities are so subordinated and (ii)
payments of assets from any defeasance trust which have been on deposit for 90
consecutive days without the occurrence of blockage of payment on any such
series of Subordinated Debt Securities as described below) ("Securities
Payments"). Until the Senior Debt is paid in full, any Securities Payment to
which the holders of Subordinated Debt Securities or the Trustee for their
benefit would be entitled, will be paid or delivered by the Company or any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, directly to the holders of Senior Debt or
their representative or representatives or the trustee or trustees under any
indenture pursuant to which any instruments evidencing, any Senior Debt may
have been issued. (Subordinated Indenture Sections 1301 and 1302)
The Subordinated Indenture contains certain standstill provisions,
which provide that no payments of principal of, or interest on, the
Subordinated Debt Securities may be made and no Subordinated Debt Securities
may be accelerated if at the time thereof the Trustee has received a written
notice (a "Default Notice") from the holder or holders of not less than 51% in
principal amount of the outstanding Senior Debt or any agent therefor (a
"Senior Agent") specifying that an event of default (a "Senior Event of
Default") under any Senior Debt has occurred. Such standstill will remain in
effect until the first to occur of the following: (i) the Senior Event of
Default is cured,
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(ii) the Senior Event of Default is waived by the holders of such Senior Debt
or the Senior Agent or (iii) the expiration of 180 days after the date the
Default Notice is received by the Trustee if the maturity of such Senior Debt
has not been accelerated at such time. Any such standstill will not prevent the
occurrence of an "Event of Default" under the Subordinated Indenture.
In the event that the Trustee receives any Securities Payment
prohibited by the subordination provisions of the Subordinated Indenture, such
payment will be held by the Trustee in trust for the benefit of, and will
immediately be paid over upon written request to, the holders of Senior Debt or
their representative or representatives, or the trustee or trustees under any
applicable indenture for application to the payment of Senior Debt.
(Subordinated Indenture Section 1304) Such subordination will not prevent the
occurrence of any event of default in respect of the Subordinated Debt
Securities.
By reason of such subordination, in the event of the insolvency of the
Company, holders of Senior Debt may receive more, ratably, and holders of the
Subordinated Debt Securities having a claim pursuant to such securities may
receive less, ratably, than the other creditors of the Company. There may also
be interruption of scheduled interest and principal payments resulting from
events of default on Senior Debt.
Modification and Waiver. Modifications and amendments of the
respective Indentures may be made by the Company and the Trustee with the
consent of the holders of not less than a majority in aggregate principal
amount of the outstanding Debt Securities of all series affected by such
modification or amendment (voting as one class); provided, however, that no
such modification or amendment may, without the consent of the holder of each
outstanding Debt Security affected thereby, (i) change the stated maturity of
the principal of, or any installment of principal of or interest on, any Debt
Security, reduce the principal amount of, or premium or interest on, any Debt
Security, reduce the amount of principal of an Original Issue Discount Debt
Security due and payable upon acceleration of the maturity thereof, change the
place of payment where or coin or currency in which the principal of, or any
premium or interest on, any Debt Security is payable, or impair the right to
institute suit for the enforcement of any payment on or after the stated
maturity of any Debt Security, (ii) reduce the percentage in principal amount
of outstanding Debt Securities of any series, the consent of the holders of
which is required for modification or amendment of the Senior Indenture or for
waiver of compliance with certain provisions of the Senior Indenture or for
waiver of certain defaults, or (iii) modify any of the various sections
relating to above-described provisions. (Indenture Section 902)
The holders of not less than a majority in aggregate principal amount
of the outstanding Debt Securities of each series may, on behalf of the holders
of all Debt Securities of that series, waive, insofar as that series is
concerned, compliance by the Company with certain restrictive provisions of the
Indenture. (Indenture Section 1010) The holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
may, on behalf of the holders of all Debt Securities of that series, waive any
past default under the Indenture with respect to Debt Securities of that
series, except a default (i) in the payment of principal of, or any premium or
interest on, any Debt Security of such series when due (other than amounts due
and payable solely upon acceleration), or (ii) in respect of a covenant or
provision of the Indenture which cannot be modified or amended without the
consent of the holder of each outstanding Debt Security of such series
affected. (Indenture Section 513) The definition of "Senior Debt" in the
Subordinated Indenture may not be amended or modified in a manner adverse to
the holders of then outstanding Senior Debt without the consent of the holders
of all Senior Debt Securities affected thereby. (Indenture Section 907)
The Indentures provide that, in determining whether the holders of the
requisite principal amount of the outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of holders of Debt Securities, (i)
the principal amount of an Original Issue Discount Debt Security that will be
deemed to be outstanding will be the amount of the principal thereof that would
be due and payable as of the date of such determination upon acceleration of
the maturity thereof to such date, and (ii) the principal amount of a Debt
Security denominated in a foreign currency or currency unit that will be deemed
to be outstanding will be the United States dollar equivalent, determined as of
the date of original issuance of such Debt Security, of the principal amount of
such Debt Security (or, in the case of an Original Issue Discount Debt
Security, the United States dollar equivalent, determined as of the date of
original issuance of such Debt Security, of the amount determined as provided
in (i) above). (Indenture Section 101)
Global Securities. The following description will apply to any series
of Debt Securities issued, in whole or in part, in the form of a Global
Security or Global Securities deposited with, or on behalf of, The Depository
Trust Company ("DTC") (each such Debt Security represented by a Global
Security, being herein referred to as a "Book-Entry Security").
Upon initial issuance, all Book-Entry Securities of the same series
and bearing interest, if any, at the same rate or pursuant to the same formula
and having the same date of issuance, redemption provisions, if any, repayment
provisions, if any, stated maturity and other terms will be represented by a
single Global Security. Each Global Security representing Book-Entry
Securities will be deposited with, or on behalf of, DTC and will be registered
in the name of DTC or a nominee of DTC. Unless otherwise specified in the
applicable Prospectus Supplement, all Book-Entry Securities will be denominated
in U.S. dollars.
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Upon the issuance of a Global Security, DTC will credit accounts held
with it with the respective principal or face amounts of the Book-Entry
Securities represented by such Global Security. The accounts to be credited
shall be designated initially by the Agent through which the Debt Security was
sold or, to the extent that such Debt Securities are offered and sold directly,
by the Company. Ownership of beneficial interests in a Global Security will be
limited to institutions that have accounts with DTC ("participants") and to
persons that may hold interests through such participants. Ownership of
beneficial interests by participants in a Global Security will be shown on, and
the transfer of that ownership interest will be effected only through, records
maintained by DTC for such Global Security. Ownership of beneficial interests
in such Global Security by persons that hold through participants will be shown
on, and the transfer of that ownership interest within such participant will be
effected only through, records maintained by such participant.
Payment of principal of, premium, if any, and interest, if any, on
Book-Entry Securities represented by any such Global Security will be made to
DTC or its nominee, as the case may be, as the sole registered holder of the
Book- Entry Securities represented thereby for all purposes under the
Indentures. None of the Company, the Trustee, the Paying Agent or any agent of
the Company or the Trustee will have a responsibility or liability for any
aspect of DTC's records relating to or payments made on account of beneficial
ownership interests in a Global Security representing any Book-Entry Securities
or any other aspect of the relationship between DTC and its participants or the
relationship between such participants and the owners of beneficial interests
in a Global Security owning through such participants or for maintaining,
supervising or reviewing any of DTC's records relating to such beneficial
ownership interests.
The Company has been advised by DTC that upon receipt of any payment
of principal of, premium, if any, or interest, if any, on any such Global
Security, DTC will immediately credit, on its book-entry registration and
transfer system, the accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security as shown on the records of DTC. Payments by
participants to owners of beneficial interests in a Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held by such
participants for customer accounts registered in "street name," and will be the
sole responsibility of such participants.
No Global Security may be transferred except as a whole by a nominee
of DTC to DTC or to another nominee of DTC, or by DTC or any such nominee to a
successor of DTC or a nominee of such successor.
A Global Security representing Book-Entry Securities is exchangeable
for certificated Debt Securities of the same series and bearing interest, if
any, at the same rate or pursuant to the same formula, having the same date of
issuance, redemption provisions, if any, repayment provisions, if any, stated
maturity and other terms and of differing authorized denominations aggregating
a like amount, if any, if (i) DTC notifies the Company that it is unwilling or
unable to continue as depositary for such Global Security or if at any time DTC
ceases to be a clearing agent registered under the Exchange Act, (ii) the
Company, in its sole discretion, determines that such Global Security shall be
exchangeable for certificated Debt Securities or (iii) there shall have
occurred and be continuing an Event of Default with respect to the Book-Entry
Securities. Such certificated Debt Securities shall be registered in the names
of the owners of the beneficial interests in such Global Security as provided
by DTC's relevant participants (as identified by DTC).
Owners of beneficial interests in a Global Security will not be
considered the registered holders thereof for any purpose under the applicable
Indenture and no Global Security representing Book-Entry Securities shall be
exchangeable or transferrable. Accordingly, each person owning a beneficial
interest in such a Global Security must rely on the procedures of DTC and, if
such person is not a participant, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a registered
holder under the applicable Indenture. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in certificated form. Such limits and such laws may impair the ability to
transfer beneficial interests in a Global Security.
DTC, as the registered holder of each Global Security, may appoint
agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a registered holder is entitled to give or take under the applicable Indenture.
The Company understands that under existing industry practices, in the event
that the Company requests any action of registered holders or that an owner of
a beneficial interest in such a Global Security desires to give or take any
action which a registered holder is entitled to give or take under such
Indenture. DTC would authorize the participants holding the relevant
beneficial interests to give or take such action, and such participants would
authorize beneficial owners owning through such participants to give or take
such action or would otherwise act upon the instructions of beneficial owners
owning through them.
DTC has advised the Company that DTC is a limited-purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered under the
Exchange Act. DTC was created to hold the securities of its participants and
to facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers, banks (which may include the Trustee), trust companies,
clearing corporations, and certain other
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organizations some of whom (and/or their representatives) own DTC. Access to
DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
Certain Definitions. Set forth below are certain defined terms used
in the Indentures. Reference is made to the Indentures for a full disclosure
of all such terms, as well as any other capitalized terms used herein for which
no definition is provided. (Indenture Section 101)
"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.
"Funded Debt" means any of the following obligations of the Company or
any Subsidiary which by its terms matures at or is extendable or renewable at
the sole option of the obligor without requiring the consent of the obligee to
a date more than 360 days after the date of the creation or incurrence of such
obligation: (i) any obligations, contingent or otherwise, for borrowed money or
for the deferred purchase price of property, assets, securities or services
(including, without limitation, any interest accruing subsequent to an event of
default), (ii) all obligations (including the Debt Securities) evidenced by
bonds, notes, debentures or other similar instruments, (iii) all indebtedness
created or arising under any conditional sale or other title retention
agreement with respect to property acquired (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), except any such
obligation that constitutes a trade payable and an accrued liability arising in
the ordinary course of business, if and to the extent any of the foregoing
indebtedness would appear as a liability upon a balance sheet prepared in
accordance with generally accepted accounting principles, (iv) all Capitalized
Lease Obligations, (v) liabilities of the Company actually due and payable
under banker's acceptances or letters of credit, (vi) all indebtedness of the
type referred to in clause (i), (ii), (iii), (iv) or (v) above secured by (or
for which the holder of such indebtedness has an existing right, content or
otherwise, to be secured by) any lien upon or security interest in property of
the Company or any Subsidiary (including, without limitation, accounts and
contract rights), even though the Company or any Subsidiary has not assumed or
become liable for the payment of such indebtedness and (vii) any guarantee or
endorsement (other than for collection or deposit in the ordinary course of
business) or discount with recourse of, or other agreement, contingent or
otherwise, to purchase, repurchase, or otherwise acquire, to supply, or advance
funds or become liable with respect to, any indebtedness or any obligation of
the type referred to in any of the foregoing clauses (i) through (vi),
regardless of whether such obligation would appear on a balance sheet.
"Government Securities" means securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof.
"Material Subsidiary" means Holliday Fenoglio, Inc., AMRESCO
Management, Inc., AMRESCO Residential Mortgage Corporation, AMRESCO Advisors,
Inc., AMRESCO Residential Credit Corporation, AMRESCO Capital Corporation,
AMRESCO New England, Inc., Oak Cliff Financial, Inc. and any other Subsidiary
whose assets or revenues comprise at least five percent (5%) of the assets or
revenues of the Company and the Subsidiaries on a consolidated basis as of the
end of, or for the, Company's most recently completed fiscal quarter, as
determined from time to time.
"Original Issue Discount Debt Security" means any Debt Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
the terms of the applicable Indenture.
"Senior Debt" means any Funded Debt whether outstanding on the date of
execution of the Indenture or thereafter created or incurred, unless it is
provided in the appropriate instrument that such Funded Debt is subordinated to
any other Funded Debt. (Sections 101 and 1301)
"Subordinated Debt" means all Funded Debt except Senior Debt.
"Subsidiary," means, with respect to any Person, (i) any Corporation
of which at the time of determination more than 50% of the shares of Voting
Stock entitled is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"U.S. Government Obligations" means direct obligations of the United
States of America, or any Person controlled or supervised by and acting as an
agency or instrumentality of such government, in each case where the payment or
payments thereunder are unconditionally guaranteed as a full faith and credit
obligation by such government and which are not callable or redeemable at the
option of the issuer or issuers thereof, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
or other amount with respect to any such U.S. Government Obligation held by
such custodian for the account of the holder of a depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S.
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<PAGE> 22
Government Obligation or the specific payment of interest on or principal of or
other amount with respect to the U.S. Government Obligation evidenced by such
depository receipt.
SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Stock or Common Stock. Securities Warrants may be issued
independently or together with other Securities offered by any Prospectus
Supplement and may be attached to or separate from such other Securities. Each
series of Securities Warrants will be issued under a separate warrant agreement
(a "Securities Warrant Agreement") to be entered into between the Company and a
bank or trust company as Securities Warrant Agent, all as set forth in the
Prospectus Supplement relating to the particular issue of offered Securities
Warrants. The Securities Warrant Agent will act solely as an agent of the
Company in connection with the Securities Warrant Certificates and will not
assume any obligation or relationship of agency or trust for or with any
holders of Securities Warrant Certificates or beneficial owners of Securities
Warrants. Copies of the forms of Securities Warrant Agreements, including the
forms of Securities Warrant Certificates representing the Securities Warrants,
will be filed or incorporated by reference as exhibits to the Registration
Statement to which this Prospectus pertains. The following summaries of
certain provisions of the forms of Securities Warrant Agreements and Securities
Warrant Certificates do not purport to be complete and are subject to and are
qualified in their entirety by reference to all the provisions of the
Securities Warrant Agreements and the Securities Warrant Certificates.
General. If Securities Warrants are offered, the applicable
Prospectus Supplement will describe the terms of such Securities Warrants,
including, in the case of Securities Warrants for the purchase of Debt
Securities, the following where applicable: (i) the offering price; (ii) the
currencies in which such Securities Warrants are being offered; (iii) the
designation, aggregate principal amount, currencies, denominations and terms of
the series of Debt Securities purchasable upon exercise of such Securities
Warrants: (iv) the designation and terms of any series of Securities with which
such Securities Warrants are being offered and the number of such Securities
Warrants being offered with each such Security; (v) the date on and after which
such Securities Warrants and the related series of Securities will be
transferable separately; (vi) the principal amount of the series of Debt
Securities purchasable upon exercise of each such Securities Warrant and the
price at which and currencies in which such principal amount of Debt Securities
of such series may be purchased upon such exercise; (vii) the date on which the
right to exercise such Securities Warrants shall commence and the date (the
"Expiration Date") on which such right shall expire; (viii) whether the
Securities Warrants will be issued in registered or bearer form; (ix) a
discussion of any material United States federal income tax consequences; and
(x) any other terms of such Securities Warrants.
In the case of Securities Warrants for the purchase of Preferred Stock
or Common Stock. the applicable Prospectus Supplement will describe the terms
of such Securities Warrants, including the following where applicable: (i) the
offering price; (ii) the aggregate number of shares purchasable upon exercise
of such Securities Warrants and, in the case of Securities Warrants for
Preferred Stock, the designation, aggregate number and terms of the series of
Preferred Stock purchasable upon exercise of such Securities Warrants; (iii)
the designation and terms of the series of Securities with which such
Securities Warrants are being offered and the number of such Securities
Warrants being offered with each such Security; (iv) the date on and after
which such Securities Warrants and the related series of Securities will be
transferable separately; (v) the shares of Preferred Stock or Common Stock
purchasable upon exercise of each such Securities Warrant and the price at
which such shares of Preferred Stock or Common Stock may be purchased upon each
exercise; (vi) the date on which the right to exercise such Securities Warrants
shall commence and the expiration date thereof; (vii) a discussion of any
material United States federal income tax consequences; and (viii) any other
terms of such Securities Warrants. Securities Warrants for the purchase of
Preferred Stock or Common Stock will be offered and exercisable for U.S.
dollars only and will be in registered form only.
Securities Warrant Certificates may be exchanged for new Securities
Warrant Certificates of different denominations, may (if in registered form) be
presented for registration of transfer and may be exercised at the corporate
trust office of the Securities Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Securities
Warrant to purchase Debt Securities, holders of such Securities Warrants will
not have any of the rights of holders of the Debt Securities purchasable upon
such exercise, including the right to receive payments of principal of,
premium, if any, or interest, if any, on the Debt Securities purchasable upon
such exercise or to enforce covenants in the applicable Indenture. Prior to
the exercise of any Securities Warrants to purchase Preferred Stock or Common
Stock, holders of such Securities Warrants will not have any rights of holders
of the Preferred Stock or Common Stock purchasable upon such exercise,
including the right to receive payment of dividends, if any, on the Preferred
Stock or Common Stock purchasable upon such exercise or to exercise any
applicable right to vote.
Exercise of Securities Warrants. Each Securities Warrant will entitle
the holder thereof to purchase such principal amount of Debt Securities or
shares of Preferred Stock or Common Stock, as the case may be, at such exercise
price as shall in each case be set forth in, or calculable from, the Prospectus
Supplement relating to the offered Securities Warrants. After the close of
business on the Expiration Date (or such later date to which such Expiration
Date may be extended by the Company), unexercised Securities Warrants will
become void.
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<PAGE> 23
Securities Warrants may be exercised by delivering to the Securities
Warrant Agent payment as provided in the applicable Prospectus Supplement of
the amount required to purchase the Debt Securities, Preferred Stock or Common
Stock, as the case may be, purchasable upon such exercise together with certain
information set forth on the reverse side of the Securities Warrant
Certificate. Securities Warrants will be deemed to have been exercised upon
receipt of payment of the exercise price, subject to the receipt of the
Securities Warrant Certificate evidencing such Securities Warrants. Upon
receipt of such payment and the Securities Warrant Certificate properly
completed and duly executed at the corporate trust office of the Securities
Warrant Agent or any other office indicated in the applicable Prospectus
Supplement, the Company will, as soon as practicable, issue and deliver the
Debt Securities, Preferred Stock or Common Stock, as the case may be,
purchasable upon exercise. If fewer than all of the Securities Warrants
represented by such Securities Warrant Certificate are exercised. a new
Securities Warrant Certificate will be issued for the remaining amount of
Securities Warrants.
Amendments and Supplements to Securities Warrant Agreement. The
Securities Warrant Agreements may be amended or supplemented without the
consent of the holders of the Securities Warrants issued thereunder to effect
changes that are not inconsistent with the provisions of the Securities
Warrants and that do not adversely affect the interests of the holders of the
Securities Warrants.
Common Stock Warrant Adjustments. The exercise price of, and the
number of shares of Common Stock covered by, a Common Stock Warrant are subject
to adjustment in certain events, including (i) the issuance of capital stock as
a dividend or distribution on the Common Stock; (ii) subdivisions and
combinations of the Common Stock; (iii) the issuance to all holders of Common
Stock of certain rights or warrants entitling them to subscribe for or purchase
Common Stock within 45 days after the date fixed for the determination of the
stockholders entitled to receive such rights or warrants, at less than the
current market price (as defined in the Warrant Agreement for such series of
Common Stock Warrants) and (iv) the distribution to all holders of Common Stock
of evidences of indebtedness or assets of the Company (excluding certain cash
dividends and distributions described below) or rights or warrants (excluding
those referred to above). In the event that the Company shall distribute any
rights or warrants to acquire capital stock pursuant to clause (iv) above (the
"Capital Stock Rights") pursuant to which separate certificates representing
such Capital Stock Rights will be distributed subsequent to the initial
distribution of such Capital Stock Rights (whether or not such distribution
shall have occurred prior to the date of the issuance of a series of Common
Stock Warrants), such subsequent distribution shall be deemed to be the
distribution of such Capital Stock Rights; provided that the Company may, in
lieu of making any adjustment in the exercise price of and the number of shares
of Common Stock covered by a Common Stock Warrant upon a distribution of
separate certificates representing such Capital Stock Rights. make proper
provision so that each holder of such a Common Stock Warrant who exercises such
Common Stock Warrant (or any portion thereof) (a) before the record date for
such distribution of separate certificates shall be entitled to receive upon
such exercise shares of Common Stock issued with Capital Stock Rights and (b)
after such record date and prior to the expiration, redemption or termination
of such Capital Stock Rights shall be entitled to receive upon such exercise,
in addition to the shares of Common Stock issuable upon such exercise, the same
number of such Capital Stock Rights as would a holder of the number of shares
of Common Stock that such Common Stock Warrant so exercised would have entitled
the holder thereof to acquire in accordance with the terms and provisions
applicable to the Capital Stock Rights if such Common Stock Warrant was
exercised immediately prior to the record date for such distribution. Common
Stock owned by or held for the account of the Company or any majority owned
Subsidiary shall not be deemed outstanding for the purpose of any adjustment.
