As filed with the Securities and Exchange Commission on October 17, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
THE FINOVA GROUP INC.
(Exact Name of Registrant As Specified in Its Charter)
Delaware 86-0695381
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
FINOVA CAPITAL CORPORATION
(Exact Name of Registrant As Specified in Its Charter)
Delaware 94-1278569
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
(602) 207-6900
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
Samuel L. Eichenfield
Chairman, President and Chief Executive Officer
The FINOVA Group Inc.
FINOVA Capital Corporation
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
(602) 207-6900
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent For Service)
--------------------------------------------------
Please send copies of all communications to:
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<S> <C> <C>
Richard Lieberman Karen E. Bertero Paul C. Pringle
Vice President - Gibson, Dunn & Crutcher LLP Brown & Wood LLP
Assistant General Counsel 333 South Grand Avenue 555 California Street
The FINOVA Group Inc. Los Angeles, California 90071 San Francisco, California 94104-1715
1850 North Central Avenue (213) 229-7000 (415) 772-1200
P.O. Box 2209
Phoenix, Arizona 85002-2209
(602) 207-6900
</TABLE>
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]
<PAGE>
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. [_]
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<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Amount To Be Aggregate Price Per Aggregate Offering Amount Of
Title Of Securities To Be Registered Registered(1) Unit Price(1)(2) Registration Fee(3)
- ------------------------------------------------------------------------------------------------------------------------------------
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Debt Securities(4)
- --------------------------------------------
Common Stock - par value $.01 per
share(5)(6)
- --------------------------------------------
Preferred Stock - par value $.01 per $2,000,000,000 (2) $2,000,000,000 $606,060.60
share(7)
- --------------------------------------------
Depositary Shares(8)
- --------------------------------------------
Warrants(9)
- --------------------------------------------
</TABLE>
(1) In no event will the aggregate maximum offering price of all securities
issued pursuant to this Registration Statement exceed $2,000,000,000. Any
securities registered hereunder may be sold separately or as units with other
securities registered hereunder.
(2) The proposed maximum offering price per unit (a) has been omitted pursuant
to Instruction II.D of Form S-3 and (b) will be determined, from time to time,
by the Registrants in connection with the issuance by the Registrants of the
securities registered hereunder.
(3) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
(4) Subject to footnote 1, there is being registered hereunder an indeterminate
principal amount of debt securities as may be sold, from time to time, by the
Registrants.
(5) Subject to footnote 1, there is being registered hereunder an indeterminate
number of shares of common stock as may be sold from time to time, by the
Registrants, including shares of other classes or series of the Registrants'
stock that may be issued upon reclassification of unissued, authorized stock of
the Registrants. There also is being registered hereunder an indeterminate
number of shares of common stock, including shares of other classes or series of
the Registrants' stock that may be issued upon reclassification of unissued,
authorized stock of the Registrants, as may be issuable upon conversion of the
debt securities or the preferred stock or upon exercise of Warrants registered
hereby.
(6) Includes the preferred stock purchase rights of The FINOVA Group Inc. which
initially are attached to and trade with the shares of common stock of The
FINOVA Group Inc. being registered hereby. The value attributable to such
Rights, if any, is reflected in the market price of such common stock.
(7) Subject to footnote 1, there is being registered hereunder an indeterminate
number of shares of preferred stock as may be sold from time to time, by the
Registrants. There also is being registered hereunder an indeterminate number of
shares of preferred stock as shall be issuable upon exercise of Warrants
registered hereby.
(8) Subject to footnote 1, there is being registered hereunder an indeterminate
number of depositary shares as may be sold from time to time, by the
Registrants.
(9) Subject to footnote 1, there is being registered hereunder an indeterminate
number of warrants representing rights to purchase shares of common stock or
preferred stock of the Registrants, including shares of other classes or series
of the Registrants' stock that may be issued upon reclassification of unissued,
authorized stock of such Registrants, as the case may be, registered hereby.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
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 OCTOBER 17, 1997
Prospectus [FINOVA Logo]
- ----------
[The FINOVA Group Inc. logo]
[FINOVA Capital Corporation logo]
By this prospectus, we may offer up to
$2,000,000,000 of our:
DEBT SECURITIES
COMMON STOCK (including, for The We will provide the specific terms of
FINOVA Group Inc., Rights to these securities in supplements to
Purchase Junior Participating this prospectus. You should read this
Preferred Stock) prospectus and the supplements
PREFERRED STOCK carefully before you invest.
DEPOSITARY SHARES
WARRANTS
FINOVA Capital Corporation is a wholly We may offer the securities directly
owned subsidiary of The FINOVA Group or through underwriters, agents or
Inc. dealers. The supplement will describe
the terms of that plan of
distribution. "Plan of Distribution"
below also provides more information
on this topic.
These securities have not been
approved or disapproved by the SEC or
any state securities commission.
None of those authorities has
determined that this prospectus is
accurate or complete. Any
representation to the contrary is a
criminal offense.
The date of this prospectus is __________, 1997
<PAGE>
Certain persons participating in this offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities offered
under this prospectus. Those transactions include over-allotment, stabilizing
transactions, short covering transactions and penalty bids. For a description of
those activities, see "Plan of Distribution" in the prospectus. If begun, they
may discontinue those activities at any time.
WHERE YOU CAN FIND MORE INFORMATION
The FINOVA Group, Inc. ("FINOVA
Group") and FINOVA Capital Corporation * Portions of the Proxy Statement
("FINOVA Capital") file annual, on Schedule 14A for FINOVA
quarterly and current reports, proxy Group's Annual Meeting of
and information statements and other Shareholders held on May 8, 1997
information with the SEC. You may read that have been incorporated by
and copy any document we file at the reference into our 10-K.