No adjustment in the exercise price of and the number of shares of
Common Stock covered by a Common Stock Warrant will be made for regular
quarterly or other periodic or recurring cash dividends or distributions or for
cash dividends or distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require a change of at
least 1% in the exercise price then in effect; provided that any such
adjustment not so made will be carried forward and taken into account in any
subsequent adjustment; and provided further that any such adjustment not so
made shall be made no later than three years after the occurrence of the event
requiring such adjustment to be made or carried forward. Except as stated
above, the exercise price of and the number of shares of Common Stock covered
by a Common Stock Warrant will not be adjusted for the issuance of Common Stock
or any securities convertible into or exchangeable for Common Stock, or
securities carrying the right to purchase any of the foregoing.
In the case of (i) a reclassification of or change to the Common
Stock, other than changes in par value, (ii) a consolidation or merger
involving the Company, other than where the Company is the continuing
corporation and reclassification or change, as described in (i) above, is
involved or (iii) a sale or conveyance to another corporation of the property
and assets of the Company as an entirety or substantially as an entirety, the
holders of the Common Stock Warrants then outstanding will be entitled
thereafter to convert such Common Stock Warrants into the kind and amount of
shares of stock and other securities or property which they would have received
upon such reclassification, change, consolidation, merger, sale or conveyance
had such Common Stock Warrants been exercised immediately prior to such
reclassification. change. consolidation, merger, sale or conveyance.
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<PAGE> 24
PLAN OF DISTRIBUTION
The Company may offer and sell the Offered Securities in one or more
of the following ways: (i) through underwriters or dealers, (ii) through
agents, or (ii) directly to one or more purchasers. The Prospectus Supplement
with respect to a particular offering of a series of Offered Securities will
set forth the terms of the offering of such Offered Securities, including the
name or names of any underwriters or agents with whom the Company has entered
into arrangements with respect to the sale of such Offered Securities, the
public offering or purchase price of such Offered Securities and the proceeds
to the Company from such sales and any underwriting discounts, agency fees or
commissions and other items constituting underwriters' compensation, the
initial pubic offering price, any discounts or concessions to be allowed or
re-allowed or paid to dealers and any securities exchange, if any, on which
such Offered Securities may be listed. Dealer trading may take place in
certain of the Offered Securities, including Offered Securities not listed on
any securities exchange.
If underwriters are involved in the offer and sale of Offered
Securities, the Offered Securities will be acquired by the underwriters for
their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The Offered
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters, or by underwriters without a syndicate,
all of which underwriters in either case will be designated in the applicable
Prospectus Supplement. Unless otherwise set forth in the applicable Prospectus
Supplement, under the terms of the underwriting agreement, the obligations of
the underwriters to purchase Offered Securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all of
the Offered Securities if any are purchased. Any initial public offering price
and any discounts or concessions or re-allowed or paid to dealers may be
changed from time to time.
Offered Securities may be offered and sold directly by the Company or
through agent designated by the Company from time to time. Any agent involved
in the offer or sale of the Offered Securities with respect to which this
Prospectus is delivered will be named in, and any commissions payable by the
Company to such agent will be set forth in or calculable from, the applicable
Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment.
If so indicated in the applicable Prospectus Supplement, the Company
may authorize underwriters, dealers or agents to solicit offers by certain
institutions to purchase the Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to delayed
delivery contracts ("Delayed Delivery Contracts") providing for payment and
delivery on the date or dates stated in the Prospectus Supplement. Each
Delayed Delivery Contract will be for an amount of the Offered Securities not
less than and, unless the Company otherwise agrees, the aggregate amount of the
Offered Securities sold pursuant to Delayed Delivery Contracts shall be not
more than the respective minimum and maximum amounts stated in the Prospectus
Supplement. Institutions with which Delayed Delivery Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions, but shall in all cases be subject to the approval of the Company
in its sole discretion. The obligations of the purchaser under any Delayed
Delivery Contract to pay for and take delivery of the Offered Securities will
not be subject to any conditions except that (i) the purchase of the Offered
Securities by such institution shall not at the time of delivery by prohibited
under the laws of the jurisdiction to which such institution is subject and
(ii) any related sale of the Offered Securities to underwriters shall have
occurred. A commission set forth in the Prospectus Supplement will be paid to
underwriters soliciting purchases of the Offered Securities pursuant to Delayed
Delivery Contracts accepted by the Company. The underwriters will not have any
responsibility in respect of the validity or performance of Delayed Delivery
Contracts.
The Debt Securities, the Preferred Stock and the Securities Warrants
will be new issues of securities with no established trading market. Any
underwriters to whom Offered Securities are sold by the Company for public
offering and sale may make a market in such Offered Securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the
liquidity of the trading market for any Offered Securities.
Any underwriter, dealer or agent participating in the distribution of
the Offered Securities may be deemed to be an underwriter, as that term is
defined in the Securities Act, of the Offered Securities so offered and sold
and any discounts or commissions received by it from the Company and any profit
realized by it on the sale or resale of the Offered Securities may be deemed to
be underwriting discounts and commissions under the Securities Act.
Under agreements entered into with the Company, underwriters, dealers
and agents may be entitled to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the underwriters or agents may be
required to make in respect thereof.
Underwriters, dealers and agents also may be customers of, engage in
transactions with, or perform other services for the Company in the ordinary
course of business.
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<PAGE> 25
LEGAL MATTERS
The validity of the shares of Common Stock, the Preferred Stock, the
Debt Securities and Securities Warrants offered hereby will be passed upon for
the Company by L. Keith Blackwell, General Counsel of the Company. Certain
legal matters will be passed upon for the Company by Haynes and Boone, LLP,
Dallas, Texas.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report which is incorporated herein by reference
and has been so incorporated in reliance upon their authority as experts in
accounting and auditing.
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<PAGE> 26
GLOSSARY
The following are certain defined terms which may be used in this Prospectus
and any accompanying Prospectus Supplement:
"ACACIA" means Acacia Realty Advisors, Inc.
"ACACIA ACQUISITION" means the acquisition by the Company of the assets
comprising the real estate pension advisory business of Acacia Realty
Advisors, Inc.
"ACC" means AMRESCO Capital Corporation, a subsidiary of the Company.
"AMRESCO RESIDENTIAL" means, collectively, ARMC and AMRESCO Residential Credit
Corporation, subsidiaries of the Company.
"ARMC" means AMRESCO Residential Mortgage Corporation, a subsidiary of the
Company.
"ASSET PORTFOLIO" means a pool or portfolio of performing, non-performing or
underperforming commercial, industrial, agricultural and/or real estate
loans.
"BEI" means BEI Holdings, Ltd.
"BEI MERGER" means the merger of Holdings with and into a subsidiary of BEI on
December 31, 1993.
"CKSRS" means CKSRS Housing Group, Ltd., a Florida limited partnership.
"COMPANY" means, unless otherwise stated in this Prospectus or unless the
context otherwise requires, the Company and each of its subsidiaries.
"CONDUIT PURCHASERS" means investment bankers and other financial
intermediaries who purchase or otherwise accumulate pools or portfolios of
loans having common features (e.g., real estate mortgages, etc.), with the
intent of securitizing such loan assets and selling them to a trust that
obtains its funds by selling ownership interests in the trust to public or
private investors.
"CONVERTIBLE SUBORDINATED DEBENTURES" means the Company's 8% Convertible
Subordinated Debentures due 2005.
"CONVERTIBLE SUBORDINATED DEBENTURE INDENTURE" means that certain Indenture
dated November 27, 1995, governing the Convertible Subordinated Debentures.
"CREDIT AGREEMENTS" means the Revolving Loan Agreement and the Warehouse
Agreements.
"CREDIT ENHANCEMENT" means the method by which a seller of asset-backed
securities achieves a higher credit rating with respect to such securities
than the credit rating of the assets collateralizing such securities.
Credit enhancement is often achieved through the use of financial guaranty
insurance policies.
"DTC" means The Depository Trust Company or its nominees.
"DUS" means the Delegated Underwriting and Servicing program established by
Fannie Mae that permits a DUS approved lender to commit and close loans for
multi-family mortgages for resale to Fannie Mae without Fannie Mae's prior
approval of such loans.
"EQS" means, collectively, EQ Services, Inc. and Equitable Real Estate
Investment Management, Inc.
"EQS ACQUISITION" means the acquisition by the Company of the third-party
securitized, commercial mortgage loan Master Servicer and Special Servicer
business of EQS.
"FACE VALUE" means, with respect to any loan or Asset Portfolio, the aggregate
unpaid principal balance of a loan or loans.
"FANNIE MAE" means the Federal National Mortgage Association.
"FDIC" means the Federal Deposit Insurance Corporation.
"FREDDIE MAC" means the Federal Home Loan Mortgage Corporation.
"HOLDINGS" means AMRESCO Holdings, Inc.
"HOLLIDAY FENOGLIO" means Holliday Fenoglio, Inc., a subsidiary of the Company.
"MASTER SERVICER" means an entity which provides administrative services with
respect to securitized pools of mortgage-backed securities.
"NATIONSBANK CONTRACT" means the asset management contract, as amended,
originally dated July 1, 1992, among the Company, NationsBank Corporation
and certain of its bank subsidiaries.
"NATIONSBANK OF TEXAS" means NationsBank of Texas, N.A.
"PRIMARY SERVICER" means an entity which provides various administrative
services with respect to loans such as collecting monthly mortgage payments,
maintaining escrow accounts for the payment of ad valorem taxes and
insurance premiums on behalf of borrowers, remitting payments of principal
and interest promptly to investors in mortgages or the Master Servicer of a
pool and reporting to those investors or the Master Servicer on financial
transactions related to such mortgages.
"REVOLVING LOAN AGREEMENT" means the Revolving Loan Agreement dated as of
September 29, 1995 and as subsequently amended, among the Company,
NationsBank of Texas, as Agent, and the Banks which are parties thereto from
time to time.
"RTC" means the Resolution Trust Corporation.
"SECURITIZATION" and "SECURITIZED" mean a transaction in which loans originated
or purchased by an entity are sold to special purpose entities organized for
the purpose of issuing asset-backed securities.
"SENIOR SUBORDINATED NOTES" means the Company's 10% Senior Subordinated Notes
due 2003.
"SENIOR SUBORDINATED NOTES INDENTURE" means the Indenture dated February 2,
1996, governing the Senior Subordinated Notes.
"SPECIAL SERVICER" means an entity which provides asset management and
resolution services with respect to non-performing or under-performing loans
within a pool of performing loans and/or mortgages.
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<PAGE> 27
"WAREHOUSE" means a type of lending arrangement whereby loans funded or
purchased and held for sale are financed by financial institutions or
institutional lenders on a short-term basis and secured by the underlying
loans.
"WAREHOUSE AGREEMENTS" mean all warehouse loan facilities entered into by the
Company from time to time.
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<PAGE> 28
---------------------------------
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made by this Prospectus and, if given
or made, such information or representations must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer
to sell or solicitation by anyone in any state in which such offer or
solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that the information contained herein is correct as of any time subsequent to
the date hereof.
---------------------------------
TABLE OF CONTENTS
Page
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<TABLE>
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . 3
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . 3
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . 6
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . 9
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS . . . . . 9
DESCRIPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . .10
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . .22
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . .23
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
</TABLE>
---------------------------------
AMRESCO, INC.
---------------------------------
PROSPECTUS
---------------------------------
, 1996
---------------------
---------------------------------
<PAGE> 29
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee . . . . . . . . . . . . . . . . . . . . . . . $ 86,207
Printing Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Blue Sky Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Indenture Trustees Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Fees of Transfer Agent and Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Miscellaneous Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ *
========
</TABLE>
- --------------------------
* To be completed by amendment.
All of the above expenses except the Securities and Exchange
Commission registration fee are estimated. All of such expenses will be borne
by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Amended and Restated Certificate of Incorporation (the
"Certificate") and the Company's Amended and Restated Bylaws (the "Bylaws")
provide that the Company shall indemnify, to the full extent permitted by law,
any person against liabilities arising from their service as directors,
officers, employees or agents of the Company. Section 145 of the DGCL empowers
a corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 145 also empowers a corporation to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person acted in
any of the capacities set forth above, against expenses (including attorney's
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted under similar standards, except
that no indemnification may be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the corporation
unless, and only to the extent that, the Court of Chancery or the court in
which such action was brought shall determine that despite the adjudication of
liability such person is fairly and reasonably entitled to indemnify for such
expenses which the court shall deem proper.
Section 145 further provides that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled, and that the corporation is empowered to
purchase and maintain insurance on behalf of a director or officer of the
corporation against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liabilities
under Section 145.
The Certificate and the Bylaws provide that no director of the Company
shall be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL or (iv) for any transaction from which the director derived an
improper personal benefit. Any repeal or modification of this provision related
to director's liability shall not adversely affect any right or protection of a
director of the Company existing immediately prior to such repeal or
modification. Further, if the DGCL shall be repealed or modified, the
elimination of liability of a director provided in the Certificate and the
Bylaws shall be to the fullest extent permitted by the DGCL as so amended.
Pursuant to Registration Rights Agreements with certain stockholders
of the Company, the Company has agreed to indemnify such stockholders against
certain liabilities, including liabilities under the Securities Act or
otherwise. For the undertaking with respect to indemnification, see Item 17
herein.
II-1
<PAGE> 30
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<S> <C>
1.1 Form of Underwriting Agreement for Debt Securities.
1.2* Form of Underwriting Agreement for Preferred Stock.
1.3* Form of Underwriting Agreement for Common Stock.
4.1 Specimen Common Stock Certificate of the Registrant, incorporated by reference to Exhibit
4.4 to the Registrant's Registration Statement on Form S-3 (No. 33-63683).
4.2 Senior Indenture.
4.3 Form of Senior Note (included in Exhibit 4.2).
4.4* Subordinated Indenture.
4.5* Form of Subordinated Note (included in Exhibit 4.4).
4.6* Form of Certificate of Designation for Preferred Stock.
4.7* Specimen Preferred Stock Certificate.
4.8* Form of Warrant Agreement.
4.9* Specimen Warrant Certificate (included in Exhibit 4.8).
5.1 Form of Opinion of L. Keith Blackwell, Corporate Counsel to the Company regarding legality of securities
being registered.
12.1 Statement of Computation of Ratio of Earnings to Fixed Charges.
12.2 Statement of Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.
23.1 Consent of L. Keith Blackwell, contained in the opinion filed as Exhibit 5.1.
23.2 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney.
25.1* Statement of Eligibility of Senior Trustee on Form T-1.
25.2* Statement of Eligibility of Subordinated Trustee on Form T-1.
</TABLE>
- --------------------------
* To be filed.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement
(notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total value of securities offered would not exceed
that which was registered) and any deviation from the
low or high end of the estimated maximum offering
range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement).
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE> 31
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act of 1939, as amended
(the "Act"), in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Act.
II-3
<PAGE> 32
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on the 14th day of
June, 1996.
AMRESCO, INC.
By: /s/ L. Keith Blackwell
---------------------------------------------
L. Keith Blackwell
Vice President, General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the 14th day of June, 1996:
<TABLE>
<CAPTION>
<S> <C>
SIGNATURE TITLE
--------- -----
/s/ Robert H. Lutz, Jr.* Chairman of the Board and
- ---------------------------------------------------------- Chief Executive Officer
Robert H. Lutz, Jr.
/s/ Robert L. Adair III* Director, President and
- ---------------------------------------------------------- Chief Operating Officer
Robert L. Adair III
/s/ Barry L. Edwards* Executive Vice President and
- ---------------------------------------------------------- Chief Financial Officer
Barry L. Edwards (Principal Financial Officer)
/s/ James P. Cotton, Jr.* Director
- ----------------------------------------------------------
James P. Cotton, Jr.
Director
- ----------------------------------------------------------
Richard L. Cravey
/s/ Gerald E. Eickhoff* Director
- ----------------------------------------------------------
Gerald E. Eickhoff
Director
- ----------------------------------------------------------
Edwin A. Wahlen, Jr.
/s/ Amy J. Jorgensen* Director
- ----------------------------------------------------------
Amy J. Jorgensen
Director
- ----------------------------------------------------------
John J. McDonough
/s/ Bruce W. Schnitzer* Director
- ----------------------------------------------------------
Bruce W. Schnitzer
/s/ Ronald B. Kirkland* Vice President and Chief
- ---------------------------------------------------------- Accounting Officer
Ronald B. Kirkland (Principal Accounting Officer)
</TABLE>
II-4
<PAGE> 33
*L. Keith Blackwell, by signing his name hereto, does sign and execute
this Registration Statement on behalf of each of the above-named officers and
directors of the Registrant on this 14th day of June, 1996, pursuant to powers
of attorneys executed on behalf of each of such officers and directors, and
previously filed with the Securities and Exchange Commission.
By: /s/ L. Keith Blackwell
-------------------------------------
L. Keith Blackwell
Attorney-in-Fact
II-5
<PAGE> 34
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. EXHIBIT PAGE
----------- ------- ----------------
<S> <C>
1.1 Form of Underwriting Agreement for Debt Securities.
1.2* Form of Underwriting Agreement for Preferred Stock.
1.3* Form of Underwriting Agreement for Common Stock.
4.1 Specimen Common Stock Certificate of the Registrant, Incorporated by reference to
Exhibit 4.4 to the Registrant's Registration Statement on Form S-3 (No. 33-63683).
4.2 Senior Indenture.
4.3 Form of Senior Note (included in Exhibit 4.2).
4.4* Subordinated Indenture.
4.5* Form of Subordinated Note (included in Exhibit 4.4).
4.6* Form of Certificate of Designation for Preferred Stock.
4.7* Specimen Preferred Stock Certificate.
4.8* Form of Warrant Agreement.
4.9* Specimen Warrant Certificate (included in Exhibit 4.8).
5.1 Form of Opinion of L. Keith Blackwell, Corporate Counsel to the Company regarding
legality of securities being registered.
12.1 Statement of Computation of Ratio of Earnings to Fixed Charges.
12.2 Statement of Computation of Ratio of Earnings to Fixed Charges and Preferred Stock
Dividends
23.1 Consent of L. Keith Blackwell, contained in the opinion filed as Exhibit 5.1.
23.2 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney.
25.1* Statement of Eligibility of Senior Trustee on Form T-1.
25.2* Statement of Eligibility of Subordinated Trustee on Form T-1.
</TABLE>
- ---------------------------
* To be filed.
<PAGE> 1
EXHIBIT 1.1
AMRESCO, INC.
DEBT SECURITIES
PURCHASE AGREEMENT
_________________________, 199__
______________________________
______________________________
______________________________
______________________________
Ladies and Gentlemen:
AMRESCO, INC., a Delaware corporation (the "Company"), proposes to
issue and sell to you (the "Underwriters") its _________________________ in an
aggregate principal amount of $_____________ (the "Notes" or the
"Securities"). The Notes shall be issued under an indenture, dated as of
____________ 1996 (the "Base Indenture"), between the Company and
______________________ as trustee (the "Trustee"), as amended and supplemented
by an Officer's Certificate and Company Order dated as of _______________, 1996
the ("Company Order"), establishing the terms of the Notes. The Base
Indenture, as amended and supplemented by the Company Order, is sometimes
referred to herein as the "Indenture."
The Company hereby confirms its agreement with respect to the sale of
the Securities to the Underwriters.
1. Registration Statement and Prospectus. A registration
statement on Form S-3 (File No. 333-______) with respect to the Company's Debt
Securities, Preferred Stock, Common Stock, Securities Warrants and Units (each
as defined in the Prospectus (as defined below) and collectively referred to
hereafter as the "Other Securities"), including a preliminary form of
prospectus, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations ("Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, and has been filed with the
Commission; Amendment Nos. ___ to such Registration Statement, including a
preliminary form of prospectus supplement with respect to the Securities, also
have been so prepared and filed; and one or more other amendments to such
registration statement also have been, or will be, so prepared and filed.
Copies of such registration statement and amendments and each related
preliminary prospectus and prospectus supplement have been delivered to the
Underwriters.