SEC's public reference rooms in
Washington, D.C., New York, New York * Quarterly Reports on Form 10-Q
and Chicago, Illinois. Please call the of FINOVA Group and FINOVA
SEC at 1-800-SEC-0330 for more Capital for the quarters ended
information on the public reference March 31 and June 30, 1997.
rooms and their copy charges. Our SEC
filings are also available to the * Current Reports on Form 8-K of
public from the SEC's web site at FINOVA Group dated January 21,
http://www.sec.gov. You may also April 15, July 15, August 14,
inspect our SEC reports and other and October 1, 1997.
information at the New York Stock
Exchange, 20 Broad Street, New York, * Current Reports on Form 8-K of
New York 10005. FINOVA Capital dated January 23,
April 17, July 16, and October
The SEC allows us to "incorporate 15, 1997.
by reference" the information we file
with them, which means we can disclose You may request a copy of those
information to you by referring you to filings, other than exhibits, at no
those documents. Information cost, by contacting us at:
incorporated by reference is part of
this prospectus. Later information Treasurer
filed with the SEC updates and The FINOVA Group Inc.
supersedes this prospectus. 1850 North Central Avenue
P.O. Box 2209
We incorporate by reference the Phoenix, Arizona 85002-2209
documents listed below and any future (602) 207-6900
filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934
until this offering is completed:
* Annual Reports on Form 10-K of
FINOVA Group and FINOVA Capital
for the year ended December 31,
1996.
THE COMPANIES
FINOVA Group is a financial financing needs falling generally
services holding company. Through our between $500,000 and $35 million.
principal subsidiary, FINOVA Capital,
we provide a broad range of financing We operate in 16 specific industry
and capital market products to or market niches under three market
mid-size business. We concentrate on segments in which our expertise in
lending to midsize businesses. FINOVA evaluating the credit-worthiness of
Capital has been in operation for over prospective customers and our ability
42 years. to provide value-added services enable
us to differentiate ourselves from our
We extend revolving credit competitors. That expertise and
facilities, term loans, and equipment ability also
and real estate financing to
"middle-market" businesses with
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enable us to command pricing that Typical transaction sizes range
provides a satisfactory spread over from $2 million to $35 million.
our borrowing costs.
* Inventory Finance provides
We seek to maintain a high quality inbound and outbound inventory
portfolio and to minimize non-earning financing, combined
assets and write-offs. We use clearly inventory/accounts receivable
defined underwriting criteria and lines of credit and purchase
stringent portfolio management order financing for equipment
techniques. We diversify our lending distributors, value-added
activities geographically and among a resellers and dealers
range of industries, customers and nationwide. Transaction sizes
loan products. generally range from $500,000 to
$30 million.
Due to the diversity of our
portfolio, we believe we are better * Factoring Services offers full
able to manage competitive changes in service factoring and accounts
our markets and to withstand the receivable management services
impact of deteriorating economic for entrepreneurial and larger
conditions on a regional or national firms, primarily in the textile
basis. There can be no assurance, and apparel industries. The
however, that competitive changes, annual factored volume of these
borrowers' performance, economic companies is generally between
conditions or other factors will not $5 million and $25 million. This
result in an adverse impact on our line provides accounts
results of operations or financial receivable and inventory
condition. financing and loans secured by
equipment and real estate.
We generate interest and other
income through charges assessed on * Rediscount Finance offers
outstanding loans, loan servicing, revolving credit facilities to
leasing, brokerage and other fees. Our the independent consumer finance
primary expenses are the costs of industry including sales,
funding our loan and lease business, automobile, mortgage and premium
including interest paid on debt, finance companies. Typical
provisions for possible credit losses, transaction sizes range from $1
marketing expenses, salaries and million to $35 million.
employee benefits, servicing and other
operating expenses and income taxes. Specialty Finance
Lines of Business * Commercial Equipment Finance
offers equipment leases, loans
We operate the following principal and "turnkey" financing to a
lines of business under three market broad range of midsize
segments: companies. Specialty markets
include the corporate aircraft
Commercial Finance and emerging growth technology
industries, primarily
* Asset-Based Finance offers biotechnology and electronics.
collateral-oriented revolving Typical transaction sizes range
credit facilities and term loans from $500,000 to $15 million.
for manufacturers, distributors,
wholesalers and service * Commercial Real Estate Finance
companies. Typical transaction provides term financing for
sizes range from $500,000 to $3 hotel, anchored retail, office
million. and owner-occupied properties.
Typical transaction sizes range
* Corporate Finance provides a from $5 million to $25 million.
full range of cash flow-oriented
and asset-based term and
revolving loan products for
manufacturers, wholesalers,
distributors, specialty
retailers and commercial and
consumer service businesses.
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* Communications Finance railroads and operators of other
specializes in term financing to transportation related
advertising and equipment. Typical transaction
subscriber-supported businesses sizes range from $5 million to
including radio and television $30 million.
stations, cable operators,
outdoor advertising firms and Capital Markets
publishers. Typical transaction
sizes range from $1 million to * FINOVA Realty Capital
$40 million. specializes in commercial real
estate brokerage activities,
* Franchise Finance offers mezzanine financing and equity
equipment, real estate and participations. Typical
acquisition financing for transaction sizes range from $1
operators of established million to $5 million.
franchise concepts. Transaction
sizes generally range from * FINOVA Investment Alliance
$500,000 to $15 million. provides equity and mezzanine
debt financing for midsize
* Healthcare Finance offers a full businesses in partnership with
range of working capital, institutional investors and
equipment and real estate selected fund sponsors. Typical
financing products for the U.S. transaction sizes range from $2
health care industry. million to $15 million.
Transaction sizes typically
range from $500,000 to $25 Both FINOVA Group and FINOVA
million. Capital are Delaware corporations.
FINOVA Group was incorporated in 1991
* Public Finance provides to serve as the successor to The Dial
tax-exempt term financing to Corp's financial services businesses.
state and local governments and Dial transferred those businesses to
non-profit corporations. Typical FINOVA Group in March 1992 in a
transaction sizes range from spin-off. Since that time, FINOVA
$100,000 to $5 million. Group has increased its total assets
from about $2.6 billion at December
* Portfolio Services provides 31, 1992 to $8.1 billion at June 30,
customized receivable servicing 1997. Income from continuing
and collections for time-share operations increased from $37 million
developers and other generators in 1992 to $116.5 million in 1996. We
of consumer receivables. believe FINOVA Group ranks among the
largest independent commercial finance
* Resort Finance focuses on companies in the U.S., based on total
construction, acquisition and assets. The common stock of FINOVA
receivables financing of time Group is traded on the New York Stock
share resorts worldwide as well Exchange.
as term financing for
established golf resort hotels FINOVA Capital was incorporated in
and receivables funding for 1965 and is the successor to a
developers of second home California corporation that was formed
communities. Typical transaction in 1954. All of FINOVA Capital's
sizes range from $5 million to capital stock is owned by FINOVA
$35 million. Group.