The Company has elected to rely upon Rule 430A of the Rules and
Regulations and, accordingly, will prepare and file a prospectus (or a term
sheet meeting the requirements of Rule 434) pursuant to Rule 424(b) that
discloses the information previously omitted from the Prospectus (as defined
below) in reliance upon Rule 430A. Such registration statement (including all
schedules and exhibits thereto, but excluding Form T-1) as amended at the time
it was declared effective by the Commission and, in the event of any amendment
thereto after the effective date and prior to the Closing Date (as hereafter
defined), such
<PAGE> 2
registration statement as so amended (but only from and after the effectiveness
of such statement), including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rules 430A(b)
and 434(d) of the Rules and Regulations, is hereafter called the "Registration
Statement." The prospectus included in the Registration Statement (including
any prospectus supplement relating to the Securities) at the time it was
declared effective by the Commission is hereafter called the "Prospectus,"
except that if any prospectus (including any term sheet meeting the
requirements of Rule 434 of the Rules and Regulations provided by the Company
for use with a prospectus subject to completion within the meaning of Rule 434
in order to meet the requirements of Section 10(a) of the Rules and
Regulations) filed by the Company, with the Commission pursuant to Rule 424(b)
(and Rule 434, if applicable) of the Rules and Regulations or any other such
prospectus provided to the Underwriters by the Company for use in connection
with the offering of the Securities (whether or not required to be filed by the
Company with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or otherwise) differs from the prospectus on file at the time the
Registration Statement was declared effective by the Commission, the term
"Prospectus" shall refer to such differing prospectus (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations) from and after the
time such prospectus is filed with the Commission or transmitted to the
Commission for filing pursuant to such Rule 424(b) (and Rule 434, if
applicable) or from and after the time it is first provided to the Underwriters
by the Company for such use. The term "Preliminary Prospectus" as used herein
means any preliminary prospectus included in the Registration Statement
(including any prospectus supplement relating to the Securities) prior to the
time it became effective under the Act and any prospectus (including any
prospectus supplement relating to the Securities) subject to completion as
described in Rule 430A or 434 of the Rules and Regulations. Any reference
herein to the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act
as of the date of such Prospectus. Any reference to any amendment or
supplement to the Prospectus (including any supplement to the Prospectus) shall
be deemed to refer to and include any documents filed after the date of such
Prospectus under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated therein by reference.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters as
follows:
(a) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission or the
securities authority of any state or other jurisdiction in which the
Notes are to be offered and sold and each Preliminary Prospectus, at
the time of filing thereof, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
foregoing shall not apply to statements in or omissions from any
Preliminary Prospectus in reliance upon, and in conformity with,
written information furnished to the Company by any Underwriter
specifically for use in the Prospectus as supplemented to relate to
the Securities.
(b) As of the time the Registration Statement (or any
post-effective amendment thereto) is or was declared effective by the
Commission, upon the filing or first delivery to the Underwriters of
the Prospectus (or any supplement to the Prospectus (including any
term sheet meeting the requirements of Rule 434)) and at the Closing
Date, (i) the Registration Statement and Prospectus (in each case, as
so amended and/or supplemented) conformed or will conform in all
material respects to the requirements of the Act and the Rules and
Regulations, (ii) the
2
<PAGE> 3
Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (iii) the Prospectus (as so supplemented)
did not or will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they are or were made, not misleading; except
that the foregoing clauses (i), (ii) and (iii) shall not apply to
statements in or omissions from any such document in reliance upon,
and in conformity with, written information furnished to the Company
by any Underwriter specifically for use in the preparation thereof.
The Registration Statement has been declared effective by the
Commission; no stop order suspending the effectiveness of the
Registration Statement has been issued; and no proceeding for that
purpose has been initiated or, to the Company's knowledge,
threatened by the Commission.
(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, or any amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to the Statement of Eligibility of the
Trustee on Form T-1 filed as an Exhibit to the Registration Statement
or to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by any
Underwriter expressly for use in the Prospectus as supplemented to
relate to the Securities.
(d) The Registration Statement and Prospectus conform,
and any amendments or supplements thereto will conform, in all
material respects to the requirements of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder and do not and will not, as
of the applicable effective date in the case of the Registration
Statement and any amendment thereto and as of the applicable filing
date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to the Statement of
Eligibility of the Trustee on Form T-1 filed as an Exhibit to the
Registration Statement or to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by any Underwriter expressly for use in the Prospectus
as supplemented to relate to the Securities.
(e) The consolidated financial statements of the Company,
together with the related notes thereto, set forth or incorporated by
reference in the Registration Statement and Prospectus comply in all
material respects with the requirements of the Act and fairly present
the financial condition of the Company and its Subsidiaries (as
hereinafter defined) or its predecessor or
3
<PAGE> 4
acquired businesses, as the case may be, as of the dates
indicated and the results of operations and changes in cash flows for
the periods therein specified in conformity with generally accepted
accounting principles consistently applied throughout the periods
involved (except as otherwise stated therein), and the independent
public accountants whose reports are contained therein are independent
public accountants as required by the Act, the Exchange Act and the
Rules and Regulations. The financial statement schedules, if any,
included in the Registration Statement or incorporated by reference
therein, or in any post-effective amendment thereto, and the other
financial and statistical information included in the Prospectus under
the captions "Summary Financial and Other Data," "Capitalization,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business" in all material respects present
fairly and on a basis consistent with the books and records of the
Company the information stated therein. The terms "Subsidiary" and
"Material Subsidiary" shall have the meanings assigned thereto in the
Indenture.
(f) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding
obligation of the Company, enforceable in accordance with its terms,
except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws and subject as to
enforcement, to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws relating to or affecting the
enforcement of creditors' rights generally and to general equitable
principles.
(g) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture and the Notes. The Indenture has been duly and validly
authorized by the Company and, when the Indenture has been executed
and delivered, will be a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject,
as to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to or
affecting the enforcement of creditors' rights generally and to
general equitable principles. The Notes sold hereunder have been duly
and validly authorized by the Company and, when the Notes have been
executed and authenticated in the manner set forth in the Indenture
and issued, sold, and delivered in the manner set forth in the
Prospectus, will be the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and the
terms of the Indenture, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization and moratorium laws affecting
the enforcement of creditors' rights generally and to general
equitable principles. The Indenture will have been duly qualified
under the Trust Indenture Act upon effectiveness of the Registration
Statement. The Indenture will be substantially in the form filed as
an exhibit to the Registration Statement and will comply with the
Trust Indenture Act and the regulations thereunder. The Indenture and
the Notes conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(h) The authorized capital stock of the Company is as set
forth under the caption "Capitalization" in the Prospectus. All of
the outstanding shares of capital stock have been duly authorized,
validly issued and are fully paid and non-assessable. The outstanding
securities of the Company described in the Registration Statement and
Prospectus conform to such descriptions. All offers and sales of the
Company's capital stock, 8% Convertible Subordinated Debentures due
4
<PAGE> 5
2005 or 10% Senior Subordinated Notes due 2003 prior to the date
hereof were at all relevant times duly registered under the Act or
exempt from the registration requirements of the Act and were duly
registered or the subject of an available exemption from the
registration requirements of the applicable state securities or Blue
Sky laws. None of the issued shares of capital stock of the Company
or its predecessors or any of its Subsidiaries has been issued or is
owned or held in violation of any pre-emptive rights of shareholders,
and no preemptive rights or similar rights of any security holders of
the Company exist with respect to the Notes. The Company has no
agreement with any security holder as to which the Company has not
obtained waiver which gives such security holder the right to require
the Company to register under the Act any securities of any nature
owned or held by such person in connection with the transactions
contemplated by this Agreement.
(i) Immediately after the sale of the Securities by the
Company hereunder, the aggregate amount of Securities which shall have
been issued and sold by the Company hereunder and of any of the Other
Securities that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of securities
registered under the Registration Statement.
(j) The execution, delivery and performance of this
Agreement, the Indenture and the Securities, the issuance and delivery
of the Securities, and the consummation of the transactions herein and
therein contemplated will not conflict with, or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, (i) any statute, (ii) any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party
or by which either the Company or any Subsidiary is bound or to which
any of their respective property is subject, (iii) the Company's or
any Subsidiary's charter or by-laws, or (iv) any order, rule,
regulation or decree of any court or governmental agency or body
having jurisdiction over the Company, any Subsidiary or any of their
respective properties, which breach, violation or default reasonably
could or might be expected, individually or in the aggregate with
other such breaches, violations or defaults, to result in a material
adverse effect on the financial condition, results of operations or
business of the Company and its Subsidiaries, taken as a whole. Other
than those already obtained or waivers from which have been obtained,
no consent, approval, authorization or order of, or filing with, any
court or governmental agency or body is required by the Company or any
Subsidiary for the execution, delivery and performance of this
Agreement, the Indenture or the Securities or for the consummation of
the transactions contemplated hereby and thereby, including the
issuance, sale and delivery of the Securities by the Company, except
such as may be required under the Act, the Trust Indenture Act or
state securities or blue sky laws.
(k) Neither the Company nor any Subsidiary is (i) in
violation of its respective certificate of incorporation or charter or
its respective by-laws or other organizational documents, (ii) in
default (nor has an event occurred which with notice or passage of
time or both would constitute such a default) under any bond,
indenture, mortgage, deed of trust, note, loan or credit agreement or
other material agreement or instrument to which any of them is a party
or by which any of them or any of their properties or assets may be
bound or affected, (iii) in violation of any order of any court,
arbitrator or governmental body or (iv) except as disclosed in the
Registration Statement and the Prospectus, in violation of or has
violated any franchise, grant, authorization, license, permit,
judgment, decree, order, statute, rule or regulation, which, in the
case of clauses (i)-(iv) of this sentence, would (individually
or in the aggregate) (x) adversely affect the legality,
5
<PAGE> 6
validity or enforceability of this Agreement, the Indenture or the
Securities, or any document related hereto or thereto or (y) have a
material adverse effect on the financial condition, results of
operations or business of the Company and the Subsidiaries, taken as a
whole, or (z) materially impair the Company's ability to perform fully
on a timely basis any obligations which it has under this Agreement,
the Indenture or the Securities. The Company or the Subsidiaries
hold, and are operating in compliance with, all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates
and orders of any governmental or self-regulatory body required for
the conduct of their respective businesses, except where any such
failure to hold or comply will not have a material adverse effect on
the Company and its Subsidiaries, taken as a whole. The descriptions
in the Registration Statement and the Prospectus of statutes, legal
and governmental proceedings or contracts and other documents are
accurate in all material respects and fairly present the information
required to be shown; and there are no statutes or legal or
governmental proceedings required to be described in the Registration
Statement or the Prospectus that are not described as required.
(l) Each of the Company and the Material Subsidiaries has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation with
full corporate power and authority to own or lease its properties and
conduct its business as currently being carried on and as described in
the Registration Statement and Prospectus; and is duly qualified to do
business as a foreign corporation and is in good standing in each
other jurisdiction in which it owns or leases real property of a
nature, or transacts business of a type, that would make such
qualification necessary and in which the failure to so qualify would
have a material adverse effect on the financial condition, results of
operations or business of the Company and the Subsidiaries, taken as a
whole. Each of the Company and the Subsidiaries is in compliance with
the rules, regulations or other lawful directives established by each
regulatory authority having jurisdiction over the Company's or the
Subsidiary's respective business, conduct and affairs, including
without limitation the timely and accurate filing of all reports,
statements, documents, registrations, filings or submissions required
to be filed by it with any such regulatory authority, where the
failure to comply with such rules, regulations or other lawful
directives reasonably could or might be expected to result in a
material adverse effect on the financial condition, results of
operations or business of the Company and its Subsidiaries, taken
as a whole.
(m) Except as disclosed in the Registration Statement and
the Prospectus, there is no action, suit, investigation or proceeding,
governmental or otherwise, pending or overtly threatened, to which the
Company or any Subsidiary is or may be a party or of which the
business or property of the Company or any Subsidiary is or may be the
subject which, in each case, is material to the Company and the
Subsidiaries, taken as a whole, or which seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance of the
Securities or any of the other transactions contemplated hereby or by
the Indenture, or which questions the legality or validity of any such
transactions or which seeks to recover damages or obtain other relief
in connection with any of such transactions; and there is no contract
or document of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement which is not described or filed as
required.
(n) All of the outstanding capital stock of each
Subsidiary has been duly authorized, validly issued and is fully paid
and non-assessable, and except as otherwise noted in the
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<PAGE> 7
Prospectus, is owned directly or indirectly by the Company free and
clear of any security interest, claim, lien or other encumbrance.
(o) The Company and its Subsidiaries have good and
marketable title in fee simple to all real property, if any, and good
title to all personal property owned by them, in each case free and
clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are disclosed in
the Prospectus or such as do not materially and adversely affect the
value of those properties which individually or in the aggregate are
material to the Company and its Subsidiaries taken as a whole and do
not interfere with the use made or proposed to be made of such
property by the Company or any one of its Subsidiaries, as the case
may be; and any real property and buildings held under lease by the
Company or any of its Subsidiaries are held under valid, subsisting
and enforceable leases, with such exceptions as are disclosed in the
Prospectus or are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company
or such Subsidiary.
(p) The Company and each of its Subsidiaries have filed all
necessary foreign, federal, state and local income and franchise tax
returns and, other than taxes the Company or its Subsidiaries are
contesting in good faith and for which the Company has established
adequate reserves, have paid all taxes shown as due thereon. Except
as is otherwise expressly stated in the Registration Statement or
Prospectus, the Company has no knowledge of any tax deficiency which
might be asserted against it which would materially and adversely
affect the financial condition, results of operations or business of
the Company and its Subsidiaries, taken as a whole.
(q) Since the date of the most recent audited financial
statements included in the Prospectus, neither the Company nor any of
the Subsidiaries has sustained any loss or interference with its
business, which loss or interference was material to the Company and
its Subsidiaries, taken as a whole, from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, other than
as disclosed in or contemplated by the Prospectus.
(r) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) neither
the Company nor any of the Subsidiaries has incurred any liabilities
or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are
material to the Company and the Subsidiaries taken as a whole, (ii)
the Company has not purchased any of its outstanding capital stock or
declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock, (iii) there has not been any change in the
capital stock (except as a result of shares issued upon exercise of
stock options pursuant to existing stock option plans of the Company
and the Subsidiaries, upon conversion of the Company's 8% Convertible
Subordinated Debentures and upon issuances of [65,790] shares of
restricted stock pursuant to the Company's Stock Option and Award
Plan), long-term debt or, otherwise than in the ordinary course of
business consistent with past practice, short-term debt of the Company
or any of the Subsidiaries and (iv) there has not been any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the financial condition, results of
operations or business of the Company and the Subsidiaries taken as a
whole, in each case other than as disclosed in or contemplated by the
Prospectus.
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<PAGE> 8
(s) Neither the Company nor any of its officers, directors
or affiliates has taken, directly or indirectly, any action designed
to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale of the Notes.
(t) Neither the Company nor any of the Subsidiaries, nor
any director, officer, agent, employee or other person associated with
or acting on behalf of the Company or any such Subsidiary has,
directly or indirectly (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related
to political activity, (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds, (iii) violated
any provisions of the Foreign Corrupt Practices Act of 1977, as
amended, or (iv) made any bride, rebate, payoff, influence payment,
kick back or other unlawful payment.
(u) To the Company's knowledge, the operations of the
Company and its Subsidiaries with respect to any real property
currently leased or owned or by any means controlled by the Company or
any Subsidiary (the "Real Property") are in compliance with all
federal, state and local laws, ordinances, rules and regulations
relating to occupational health and safety and the environment
(collectively "Laws"), except where the failure to so comply would not
have a material adverse effect on the Company's business or results of
operations, and the Company and its Subsidiaries have all licenses,
permits and authorizations necessary to operate under all Laws and are
in compliance with all terms and conditions of such licenses, permits
and authorizations, except where such failure would not have a
material adverse effect on the Company's and its Subsidiaries'
business or results of operations taken as a whole; neither the
Company nor any Subsidiary has authorized, conducted or has knowledge
of the generation, transportation, storage, use, treatment, disposal
or release of any hazardous substance, hazardous waste, hazardous
material, hazardous constituent, toxic substance, pollutant,
contaminate, petroleum product, natural gas, liquefied gas or
synthetic gas defined in or regulated under any environmental law on,
in or under any Real Property in violation of any Laws, except where
such violation would not have a material adverse effect on the
Company's business or results of operations; and there is no material
pending or threatened claim, litigation or any administrative agency
proceeding, nor has the Company or any Subsidiary received any written
or oral notice from any governmental entity or third party that (i)
alleges a violation of any Laws by the Company or any Subsidiary; (ii)
alleges the Company or any Subsidiary is a liable party under the
Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. Section 9601 et seq. or any state superfund law; (iii)
alleges possible contamination of the environment by the Company or
any Subsidiary or (iv) alleges possible contamination of the Real
Property, except as to each of the above, for any violations,
liability or contamination that would not have a material adverse
effect on the Company's and its Subsidiaries' business or results of
operations taken as a whole.
(v) The Company and its Subsidiaries own or have the right
to use all patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, franchises,
trade secrets, proprietary or other confidential information and
intangible properties and assets (collectively "Intangibles")
necessary to their respective businesses as presently conducted or as
the Prospectus indicates the Company or such Subsidiary proposes to
conduct; to the Company's knowledge, neither the Company nor any
Subsidiary has infringed or is infringing, and neither the Company nor
any Subsidiary has received notice of infringement with respect to,
8
<PAGE> 9
asserted Intangibles of others; and, to the Company's knowledge, there
is no infringement by others of Intangibles of the Company or any of
its Subsidiaries which would have a material adverse effect on the
Company and its Subsidiaries taken as a whole.
(w) The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
business in which they are engaged by similarly situated companies;
and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a comparable cost, except as disclosed in the Prospectus.
(x) Each of the Company and its Subsidiaries makes and
keeps accurate books, records and accounts, which, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of its assets and maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general
and specific authorization, (ii) transactions are recorded as
necessary to permit preparation of the Company's consolidated
financial statements in accordance with generally accepted accounting
principles and to maintain accountability for the assets of the
Company, (iii) access to the assets of the Company and each of its
Subsidiaries is permitted only in accordance with management's general
and specific authorization and (iv) the recorded accountability for
assets of the Company and each of its Subsidiaries is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(y) No Subsidiary is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any
other distributions on such Subsidiary's capital stock, from repaying
to the Company any loans or advances to such Subsidiary or from
transferring any of such Subsidiary's property or assets to the
Company or any other Subsidiary, except as disclosed in the
Prospectus.
(z) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in any manner that would cause it to become an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
(aa) The Company's common stock, par value $0.05 per share
(the "Common Stock") is registered pursuant to Section 12(g) of the
Exchange Act and is qualified as a Nasdaq National Market security of
The Nasdaq Stock Market, Inc. The Company has taken no action
designed to terminate, or likely to have the effect of terminating,
the registration of the Common Stock under the Exchange Act or
qualification of the Common Stock on the Nasdaq National Market, nor
has the Company received any notification that the Commission or The
Nasdaq Stock Market, Inc. is contemplating terminating such
registration or qualification.
(bb) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the
offering and sale of the Securities other than any Preliminary
Prospectus or the Prospectus or other materials permitted by the Act
to be distributed by the Company; provided, however, that materials
used in the "road show" with the express
9
<PAGE> 10
approval of the Underwriters but not otherwise delivered to
prospective purchasers of the Notes shall not be deemed, for the
purposes of this paragraph 2(y), to be distributed by the Company.
(cc) The Company is in compliance with all provisions of
Florida Statutes Section 517.075 (Chapter 92-198, laws of Florida).
Neither the Company nor any Subsidiary does any business, directly or
indirectly, with the government of Cuba or, to the Company's
knowledge, with any person or entity located in Cuba.
(dd) The conditions for use of a Registration Statement on
Form S-3 set forth in the General Instructions to Form S-3 have been
satisfied with respect to the Company and the transactions
contemplated by this Agreement and the Registration Statement.
(ee) Any certificate signed by any officer of the Company
and delivered to the Underwriters or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
(ff) Other than as contemplated herein, the Company has not
incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
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<PAGE> 11
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions
herein set forth, the Company agrees to issue and sell the Notes to
the Underwriters, and the Underwriters agree to purchase the
respective principal amounts of Notes set forth opposite each
Underwriter's name in Schedule I hereto. The purchase price for each
Note shall be ____% of the principal amount thereof, which shall
reflect an Underwriting Discount of ____% of the principal amount of
the Notes payable to the Underwriters. The obligation of each
Underwriter to the Company shall be to purchase from the Company that
principal amount of Notes set forth opposite the name of such
Underwriter in Schedule I hereof. In making this Agreement, each
Underwriter is contracting severally and not jointly. Except as
provided in paragraph (b) of this Section 3 and in Section 8 hereof,
the agreement of each Underwriter is to purchase only its respective
principal amount of Notes as specified in Schedule I.
The Notes will be delivered by the Company to Piper Jaffray
Inc. for each Underwriter's account against payment of the purchase
price therefor by wire transfer of same day funds to the account
designated by the Company, at the offices of Piper Jaffray Inc., Piper
Jaffray Tower, 222 South Ninth Street, Minneapolis, Minnesota, or such
other location as may be mutually acceptable, at 9:00 a.m.,
Minneapolis time, on the third (or, if the Notes are priced, as
contemplated by Rule 15c6-1(c) promulgated pursuant to the Exchange
Act, after 4:30 p.m. Washington, D.C. time on the date of this
Agreement, the fourth) full business day following the date hereof, or
at such other time and date as the Underwriters and the Company
determine pursuant to Rule 15c6-1(a) promulgated pursuant to the
Exchange Act, such time and date of delivery being herein referred to
as the "Closing Date." Delivery of the Notes shall be made by credit
through full fast transfer to the accounts at The Depository Trust
Company designed by Piper Jaffray Inc.
(b) It is understood that each Underwriter may (but shall
not be obligated to) make payment to the Company on behalf of another
Underwriter for the Securities to be purchased by such Underwriter.
Nothing herein contained shall constitute any of the Underwriters an
unincorporated association or partner with the Company or with each
other.
(c) The Underwriters propose to make a public offering of
the Notes directly to the public (which may include selected dealers
and special purchasers) as soon as the Underwriters deem practicable
after the Registration Statement becomes effective, at the initial
public offering price as set forth on the cover page of the
Prospectus, subject to the terms and conditions of this Agreement and
in accordance with the Prospectus. Such concessions from the public
offering price may be allowed to selected dealers and other members of
the National Association of Securities Dealers, Inc. as the
Underwriters may determine, and the Underwriters will furnish the
Company with such information about the distribution arrangements as
may be necessary for inclusion in the Registration Statement. It is
understood that the public offering price and concessions may vary
after the initial public offering.