* Transportation Finance Our principal executive offices are
structures equipment loans, located at 1850 North Central Avenue,
leases, acquisition financing P.O. Box 2209, Phoenix, Arizona
and leveraged lease equity 85002-2209. Our telephone number is
investments for commercial and (602) 207-6900.
cargo airlines worldwide,
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SELECTED FINANCIAL INFORMATION
The following information was items are part of our Annual Reports
derived from our financial statements. on Form 10-K for the year ended
Partial year results are not audited. December 31, 1996 and our Quarterly
The information is only a summary and Reports on Form 10-Q for the quarters
does not provide all of the ended March 31, 1997 and June 30,
information contained in our financial 1997. You should read our financial
statements, including the related statements and other information that
notes, and Management's Discussion and we have filed with the SEC.
Analysis. Those
THE FINOVA GROUP
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<CAPTION>
As of and for the
Six Months Ended
June 30, As of and for the Year Ended December 31,
-------- -----------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(Unaudited) (Dollars in thousands, except per share data)
0PERATIONS:
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Interest and income
earned from financing
transactions $ 445,564 $ 383,287 $ 797,934 $ 702,116 $ 474,200 $ 255,216 $ 243,337
Interest margins earned 212,450 173,442 369,105 309,084 227,463 124,847 104,699
Provision for possible
credit losses 26,300 19,500 41,751 37,568 10,439 5,706 6,740
Gains on sale of assets 13,701 8,045 12,949 10,889 3,877 5,439 3,362
Income from continuing
operations 65,409 55,608 116,493 93,798 73,770 37,846 36,750
Earnings from continuing
operations after preferred
dividends per common
and equivalent share* $ 1.17 $ 1.00 $ 2.08 $ 1.69 $ 1.46 $ 0.90 $ 0.85
Earnings per common and
equivalent share* $ 1.17 $ 0.99 $ 2.09 $ 1.75 $ 1.47 $ 0.89 $ 1.15
Dividends declared per
common share* $ 0.24 $ 0.22 $ 0.46 $ 0.42 $ 0.37 $ 0.34 $ 0.21
Average outstanding
common and equivalent
shares* 55,812,000 55,884,000 56,072,000 55,664,000 50,614,000 40,664,000 40,928,000
FINANCIAL POSITION:
Investment in financing
transactions $ 7,826,196 $ 6,697,013 $ 7,298,759 $ 6,348,079 $ 5,342,979 $ 2,846,571 $ 2,428,523
Nonaccruing assets 165,885 155,840 155,505 143,127 149,046 102,607 100,422
Reserve for possible
credit losses 159,747 136,917 148,693 129,077 110,903 64,280 69,291
Total assets 8,060,403 7,439,995 7,526,734 7,036,514 5,821,343 2,834,322 2,641,668
Total debt 6,338,122 5,970,459 5,850,223 5,649,368 4,573,354 2,079,286 1,898,773
Redeemable preferred
stock -- -- -- -- -- -- 25,000
Company-obligated
mandatory redeemable
convertible preferred
securities of subsidiary
trust solely holding
convertible debentures of
the Company 111,550 -- 111,550 -- -- -- --
Stockholders' equity 948,595 871,653 929,591 825,184 770,252 503,300 488,396
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*Retroactively adjusted for the two for one stock split effective October 1,
1997.
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RATIO OF INCOME TO TOTAL FIXED CHARGES
Six
Months
Ended
June 30, Year Ended December 31,
------------ --------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
FINOVA Group 1.54x 1.50x 1.50x 1.44x 1.58x 1.53x 1.37x
FINOVA Capital 1.54x 1.50x 1.50x 1.44x 1.58x 1.50x 1.37x
RATIO OF INCOME TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
Six
Months
Ended
June 30, Year Ended December 31,
------------ --------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
FINOVA Group 1.51x 1.50x 1.50x 1.44x 1.58x 1.50x 1.34x
FINOVA Capital 1.54x 1.50x 1.50x 1.44x 1.58x 1.46x 1.34x
Variations in interest rates generally of computing the above ratios,
do not have a substantial impact on consists of income from continuing
the ratio because fixed-rate and operations before income taxes plus
floating-rate assets are generally fixed charges. Fixed charges consist
matched with liabilities of similar of interest and related debt expense,
rate and term. and a portion of rental expense
determined to be representative of
Income available for fixed charges, interest.
for purposes
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and any business strategy, the effect of
supplements, including information economic conditions, the performance
incorporated by reference, discuss of our borrowers, actions of our
future expectations, contain competitors and our ability to respond
projections of results of operation or to those actions, the cost of our
financial condition or state other capital, which may depend in part on
forward-looking information. Known and our portfolio quality, ratings,
unknown risks, uncertainties and other prospects and outlook, changes in
factors could cause the actual results governmental regulation, tax rates and
to differ materially from those similar matters, the results of
contemplated by those statements. The litigation, the ability to attract and
forward-looking information is based retain quality employees and other
on various factors and was derived risks detailed in our other filings
using numerous assumptions. with the SEC. We do not promise to
update forward-looking information to
Important factors that may cause reflect actual results or changes in
the actual results to differ include, assumptions or other factors that
without limitation, the results of our could affect those statements.
efforts to implement our
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USE OF PROCEEDS
We intend to use the net proceeds investment in financing transactions
from the sale of the securities for and capital expenditures. We will
general corporate purposes. Those describe in the supplement any
purposes include the repayment or proposed use of proceeds other than
refinancing of debt, acquisitions in for general corporate purposes.
the ordinary course of business,
working capital,
DESCRIPTION OF DEBT SECURITIES
Debt Securities or substantially all of its
assets to another company. If
The following summary applies only these events occur, the other
to the debt securities of FINOVA company will be required to
Capital. If we issue debt securities assume FINOVA Capital's
of FINOVA Group, we will describe responsibilities on the debt,
those securities and the indenture and FINOVA Capital will be
under which they are issued in the released from all liabilities
applicable supplement. and obligations.