4. Covenants. The Company covenants and agrees with the
Underwriters as follows:
(a) The Company will use its best efforts to cause any
post-effective amendments to the Registration Statement to become
effective as promptly as possible; the Company will notify
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<PAGE> 12
the Underwriters promptly of the time when any post-effective
amendment to the Registration Statement has become effective or any
supplement to the Prospectus (including any term sheet with the
meaning of Rule 434 of the Rules and Regulations) has been filed and
of any request by the Commission for any amendment or supplement to
the Registration Statement or Prospectus or for additional
information. If the Company has elected to rely on Rule 430A of the
Rules and Regulations, the Company will prepare and file a Prospectus
(or term sheet within the meaning of Rule 434 of the Rules and
Regulations) containing the information omitted therefrom pursuant to
Rule 430A of the Rules and Regulations with the Commission within the
time period required by, and otherwise in accordance with the
provisions of, Rules 424(b), 430A and 434, if applicable, of the Rules
and Regulations. The Company will prepare and file with the
Commission, promptly upon the request of any Underwriter, any
amendments or supplements to the Registration Statement or Prospectus
(including any term sheet within the meaning of Rule 434 of the Rules
and Regulations) that, in the reasonable opinion of such Underwriter,
may be necessary or advisable in connection with the distribution of
the Securities by the Underwriters; and the Company will not file, at
any time from the date hereof to the Closing Date, any amendment or
supplement to the Registration Statement or Prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and
Regulations) or any document incorporated by reference therein (other
than any supplement to the Prospectus relating solely to Other
Securities) to which any Underwriter shall reasonably object by notice
to the Company after having been furnished a copy a reasonable time
prior to the filing.
(b) The Company will advise the Underwriters, promptly
after it shall receive notice or obtain knowledge thereof, of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding
for any such purpose; and the Company will promptly use its best
efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such a stop order should be issued.
(c) Within the time during which a prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and
Regulations) relating to the Securities is required to be delivered
under the Act, the Company will comply as far as it is able with all
requirements imposed upon it by the Act, as now and hereafter amended,
and by the Rules and Regulations, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealings in
the Securities as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of
which the Prospectus would include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the
Act, the Company will promptly notify the Underwriters and will amend
the Registration Statement or supplement the Prospectus (at the
expense of the Company) so as to correct such statement or omission or
effect such compliance.
(d) The Company will use its best efforts to qualify the
Securities for sale under the securities laws of such jurisdictions as
the Underwriters may reasonably designate and to continue such
qualifications in effect so long as required for the distribution of
the Securities, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or to execute
a general consent to service of process in any state. In each
jurisdiction in which the
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<PAGE> 13
Notes shall have been qualified as above provided, the Company will
make and file such statements and reports as may be identified as
requiring post-sale filings in any blue sky memoranda delivered in
connection with the offer and sale of the Notes contemplated hereby or
as otherwise reasonably requested by the Underwriters or officials of
such jurisdictions.
(e) The Company will furnish to you copies of the
Registration Statement (two of which will be manually signed and will
include all exhibits), the Indenture, each Preliminary Prospectus, the
Prospectus, and all amendments and supplements (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) to
such documents, in each case as soon as available and in such
quantities as each Underwriter may from time to time reasonably
request.
(f) So long as any Securities remain outstanding, the
Company will file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act and furnish to the Underwriters copies of all such
reports and any definitive proxy or information statements, all
communications with the stockholders of the Company and all
information, documents and reports filed with the National Association
of Securities Dealers, Inc., Nasdaq or any securities exchange.
(g) The Company will make generally available to its
security holders as soon as practicable, but in any event not later
than 15 months after the end of the Company's current fiscal quarter,
an earnings statement (which need not be audited) covering a 12-month
period beginning after the effective date of the Registration
Statement that shall satisfy the provisions of Section 11(a) of the
Act and Rule 158 of the Rules and Regulations.
(h) The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented
from becoming effective under the provisions of Section 9(a) hereof or
is terminated, will pay or cause to be paid (i) all expenses
(including transfer taxes allocated to the respective transferees)
incurred in connection with the delivery to the Underwriters of the
Securities, (ii) all expenses and fees (including, without limitation,
fees and expenses of the Company's accountants and counsel but, except
as otherwise provided below, not including fees and expenses of the
Underwriters' counsel) in connection with the preparation, printing,
filing, delivery, and shipping of the Registration Statement
(including the financial statements therein and all amendments,
schedules and exhibits thereto), the Securities, the Indenture, each
Preliminary Prospectus, the Prospectus, and any amendment thereof or
supplement thereto, and underwriting documents, including Blue Sky
Memoranda, (iii) all filing fees and reasonable fees and disbursements
of the Underwriters' counsel incurred in connection with the
qualification of the Securities for offering and sale by the
Underwriters or by dealers under the securities or blue sky laws of
the states and other jurisdictions which the Underwriters shall
designate in accordance with Section 4(d) hereof, (iv) the fees and
expenses of the Trustee and counsel for the Trustee, (v) the filing
fees incident to any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Securities,
(vi) listing fees, if any, (vii) fees or expenses, if any, of
Underwriters' counsel incurred in connection with investigating the
legality of an investment in the Securities by certain purchasers in
certain jurisdictions and the preparation of memoranda relating
thereto, (viii) any fees charged by security rating services for
rating the Notes, and (ix) all other reasonable costs and expenses
incident to the performance of its obligations hereunder that are not
otherwise specifically provided for herein.
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<PAGE> 14
If the sale of the Securities provided for herein is not consummated
by reason of action by the Company pursuant to Section 9(a) hereof
which prevents this Agreement from becoming effective, or by reason of
any failure, refusal or inability on the part of the Company to
perform any material agreement on its part to be performed, or because
any other material condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company is not fulfilled,
the Company will reimburse the several Underwriters for all reasonable
out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The Company
shall not in any event be liable to any of the Underwriters for loss
of anticipated profits from the transactions covered by this
Agreement.
(i) The Company will apply the net proceeds from the sale
of the Securities to be sold by it hereunder for the purposes set
forth in the Prospectus.
(j) The Company has not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(k) For so long as the delivery of a prospectus is required
in connection with the offering, sale and distribution of the Notes,
the Company will file on a timely basis such registration statements
and other filings and take such other action as is required pursuant
to the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder.
(l) So long as any of the Notes are outstanding, the
Company will furnish to each of you, upon request, the reports
required to be filed with the Trustee pursuant to the Indenture,
concurrently with such filing.
(m) The Company will use its best efforts to cause the
Notes to be listed on the New York Stock Exchange, Inc. upon issuance
of the Notes and will use its best efforts to cause the Notes to be so
listed as long as the Notes remain outstanding.
(n) The Company will inform the Florida Department of
Banking and Finance at any time prior to the consummation of the
distribution of the Securities by the Underwriters if it commences
engaging in business with the government of Cuba or with any person or
affiliate located in Cuba. Such information will be provided within
90 days after the commencement thereof or after a change occurs with
respect to previously reported information.
5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy, as of the date
hereof and at the Closing Date (as if made at the Closing Date), of and
compliance with all representations, warranties and agreements of the Company
contained herein, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective
not later than 5:00 p.m., Minneapolis time, on the date of this
Agreement, or at such later time and date as the Underwriters shall
approve and all filings required by Rules 424, 430A and 434 of the
Rules and
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<PAGE> 15
Regulations shall have been timely made; no stop order suspending the
effectiveness of the Registration Statement or any amendment thereof
shall have been issued; no proceedings for the issuance of such an
order shall have been initiated or threatened; and any request of the
Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the Underwriters' satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), contains an untrue statement
of fact which in the reasonable opinion of any Underwriter, is
material, or omits to state a fact which, in the reasonable opinion of
any Underwriter, is material and is required to be stated therein or
necessary to make the statements therein not misleading.
(c) Except as contemplated in the Registration Statement
and the Prospectus, and except for the issuance of any of the Other
Securities, subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, neither the
Company nor any Subsidiary shall have incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions not in the ordinary course of business, or
declared or paid any dividends or made any distribution of any kind
with respect to its capital stock; and there shall not have been any
change in the capital stock (other than capital stock issued upon
exercise of outstanding stock options or upon conversion of
convertible debentures), or any material change in the short-term or
long-term debt of the Company, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock
of the Company or any Subsidiary, or any material adverse change, or
any development involving a prospective material adverse change, in
the general affairs, condition (financial or otherwise), business, key
personnel, property, prospects, net worth or results of operations of
the Company and the Subsidiaries, considered as a whole, that, in your
judgment, makes it impractical or inadvisable to offer or deliver the
Securities on the terms and in the manner contemplated in the
Prospectus.
(d) On the Closing Date, there shall have been furnished to
the Underwriters, the opinion of Haynes and Boone, L.L.P., counsel for
the Company, dated the Closing Date and addressed to the Underwriters,
to the effect that:
(i) The Company has all requisite corporate power
to execute, deliver and perform this Agreement. This Agreement
has been duly authorized by all requisite corporate action
necessary on behalf of the Company, duly executed and delivered
by the Company and is enforceable against the Company, subject
to the General Qualifications.
(ii) The Company has all requisite corporate power
to execute, deliver and perform its obligations under the
Indenture. The Indenture has been duly authorized by all
requisite corporate action necessary on behalf of the Company,
has been duly executed and delivered by the Company and is
enforceable against the Company, subject to the General
Qualifications. The Notes being delivered on the Closing Date
have been duly authorized, and, when executed, authenticated,
issued and delivered in accordance with the terms of the
Indenture, will be enforceable against the Company, subject to
the General Qualifications. The Indenture and the form of
Certificate representing the Notes conform in all material
respects, as to legal matters, to the descriptions thereof
contained
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<PAGE> 16
in the Registration Statement and the Prospectus. The
Indenture complies in all material respects with the Trust
Indenture Act. The Notes have been listed for trading on the
New York Stock Exchange, Inc.
(iii) The execution and delivery by the Company of, and
performance of its obligations in, this Agreement, the
Indenture and the Notes being delivered on the Closing Date do
not (a) violate the Company's or any Material Subsidiary's
Constituent Documents, (b) breach, or result in a default
under, any existing obligation of the Company (or, as
applicable, the Material Subsidiaries) under the written
contracts listed on an exhibit to such opinion, or (c) violate
applicable provisions of statutory law or regulation. Except
for permits and similar authorizations required under the Act,
the Trust Indenture Act and the securities or Blue Sky laws of
certain jurisdictions and except for permits and authorizations
which have been obtained and registrations which have been
effected, no consent, approval, authorization, registration or
order of, or filing with, any court or governmental agency or
body is required in connection with the sale of the Notes by
the Company.
(iv) The Company's authorized, issued and
outstanding capital stock is as disclosed in the Prospectus.
All of the issued shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable. To such counsel's Actual Knowledge, except as
disclosed in the Prospectus, there are no contracts, agreements
or understandings between the Company and any person granting
such person the right to require the Company to file a
registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the
Registration Statement for the Notes (or any such right has
been effectively waived) and to such counsel's Actual
Knowledge, none of the issued shares of capital stock of the
Company, its predecessors or any Material Subsidiary has been
issued in violation of any preemptive rights of shareholders,
and no person or entity, including any holder of outstanding
shares of capital stock of the Company has any preemptive or,
to such counsel's Actual Knowledge, other similar rights to
subscribe for any of the Notes. All of the shares of capital
stock of each Material Subsidiary have been duly authorized and
validly issued, are fully paid and non- assessable, and to such
counsel's Actual Knowledge are owned of record by the Company
and the Company has not received notice of any adverse claim,
except for security interests in a majority of the present and
future capital stock of all the Material Subsidiaries granted
by the Company pursuant to the Revolving Loan Agreement dated
as of September 29, 1995, as amended, among the Company,
NationsBank of Texas, N.A. as agent and the banks which are
parties thereto from time to time.
(v) To such counsel's Actual Knowledge, the
Company is not named as a party to any pending or overtly
threatened litigation, arbitration, claim or proceeding that is
material to the Company and its Subsidiaries taken as a whole,
except as disclosed on the Company's Defensive
Litigation/Counterclaim Report for the Second Quarter 1996, and
all attachments thereto. The statements contained in the
Prospectus under the captions "Management's Discussion and
Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources," "Description of Securities,"
"Description of Notes" and "Description of Other Indebtedness,"
insofar as they purport to summarize the
16
<PAGE> 17
provisions of statutes, legal and governmental proceedings or
contracts or other documents are materially accurate and fairly
present in all material respects the information required to be
shown.
(vi) The Registration Statement is effective under
the Act and the Indenture has been qualified under the Trust
Indenture Act. Any required filing of the Prospectus pursuant
to Rule 424(b) of the Rules and Regulations has been made in
the manner and within the time period required by such Rule.
To such counsel's Actual Knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose has been instituted or
threatened by the Commission.
(vii) Each of the Company and the Material
Subsidiaries has been duly incorporated and is existing as a
corporation in good standing under the laws of its jurisdiction
of incorporation with full corporate power to own or lease its
properties and conduct its business as described in the
Registration Statement and Prospectus.
(viii) The Registration Statement and the Prospectus
(including the documents incorporated by reference therein) and
each amendment or supplement thereto (other than the financial
statements and related schedules therein and other than the
Form T-1, as to each of which such counsel need express no
opinion), as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Act, the Rules and Regulations, the
Exchange Act and the rules and regulations promulgated
thereunder.
(ix) The Company is not, and immediately after the
applicable Closing Date will not be, required to be registered
under the Investment Company Act of 1940, as amended, as an
"investment company," and, to the Actual Knowledge of such
counsel, is not a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of
1940, as amended.
Such counsel shall also advise the Underwriters that although
they do not assume any responsibility for, and cannot guarantee the
accuracy, completeness or fairness of, the statements contained in the
Registration Statement or the Prospectus, on the basis of the
information such counsel developed during the course of preparing the
Registration Statement and the Prospectus, which involved attending
conferences with officers of the Company, the Company's accountants
and other parties and a review of documents specifically referred to
or incorporated by reference in the Registration Statement and
Prospectus (although such documents incorporated by reference were
prepared and filed by the Company without, in certain cases, such
counsel's participation), and as a result of such counsel's
participation in such conferences and review of such documents, but
otherwise without independent check or verification except as
specified, such counsel has no reason to believe that the Registration
Statement, at the time the Registration Statement became effective, or
any further amendment thereto upon filing thereof (but excluding the
financial statements and supporting schedules and other financial or
statistical information or other scheduled data included or
incorporated by reference therein and the Form T-1, as to each of
which such counsel need express no comment), contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus or any further amendment
or supplement thereto (but excluding the financial statements and
supporting schedules and other financial or statistical
17
<PAGE> 18
information or other scheduled data included or incorporated by
reference therein and the Form T-1, as to each of which such counsel
need express no comment) contained or contains an untrue statement of
a material fact or omits or omitted to state a material fact necessary
to make the statements therein, in the light of the circumstances in
which they were made, not misleading.
(e) On the Closing Date, there shall have been furnished to
the Underwriters, the opinion of L. Keith Blackwell, Esq., General
Counsel for the Company, dated the Closing Date and addressed to the
Underwriters, to the effect that
(i) the Company is duly qualified to transact business
as a foreign corporation and in good standing under the laws of
each other jurisdiction in which it owns or leases material
property, or conducts material business, so as to require such
qualification, except where the failure to so qualify would not
have a material adverse effect on the financial position of the
Company and its Subsidiaries, taken as a whole.
(ii) Each of the United States and Canadian
Subsidiaries of the Company is duly qualified to transact
business as a foreign corporation and is in good standing under
the laws of each other United States and Canadian jurisdiction
in which it owns or leases material property, or conducts
material business, so as to require such qualification, except
where the failure to so qualify would not have a material
adverse effect on the financial position of the Company and its
Subsidiaries, taken as a whole.
(iii) Each sale of the Company's capital stock, its 8%
Convertible Subordinated Debentures due 2005 or its 10% Senior
Subordinated Notes due 2003 during the period from December 13,
1992 through the Closing Date was, at the time of each sale,
registered or exempt from the registration requirements of the
Act and applicable state securities or Blue Sky laws.
(iv) To such counsel's Actual Knowledge, neither the
Company nor any of the Subsidiaries has (a) breached or
otherwise violated any existing obligation of the Company under
any court order that names the Company as a party or (b)
violated applicable provisions of statutory law or regulation,
in either case where any such breach or violation would have a
material adverse effect on the financial position of the
Company and its Subsidiaries, taken as a whole.
(v) To such counsel's Actual Knowledge, (a) the Company
has not violated its Certificate of Incorporation or Bylaws and
(b) neither the Company nor any of the Material Subsidiaries
has breached or otherwise violated any existing obligation
under any material agreement to which the Company or any
Material Subsidiary is a party, in either case where such
breach or violation would have a material adverse effect on the
financial position of the Company and its Subsidiaries, taken
as a whole.
(vi) Except as disclosed in the Registration Statement
and the Prospectus, such counsel knows of no action, suit,
investigation or proceeding, governmental or otherwise, pending
or overtly threatened against the Company or any Subsidiary, or
involving the business or properties of the Company or any
Subsidiary with respect to the issuance and sale of the
Securities pursuant to this Agreement and the Indenture or
which is required
18
<PAGE> 19
to be described in the Registration Statement or Prospectus
that is not disclosed as required. The agreements, contracts
and exhibits and amendments thereto filed by the Company under
the Exchange Act to date constitute all of the material
contracts to which the Company or any of its Subsidiaries is a
party which could be, but are not, breached or violated in
connection with the execution and delivery by the Company of,
and performance of its obligations in, this Agreement, the
Indenture and the Notes and the consummation of the
transactions herein and therein contemplated. Such counsel does
not know of any contracts or documents of a character required
to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement
which are not described or filed as required. The descriptions
contained in the Registration Statement and Prospectus of
contracts and other documents are accurate and fairly present
the information required to be shown. The statements contained
in the Registration Statement or the Prospectus to the extent
such statements relate to matters of law, descriptions of
statutes, legal or governmental proceedings, regulatory matters
or other legal matters or conclusions of law, fairly summarize
such matters.
(f) On the Closing Date, there shall have been furnished to
the Underwriters, such opinion or opinions from Lindquist & Vennum
P.L.L.P., counsel for the Underwriters, dated the Closing Date and
addressed to the Underwriters, with respect to the formation of the
Company, the validity of the Securities, the Registration Statement,
the Prospectus and other related matters as the Underwriters
reasonably may request, and such counsel shall have received such
papers and information as they request to enable them to pass upon
such matters.
(g) On the Closing Date the Underwriters shall have
received letters from Deloitte & Touche, LLP, dated the Closing Date
and addressed to the Underwriters, confirming that they are
independent public accountants within the meaning of the Act and are
in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the
Commission, and stating, as of the date of such letter (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the
date of such letter), the conclusions and findings of said firm with
respect to the financial information and other matters covered by its
letter delivered to the Underwriters concurrently with the execution
of this Agreement, and the effect of the letter so to be delivered on
the Closing Date shall be to confirm the conclusions and findings set
forth in such prior letter.
(h) On the Closing Date, there shall have been furnished to
the Underwriters a certificate, dated the Closing Date and addressed
to the Underwriters, signed by the Chief Executive Officer and by the
Chief Financial Officer of the Company, to the effect that:
(i) The representations and warranties of the Company
in this Agreement are true and correct, in all material
respects, as if made at and as of the Closing Date, and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) To the best of their knowledge, no stop order or
other order suspending the effectiveness of the Registration
Statement or any amendment thereof or the qualification of the
Securities for offering or sale has been issued, and, to the
best of their knowledge,
19
<PAGE> 20
no proceeding for that purpose has been instituted or is
contemplated by the Commission or any state or regulatory body;
and
(iii) The signers of said certificate have carefully
examined the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto (including any term
sheet within the meaning of Rule 434 of the Rules and
Regulations), and (A) such documents contain all statements and
information required to be included therein, the Registration
Statement, or any amendment thereof, does not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus,
as amended or supplemented, does not include any untrue
statement of material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B)
since the effective date of the Registration Statement, there
has occurred no event required to be set forth in an amended or
supplemented prospectus which has not been so set forth, (C)
except as disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the
Registration Statement and the Prospectus, neither the Company
nor any Subsidiary has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business, or
declared or paid any dividends or made any distribution of any
kind with respect to its capital stock, and except as disclosed
in the Prospectus, there has not been any change in the capital
stock, or any material change in the short-term or long-term
debt, or any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock of the
Company or any Subsidiary, or any material adverse change, or
any development involving a prospective material adverse
change, in the general affairs, condition (financial or
otherwise), business, key personnel, property, prospects, net
worth or results of operations of the Company and the
Subsidiaries, considered as a whole, and (D) except as stated
in the Registration Statement and the Prospectus, there is not
pending, or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the
Company or any Subsidiary is a party before or by any court or
governmental agency, authority or body, or any arbitrator,
which might result in any material adverse change in the
condition (financial or otherwise), business, prospects or
results of operations of the Company and the Subsidiaries,
considered as a whole.