The debt securities of FINOVA * The Indenture provides that
Capital will be issued under an holders of a majority of the
indenture (the "Indenture") between total principal amount of the
FINOVA Capital and one or more U.S. debt outstanding in any series
banking institutions (a "Trustee"). may vote to change our
The Indenture may but need not have obligations or your rights
separate Trustees for senior and concerning that series of debt.
subordinated debt. But to change the payment of
principal or interest, every
The following summary of certain holder in that series must
provisions of the Indenture is not consent.
complete. You should look at the
Indenture that is filed as an exhibit * FINOVA Capital may discharge the
to the Registration Statement. To debt issued in any series at any
obtain a copy of the Indenture, see time by depositing sufficient
"Where You Can Find More Information" funds with the Trustee to pay
on page 2. the obligations when due. All
amounts due to you on the debt
All capitalized terms have the would be paid by the Trustee
meanings specified in the Indenture. from the deposited funds.
General Indenture Provisions that * If FINOVA Capital fails to meet
Apply to Senior and Subordinated these obligations on the debt,
Debt it will be in default.
* The Indenture does not limit the Events of Default
amount of debt that FINOVA
Capital may issue nor provide * Principal not paid when
holders any protection should due
there be a highly leveraged
transaction involving our * Sinking fund payment not
company. made when due
* If FINOVA Capital redeems debt * Failure to pay interest
which is convertible into its for 30 days after due
capital stock or other
securities, your right to * Covenants not performed
convert that debt into capital for 90 days after notice
stock or other securities will
expire on the redemption date. * Acceleration of at least
$15.0 million in principal
* The Indenture allows FINOVA amount of other debt not
Capital to merge or to rescinded in 10 days after
consolidate with another notice
company, or sell all
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* Bankruptcy, insolvency or dates, and any record dates for
other similar event the payments due.
* Any other event of default * Any provisions for redemption,
in the Indenture conversion or exchange, at our
option or otherwise, including
* The Indenture gives you the the periods, prices and terms of
following remedy if an Event of redemption or conversion.
Default occurs.
* Any sinking fund or similar
Remedy provisions, whether mandatory or
at the holder's option, along
* The Trustee or holders of with the periods, prices and
25% of the principal terms of redemption, purchase or
amount outstanding in a repayment.
series may declare
principal immediately * The amount or percentage payable
payable. However, a if we accelerate their maturity,
majority in principal if other than the principal
amount may rescind this amount.
action.
* Any changes to the events of
General default or covenants set forth
in the Indenture.
The debt securities of FINOVA Group
and FINOVA Capital offered by this * The terms of subordination, if
prospectus will be limited to $2.0 any.
billion principal amount. The
Indenture does not limit the amount of * Any other terms consistent with
debt securities FINOVA Capital could the Indenture.
offer under it. FINOVA Capital can
issue debt securities in one or more We may authorize and determine the
series, in each case as authorized by terms of a series of debt securities
us from time to time. Each series may by resolution of our board of
differ as to its terms. The debt directors or one of its committees or
securities will be FINOVA Capital's through a supplemental Indenture.
unsecured general obligations and may
or may not be subordinated to FINOVA Form of Debt Securities
Capital's other general indebtedness.
Those that are not subordinated are The debt securities will be issued
called "senior debt securities." The in registered form. Unless the
others are "subordinated debt supplement otherwise provides, debt
securities." securities will be issued as one or
more global securities. This means
The supplement will address the that we will not issue certificates to
following terms of the debt each holder. We generally will issue
securities: global securities in the total
principal amount of the debt
* Their title. securities distributed in that series.
We will issue debt securities only in
* Any limits on the principal denominations of $1,000 or integral
amounts to be issued. multiples of that amount, unless the
supplement states otherwise.
* The dates on which the principal
is payable. Global Securities
* The rates (which may be fixed or In General. Debt securities in
variable) at which they shall global form will be deposited with or
bear interest, or the method for on behalf of a depositary. Global
determining rates. securities are represented by one or
more global certificates for the
* The dates from which the series registered in the name of the
interest will accrue and will be depositary or its
payable, or the method of
determining those
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nominee. Debt securities in global The Depository Trust Company
form may not be transferred except as
a whole among the depositary, a The following is based on
nominee of or a successor to the information furnished by DTC and
depositary and any nominee of that applies to the extent it is the
successor. Unless otherwise identified depositary, unless otherwise stated in
in the supplement, the depositary will a supplement:
be The Depository Trust Company
("DTC"). Registered Owner. The debt
securities will be issued as fully
No Depositary or Global Securities. registered securities in the name of
If a depositary for a series is Cede & Co. (DTC's partnership
unwilling or unable to continue as nominee). One fully registered global
depositary, and a successor is not security generally will be issued for
appointed by us within 90 days, we each $200 million principal amount of
will issue debt securities of that debt securities. The Trustee will
series in definitive form in exchange deposit the global securities with the
for the global security or securities depositary. The deposit of the global
of that series. We also may determine securities with DTC and its
at any time in our discretion not to registration in the name of Cede & Co.
use global securities for any series. will not change the beneficial
In that event, we will issue debt ownership of the securities.
securities in definitive form.
DTC Organization. DTC is a
Ownership of the Global Securities; limited-purpose trust company
Beneficial Ownership. So long as the organized under the New York Banking
depositary or its nominee is the Law, a "banking organization" within
registered owner of a global security, the meaning of that law, a member of
that entity will be the sole holder of the Federal Reserve System, a
the debt securities represented by "clearing corporation" within the
that instrument. The Trustee and we meaning of the New York Uniform
are only required to treat the Commercial Code and a "clearing
depositary or its nominee as the legal agency" registered under the
owner of those securities for all provisions of Section 17A of the
purposes under the Indenture. Securities Exchange Act of 1934, as
amended.