(i) The Company shall have furnished to the Underwriters
and their counsel such additional documents, certificates and evidence
as the Underwriters or their counsel may have reasonably requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are
reasonably satisfactory in form and substance to the Underwriters and
counsel for the Underwriters. The Company will furnish the
Underwriters with such conformed copies of such opinions,
certificates, letters and other documents as the Underwriters shall
reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the
Act or otherwise (including in settlement of any litigation if such
settlement is
20
<PAGE> 21
effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
or incorporated therein by reference, including the information deemed
to be a part of the Registration Statement at the time of
effectiveness pursuant to Rules 430A and 434(d) of the Rules and
Regulations, if applicable, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations), or
arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against
such loss, claim, damage, liability or action; provided, however, that
the Company shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with written
information furnished to the Company by the Underwriters specifically
for use in the preparation thereof; provided further, however, that
the Company shall not be liable to any Underwriter in respect of any
untrue statement or alleged untrue statement contained in, or omission
or alleged omission from, any Preliminary Prospectus to the extent
that (i) the Prospectus did not contain such untrue statement or
alleged untrue statement or omission or alleged omission giving rise
to such loss, claim, damage, liability or action, (ii) the Prospectus
was not sent or given to the purchaser of the Notes in question at or
prior to the time at which the written confirmation of the sale of
Notes was sent or given to such person, and (iii) the failure to
deliver such Prospectus was not the result of the Company's
non-compliance with its obligations under Section 4(e) hereof.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise (including
in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any such amendment or
supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by such Underwriter, specifically
for use in the preparation thereof, and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending against any such loss,
claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party shall not relieve
the indemnifying party from any liability that it may have to
21
<PAGE> 22
any indemnified party otherwise than under such subsection or unless
and to the extent that the indemnifying party is substantially
prejudiced thereby. In case any such action shall be brought against
any indemnified party, and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of
the indemnifying party's election so to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided,
however, that if, in the sole judgment of the Underwriters, it is
advisable for the Underwriters to be represented as a group by
separate counsel, the Underwriters shall have the right to employ a
single counsel to represent all Underwriters who may be subject to a
liability arising from any claim in respect of which indemnity may be
sought by the Underwriters under paragraph (a) of this Section 6, in
which event the reasonable fees and expenses of such separate counsel
shall be borne by the indemnifying party or parties and remitted to
the Underwriters for payment to such counsel as such fees and expenses
are incurred. An indemnifying party shall not be obligated under any
settlement agreement relating to any action under this Section 6 to
which it has not agreed in writing.
(d) If the indemnification provided for in this Section 6
is unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as
a result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case
as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and
the parties' relevant intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to be
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in the first sentence of this subsection (d). The amount
paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of
this subsection (d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which
the Securities
22
<PAGE> 23
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6
shall be in addition to any liability which the Company may otherwise
have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the
Act; and the obligations of the Underwriters under this Section 6
shall be in addition to any liability that the respective Underwriters
may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who,
with his consent, is named in the Registration Statement as about to
become a director of the Company), to each officer of the Company who
has signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters and the Company contained in Section 6 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof, or the
Company or any of its officers, directors, or controlling persons and shall
survive delivery of, and payment for, the Securities to and by the Underwriters
hereunder.
8. Substitution of Underwriters.
(a) If any Underwriter or Underwriters shall fail to take
up and pay for the aggregate principal amount of Notes agreed by such
Underwriter or Underwriters to be purchased hereunder, upon tender of
such Notes in accordance with the terms hereof, and the principal
amount of Notes not purchased does not in either case aggregate more
than 10% of the aggregate principal amount of Notes set forth in
Schedule I hereto, the remaining Underwriters shall be obligated,
severally, in proportion to the respective principal amount of Notes
which they are obligated to purchase hereunder, to take up and pay for
the principal amount of Notes that the withdrawing or defaulting
Underwriter or Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take
up and pay for the aggregate principal amount of Notes agreed by such
Underwriter or Underwriters to be purchased hereunder, upon tender of
such Notes in accordance with the terms hereof, and the principal
amount of Notes not purchased aggregates more than 10% of the
aggregate principal amount of Notes set forth in Schedule I hereto,
and arrangements for the purchase of such Firm Notes by other persons
reasonably satisfactory to the Company are not made within 36 hours
thereafter, this Agreement shall terminate. In the event of any such
termination the Company shall not be under any liability to any
Underwriter (except to the extent provided in Section 4(h) and Section
6 hereof) nor shall any Underwriter (other than an Underwriter who
shall have failed, otherwise than for some material reason permitted
under this Agreement, to purchase the aggregate principal amount of
Notes agreed by such Underwriter to be purchased hereunder) be under
any liability to the Company (except to the extent provided in Section
6 hereof). Nothing contained herein shall relieve a defaulting
Underwriter from liability for its default.
23
<PAGE> 24
If Notes to which a default relates are to be purchased by
non-defaulting Underwriters or by any other party or parties, the
non-defaulting Underwriters or the Company shall have the right to
postpone the Closing Date for not more than seven business days in
order that the necessary changes in the Registration Statement,
Prospectus and any other documents, as well as any other arrangements,
may be effected. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 8.
9. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at 10:00 a.m.,
Minneapolis time, on the first business day following the date hereof,
or at such earlier time after the effective date of the Registration
Statement as the Underwriters in their discretion shall first release
the Securities for sale to the public. For the purpose of this
Section, the Securities shall be deemed to have been released for sale
to the public upon release by the Underwriters of the publication of a
newspaper advertisement relating thereto or upon release by the
Underwriters of telexes offering the Securities for sale to securities
dealers, whichever shall first occur. By giving notice as hereinafter
specified before the time this Agreement becomes effective, the
Underwriters or the Company may prevent this Agreement from becoming
effective without liability of any party to any other party, except
that the provisions of Section 4(h) and Section 6 hereof shall at all
times be effective.
(b) The Underwriters shall have the right to terminate this
Agreement by giving notice as hereinafter specified at any time at or
prior to the Closing Date, if (i) the Company shall have failed,
refused or been unable, at or prior to the Closing Date, to perform
any agreement on its part to be performed hereunder, (ii) any other
condition of the Underwriters' obligations hereunder is not fulfilled,
(iii) trading on the New York Stock Exchange or the American Stock
Exchange shall have been wholly suspended, (iv) minimum or maximum
prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required, on the New York Stock
Exchange or the American Stock Exchange, by such Exchange or by order
of the Commission or any other governmental authority having
jurisdiction, (v) a banking moratorium shall have been declared by
Federal, New York, Texas or Minnesota authorities, or (vi) there has
occurred any material adverse change in the financial markets in the
United States or an outbreak of major hostilities (or an escalation
thereof) in which the United States is involved, a declaration of war
by Congress, any other substantial national or international calamity
or any other event or occurrence of a similar character shall have
occurred since the execution of this Agreement that, in the
Underwriters' judgment, makes it impractical or inadvisable to proceed
with the completion of the sale of and payment for the Securities.
Any such termination shall be without liability of any party to any
other party except that the provisions of Section 4(h) and Section 6
hereof shall at all times be effective.
(c) If the Underwriters elect to prevent this Agreement
from becoming effective or to terminate this Agreement as provided in
this Section, the Company shall be notified promptly by the
Underwriters by telephone or telegram, confirmed by letter. If the
Company elects to prevent this Agreement from becoming effective, the
Underwriters shall be notified by the Company by telephone or
telegram, confirmed by letter.
10. Information Furnished by Underwriters. The statements set
forth in the last paragraph of the cover page and under the caption
"Underwriting" in any Preliminary Prospectus and in the Prospectus constitute
the written information furnished by or on behalf of the Underwriters referred
to in Section 2 and Section 6 hereof.
24
<PAGE> 25
11. Notices. Except as otherwise provided herein, all
communications hereunder shall be in writing or by telegraph and, if to the
Underwriters, shall be mailed, telegraphed or delivered to the Underwriters
c/o______________________________________________________________________,
Attn:_____________________________,with a copy to____________________________
__________________________________ except that notices given to an Underwriter
pursuant to Section 6 hereof shall be sent, if to ____________________________
to the address listed above; if to ___________________________________________,
Attn:____________________________; if to______________________________________,
Attn:____________________________; if to the Company, shall be mailed,
telegraphed or delivered to it at ________________________ Attention: Chief
Executive Officer, with a copy to Michael M. Boone, Esq., Haynes and Boone,
L.L.P., 3100 NationsBank Plaza, 901 Main Street, Dallas, Texas 75202. All
notices given by telegram shall be promptly confirmed by letter. Any party to
this Agreement may change such address for notices by sending to the parties to
this Agreement written notice of a new address for such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal
or equitable remedy or claim under or in respect of this Agreement or any
provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the Securities
from any of the Underwriters.
13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota.
25
<PAGE> 26
Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the
Company and the Underwriters in accordance with its terms.
Very truly yours,
AMRESCO, INC.
By
-------------------------------------
Its
------------------------------------
CONFIRMED
as of the date first
above mentioned
By:
------------------------------
By
---------------------------------
Managing Director
Acting on behalf of itself
and the other Underwriters
<PAGE> 27
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount
Underwriter of Notes
- ----------- ---------------------
<S> <C>
___________________. . . . . . . . . . . . . . . . . . . . . $__________
___________________. . . . . . . . . . . . . . . . . . . . . __________
___________________ . . . . . . . . . . . . . . . . . . . . . __________
__________
Total . . . . . . . . . . . . . . . . . . . $
==========
</TABLE>
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
AMRESCO, INC.
to
______________________________
as Trustee
--------------------
SENIOR NOTES
--------------------
INDENTURE
Dated as of _____________ ____, 1996
- --------------------------------------------------------------------------------
<PAGE> 2
AMRESCO, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of March 15, 1996
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
- ----------- -----------------
<S> <C>
Section 310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608,610
Section 311. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701, 701(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701(c)
Section 313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502,512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
Section 317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
</TABLE>
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be part of the Indenture.
i
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 105. Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 107. Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 108. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE TWO SECURITY FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 202. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 203. Form of Legend for Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE THREE THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . 26
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . . . 28
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 311. Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE FOUR SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 403. Defeasance and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
ii
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<TABLE>
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ARTICLE FIVE REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . 38
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . 39
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 505. Trustee May Enforce Claims Without Possession of Securities . . . . . . . . . . . . . . . . 41
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest . . . . . . . . . 42
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE SIX THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 604. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . 48
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 610. Resignation and Removal; Appointment of S . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 611. Acceptance of Appointment by Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 612. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . 53
SECTION 613. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . 54
SECTION 614. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>
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<TABLE>
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SECTION 701. Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . . . 56
SECTION 702. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 703. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE . . . . . . . . . . . . . . . . . . . 58
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms . . . . . . . . . . . . . . . . . . . 58
SECTION 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE NINE SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . 59
SECTION 902. Supplemental Indentures With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 903. Execution of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 906. Reference in Securities to Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . 62
ARTICLE TEN COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 1001. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1003. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1004. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1005. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1006. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1007. Payment of Taxes and Other Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1008. Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1009. Defeasance of Certain Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1011. Statement by Officers as to Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1011. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1012. Exceptions to Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE ELEVEN REDEMPTION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE TWELVE SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
</TABLE>
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<TABLE>
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SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities . . . . . . . . . . . . . . . . . . . 72
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE THIRTEEN REPURCHASE OF SECURITIES AT OPTION OF HOLDERS . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 1301. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 1302. Notice of Repurchase Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 1303. Deposit of Repurchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 1304. Securities Payable on Repurchase Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 1305. Securities Repurchased in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE FOURTEEN CORPORATE OBLIGATION ONLY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 1401. Indenture and Securities Solely Corporate Obligations . . . . . . . . . . . . . . . . . . . 75
</TABLE>
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<PAGE> 7
INDENTURE, dated as of ___________ ____, 1996 between AMRESCO, INC., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having executive offices located at 1845 Woodall
Rodgers Freeway, Suite 1700, Dallas, Texas 75201 and _________________________,
as Trustee (herein called the "Trustee"), having its principal office at
_____________________________________________.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof (including holders from time to time of the Securities of any
series held through a Holder which is a Depositary (as defined herein)), as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act or by Commission rule or regulation under the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) any gender used in this Indenture shall be deemed and
construed to include correlative words of the masculine, feminine or
neuter gender;
<PAGE> 8
(4) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP and, except
as otherwise herein expressly provided, GAAP with respect to any
computation required or permitted hereunder shall mean GAAP at the
date of such computation;
(5) the words "herein", "hereof' and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision; and
(6) the word "or" is always used inclusively (for
example, the phrase "A or B or both," not "either A or B but not
both").
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the
Company or any duly authorized (generally or in any particular respect)
committee appointed by that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification. Where any provision of this Indenture refers to action to be
taken pursuant to a Board Resolution (including establishment of any series of
the Securities and the forms and terms thereof), such action may be taken by
any committee, officer or employee of the Company authorized to take such
action (generally or in any particular respect) by a Board Resolution.
"Business Day", when used with respect to any Place of Payment or
other location, means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not
2
<PAGE> 9
a day on which banking institutions generally in that Place of Payment or other
location are authorized or obligated by law or executive order to close, unless
otherwise specified in a form of Security.
"Capital Lease Obligation" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property, which obligations are
required to be classified and accounted for as capital lease obligations on the
balance sheet of such Person under GAAP, and the amount of such obligations at
the time any determination thereof is to be made for purposes of this Indenture
shall be 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.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation, and any other obligor upon the
Securities.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, its Chief Executive Officer, its Chief
Operating Officer, its Chief Financial Officer, a Vice President, its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, or
by any other officer of the Company authorized to sign by Board Resolution, and
delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which at the date of original execution of the Indenture is
___________________.
"Corporation" includes corporations, associations, companies, joint
stock companies, limited liability companies or business trusts.
"Credit Enhancement Facility" means any document, instrument or
agreement entered into by any Person for the purpose of providing credit
support for Securitization Transactions and Warehouse Facilities.
"Defaulted Interest" has the meaning specified in Section 307.
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"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the clearing agency registered under the Exchange Act, specified
for that purpose as contemplated by Section 301 or any successor clearing
agency registered under the Exchange Act as contemplated by Section 305, and if
at any time there is more than one such Person, "Depositary" as used with
respect to the Securities of any series shall mean the Depositary with respect
to the Securities of such series.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United
States of America 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 in effect from time to time.
"Global Security" means a Security bearing the legend specified in
Section 202 evidencing all or part of a series of Securities, issued to the
Depositary for such series or its nominee, and registered in the name of such
Depositary or nominee.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, as to any Person, any of the following
obligations, contingent or otherwise, whether outstanding on the date of this
Indenture or thereafter created, incurred, assumed or guaranteed by such
Person:
(a) all obligations for borrowed money or for the
deferred purchase price of property or services (including, without
Stations any interest accruing subsequent to an event of default),
except any such obligation that constitutes a trade payable or an
accrued liability arising in the ordinary course of business, if and
to the extent the foregoing Indebtedness would appear as a liability
on a balance sheet of such Person prepared in accordance with GAAP;
(b) all obligations evidenced by bonds, notes, debentures
or other similar instruments issued by such Person;
(c) all Indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
property acquired (even though the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property), except any such obligation
that constitutes a trade payable or an accrued liability
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arising in the ordinary course of business, if and to the extent the
foregoing Indebtedness would appear as a liability on a balance sheet
of such Person prepared in accordance with GAAP;
(d) all Capital Lease Obligations;
(e) all obligations for the payment of principal or
interest, all commitment fees and all reimbursement obligations
incurred, created or arising in connection with Securitization
Transactions, Warehouse Facilities or Credit Enhancement Facilities;
(f) all Indebtedness of the types referred to in the
foregoing clauses (a) through (e) above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any lien upon or security interest in
property of such Person (including, without limitation, accounts and
contract rights), even though such Person has not assumed or become
liable for the payment of such Indebtedness;
(g) any guarantee of any Indebtedness of the types
referred to in the foregoing clauses (a) through regardless of whether
such obligation would appear on a balance sheet of such Person
prepared in accordance with GAAP; and
(h) all renewals, extensions and refundings of any
Indebtedness of the types referred to in any of the foregoing clauses
(a) through (g).
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument due to the appointment of
one or more separate Trustees for any one or more separate series of Securities
pursuant to Section 610(e), "Indenture" shall mean, with respect to such series
of Securities for which any such Person is Trustee, this instrument as
originally executed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of particular series
of Securities for which such Person is Trustee established as contemplated by
Section 301, exclusive, however, of any provisions or terms which relate solely
to other series of Securities for which such Person is not Trustee, regardless
of when such terms or provisions were adopted, and exclusive of any provisions
or terms adopted by means of one or more indentures supplemental hereto
executed and delivered after such Person had become such Trustee but to which
such Person, as such Trustee, was not a party.
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"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Material Subsidiary" means Holliday Fenoglio, Inc., AMRESCO
Management, Inc., AMRESCO Residential Mortgage Corporation, AMRESCO Advisors,
Inc., AMRESCO Residential Credit Corporation, AMRESCO Capital Corporation,
AMRESCO New England, Inc., Oak Cliff Financial, Inc. and any other Subsidiary
whose assets or revenues comprise at least five percent (5%) of the assets or
revenues of the Company and the Subsidiaries on a consolidated basis as of the
end of, or for the, Company's most recently completed fiscal quarter, as
determined from time to time.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President, the Chief Executive
Officer or a Vice President of the Company, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities or any portion thereof for whose payment
or redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own
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Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) any Security with respect to which the Company has
effected defeasance pursuant to clauses (1)(B)) and (3) of Section 401
hereof; and
(iv) Securities which have been paid pursuant to Section
306 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Securities, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units that shall be
deemed to be Outstanding shall be the U.S. dollar equivalent, determined in the
manner provided as contemplated by Section 301 as of the date of original
issuance of such Security, of the principal amount (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent, determined as of
the date of original issuance of such Security, of the amount determined as
provided in (i) above) of such Security as determined by the Company pursuant
to Section 301, and (iii) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in making any such
determination or relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows
to be so owned shall be so disregarded. Securities so owned which have been
pledgee in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect
to such Securities and that the pledges is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) and/or interest on any Securities on behalf
of the Company.
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"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including without
limitation the rate or rates of interest (or formula for determining the rate
or rates of interest), if any, thereon, the Stated Maturity or Maturities
thereof and the redemption provisions, if any, with respect thereto, are to be
determined by the Company or its agents upon the issuance of such Securities.
"Person" means any individual, Corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and/or interest on the Securities of that series are payable.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security, and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security or portion
thereof to be redeemed, means the date fixed for such redemption pursuant to
this Indenture.
"Redemption Price", when used with respect to any Security or portion
thereof to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means
any officer of the Trustee assigned by it to administer its corporate trust
matters.
"Repurchase Date", when used with respect to any Security or portion
thereof to be repurchased, means the date fixed for such repurchase pursuant to
this Indenture.
"Repurchase Price", when used with respect to any Security or portion
thereof to be repurchased, means the price at which it is to be repurchased
pursuant to this Indenture.
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"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture; provided, however, that if at any time there is
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"Securitization Transaction" means a public or private transfer of
installment sales contracts, loans, leases or other receivables by which the
Company directly or indirectly securities a pool of specified installment sales
contracts, loans, leases or other receivables.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means, with respect to any Person, (i) any Corporation of
which at the time of determination more than 50% of the shares of Voting Stock
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person (or a combination thereof)
and (ii) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more Subsidiaries of such
Person (or any combination thereof).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended, and any reference herein to the Trust Indenture Act or a particular
provision thereof shall mean such Act or provision, as the case may be, as
amended or replaced from time to time or as supplemented from time to time by
rules or regulations adopted by the Commission under or in furtherance of the
purposes of such Act or provision, as the case may be.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is
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more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligations" means direct obligations of the United
States of America, or any Person controlled or supervised by and acting as an
agency or instrumentality of such government, in each case where the payment or
payments thereunder are unconditionally guaranteed as a full faith and credit
obligation by such government and which are not callable or redeemable at the
option of the issuer or issuers thereof, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
or other amount with respect to any such U.S. Government Obligation held by
such custodian for the account of the holder of a depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of or other
amount with respect to the U.S. Government Obligation evidenced by such
depository receipt.
"Vice President", when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president".
"Voting Stock", when used with respect to a Corporation, means stock
of the class or classes having general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of such Corporation (irrespective of whether at the time stock or
securities of any other class or classes shall have or might have voting power
by reason of the happening of any contingency).
"Warehouse Facility" means a funding arrangement with one or more
financial institutions or other lenders or purchasers, either directly or
through a special purpose vehicle, exclusively to finance for a period not to
exceed six months the purchase of consumer installment sales contracts, loans,
leases or other receivables pending Securitization Transactions, including,
without limitation, so-called "pool bank" arrangements and repurchase
agreements.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee, if so requested by the Trustee, an Officers' Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion
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of such counsel all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such
certificate or opinion has read such condition or covenant and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion whether such
covenant or condition has been complied with; and
(4) a statement whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Every such certificate provided under this Indenture shall be without
personal recourse to the individual executing the same and may include an
express statement to such effect.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters m one or several documents.
Any certificate or opinion of any officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate, opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or
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Opinion of Counsel or representation of counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company. Any certificate or opinion of counsel may be stated to be based on
the certificates or opinions of other counsel, in which event it shall be
accompanied by a copy of such other certificates or opinions.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture or any Security, they may, but need not, be
consolidated and form one instrument. All applications, requests,
certificates, statements or other instruments given under this Indenture shall
be without personal recourse to any individual giving the same and may include
an express statement to such effect.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders (including Persons who hold
their Securities through a Holder which is a Depositary) in person or by an
agent duly appointed in writing, and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
601) conclusive in favor of the Trustee and the Company and any agent of the
Trustee or the Company, if made in the manner provided in this Section.
Without limiting the generality of the foregoing, a Holder, including
a Depositary that is a Holder of a Global Security, may make, give or take, by
a proxy or proxies duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be made, given or taken by the Holders, and a
Depositary that is a Holder of a Global Security may provide its proxy or
proxies to the beneficial owners of interests in any such Global Security
through such Depositary's standing instructions and customary practices.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee
may
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determine, provided that, in any instance, the Trustee may require further
proof with respect to any matter referred to in this Section.
(c) The ownership, principal amount and serial numbers of
Securities held by any Person, and the date of commencement and the date of the
termination of holding the same, shall be proved by the Security Register.
(d) The Company may fix any day as the record date for the purpose
of determining the Holders (including Persons who hold Securities through a
Holder which is a Depositary) of Securities of any series entitled to give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action, or to vote on any action, authorized or permitted to be given or
taken by Holders of Securities of such series. If not set by the Company prior
to the first solicitation of a Holder of Securities of such series made by any
Person in respect of any such action, or, in the case of any such vote, prior
to such vote, the record date for any such action or vote shall be the 30th day
(or, if later, the date of the most recent list of Holders required to be
provided pursuant to Section 701) prior to such first solicitation or vote, as
the case may be. With regard to any record date for action to be taken by the
Holders (including Persons who hold Securities through a Holder which is a
Depositary) of one or more series of Securities, only the Holders of Securities
of such series on such date (or their duly designated proxies) shall be
entitled to give or take, or vote on, the relevant action.
With regard to any action that may be given or taken hereunder only by
Holders (including Persons who hold their Securities through a Holder which is
a Depositary) of a requisite principal amount of Outstanding Securities of any
series (or their duly appointed agents) and for which a record date is set
pursuant to this subsection (d), the Company may, at its option, set an
expiration date after which no such action purported to be given or taken by
any Holder shall be effective hereunder unless given or taken on or prior to
such expiration date by Holders (including Persons who hold Securities through
a Holder which is a Depositary) of the requisite principal amount of
Outstanding Securities of such series on such record date (or their duly
appointed agents). On or prior to any expiration date set pursuant to this
Subsection (d), the Company may, on one or more occasions at its option, extend
such date to any later date. Nothing in this subsection (d) shall prevent any
Holder (or any duly appointed agent thereof from giving or taking, after any
expiration date, any action identical to, or, at any time, contrary to or
different from any action given or taken, or purported to have been given and
taken, hereunder by a Holder on or prior to such date, in which event the
Company may set a record date in respect hereof pursuant to this subsection
(d).
Notwithstanding the foregoing, upon receipt by the Trustee, with
respect to Securities of any series, of (i) any Notice of Default pursuant to
Section 501, (ii) any declaration or acceleration, or any rescission and
annulment of any such declaration,
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pursuant to Section 502, or (iii) any direction given pursuant to Section 512
(any such notice, declaration, rescission and annulment, or direction being
referred to herein as a "Direction"), a record date shall automatically and
without any other action by any Person be set for the purpose of determining
the Holders (including Persons who hold Securities through a Holder which is a
Depositary) of Outstanding Securities of such series entitled to join in such
Direction, which record date shall be the close of business on the day the
Trustee receives such Direction. The Holders (including Persons who hold
Securities through a Holder which is a Depositary) of Outstanding Securities of
such series on such record date (or their duly appointed agents), and only such
Persons, shall be entitled to join in such Direction, whether or not such
Holders remain Holders after such record date; provided that, unless such
Direction shall have become effective by virtue of Holders (including Persons
who hold Securities through a Holder which is a Depositary) of the requisite
principal amount of Outstanding Securities of such series on such record date
(or their duly appointed agents) having joined therein on or prior to the 90th
day after such record date, such Direction shall automatically and without any
action by any Person be canceled and be of no further effect. Nothing in this
paragraph shall prevent a Holder (or duly appointed agent thereof) from giving,
before or after the expiration of such 90-day period, a Direction contrary to
or different from, or, after the expiration of such period, identical to, a
Direction that has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date in respect thereof shall be set
pursuant to this subsection (d).
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing to
or with a Responsible Officer of the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Department, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in
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writing and mailed, first-class postage prepaid, or sent by facsimile
and U.S. mail, first-class postage prepaid, to the Company addressed
to it at the address of its principal office specified in the first
paragraph of this instrument (Attention: Treasurer) or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder
(including Persons who hold Securities through a Holder which is a Depositary
if the name and address of such beneficial holder has been provided in writing
to the Person required to give such notice prior to the date such notice is
given) affected by such event, at such Holder's address as it appears in the
Security Register or as provided in writing by the Depositary, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Any notice mailed to the Holder in the manner
herein prescribed shall be conclusively deemed to have been received by such
Holder, whether or not such Holder actually receives such notice. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made by or with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language.
SECTION 107. Compliance with Trust Indenture Act.
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act that are required to be part of this Indenture. If
any provision hereof limits, qualifies or conflicts with a provision of the
Trust Indenture Act that is required under such Act to be a part of and govern
this Indenture, the provision of the Trust Indenture Act shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or
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excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company or the
Trustee shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, either wholly or partially, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and such provisions shall be given effect to the
fullest extent permitted by law.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Authenticating
Agent, any Paying Agent, any Securities Registrar, and their successors
hereunder and the Holders (including Persons who hold Securities through a
Holder which is a Depositary), any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of Texas.
SECTION 113. Legal Holidays.
Except as may be otherwise specified with respect to any particular
Securities, in any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no
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interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series, including Global Securities
representing Securities of such series, shall be in the form established,
without the approval of any Holders or the Trustee, by or pursuant to a Board
Resolution in accordance with Section 301 or by one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities.
The definitive Securities may be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein and
issued pursuant to the within-mentioned Indenture.
,as
-----------------------------------
Trustee
By
--------------------------------------
Authorized Signature
SECTION 203. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder shall, in
addition to the provisions established by or pursuant to a Board Resolution or
in one or more indentures supplemental hereto in accordance with Section 201,
bear a legend in
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substantially the following form or such similar form as may be required by the
Depositary:
"Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New
York, New York) to the issuer or to 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 requested
by an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein."
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established, without the approval of any Holders or the Trustee, by or pursuant
to authority granted by one or more Board Resolutions, and, subject to Section
303, there shall be set forth in an Officers' Certificate, or established in
one or more indentures supplemental hereto, prior to the initial issuance of
Securities of any series, all or any of the following, as applicable:
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from Securities of any
other series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906, 1107
and except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered hereunder) and
the absence of such limitation shall mean that the Company may issue
from time to time additional securities of such series without
limitation as to aggregate principal amount;
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or
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more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest;
(4) the date or dates, or the method by which such date
or dates are determined or extended, on which the principal or
installments of principal and premium, if any, of the Securities of
the series is or are payable;
(5) the rate or rates (which may be fixed or variable) at
which the Securities of the series shall bear interest, if any, or the
method by which such rate or rates shall be determined, the date or
dates from which such interest shall accrue, the Interest Payment
Dates on which such interest shall be payable, the Regular Record Date
for the interest payable on any Interest Payment Date and the
circumstances, if any in which the Company may defer interest payments
and the basis upon which interest shall be calculated if other than
that of a 360-day year of twelve 30-day months;
(6) the place or places, if any, where the principal of
(and premium, if any) and interest on Securities of the series shall
be payable, any Securities of the series may be surrendered for
registration of transfer or exchange and notices and demands to or
upon the Company with respect to the Securities of the series and this
Indenture may be served, other than or in addition to the Corporate
Trust Office of the Trustee;
(7) if applicable, the period or periods within which,
the price or prices at which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in part, at the
option of the Company;
(8) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) whether the Securities of the series will be
convertible into shares of Common Stock and/or exchangeable for other
securities, and if so, the terms and conditions upon which such
Securities will be so convertible or exchangeable, and any deletions
from or modifications or additions to this Indenture to permit or to
facilitate the issuance of such convertible or exchangeable Securities
or the administration thereof;
(10) the identity of each Security Registrar and Paying
Agent, if other than or in addition to the Trustee;
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(11) if the amount of principal of, or any premium or
interest on, any Securities of the series may be determined by
reference to an index or pursuant to a formula, the manner in which
such amounts shall be determined;
(12) the applicability of, and any addition to or change
in, the covenants and definitions currently set forth in this
Indenture;
(13) if other than denominations of $1,000 or any amount
in excess thereof which is an integral multiple of $1,000, the
denominations in which Securities of the series shall be issuable;
(14) if other than the currency of the United States of
America, the currency, currencies, currency units or composite
currencies in which payment of the principal of and any premium and
interest on any Securities of the series shall be payable and the
manner of determining the U.S. dollar equivalent of the principal
amount thereof for purposes of the definition of "Outstanding" in
Section 101, and, if the principal of or any premium or interest on
any Securities of the series is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies or currency
units other than that or those in which the Securities are stated to
be payable, the currency, currencies or currency units in which
payment of the principal of and any premium and interest on Securities
of such series as to which such election is made shall be payable, and
the periods within which and the terms and conditions upon which such
election is to be made;
(15) any other event or events of default applicable with
respect to Securities of the series in addition to or in lieu of those
provided in Section 501 and any change in the right of the Trustee or
the Holders to declare the principal of or any premium or interest on
such Securities due and payable;
(16) if less than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502;
(17) whether the Securities of the series shall be issued
in whole or in part in the form of one or more Global Securities and,
if so, (a) the Depositary with respect to such Global Security or
Securities and (b) the circumstances under which any such Global
Security may be exchanged for Securities registered in the name of,
and any transfer of such Global Security may be registered to, a
Person other than such Depositary or its nominee, if other than as set
forth in Section 305;
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(18) if applicable, that the Securities of the series, in
whole or any specified part, shall not be defeasible pursuant to
Section 403 or Section 1005 or both such Sections and, if other than
by a Company Order, the manner in which any election by the Company to
defend such Securities shall be evidenced; and
(19) any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture, except as
permitted by Section 901(5)).
All Securities of any one series (other than Securities offered in a
Periodic Offering) shall be substantially identical except as to denomination
and except as may otherwise be provided by or pursuant to the Board Resolution
referred to above and, subject to Section 303, set forth, or determined in the
manner provided, in the Officers' Certificate referred to above or in any such
indenture supplemental hereto. All Securities of any one series need not be
issued at the same time. Unless otherwise provided, Securities of a single
series may have different terms, and a series may be reopened, without the
consent of the Holders of Securities of such series, for issuance of additional
Securities of such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
With respect to Securities of a series offered in a Periodic Offering,
such Board Resolution and Officers' Certificate or supplemental indenture may
provide general terms or parameters for Securities of such series and provide
either that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company or its agents in accordance with other procedures specified in a
Company Order as contemplated by the third paragraph of Section 303.
SECTION 302. Denominations.
Unless otherwise provided in the applicable Officers' Certificate or
supplemental indenture, the Securities of each series shall be issued in
registered form without coupons in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such provisions with
respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000.
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SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, one of its Vice Chairman of the Board, its President,
its Chief Executive Officer, its Chief Operating Officer, its Chief Financial
Officer, it Treasurer or one of its Vice Presidents, under its corporate seal
affixed thereto or reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities, or, in the case of
Securities offered in a Periodic Offering, from time to time in accordance with
such other procedures (including, without limitation, the receipt by the
Trustee of electronic instructions from the Company or its duly authorized
agents, promptly confirmed in writing by the Company) acceptable to the Trustee
as may be specified from time to time by a Company Order for establishing the
specific terms of particular Securities being so offered, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities. If the form or forms or terms of the Securities of the series have
been established by or pursuant to one or more Board Resolutions as permitted
by Sections 201 and 301, in authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon
(a) an Opinion of Counsel stating:
(1) that the form or forms of such Securities have been
established in conformity with the provisions of this Indenture;
(2) that the terms of such Securities have been
established in conformity with the provisions of this Indenture;
(3) that authentication and delivery of such Securities
and the execution and delivery of the supplemental indenture, if any,
by the Trustee will not violate the terms of the Indenture;
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(4) that the Company has the corporate power to issue,
and has duly authorized, such Securities;
(5) that such Securities, when authenticated and
delivered by the Trustee and issued by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms,
subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer and other laws of general
applicability relating to or affecting the enforcement of creditors'
rights and to general equity principles, provided that such Opinion of
Counsel need not express an opinion as to whether a court in the
United States would render a money judgment in a currency other than
that of the United States; and
(6) that the issuance of such Securities will not
contravene the certificate of incorporation or bylaws of the Company
or result in any violation of any of the terms or provisions of any
law or regulation or of any indenture, mortgage or other agreement
known to such Counsel by which the Company is bound;
(b) an executed supplemental indenture, if any;
(c) a copy of a Board Resolution; and
(d) an Officers' Certificate;
provided, however, that, with respect to Securities of a series offered in a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel in connection only with the first authentication of each form of
Securities of such series and that the opinions described in clauses (a)(2) and
(a)(5) above may state, respectively, that
(2) if the terms of such Securities are to be established
pursuant to a Company Order or pursuant to such procedures as may be
specified from time to time by a Company Order, all as contemplated by
a Board Resolution or action taken pursuant thereto, such terms will
have been duly authorized by the Company and established in conformity
with the provisions of this Indenture; and
(5) that such Securities, when executed by the Company,
completed, authenticated and delivered by the Trustee in accordance
with this Indenture, and issued and delivered by the Company and paid
for, all in accordance with any agreement of the Company relating to
the offering, issuance and sale of
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such Securities, will be duly issued under this Indenture and will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting generally the enforcement of creditors' rights and to
general principles of equity.
With respect to Securities of a series offered in a Periodic Offering,
the Trustee may rely, as to the authorization by the Company of any of such
Securities, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel, Company
Order and other documents delivered pursuant to Sections 201 and 301 and this
Section, as applicable, in connection with the first authentication of a form
of Securities of such series and it shall not be necessary for the Company to
deliver such Opinion of Counsel and other documents (except as may be required
by the specified other procedures, if any, referred to above) at or prior to
the time of authentication of each Security of such series unless and until the
Trustee receives notice that such Opinion of Counsel or other documents have
been superseded or revoked, and may assume compliance with any conditions
specified in such Opinion of Counsel (other than any conditions to be performed
by the Trustee). If such form or forms or terms have been so established, the
Trustee shall not be required to authenticate such Securities if the issue of
such Securities pursuant to this Indenture will affect the Trustee's own
rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any Series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver,
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temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers of the Company executing such Securities may determine, as
conclusively evidenced by their execution of such Securities. In the case of
Securities of any series, such temporary Securities may be in the form of
Global Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable, subject to Section
305, for definitive Securities of like tenor of such series upon surrender of
the temporary Securities of such series at the office or agency of the Company
in a Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any
series the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Securities of the
same series and of like tenor and of any authorized denominations. Unless
otherwise provided in or pursuant to this Indenture, until so exchanged the
temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series and
tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" of each series of Securities for the
purpose of registering Securities and transfers of Securities as herein
provided at the Corporate Trust Office.
Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company in any Place of Payment for such
series, the Company shall execute and the Trustee shall authenticate and
deliver (in the name of the designated transferee or transferees) one or more
new Securities of the same series, of any authorized denominations and of a
like aggregate principal amount and tenor and bearing a number not
contemporaneously outstanding.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Securities
to be exchanged at the office or agency of the Company in any Place of Payment
for such series. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the
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<PAGE> 32
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt and entitled to the same benefits under this Indenture as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company may but shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part or (iii) to register the transfer of or exchange any certificated
Securities during a period beginning five days before the date of Maturity with
respect to such Security and ending on such date of Maturity.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, no Global Security shall be exchangeable pursuant
to this Section 305 for Securities registered in the name of, and no transfer
of a Global Security of any series may be registered to, any Person other than
the Depositary for such Security or its nominee, unless (i) such Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security or the Company determines that the Depositary is
unable to continue as Depositary and the Company thereafter fails to appoint a
successor Depositary, (ii) the Company provides for such exchange or
registration of transfer pursuant to Section 301 of this Indenture, (iii) the
Company executes and delivers to the Trustee a Company Order that such Global
Security shall be so exchangeable and the transfer thereof so registrable, or
(iv) there shall have occurred and be continuing an Event of Default with
respect to the Securities of such series which entitles the Holders of such
Securities to accelerate the maturity thereof. Upon the occurrence in respect
of any Global Security of any
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series of any one or more of the conditions specified in clauses (i),, (ii),
(iii) or (iv) of the preceding sentence or such other conditions as may be
specified as contemplated by Section 301 for such series, such Global Security
may be exchanged for Securities not bearing the legend specified in Section 203
and registered in the names of such Persons as may be specified by the
Depositary, (including Persons other than the Depositary or its nominees).
Notwithstanding any other provision of this Indenture, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security, including a Global Security, is surrendered
to the Trustee or the Company, together with such security, bond or indemnity
as may be required by the Trustee or the Company to save each of them and any
agent of either of them harmless, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a new Security, including a
new Global Security if the mutilated Security was a Global Security, of the
same series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, including a Global Security if the destroyed, lost or stolen Security
was a Global Security, and (ii) such security or indemnity as may be required
by them to save each of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser (or any equivalent person under any
applicable statute, rule or regulation or interpretation then in effect), the
Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such destroyed,
lost or stolen Security, a new Security, including a Global Security if the
destroyed, lost or stolen Security was a Global Security, of the same series
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee), if any, connected
therewith.
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Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that series duly issued hereunder. A new
Security shall have such legends as appeared on the old Security unless the
Company determines otherwise.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered in the Security Register at the close of business on
the Regular Record Date for such Interest Payment Date.
Any interest on any Security of any series which is payable but is not
punctually paid or duly provided for on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security
of such series and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit on or prior to the date of the proposed
payment, such money when so deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee
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of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities of
such series at such Holder's address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other lawful manner
not inconsistent with the requirements of any securities exchange on
which such Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
At the option of the Company, interest on any Security may be paid (i)
by mailing a check to the address of the Person entitled thereto as such
address shall appear in the Security Register, or (ii) by wire transfer to an
account maintained by the Person entitled thereto as specified in the Security
Register, the cost of such wire transfer to be borne by the Company.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered in the Security Register
as the owner of such Security for the purpose of receiving payment of principal
of (and premium, if any) and (subject to Sections 305 and 307) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
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No holder of any beneficial interest in any Global Security held on
its behalf by a Depositary (or its nominees) shall have any rights under this
Indenture with respect to such Global security or any Security represented
thereby, and such Depositary may be treated by the Company, the Trustee, and
any agent of the Company or the Trustee as the owner of such Global Security or
any Security represented thereby for all purposes whatsoever. Notwithstanding
the foregoing, with respect to any Global Security, 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 a Depositary as Holder of such Global Security, or impair, as
between a Depositary and the owners of beneficial interests in such Global
Security, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominees) as Holder of such Global Security.
None of the Company, the Trustee or any Paying Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. The Trustee
is hereby directed by the Company to destroy the canceled Securities held by
the Trustee, and the Trustee shall provide the Company with a certificate of a
Responsible Officer certifying as to the destruction of such Securities.
SECTION 310. Computation of Interest.
Except as otherwise specified pursuant to Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months and no interest will accrue
with respect to the 31st day of any month.
SECTION 311. Maximum Interest Rate.
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Regardless of any provision contained in any Security or this
Indenture, no Holder shall be entitled to receive, collect or apply as interest
on any Security any amount in excess of the maximum rate permitted by
applicable law, and, in the event that any Holder ever receives, collects, or
applies as interest any such excess, the amount that would be excessive
interest shall be deemed to be a partial prepayment of principal and treated
hereunder as such; and, if the principal amount of any Security is paid in
full, any remaining excess shall forthwith be paid to the Company.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect with respect to any series of Securities specified in a Company Request
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities of such series theretofore
authenticated and delivered (other than (i) Securities which
have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption
within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the
Company,
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and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount of money (in the
currency in which such Securities are payable) and/or (if such
Securities are payable in U.S. dollars) U.S. Government
Obligations which through the payment of interest and
principal in accordance with their terms, without
consideration of any reinvestment thereof, will provide not
later than the opening of business on the due dates of any
payment of principal (and premium, if any) and interest with
respect thereto, or a combination thereof, in an amount
sufficient to pay and discharge the entire indebtedness on
such Securities not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest
to the date of such deposit (in the case of Securities which
have become due and payable) or to the respective Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company, and
(3) the Company has delivered to the Trustee a
certificate of a nationally-recognized firm of certified public
accountants certifying as to the sufficiency of the amounts deposited
pursuant to subclause (B) of clause (1) of this Section for payment of
the principal (and premium, if any) and interest on the dates such
payments are due, and an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture with
respect to the Securities of such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to a series of Securities, the obligations of the Company and the
Trustee to the Holders of Securities of other series not so satisfied and
discharged, the obligations of the Company to the Trustee under Section 607,
the obligations of the Trustee to any Authenticating Agent under Section 614,
and, if money and/or U.S. Government Obligations shall have been deposited with
the Trustee pursuant to Subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 402 and the last paragraph of Section
1003, shall survive.
SECTION 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003, all money
and/or U.S. Government Obligations deposited with the Trustee pursuant to
Section 401 and all money received by the Trustee in respect of U.S. Government
Obligations deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities of
each series and this Indenture, to the payment, either directly or through any
Paying Agent (including the
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Company acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium, if any) and interest
for whose payment such money has or U.S. Government Obligations have been
deposited with or received by the Trustee; but such money and/or U.S.
Government Obligations need not be segregated from other funds of the Trustee
except to the extent required by law.