Each actual purchaser of debt
securities represented by a global DTC is owned by a number of its
security (a "beneficial owner") will direct participants and by the New
not be entitled to receive physical York Stock Exchange, Inc., the
delivery of certificated securities, American Stock Exchange, Inc. and the
will not be considered the holder of National Association of Securities
those securities for any purpose under Dealers, Inc. Direct participants
the Indenture, and will not be able to include securities brokers and
transfer or exchange the global dealers, banks, trust companies,
securities, unless this prospectus or clearing corporations and certain
the supplement provide to the other organizations who directly
contrary. As a result, each beneficial participate in DTC (each a "direct
owner must rely on the procedures of participant"). Other entities
the depositary to exercise any rights ("indirect participants") may access
of a holder under the Indenture. In DTC's system by clearing transactions
addition, if the beneficial owner is through or maintaining a custodial
not a direct or indirect participant relationship with direct participants,
in the depositary (each a either directly or indirectly. The
"participant") the beneficial owner rules applicable to DTC and its
must rely on the procedures of the participants are on file with the SEC.
participant through which it owns its
beneficial interest in the global DTC Activities. DTC holds
security. securities that its participants
deposit with it. DTC also facilitates
The laws of some jurisdictions the settlement among participants of
require that certain purchasers of securities transactions, such as
securities take physical delivery of transfers and pledges, in deposited
the securities in certificated form. securities through electronic
Those laws and the above conditions computerized book-entry changes in
may impair the ability to transfer participant's accounts. Doing so
beneficial interests in the global eliminates the need for physical
securities. movement of securities certificates.
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Participants' Records. Except as will be governed by standing
otherwise provided in this prospectus instructions and customary practices,
or a supplement, purchases of the debt as is the case with securities held
securities must be made by or through for customers in bearer form or
direct participants, which will registered in "street name." Those
receive a credit for the securities on payments will be the responsibility of
the depositary's records. The that participant, not the depositary,
beneficial owner's ownership interest the Trustee or us, subject to any
is in turn to be recorded on the legal requirements in effect at that
direct and indirect participants' time.
records. Beneficial owners will not
receive written confirmations from the We are responsible for payment of
depositary of their purchase, but they principal, interest and premium, if
are expected to receive them, along any, to the Trustee, who is
with periodic statements of their responsible to pay it to the
holdings, from the direct or indirect depositary. The depositary is
participants through whom they entered responsible for disbursing those
into the transaction. payments to direct participants. The
participants are responsible for
Transfers of interests in the disbursing payments to the beneficial
global securities will be made on the owners.
books of the participants on behalf of
the beneficial owners. Certificates Transfer or Exchange of Securities
representing the interest of the
beneficial owners in the securities You may transfer or exchange the
will not be issued unless the use of debt securities (other than a global
global securities is suspended, as security) without service charge at
provided above. our office designated for that purpose
or at the office of any transfer agent
The depositary has no knowledge of or security registrar identified under
the actual beneficial owners of the the Indenture. You must execute a
global securities. Its records only proper form of transfer and pay any
reflect the identity of the direct taxes and other governmental charges
participants as owners of the resulting from that action. You may
securities. Those participants may or transfer or exchange the debt
may not be the beneficial owners. securities (other than a global
Participants are responsible for security) initially at our offices at
keeping account of their holdings on 1850 North Central Avenue, P.O. Box
behalf of their customers. 2209, Phoenix, Arizona 85002-2209 or
at our office or agency established
Notices Among the Depositary, for that purpose in New York, New
Participants and Beneficial Owners. York.
Notices and other communications by
the depositary, its participants and Debt securities in the several
the beneficial owners will be governed denominations will be interchangeable
by arrangements among them, subject to without service charge, but we may
any legal requirements in effect. require payment to cover taxes and
other governmental charges. The
Voting Procedures. Neither DTC nor Trustee initially will act as
Cede & Co. will give consents for or authenticating agent under the
vote the global securities. The Indenture.
depositary generally mails an omnibus
proxy to us just after the applicable Same-Day Settlement and Payment
record date. That proxy assigns Cede &
Co.'s consenting or voting rights to Unless the supplement otherwise
the direct participants to whose provides, the debt securities will be
accounts the securities are credited settled in immediately available
at that time. funds. We will make payments of
principal and interest in immediately
Payments. Principal and interest available funds.
payments made by us will be delivered
to the depositary. DTC's practice is Payment and Paying Agent
to credit direct participants'
accounts on the applicable payment If the debt securities are not held
date unless it has reason to believe in global form, we will make payment
it will not receive payment on that of principal and premium, if any,
date. Payments by participants to against surrender of the debt
beneficial owners securities at the principal office of
the Trustee in New York, New York. We
will pay
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any installment of interest on debt one or more Subsidiaries or by FINOVA
securities to the record holder on the Capital and one or more Subsidiaries.
record date for that interest. We can
make those payments through the "Restricted Subsidiary" is any
Trustee, as noted above, by check Subsidiary a majority of the Voting
mailed by first class mail to the Stock of which is owned directly by
registered holders at their registered FINOVA Capital or by one or more
address or by wire transfer to an Restricted Subsidiaries, or by FINOVA
eligible account of the registered Capital and one or more Restricted
holder. Subsidiaries and which is designated
as a Restricted Subsidiary by
If any payments of principal, resolution of FINOVA Capital's board
premium or interest are not claimed of directors.
within three years of the date the
payment became due, those funds are to "Unrestricted Subsidiary" means any
be repaid to us. The beneficial owners Subsidiary other than a Restricted
of those interests thereafter will Subsidiary.
look only to us for payment for those
amounts. "Voting Stock" means stock of any
class or classes (however designated)
Certain Indenture Provisions having ordinary voting power for the
election of a majority of the members
Certain Definitions. The following of the board of directors (or any
is a summary of certain terms defined governing body) of that corporation,
in the Indenture and applicable only other than stock having that power
to senior debt securities. Those terms only by reason of the happening of a
are determined in accordance with contingency.
generally accepted accounting
principles, unless specifically stated Limitation on Liens. The Indenture
otherwise. provides that FINOVA Capital will not
create, assume, incur or allow to be
"Consolidated Net Tangible Assets" created, assumed or incurred or to
means the total of all assets exist any Lien on any of its
reflected on the most recent quarterly properties unless FINOVA Capital
or annual consolidated balance sheet secures the senior debt securities
of FINOVA Capital and its consolidated equally and ratably with any other
subsidiaries, at their net book values obligation secured in that manner. The
(after deducting related depreciation, Indenture contains the following
depletion, amortization and all other exceptions to that prohibition:
valuation reserves), less the
aggregate of its current liabilities * Leases of property in the
and those of its consolidated ordinary course of business or
Subsidiaries reflected on that balance if the property is not needed in
sheet. We exclude from assets the operation of our business.