SECTION 403. Defeasance and Discharge of Indenture.
If principal of and any premium and interest on Securities of any
series are denominated and payable in U.S. Dollars, the Company shall be
deemed to have paid and discharged the entire indebtedness on all the
Outstanding Securities of such series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such Outstanding Securities, shall no longer be in
effect (and the Trustee, at the request and expense of the Company, shall
execute proper instruments acknowledging the same), except as to:
(a) the rights of Holders of Securities of such series to
receive, from the trust funds described in subparagraph (d) hereof,
(i) payment of the principal of (and premium, if any) or interest on
the Outstanding Securities of such series on the Stated Maturity of
such principal or installment of principal or interest and (ii) the
benefit of any mandatory sinking fund payments applicable to the
Securities of such series on the day on which such payments are due
and payable in accordance with the terms of this Indenture and such
Securities;
(b) the Company's obligations with respect to such
Securities under Sections 305, 306, 1002 and 1003; and
(c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder;
provided that, the following conditions shall have been satisfied:
(d) The Company has deposited or caused to be irrevocably
deposited with the Trustee (or another trustee satisfying the
requirements of Section 609) as trust funds in the trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities of such series, (i) U.S. Dollars in an
amount, or (ii) U.S. Government Obligations which through the payment
of interest and principal in respect thereof in accordance with their
terms will provide not later than one day before the due date of any
payment referred to in clause (A) or (B) of this subparagraph (d) U.S.
Dollars in an amount or (iii) a combination thereof, sufficient, in
the opinion of a
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nationally-recognized firm of independent certified public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay and discharge (A) the principal of (and premium, if any) and
each installment of principal of (and premium, if any) and interest on
the Outstanding Securities of such series on the Stated Maturity of
such principal or installment of principal and interest and (B) any
mandatory sinking fund or analogous payments applicable to the
Securities of such series on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such
Securities;
(e) such deposit shall not cause the Trustee with respect
to the Securities of such series to have a conflicting interest as
defined in Section 608 and for purposes of the Trust Indenture Act
with respect to such Securities;
(f) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it
is bound;
(g) such provision would not cause any Outstanding
Securities of such series then listed on the New York Stock Exchange
or other securities exchange to be delisted as a result thereof;
(h) no Event of Default or event which with notice or
lapse of time would become an Event of Default with respect to the
Securities of such series shall have occurred and be continuing on the
date of such deposit or during the period ending on the 91st day after
such date;
(i) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that there has
been a change in applicable federal law such that, or the Company has
received from, or there has been published by, the Internal Revenue
Service a ruling to the effect that, Holders of the Securities of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposits, defeasance and discharge and
will be subject to federal income tax on the same amount and in the
same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred; and
(j) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the defeasance contemplated by this
Section have been complied with.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, and unless otherwise provided with respect to Securities of any
series pursuant to Section 301, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any
Security of such series when it becomes due and payable, and
continuance of such default for a period of 30 days (for Securities
the interest on which is payable less frequently than monthly) or for
a period of 10 days (for Securities the interest on which is payable
monthly); or
(2) default in the payment of the principal of (or
premium, if any, on) any Security of such series when due and payable;
or
(3) default in the deposit of any sinking fund payment in
respect of any Security of such series, when and as due by the terms
of a Security of such series; or
(4) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture or the
Securities of such series (other than a covenant or warranty a default
in the performance or breach of which is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of a series of one or more Securities
other than such series), and continuance of such default or breach for
a period of 30 days after written notice thereof has been received by
the Company from the Trustee or by the Company and the Trustee from
the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of such series, specifying such default or
breach and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder; or
(5) the occurrence of an event of default, as defined in
any indenture or instrument under which the Company or any Material
Subsidiary shall have Outstanding at least $1,000,000 aggregate
principal amount of Indebtedness (other than as part of a
Securitization Transaction), shall happen and be continuing and such
Indebtedness shall, as a result thereof, have been accelerated (or
comparable event shall have occurred) so that the same shall
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have become due and payable prior to the date on which the same would
otherwise have become due and payable and such acceleration has been
in effect without rescission or annulment for a period of 30 days;
provided, however, that if such event of default under such indenture
or instrument shall be remedied or cured by the Company or waived by
the holders of such Indebtedness, or if such acceleration under such
indenture or instrument shall have been rescinded or annulled by the
holders of such Indebtedness, then, unless the Securities of such
series shall have been accelerated as provided in this Indenture, the
Event of Default hereunder by reason thereof shall be deemed likewise
to have been thereupon remedied, cured or waived without further
action upon the part of either the Trustee or any Holders of the
Securities of any series; or
(6) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
or any Material Subsidiary in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or (B) a decree or order adjudging the Company or
any Material Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any
Material Subsidiary under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Material
Subsidiary or of any substantial part of the property of the Company
or any Material Subsidiary, or ordering the winding up or liquidation
of the affairs of the Company or any Material Subsidiary, and in the
case of either clause (A) or clause (B) the continuance of any such
decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or
(7) the commencement by the Company or any Material
Subsidiary of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by the Company or any Material
Subsidiary to the entry of a decree or order for relief in respect of
the Company or any Material Subsidiary in an involuntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against the Company
or any Material Subsidiary, or the filing by the Company or any
Material Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or
the consent by the Company or any Material Subsidiary to the filing of
such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or any Material
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Subsidiary or of any substantial part of the property of the Company
or any Material Subsidiary, or the making by the Company or any
Material Subsidiary of an assignment for the benefit of creditors, or
the admission by the Company or any Material Subsidiary in writing of
its inability to pay its debts generally as they become due, or the
taking of corporate action by the Company or any Material Subsidiary
in furtherance of any such action; or
(8) a final judgment, judicial decree or order for the
payment of money in excess of $5,000,000 shall be rendered against the
Company or any Material Subsidiary, and such judgment, decree or order
shall have remained unpaid, unvacated, unbonded or unstayed for a
period of 30 days; or
(9) any other Event of Default provided with respect to
Securities of such series pursuant to Section 301.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Outstanding Securities of any
series occurs and is continuing, then and in every such case the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of such series may declare the principal amount (or, if any of the
Securities of such series are Original Issue Discount Securities, such lesser
portion of the principal amount of such Securities as may be specified in the
terms thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
portion thereof) shall become immediately due and payable; provided that in the
case of an Event of Default described in Section 501(6) or (7) hereof, the
principal amount of all Securities (or specified portion thereof) shall become
due and payable immediately, without any notice to the Company or the Trustee.
Upon payment of such principal amount (and premium, if any), such
interest and interest on overdue principal and overdue interest to the extent
prescribed therefor in the Securities of such series (to the extent payment of
such interest is legally enforceable), all of the Company's obligations in
respect of the payment of principal and interest on the Securities of such
series shall terminate.
At any time after such a declaration of acceleration with respect to
Outstanding Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
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(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue interest on all Securities of
such series,
(B) the principal of (and premium, if any, on)
any Securities of such series which have become due otherwise
than by such declaration of acceleration and interest thereon
at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest
is lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section
607; and
(2) all Events of Default with respect to Securities of
such series, other than the non-payment of the principal of Securities
of such series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security of any series when such interest becomes due and payable and
such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of
(or premium, if any, on) any Security of any series at the Maturity
thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Security, the whole amount then due and payable on such
Security for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest at the rate
or rates prescribed therefor in such Security, and, in addition thereto such
further amount as shall be sufficient
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to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities of any series or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Securities of any series shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) or such portion of the principal
amount of any series of Original Issue Discount Securities as may be
specified in the terms of such series and interest owing and unpaid in
respect of the Securities of such series and to file such other papers
or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under
Section 607) and of the Holders allowed in such judicial proceeding,
and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series 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 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
607.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
of any series 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 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and for any
other amounts due the Trustee under Section 607, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee with respect to any series of
Securities pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Securities of such series and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities of
such series in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
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(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Securities of such series;
(2) the Holders of not less than 25% in principal amount
of the Outstanding Securities of such series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity, has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities of
such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date, or, in the case of a repurchase right at the option of the Holder, if
any, on the repurchase date specified pursuant to Section 301) and to institute
suit for the enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding,
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the Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities- in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of Securities of
any series to exercise any right or remedy accruing upon any Event of Default
with respect to such series shall impair any such right or remedy or constitute
a waiver of any such Event of Default or an acquiescence therein. Every right
and remedy given by this Article or by law to the Trustee or to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture, and
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
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The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series may, on behalf of the Holders of
all the Securities of such series, waive any past default hereunder with
respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if
any) or interest on any Security of such series when due (other than
amounts due and payable solely upon acceleration pursuant to Section
502), unless theretofore paid in full and cured in accordance with the
terms of this Indenture, or
(2) in respect of a covenant or provision hereof which
under Section 902 cannot be modified or amended without the consent of
the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; provided, however, that the provisions of this Section shall not
apply to any suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities
of the affected series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Security on or after the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date or, in
the case of a repurchase right at the option of the Holder, if any, on the
repurchase date specified pursuant to Section 301).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the
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benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) With respect to Securities of any series, except during the
continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture.
(b) With respect to Securities of any series, in case an Event of
Default has occurred and is continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
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(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith with respect
to any series of Securities in accordance with the direction of the
Holders of a majority in principal amount of the Outstanding
Securities of such series, relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Notes, provided such direction shall not
be in conflict with any rule of law or with this Indenture; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any Event of Default hereunder
with respect to the Securities of any series, the Trustee shall transmit by
mail to all Holders of Securities of such series, as their names and addresses
appear in the Security Register, notice of such default hereunder known to the
Trustee, unless such default shall have been cured or waved; provided however,
that, except in the case of a default in the payment of the principal of (or
premium, if any) or interest on any Security of such series or in the payment
of any sinking fund installment with respect to Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Securities of
such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) with respect to Securities of such
series, no such notice to Holders shall be given until at least 60 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to Securities of such series.
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SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon, other evidence of Indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order or as otherwise expressly provided herein and any resolution of
the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Securities of any series
pursuant to this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, fees,
expenses and liabilities which might be incurred by it, including
reasonable fees of counsel, in complying with such request or
direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, coupon, note, other
evidence of Indebtedness or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine, during business hours and upon reasonable notice,
the books, records and premises of the Company pertaining to the
Securities, personally or by agent or attorney;
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(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon
it by this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities of each series,
except the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities of any series, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture and any supplemental
indenture, to authenticate such Securities and to perform its obligations under
this Indenture and such Securities. The Trustee or any Authenticating Agent
shall not be accountable for the use or application by the Company of
Securities of any series or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to TIA
Sections 310(b) and 311, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law and shall be held
uninvested. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
(a) The Company agrees
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(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to the Trustee's negligence, bad faith or
willful misconduct; and
(3) to indemnify the Trustee and its agents for, and to
hold them harmless against, any loss, liability or expense incurred
without negligence, bad faith or willful misconduct on its part,
arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses of
defending themselves against any claim or liability in connection with
the exercise or performance of any of their powers or duties
hereunder.
(b) As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of and interest
on the Securities of any series. "Trustee" for the purposes of this Section
includes any predecessor Trustee, but negligence, bad faith or willful
misconduct of any Trustee shall not be attributable to any other Trustee.
(c) When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(6) or (7), the
expenses and the compensation for such services are intended to constitute
expenses of administration under any bankruptcy law.
SECTION 608. Disqualification; Conflicting Interests.
The provisions of TIA Section 310(b) shall apply to the Trustee.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
eligible to act under TIA Section 310(a)(1) and whose parent shall have a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by Federal, State or District of Columbia authority. If such
Corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of said
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supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
Neither the Company, nor any Person directly or indirectly controlling,
controlled by or under common control with the Company, shall act as Trustee
hereunder.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company specifying its intention to resign, the applicable series affected by
such resignation, the reason therefor and the date upon which such resignation
shall become effective. Notwithstanding the foregoing, unless the reason for
such resignations is a conflict pursuant to Section 608, the Trustee must
resign with respect to all Securities if the Trustee resigns with respect to
any series of Securities. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the Trustee
within 60 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) The Trustee may be removed with respect to any or all series
of Securities at any time upon 30 days notice by filing with it an instrument
in writing signed on behalf of the Company by a duly authorized officer of the
Company specifying such removal and the date on which it is to become
effective.
(e) If at any time:
(1) the Trustee shall fail to comply with TIA, Section
310(b) after written request therefor by the Company or by any Holder
who has been a bona fide Holder of a Security for at least six months,
or
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(2) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to any one or more series of Securities or all Securities,
or (ii) subject to Section 514 hereof, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to such series of Securities and the
appointment of a successor Trustee or Trustees.
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series) and shall comply with
the applicable requirements of Section 611 hereof. If, within one year after
such resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 611 hereof, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by Section 611 hereof,
then any Holder who has been a bona fide Holder of a Security of such series
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(g) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written
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notice of such event by first-class mail, postage prepaid, to all Holders of
Securities of such series as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust
Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties hereunder of the retiring Trustee; but, on
the request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on
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request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates. Whenever there is a successor Trustee with respect to one or more
(but less than all) series of securities issued pursuant to this Indenture, the
terms "Indenture" and "Securities" shall have the meanings specified in the
provisos to the respective definitions of those terms in Section 101 which
contemplate such situation.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) and (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any Corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any Corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any Corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities;
in case any of the Securities shall not have been authenticated by the Trustee
then in office, any successor by merger, conversion or consolidation to such
Trustee may authenticate such Securities either in the name of such predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Securities
or in this Indenture provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 613. Preferential Collection of Claims Against Company.
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The Trustee shall comply with TIA Section 311(a). A Trustee which has
resigned or been removed is subject to TIA Section 311(a) to the extent
indicated therein.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee,
with the concurrence of the Company, may appoint an Authenticating Agent or
Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series, and Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a Corporation organized and
doing business under the laws of the United States of America, any State
thereof or the District of Columbia authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal, State or
District of Columbia authority. If such Authenticating Agent publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such Corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of
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resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to reimbursement for such payments subject to Section
607.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
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This is one of the Securities of the series designated herein and
issued pursuant to the within-mentioned Indenture.
----------------------------------------
as Trustee
By
--------------------------------------
Authorized Signature
--------------------------------------
as Authenticating Agent
By
--------------------------------------
Authorized Signature
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of such series of
Securities received by the Trustee in its capacity as Security Registrar.
(b) The rights of Holders of any series of Securities to
communicate with other Holders of such series with respect to their rights
under this Indenture or under such Securities, and the corresponding rights and
privileges of the Trustee, shall be as provided by TIA Section 312(b).
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 312 of the TIA, regardless of the source
from which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 312(b) of the TIA.
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SECTION 702. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities of all series as
provided in TIA Section 313(c) a brief report dated as of such May 15 if
required by TIA Section 313(a). A copy of each such report shall, at the time
of such transmission to Holders, be filed by the Trustee with each stock
exchange upon which any Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when any series of Securities is
listed on any stock exchange.
SECTION 703. Reports by Company.
The Company shall:
(1) file with the Trustee, within 13 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934; or, if the Company is not required to file information, documents
or reports pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations;
(3) transmit by mail to all Holders of all series of Securities,
as their names and addresses appear in the Security Register, reports as may be
required by rules and regulations prescribed from time to time by the
Commission; and
(4) furnish to the Trustee the Officers' Certificates required by
Section 1010 hereof.
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The Trustee has no duty to review the financial or other reports
described in paragraphs (1) and (2) of this Section for purposes of determining
compliance with this or any other provision of this Indenture.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person unless:
(1) the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a Corporation, partnership or
trust, shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, the due and punctual payment of the principal of (and
premium, if any) and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction,
no Event of Default, and no event which, after notice or lapse of time
or both, would become an Event of Default, shall have occurred and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
For purposes of this Section and Section 802 hereof, a conveyance, transfer,
sale or lease of the properties and assets of the Company "substantially as an
entirety" shall mean a conveyance, transfer or lease of properties and assets
of the Company representing 80% or more of the fair value (as determined in
good faith by the Board of Directors) of all the Company's properties and
assets on the date of such conveyance, transfer, sale or lease.
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SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger by the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety to any Person in
accordance with Section 801 hereof, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease to another person, the
predecessor Person shall be released from all obligations and covenants under
this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of one or more specified series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default (and if such
Events of Default are to be for the benefit of less than all series of
Securities, stating that such Events of Default are being included
solely for the benefit of such series); or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or
to permit or facilitate the issuance of Securities of any series in
certificated or uncertificated form; or
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(5) to add to, change or eliminate any of the provisions
of this Indenture in respect of one or more series of Securities,
provided that any, such addition, change or elimination (i) shall
neither (A) apply to any Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit
of such provision nor (B) modify the rights of the Holder of any such
Security with respect to such provision or (ii) shall become effective
only when there is no such Security Outstanding; or
(6) to secure the Securities of any series; or
(7) to establish the form or terms of Securities of any
series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611(b); or
(9) to cure any ambiguity or defect in or to correct or
supplement any provision herein which may be defective or inconsistent
with any other provision in this Indenture or any Security of any
series, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall not
adversely affect the interests of the Holders of Securities of any
series in any material respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series at the time
Outstanding affected by such supplemental indenture (voting as one class), by
Act of said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders of Securities
of such series under this Indenture; provided however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any such affected
Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof,
or reduce the amount of the principal of
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an Original Issue Discount Security that would be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to
Section 302, or change any Place of Payment where, or the coin or
currency in which, any such Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption or repayment, on or after the
Redemption Date or any repayment date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any modifications or amendments to the Indenture with
respect to such series or to the terms and conditions of such series
or to approve a supplemental indenture with respect to such series, or
the consent of whose Holders is required for any waiver with respect
to such series of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences provided for in
this Indenture, or
(3) modify any of the provisions of this Section 902,
Section 513 hereof or Section 1009 hereof, except to increase any such
percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; provided
however, that this clause shall not be deemed to require the consent
of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section 902 and Section 1005
hereof, or the deletion of this proviso, in accordance with the
requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601 hereof) shall be fully protected in
relying upon, an Opinion of Counsel stating that
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the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities of the series affected thereby theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby to the extent
provided therein.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in a form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of such series in accordance with the
terms of such Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of such series may be presented
or surrendered for payment, where Securities of such series may be surrendered
for
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registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities of such series and this Indenture may
be served. The Company will give prompt written notice to the Trustee of the
location and any change in the location of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum in the currency in which such series of Securities is payable
sufficient to pay the principal (and premium, if any) or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
(and premium, if any) or interest on any Securities of such series, deposit
with a Paying Agent as sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee or the Company to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
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(1) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Securities of such
series in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Holders or otherwise disposed of as
herein provided;
(2) give the Trustee notice of any Event of Default by
the Company (or any other obligor upon the Securities of such series)
in the making of any payment of principal (and premium, if any) or
interest on the Securities of such series; and
(3) during the continuance of any such Event of Default
by the Company, upon the written request of the Trustee, forthwith pay
to the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent, and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest shall have become due and
payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease.
SECTION 1004. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things reasonably necessary to preserve and keep in full force and effect its
corporate existence, rights (charter and statutory) and franchises of the
Company and its Material Subsidiaries; provided, however, that the Company
shall not be required to preserve any-such right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Material Subsidiaries and
that the loss thereof will not have a material adverse effect on the business
or financial condition of the Company and its Subsidiaries, taken as a whole.
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SECTION 1005. Maintenance of Properties.
The Company will:
(1) cause its properties and the properties of its
Material Subsidiaries (other than properties obtained by the Company
or any Material Subsidiary through foreclosure or other resolution of
any loan) used or useful in the conduct of the business of the Company
and its Material Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary
facilities and equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that the
foregoing shall not prevent the Company or a Material Subsidiary from
discontinuing the operation and maintenance of any of its properties
if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business and will not have a material adverse
effect on the business or financial condition of the Company and its
Subsidiaries, taken as a whole;
(2) take all appropriate steps to preserve, protect and
maintain the trademarks, trade names, copyrights, licenses and permits
used in the conduct of the business of the Company and its Material
Subsidiaries; provided, however, that the foregoing shall not prevent
the Company or a Material Subsidiary from selling, abandoning or
otherwise disposing of any such trademark, trade name, copyright,
license or permit if such sale, abandonment or disposition is, in the
judgment of the Company, desirable in the conduct of its business and
will not have a material adverse effect on the business or financial
condition of the Company and its Subsidiaries, taken as a whole; and
(3) The Company and each of its Material Subsidiaries
shall comply with all statutes, laws, ordinances, or government rules
and regulations to which it is subject, noncompliance with which would
materially adversely affect the business or financial condition of the
Company and its Subsidiaries, taken as a whole.
SECTION 1006. Insurance.
The Company shall carry and maintain, and cause each of its
Subsidiaries to carry and maintain, insurance with financially sound and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by similarly-situated companies engaged in similar
operations and owning similar properties in similar geographic areas in which
the Company or such Subsidiary operates, provided that such insurance is
generally available at
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commercially reasonable rates, and further provided that the Company may
self-insure, or insure through captive insurers or insurance cooperatives to
the extent consistent with prudent business practices. Such insurance shall be
in such amounts, contain such terms, be in such forms and be for such periods
as are customary for such similarly-situated companies in the Company's
industry or insurance markets reasonably accessible by the Company. The
Company will provide and will cause each Subsidiary to provide such information
and documents reasonably requested by the Trustee from time to time with
respect to the Company's provision for insurance. The obligations evidenced by
this covenant shall be interpreted to reflect changes in insurance practices
related to the method in which insurance risks are covered in the North
American and European markets or in any other market in which the Company or
its Subsidiaries, as the case may be, reasonably places coverage.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary and
(2) all material lawful claims for labor, material and supplies which, if
unpaid, might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which disputed amounts adequate reserves
have been established in accordance with GAAP.
SECTION 1008. Books and Records.
The Company shall, and shall cause each Material Subsidiary to, at all
times keep proper books of record and account in which proper entries shall be
made in accordance with GAAP and, to the extent applicable, regulatory
accounting principles.
SECTION 1009. Defeasance of Certain Obligations.
The following provisions shall apply to the Securities of each series
unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 301.
The Company may omit to comply with any term, provision or condition set forth
in Article Ten and Section 301(12) and any such omission with respect Article
Ten and to Section 301(12) shall not be an Event of Default, in each case with
respect to the Securities of that series, provided that the following
conditions have been satisfied:
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(1) with reference to this Section 1009, the Company has
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 609 hereof) as
trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of
that series, (i) money in an amount, or (ii) U.S. Government
Obligations which through the payment of interest and principal in
respect thereof in accordance with their terms will provide not later
than one day before the due date of any payment referred to in clause
(A) or (B) of this subparagraph (1) money in an amount, or (iii) a
combination thereof, 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 (A) the principal of (and premium, if any) and each
installment of principal (and premium, if any) and interest on the
Outstanding Securities on the Stated Maturity of such principal or
installments of principal and interest and (B) any mandatory sinking
fund payments or analogous payments applicable to the Securities of
such series on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Securities;
(2) such deposit shall not cause the Trustee with respect
to the Securities of that series to have a conflicting interest as
defined in Section 608 hereof and for purposes of the Trust Indenture
Act with respect to the Securities of any series;
(3) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or material instrument to which the Company is a party or by
which it is bound;
(4) no Event of Default or event which with notice or
lapse of time would become an Event of Default with respect to the
Securities of that series shall have occurred and be continuing on the
date of such deposit;
(5) the Company has delivered to the Trustee an Opinion
of Counsel to the effect that Holders of the Securities of such series
will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and defeasance of certain
obligations and will be subject to Federal income tax on the same
amount and in the same manner and at the same times as would have been
the case if such deposit and defeasance had not occurred; and
(6) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the defeasance
contemplated in this Section have been complied with.
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SECTION 1010. Statement by Officers as to Default.
(1) The Company will deliver to the Trustee, within 45
days after the end of each calendar quarter, an Officers' Certificate,
stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (other than a
term, provision or condition specifically dealt with in Clause (2) of
this Section 1011) and, if the Company shall be in default, specifying
all such defaults and the nature and status thereof of which they may
have knowledge.
(2) The Company will deliver to the Trustee, within five
days after any officer eligible hereunder to sign an Officers'
Certificate becomes aware of the occurrence thereof, written notice of
any event which after notice or lapse of time or both would become an
Event of Default pursuant to Clause (5) of Section 501.
SECTION 1011. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Article Ten and Section 301(12),
inclusive, with respect to the Securities of any series if before the time for
such compliance the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of such series shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive any such term,
provision or condition. If a record date is fixed for such purpose, the
Holders on such record date or their duly designated proxies, and only such
Persons, shall be entitled to waive any such term, provision or condition
hereunder, whether or not such Holders remain Holders after such record date;
provided that unless the Holders of not less than a majority in principal
amount of the Outstanding Securities of such series shall have waived such
term, provision or condition prior to the date which is 90 days after such
record date, any such waiver previously given shall automatically and without
further action by any Holder be canceled and of no further effect.
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SECTION 1012. Exceptions to Covenants.
The Company shall not, and shall not permit any Subsidiary to, take or
permit to be taken any action or fail to take any action which is permitted by
any of the covenants contained in this Indenture if such action or omission
would result in the breach of any other covenant contained in this Indenture.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem Securities of any series shall
be evidenced by an Officers' Certificate. The Company shall, at least 45 days
prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of
(1) such Redemption Date,
(2) the Redemption Price,
(3) if the Securities of such series have different terms
and less than all of the Securities of such series are to be redeemed,
the terms of the Securities to be redeemed,
(4) whether the redemption is pursuant to a mandatory or
optional sinking fund, or both, if such is the case, and
(5) if less than all the Securities of such series with
identical terms are to be redeemed, the principal amount of such
Securities to be redeemed.
In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
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If less than all the Securities of like tenor of any series are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of like tenor of such series not previously called for redemption,
by such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of like tenor of that series or any
integral multiple thereof of the principal amount of Securities of such series
of a denomination larger than the minimum authorized denomination for
Securities of that series).
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at each such Holder's
address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of like
tenor of any series are to be redeemed, the identification (and, in
the case of partial redemption, the principal amounts) of the
particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is
the case.
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Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Trustee in the name and at the expense of the
Company, unless the Company notifies the Trustee of its intention to give such
notice directly-
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in immediately available funds sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that, unless otherwise
specified as contemplated by Section 301 hereof, installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Regular Record Dates according
to their terms and the provisions of Section 307 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment for such series (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities of the same
series and of like tenor, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so
70
<PAGE> 77
surrendered. To the extent a series of Securities represented by a Global
Security is to be redeemed only in part, a notation of such redemption shall be
made by the Trustee in the schedule of exchanges on the Global Security.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 hereof for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of like tenor of a
series (other than any previously called for redemption) and (2) may apply as a
credit Securities of like tenor of a series which have been redeemed either at
the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of like tenor of such
series required to be made pursuant to the terms of such Securities as provided
for by the terms of such series; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly. Such Securities
shall be first applied to the sinking fund payment next due and any excess
shall be applied to the following sinking fund payments in the order they are
due.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
Securities of like tenor of a series, the Company will deliver to the Trustee
an Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for such
71
<PAGE> 78
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities of like
tenor of that series pursuant to Section 1202 hereof and, at the time of
delivery of such Officers' Certificate, will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 hereof
and cause notice of the redemption thereof to be given in the name of and at
the expense of the Company in the manner provided in Section 1104 hereof. Such
notice having been duly given. the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107 hereof.
ARTICLE THIRTEEN
REPURCHASE OF SECURITIES AT OPTION OF HOLDERS
SECTION 1301. Applicability of Article.
Securities of any series which are repurchasable before their Stated
Maturity at the option of the Holders shall be repurchasable in accordance with
their terms and (except as otherwise specified pursuant to Section 301 for
Securities of any series) in accordance with this Article.
SECTION 1302. Notice of Repurchase Date.
Notice of any Repurchase Date with respect to Securities of any series
shall, unless otherwise specified by the terms of such Securities, be given by
the Company not less than 45 nor more than 60 days prior to such Repurchase
Date to each Holder of Securities of such series subject to repurchase in
accordance with Section 105 hereof.
The notice as to Repurchase Date shall state:
(1) the Repurchase Date;
(2) the Repurchase Price;
(3) the place or places where such Securities are to be
surrendered for payment of the Repurchase Price and the date by which
such Securities must be so surrendered in order to be repurchased;
(4) a description of the procedure which a Holder must
follow to exercise a repurchase right; and
(5) that exercise of the option to elect repurchase is
irrevocable.
72
<PAGE> 79
No failure of the Company to give the foregoing notice shall limit any Holder's
right to exercise a repurchase right.
SECTION 1303. Deposit of Repurchase Price.
On or prior to the Repurchase Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Repurchase Price of and (unless the Repurchase Date
shall be an Interest Payment Date) accrued interest, if any, on all of the
Securities of such series which are to be repurchased on that date.
SECTION 1304. Securities Payable on Repurchase Date.
The form of option to elect repurchase having been delivered as
specified in the form of Security for such series as provided in Article Two,
the Securities of such series so to be repurchased shall, on the Repurchase
Date, become due and payable at the Repurchase Price applicable thereto and
from and after such date (unless the Company shall default in the payment of
the Repurchase Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for repurchase in accordance
with said notice, such Security shall be paid by the Company at the Repurchase
Price together with accrued interest to the Repurchase Date; provided, however,
that installments of interest whose Stated Maturity is on or prior to such
Repurchase Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Regular and Special Record Dates according to their terms and the
provisions of Section 307 hereof.
If any such Security shall not be paid upon surrender thereof for
repurchase, the principal (and premium, if any) shall, until paid, bear
interest from the Repurchase Date at the rate prescribed therefor in such
Security.
SECTION 1305. Securities Repurchased in Part.
Any Security which by its terms may be repurchased in part at the
option of the Holder and which is to be repurchased only in part shall be
surrendered at any office or agency of the Company designated for that purpose
pursuant to Section 1002 hereof (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities of the same
series and of like tenor of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange
73
<PAGE> 80
for the unrepurchased portion of the principal of the Security so surrendered.
To the extent a series of Securities represented by a Global Security is to be
repurchased in part only, a notation of such redemption shall be made by the
Trustee in the schedule of exchanges on the Global Security.
ARTICLE FOURTEEN
CORPORATE OBLIGATION ONLY
SECTION 1401. Indenture and Securities Solely Corporate Obligations.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, any indenture supplement, or in any Security,
because of any Indebtedness evidenced thereby, shall be had against any
incorporator, or against any past, present or future stockholder, employee,
officer or director, as such, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or penalty or by any legal or equitable proceeding or otherwise, all
such liability, whether at common law, in. equity, by any constitution, statute
or otherwise, of incorporators, stockholders, employees, officers or directors
being expressly waived and released by the acceptance of the Securities by the
Holders thereof and as part of the consideration of the issuance of the
Securities.
* * *
74
<PAGE> 81
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
AMRESCO, INC.
By:
-------------------------------------
Robert H. Lutz, Jr.
Chairman and Chief Executive
Officer
Attest:
- ----------------------------------
Name:
-----------------------------
Title:
----------------------------
----------------------------------------
as Trustee
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Attest:
- ----------------------------------
Name:
-----------------------------
Title:
----------------------------
75
<PAGE> 1
EXHIBIT 5.1
[AMRESCO, INC. LETTERHEAD]
[Form of Opinion]
AMRESCO, INC.
1845 Woodall Rodgers Freeway
Suite 1700
Dallas, Texas 75201
Re: Registration Statement on Form S-3 of $250,000,000 aggregate
initial offering price of Securities
Ladies and Gentlemen:
I am general counsel of AMRESCO, INC., a Delaware corporation (the
"Company"), and have acted as such in connection with a Registration Statement
on From S-3 (the "Registration Statement") relating to the sale by the Company
from time to time of (i) its unsecured debt securities, which may be either
senior debt securities (the "Senior Debt Securities") or subordinated debt
securities (the "Subordinated Debt Securities" and, together with the Senior
Debt Securities, the "Debt Securities"); (ii) shares of its preferred stock,
$1.00 par value per share (the "Preferred Stock"), in one or more series; (iii)
shares of its common stock, par value $0.05 per share (the "Common Stock"); and
(iv) warrants (collectively, the "Securities Warrants") to purchase Debt
Securities (the "Debt Securities Warrants"), Preferred Stock (the "Preferred
Stock Warrants") or shares of Common Stock (the "Common Stock Warrants"), for
an aggregate initial public offering price of up to $250,000,000 (or the
equivalent in foreign currencies, currency units or composite currencies (each,
a "Currency"). The Debt Securities, Preferred Stock, Common Stock and
Securities Warrants are herein collectively referred to as the "Securities."
I have examined such documents, records and matters of law as I have
deemed necessary for the purposes of this opinion. In rendering the following
opinions, I have relied as to certain factual matters upon certificates of
officers of the Company and public officials, and I have not independently
checked or verified the accuracy of the statements contained therein.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them by the Registration Statement.
Based on the foregoing and having due regard for such legal
consideration as I deem relevant, I am of the opinion that:
1. When (a) the Debt Securities have been duly established by the
applicable Indentures (including, without limitation, the adoption by the Board
of Directors of the Company of a resolution duly authorizing the issuance and
delivery of the Debt Securities) duly authenticated by the trustee and duly
executed and delivered on behalf of the Company against payment therefor in
accordance with the terms and provisions of the applicable
<PAGE> 2
AMERESCO, Inc.
Page 2
Indenture and as contemplated by the Registration Statement, the Prospectus and
the related Prospectus Supplement(s), (b) when the Registration Statement and
any required post-effective amendment thereto and any and all Prospectus
Supplement(s) required by applicable laws have all become effective under the
Securities Act, (c) assuming that the terms of the Debt Securities and the
Indentures as executed and delivered are as described in the Registration
Statement, the Prospectus and the related Prospectus Supplement(s) and (d)
assuming that the Debt Securities are then issued and sold as contemplated in
the Registration Statement, the Prospectus and the related Prospectus
Supplement(s), the Debt Securities will be constituted valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with the terms of the Debt Securities.
2. When (a) the Securities Warrants have been duly executed and
delivered (including, without limitation, the adoption by the Board of
Directors of the Company of a resolution duly authorizing the issuance and
delivery of the Securities Warrants), and issued and sold in the form and in
the manner contemplated in the Registration Statement, the Prospectus and the
related Prospectus Supplement(s), (b) when the Registration Statement and any
required post-effective amendment thereto and any and all Prospectus
Supplement(s) required by applicable law have all become effective under the
Securities Act, (c) assuming that the terms of the Securities Warrants as
executed and delivered are as described in the Registration Statement, the
Prospectus and the related Prospectus Supplement(s), and (d) assuming that the
Securities Warrants are then issued and sold as contemplated in the
Registration Statement, the Prospectus and the related Prospectus
Supplement(s), the Securities Warrants will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms.
3. The Company has the authority pursuant to its Certificate of
Incorporation, as amended, to issue up to 5,000,000 shares of Preferred Stock.
When a series of Preferred Stock has been duly established in accordance with
the terms of the Certificate of Incorporation and applicable law, and upon
adoption by the Board of Directors of the Company of a resolution in form and
content as required by applicable law and upon issuance and delivery of and
payment for such shares in the manner contemplated by the Registration
Statement, the Prospectus and the related Prospectus Supplement(s) and by such
resolution, such shares of such series of Preferred Stock (including any
Preferred Stock duly issued (i) upon the exercise of any Securities Warrants
exercisable for Preferred Stock or (ii) upon the exchange or conversion of Debt
Securities that are exchangeable or convertible into Preferred Stock) will be
validly issued, fully paid and nonassessable.
4. The Company has the authority pursuant to its Certificate of
Incorporation, as amended, to issue up to 50,000,000 shares of Common Stock.
Upon adoption by the Board of Directors of the Company of a resolution in form
and content as required by applicable law and upon issuance and delivery of and
payment for such shares in the manner contemplated by the Registration
Statement, the Prospectus and the related Prospectus Supplement(s) and by such
resolution, such shares of Common Stock (including any Common Stock duly issued
(i) upon the exchange or conversion of any shares of Preferred Stock that are
exchangeable or convertible into Common Stock or (ii) upon the exercise of any
Securities Warrants
<PAGE> 3
AMRESCO, Inc.
Page 3
exercisable for Common Stock or (iii) upon the exchange or conversion of Debt
Securities that are exchangeable or convertible into Common Stock) will be
validly issued, fully paid and nonassessable.
The opinions set forth above are subject to the following
qualifications and exceptions:
(a) My opinions are subject to (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar law of general application affecting creditors' rights, (ii)
provisions of applicable law pertaining to the voidability of
preferential or fraudulent transfers and conveyances and (iii) the
fact that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may
be brought. In addition, certain other provisions of the Securities
may be unenforceable in whole or in part under the laws (including
judicial decisions) of the State of Texas or the United States of
America; provided, however, that the inclusion of any such provisions
and any limitations imposed by such laws on the enforceability of the
Securities will not affect the validity or enforceability as a whole
of any of the Securities and will not prevent the holders thereof from
the ultimate realization of the practical rights and benefits afforded
by such Securities, except for the economic consequences of any
judicial, administrative or other procedural delay which may result
from the application of any such law.
(b) My opinions are subject to the effect of general
principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing, and other
similar doctrines affecting the enforceability of agreements generally
(regardless of whether considered in a proceeding in equity or at
law).
(c) In rendering the opinions set forth above, I have
assumed that, at the time of the authentication and delivery of a
series of Securities, the resolutions of the Board of Directors
referred to above will not have been modified or rescinded, there will
not have occurred any change in the law affecting the authorization,
execution, delivery, validity or enforceability of the Securities, the
Registration Statement will have been declared effective by the
Commission and will continue to be effective, none of the particular
terms of a series of Securities will violate any applicable law and
neither the issuance and sale thereof nor the compliance by the
Company with the terms thereof will result in a violation of any
agreement or instrument then binding upon the Company or any order of
any court or governmental body having jurisdiction over the Company.
(d) As of the date of this opinion, a judgment for money
in an action based on a Debt Security denominated in a foreign
currency or currency unit in a federal or State court in the United
States ordinarily would be enforced in the United States only in
United States dollars. The date used to determine the rate of
conversion into United States dollars of the Currency in which a
particular Debt Security is
<PAGE> 4
AMRESCO, Inc.
Page 4
denominated will depend upon various factors, including which court renders the
judgment.
My opinions expressed above are limited to the laws of the State of
Texas, the Delaware General Corporation Law and the federal laws of the United
States of America.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5.1 to the Registration Statement and to
reference me under the caption "Legal Matters" in the Prospectus constituting a
part of the Registration Statement.
Dated: June __, 1996
Very truly yours,
L. Keith Blackwell
Vice President, General Counsel and
Secretary
<PAGE> 1
AMRESCO, INC.
EXHIBIT 12.1 - COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Quarter Ended
March 31, Year Ended December 31,
----------------- -------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------ ------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating income before income taxes $8,095 $5,336 $30,258 $35,686 $43,677
Fixed charges:
Interest expense 5,167 415 6,921 1,768 754
Amortization of debt issuance costs 196 - 15 - -
------ ------ ------- ------- ------- ------- -------
Operating income before income taxes and
fixed charges 13,458 5,751 37,194 37,454 44,431
Total fixed charges 5,363 415 6,936 1,768 754
------ ------ ------- ------- ------- ------- -------
Ratio of earnings to fixed charges 2.5x 13.9x 5.4x 21.2x 58.9x (1) (1)
====== ====== ======= ======= ======= ======= =======
</TABLE>
(1) The Company or its predecessors had no or nominal fixed charges in 1991
and 1992 and it was not meaningful, therefore, to calculate these ratios
for the years ended December 31, 1991 and 1992.
<PAGE> 1
AMRESCO, INC.
EXHIBIT 12.2 - COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Quarter Ended
March 31, Year Ended December 31,
----------------- ------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------ ------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating income before income taxes $8,095 $5,336 $30,258 $35,686 $43,677
Fixed charges:
Interest expense 5,167 415 6,921 1,768 754
Amortization of debt issuance costs 196 - 15 - -
------ ------ ------- ------- ------- ------- -------
Operating income before income taxes
and fixed charges 13,458 5,751 37,194 37,454 44,431
Total fixed charges 5,363 415 6,936 1,768 754
Total preferred stock dividends - - - - -
------ ------ ------- ------- ------- ------- -------
Ratio of earnings to fixed charges
and preferred stock dividends 2.5x 13.9x 5.4x 21.2x 58.9x (1) (1)
====== ====== ======= ======= ======= ======= =======
</TABLE>
(1) The Company or its predecessors had no or nominal fixed charges or
preferred stock dividends in 1991 and 1992 and it was not meaningful,
therefore, to calculate these ratios for the years ended December 31,
1991 and 1992.
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
AMRESCO, INC. on Form S-3 of our report dated February 6, 1996, appearing in
the Annual Report on Form 10-K of AMRESCO, INC. for the year ended December 31,
1995 and to the reference to us under the heading "Experts" in the Prospectus,
which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
June 14, 1996
Dallas, Texas
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitute and appoints each of Robert H. Lutz, Jr., Robert L.
Adair III and L. Keith Blackwell, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, acting along, to sign,
execute and file with the Securities and Exchange Commission and any state
securities regulatory board or commission any documents relating to the
proposed issuance and registration of the securities offered pursuant to the
Registration Statement of AMRESCO, INC. on Form S-3 under the Securities Act of
1933, including any amendment or amendments relating thereto, with all exhibits
and any and all documents required to be filed with respect thereto with any
regulatory authority, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could
do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ ROBERT H. LUTZ, JR. Chairman of the Board and Chief Executive May 29, 1996
---------------------------------------- Officer
Robert H. Lutz, Jr.
/s/ ROBERT L. ADAIR III Director, President and Chief Operating May 29, 1996
---------------------------------------- Officer
Robert L. Adair III
/s/ BARRY L. EDWARD Executive Vice President and Chief May 29, 1996
---------------------------------------- Financial Officer (Principal Financial
Barry L. Edwards Officer)
/s/ JAMES P. COTTON, JR. Director May 29, 1996
----------------------------------------
James P. Cotton, Jr.
Director
----------------------------------------
Richard L. Cravey
/s/ GERALD E. EICKHOFF Director May 29, 1996
----------------------------------------
Gerald E. Eickhoff
Director
----------------------------------------
Edwin A. Wahlen, Jr.
/s/ AMY J. JORGENSEN Director May 29, 1996
----------------------------------------
Amy J. Jorgensen
Director
----------------------------------------
John J. McDonough
/s/ BRUCE W. SCHNITZER Director May 29, 1996
----------------------------------------
Bruce W. Schnitzer
/s/ RONALD B. KIRKLAND Vice President and Chief Accounting Officer May 29, 1996
---------------------------------------- (Principal Accounting Officer)
Ronald B. Kirkland
</TABLE>