goodwill, unamortized debt discount
and all other like intangible assets. * Purchase money security
For purposes of this definition, interests that are non-recourse
"current liabilities" include all to FINOVA Capital or its
indebtedness for money borrowed, Restricted Subsidiaries except
incurred, issued, assumed or to the extent of the property so
guaranteed by FINOVA Capital and its acquired or any proceeds from
consolidated subsidiaries, and other that property, or both.
payables and accruals, in each case
payable on demand or due within one * Governmental deposits or
year of the date of determination, but security as a condition to the
exclude any portion of long-term debt transaction of business or the
maturing within one year of that date exercise of a privilege, or to
of determination, all as reflected on maintain self-insurance, or to
the consolidated balance sheet of participate in any fund in
FINOVA Capital and its consolidated connection with worker's
subsidiaries. compensation, unemployment
insurance, pensions, social
"Lien" means any lien, charge, security or for appeal bonds.
claim, security interest, pledge,
hypothecation, right of another under
any conditional sale or other title
retention agreement or any other
encumbrance affecting title to
property. Lien includes any lease
under a sale and leaseback
arrangement.
"Subsidiary" means any corporation
a majority of the Voting Stock of
which is owned, directly or
indirectly, by FINOVA Capital or by
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* Liens for taxes or assessments * Liens securing indebtedness of
not yet due or which are payable FINOVA Capital or a Restricted
without a penalty or are being Subsidiary provided those and
contested in good faith and with similar Liens on indebtedness do
adequate reserves, so long as not exceed 10% of Consolidated
foreclosure or similar Net Tangible Assets, excluding
proceedings are not commenced. certain preexisting indebtedness
and those Liens permitted above.
* Judgment Liens that have not
remained undischarged or Merger, Consolidation and Sale of
unstayed for more than six Assets. FINOVA Capital cannot merge
months. with or into, consolidate with, sell
or lease all or substantially all of
* Incidental or undetermined its assets to or purchase all or
construction, mechanics or substantially all the assets of
similar Liens arising in the another corporation unless it will be
ordinary course of business the surviving corporation or the
relating to obligations not successor is incorporated in the U.S.
overdue or which are being and assumes all of FINOVA Capital's
contested by FINOVA Capital or a obligations under the debt securities
Restricted Subsidiary in good and the Indenture, provided, and if
faith and deposits for releases immediately after that transaction, no
of such Liens. default will exist. A purchase by a
Subsidiary of all or substantially all
* Zoning restrictions, licenses, of the assets of another corporation
easements and similar will not be a purchase of those assets
encumbrances or defects if by FINOVA Capital. If, however, any of
immaterial. the transactions noted in this
paragraph occurs and results in a Lien
* Other Liens immaterial in the on any of FINOVA Capital's properties
aggregate incidental to FINOVA (except as permitted above), FINOVA
Capital's or the Restricted Capital must simultaneously secure the
Subsidiary's business or senior debt securities equally and
property, other than for ratably with the debt secured by that
indebtedness. Lien.
* Banker's liens and set off Modification of the Indenture. The
rights in the ordinary course of Trustee and FINOVA Capital may amend
business. the Indenture without consent of the
holders of debt securities to do
* Leasehold or purchase rights, certain things, such as establishing
exercisable for fair the form and terms of any series of
consideration, arising in the debt securities. FINOVA Capital must
ordinary course of business. obtain consent of holders of at least
two-thirds of the outstanding debt
* Liens on property or securities securities affected by a change to
existing when an entity becomes amend the terms of the Indenture or
a Restricted Subsidiary or any supplemental indenture or the
merges with FINOVA Capital or a rights of the holders of those debt
Restricted Subsidiary, provided securities.
they are not incurred in
anticipation of those events. Unanimous consent is required for
changes to extend the fixed maturity
* Liens on property or securities of any debt securities, reduce the
existing at the time of principal, redemption premium or rate
acquisition. of interest, extend the time of
payment of interest, change the form
* Liens in a total amount less of currency, limit the right to sue
than $25 million, excluding for payment on or after maturity of
Liens covered by the exceptions the debt securities, adversely affect
noted above. the right, if any, to convert or
exchange the debt securities or
adversely affect the subordination
provisions, if any. Unanimous consent
is also required to reduce the level
of consents needed to approve any such
change. The Trustee must consent to
changes modifying its rights, duties
or immunities.
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Defaults. Events of default under If an event of default occurs and
the Indenture for any series are: is continuing, the Trustee may
reimburse itself for its reasonable
* Failure for 30 days to pay compensation and expenses incurred out
interest on any debt securities of any sums held or received by it
of that series. before making any payments to the
holders of the debt securities of the
* Failure to pay principal (other defaulted series.
than sinking fund redemptions)
or premium, if any, on debt The right of any holders of debt
securities of that series. securities of a series to commence an
action for any remedy is subject to
* Failure for 30 days to pay any certain conditions, including the
sinking fund installment on that requirement that the holders of at
series. least 25% of that series request that
the Trustee take such action, and
* Violation of a covenant under offer reasonable indemnity to the
the Indenture pertaining to that Trustee against its liabilities
series that persists for at incurred in doing so.
least 90 days after FINOVA
Capital is notified by the Defeasance
Trustee or the holders of 25% of
the series. FINOVA Capital may defease the debt
securities of a series, meaning it
* Default in other instruments or would satisfy its duties under that
under any other series of debt series before maturity. It may do so
securities resulting in by depositing with the Trustee, in
acceleration of indebtedness trust for the benefit of the holders,
over $15 million, unless that either enough funds to pay, or direct
default is rescinded or U.S. government obligations that,
discharged within 10 days after together with the income of those
written notice by the Trustee or obligations (without considering any
the holders of 10% of that reinvestment), will be sufficient to
series. pay, the obligation of that series,
including principal, premium, if any,
* Bankruptcy, insolvency or and interest. Certain other conditions
similar event. must be met before it may do so.
FINOVA Capital must deliver an opinion
* Any other event of default with of counsel that the holders of that
respect to the debt securities series will have no Federal income tax
of that series. consequences as a result of that
deposit.
If an event of default occurs and
continues, the Trustee or the holders Subordination
of at least 25% of the series may
declare those debt securities due and The terms and conditions of any
payable. FINOVA Capital is required to subordination of subordinated debt
certify to the Trustee annually as to securities to other indebtedness of
its compliance with the Indenture. FINOVA Capital will be described in
the supplement relating to the
Holders of a majority of the subordinated debt securities. The
principal of a series may control terms will include a description of
certain actions of the Trustee and may the indebtedness ranking senior to the
waive past defaults for that series. subordinated debt securities, the
Except as provided in the Indenture, restrictions on payments to the
the Trustee will not be under any holders of the subordinated debt
obligation to exercise any of the securities while a default exists with
rights or powers vested in it by the respect to senior indebtedness, any
Indenture at the request, order or restrictions on payments to the
direction of any holder unless one or holders of the subordinated debt
more of them shall have offered securities following an event of
reasonable indemnity to the Trustee. default and provisions requiring
holders of the subordinated debt
securities to remit certain payments
to holders of senior indebtedness.
Because of the subordination, if
FINOVA Capital becomes insolvent,
holders of the subordinated debt
securities may recover
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less, ratably, than other creditors of securities of FINOVA Capital, or
FINOVA Capital, including holders of securities of any other issuer or
senior indebtedness. obligor.
Conversion Concerning the Trustee
Debt securities may be convertible The Trustee may, but need not be,
into or exchangeable for common stock, one of the banks in one of FINOVA
preferred stock, other debt Capital's credit agreements and from
securities, warrants or other of time to time may perform other
banking, trust or related services on
behalf of FINOVA Capital or our
customers.
DESCRIPTION OF CAPITAL STOCK
The following summary of certain cumulative voting in the election of
provisions of the common stock, the directors. The board may declare
preferred stock, the junior dividends on the common stock in its
participating preferred stock (the discretion, if funds are legally
"Junior Preferred Stock") and the available for those purposes. On
rights to purchase the Junior liquidation, common stockholders are
Preferred Stock (the "Rights") of entitled to receive pro rata any
FINOVA Group is not complete. You remaining assets of FINOVA Group,
should refer to the certificate of after we satisfy or provide for the
incorporation and bylaws of FINOVA satisfaction of all liabilities as
Group, as amended, FINOVA Group's well as obligations on our preferred
certificate of designations for the stock, if any. The holders of common
Junior Preferred Stock and the Rights stock do not have preemptive rights to
Agreement dated as of February 15, subscribe for or purchase any shares
1992, as amended and restated as of of capital stock or other securities
September 14, 1995 (the "Rights of FINOVA Group.
Agreement"), between FINOVA Group and
Harris Trust & Savings Bank, as Preferred Stock
successor Rights Agent. To obtain
copies of those documents, see "Where Under FINOVA Group's certificate of
You Can Find More Information" on page incorporation, the board is
2. If we issue capital stock of FINOVA authorized, without stockholder
Capital, we will describe those action, to issue preferred stock in
securities in the applicable one or more series, with the
supplement. designations, powers, preferences,
rights, qualifications, limitations
FINOVA Group is authorized by its and restrictions as the board
certificate of incorporation to issue determines. Thus, the board, without
105,000,000 shares of capital stock, stockholder approval, could authorize
consisting of 5,000,000 shares of the issuance of preferred stock with
preferred stock, par value $.01 per voting, conversion and other rights
share, and 100,000,000 shares of that could adversely affect the voting
common stock, par value $.01 per power and other rights of the holders
share. As of October 3, 1997, there of the common stock or that could make
were 54,441,678 shares of common stock it more difficult for another company
outstanding (excluding 2,401,728 to enter into certain business
treasury shares held by FINOVA Group) combinations with FINOVA Group. See
and no shares of preferred stock "--Certain Other Provisions of the
outstanding. However, FINOVA Group has Certificate of Incorporation, the
authorized 600,000 shares of Junior Bylaws and Delaware Law--Preferred
Preferred Stock which have been Stock" below.
reserved for issuance on the exercise
of the Rights. Shareholder Rights Plan
Common Stock In 1992, FINOVA Group issued one
Right for each outstanding share of
The holders of the common stock are common stock. FINOVA Group has and
entitled to one vote per share. FINOVA will continue to issue one Right with
Group's certificate of incorporation each newly issued share of its common
does not provide for stock (including stock issued on
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<PAGE>
conversion of preferred securities). How the Rights Work. If a person or
The obligation to continue to issue group becomes an Acquiring Person,
the Rights, however, will terminate on their Rights become void. The other
the expiration, exchange or redemption Rights holders will have the right to
of the Rights. exercise their Rights, at the then
current exercise price, for FINOVA
Each Right entitles the registered Group common stock having a market
holder to purchase from FINOVA Group value of two times the exercise price
1/200th of a share of the Junior of the Right. That right to purchase,
Preferred Stock. The purchase price is however, will not exist if the Rights
$67.50 per 1/200th of a share, subject Distribution Date is due to a tender
to adjustment under certain or exchange offer for all of FINOVA
circumstances. Group's common stock and the
independent members of our board
The Rights will trade only with the determine that the offer is at a fair
common stock and FINOVA Group will not price, on fair terms and is otherwise
issue separate certificates for the in the best interests of FINOVA Group
Rights until the "Rights Distribution and its stockholders.
Date." That date occurs on the first
to occur of the following events: The other Rights holders also will
have the same exercise rights
* 10 days after a public described above if, after a person or
announcement (the "Share group becomes an Acquiring Person,
Acquisition Date") that a person FINOVA Group is acquired in a merger
or group of persons acting or business combination or at least
together has become the half of our total assets and earning
beneficial owner of at least 20% power are sold. The exception is the
or more of FINOVA Group's common same as the one noted in the above
stock, directly or indirectly paragraph, provided that the price
(becoming an "Acquiring offered to the shareholders for each
Person"), or share of common stock is not less than
that paid in the tender or exchange
* 10 business days after the start offer, and the consideration is in the
or announcement of an intention same form as that paid in the tender
to make a tender offer or or exchange offer. If the requirements
exchange offer that would result of this exception are met, then the
in a person or group acting Rights will expire.
together beneficially owning 20%
or more of FINOVA Group's common Exchange of Rights. After a person
stock, directly or indirectly. or group becomes an Acquiring Person
The board, however, may extend but before the Acquiring Person
that 10 business day deadline acquires at least half of the
prior to the time the person or outstanding common stock, our board
group becomes an Acquiring may exchange all or some of the Rights
Person. at an exchange ratio of one share of
common stock or 1/200th of a share of
The Rights may not be exercised Junior Preferred Stock per Right,
until the Rights Distribution Date. subject to adjustment.
The Rights will expire on February 28,
2002 unless we extend that date or, Redemption of Rights. We may redeem
unless we redeem or exchange the all the Rights, but not some of them,
Rights before then. for $.005 per Right at any time before
the earlier of 15 days after the Share
The value of each 1/200th interest Acquisition Date or the expiration
in a share of Junior Preferred Stock date noted above. The board may
is intended to approximate the value determine the conditions, terms and
of one share of FINOVA Group common effective date for the redemption. We
stock, due to the dividend, may pay the redemption price in cash,
liquidation and voting rights of the common stock or any other method
Junior Preferred Stock, although there selected by the board. Upon
can be no assurance the value will be redemption, the right to exercise the
the same. Rights will terminate and the holders
will only have the right to receive
the redemption price.
No Rights as a Stockholder. Rights
holders, as Rights holders, have no
independent rights as stockholders of
FINOVA Group,
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including the right to vote or to to FINOVA Group or its stockholders
receive dividends, until the Rights for monetary damages for any breach of
are exercised. his or her fiduciary duty as a
director, except as provided by
Antitakeover Effects. The Rights Delaware law.
have certain antitakeover effects. The
Rights will substantially dilute the Board of Directors. FINOVA Group's
ownership interest in our shares of certificate of incorporation and
any Acquiring Person. That dilution bylaws divide the board into three
would impair the ability of the classes of directors, with the classes
Acquiring Person to change the to be as nearly equal in number as
composition of our board. It also possible. The stockholders elect one
would impact its ability to acquire class of directors each year for a
FINOVA Group on terms not approved by three-year term.
our board, including through a tender
offer at a premium to the market The classification of directors
price, other than through an offer makes it more difficult for
conditioned on a substantial number of stockholders to change the composition
Rights being acquired. The Rights of the board. At least two annual
should not interfere with any merger meetings of stockholders, instead of
or business combination approved by one, generally will be required to
the board, since we may redeem the change a majority of the board. That
Rights before they become exercisable. delay may help ensure that FINOVA
Group's directors, if confronted by a
Junior Preferred Stock Not proxy contest, tender or exchange
Registered. The Junior Preferred Stock offer or extraordinary corporate
is not registered with the SEC or any transaction, would have sufficient
other securities administrator. If the time to review the proposal as well as
Rights become exercisable, we intend any available alternatives to the
to register with the SEC the Junior proposal and to act in what they
Preferred Stock exchangeable for the believe to be the best interest of the
Rights. stockholders. The classification
provisions apply to every election of
Certain Other Provisions of the directors, regardless of whether a
Certificate of Incorporation, the change in the composition of the board
Bylaws and Delaware Law would be beneficial to FINOVA Group
and its stockholders and whether or
FINOVA Group's certificate of not a majority of the stockholders
incorporation and bylaws contain believe that such a change is
certain provisions that could make desirable.
more difficult our acquisition by
means of a tender offer, a proxy The classification provisions also
contest or otherwise. This description could discourage a third party from
is only a summary and does not provide initiating a proxy contest, tender
all the information contained in offer or other attempt to obtain
FINOVA Group's certificate of control of FINOVA Group, even though
incorporation and bylaws. To obtain an attempt might be beneficial to
copies of these documents, see "Where FINOVA Group and its stockholders. The
You Can Find More Information" on page classification of the board thus
6. increases the likelihood that
incumbent directors will retain their
Delaware law permits a corporation positions. In addition, because the
to eliminate or limit the personal classification provisions may
liability of its directors to the discourage accumulations of large
corporation or to any of its blocks of FINOVA Group's stock by
stockholders for monetary damages for purchasers whose objective is to take
a breach of fiduciary duty as a control of FINOVA Group and remove a
director, except (i) for breach of the majority of the board, the
director's duty of loyalty, (ii) for classification of the board could
acts or omissions not in good faith or reduce the likelihood of fluctuations
which involve intentional misconduct in the market price of the common
or a knowing violation of law, (iii) stock that might result from
for certain unlawful dividends and accumulations of large blocks.
stock purchases and redemptions or Accordingly, stockholders could be
(iv) for any transaction from which deprived of certain opportunities to
the director derived an improper sell their shares of common stock at a
personal benefit. FINOVA Group's higher market price than otherwise
certificate of incorporation provides might be the case.
that no director will be personally
liable Number of Directors; Removal;
Filling Vacancies. FINOVA Group's
certificate of
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<PAGE>
incorporation provides that, subject The provisions of FINOVA Group's
to any rights of preferred certificate of incorporation and
stockholders to elect additional bylaws prohibiting stockholder action
directors under specified by written consent may have the effect
circumstances, the number of directors of delaying consideration of a
will be fixed in the manner provided stockholder proposal until the next
in the bylaws. FINOVA Group's bylaws annual meeting, unless a special
provide that, subject to any rights of meeting is called by the Chairman or
holders of preferred stock to elect at the request of a majority of the
directors under specified whole board. These provisions also
circumstances, the number of directors would prevent the holders of a
will be fixed from time to time majority of stock from unilaterally
exclusively by directors constituting using the written consent procedure to
a majority of the total number of take stockholder action. Moreover, a
directors that FINOVA Group would have stockholder could not force
if there were no vacancies on the stockholder consideration of a
board, but must consist of between 3 proposal over the opposition of the
and 17 directors. Chairman and the board by calling a
special meeting of stockholders prior
In addition, FINOVA Group's bylaws to the time the Chairman or a majority
provide that, subject to any rights of of the whole board believes such
preferred stockholders, and unless the consideration to be appropriate.
board otherwise determines, any
vacancies will be filled only by the Advance Notice Provisions for
affirmative vote of a majority of the Stockholder Nominations and
remaining directors, though less than Stockholder Proposals. The bylaws
a quorum. Accordingly, absent an establish an advance notice procedure
amendment to the bylaws, the board for stockholders to nominate
could prevent any stockholder from directors, or bring other business
enlarging the board and filling the before an annual meeting of
new directorships with that stockholders of FINOVA Group.
stockholder's own nominees.
A person may not be nominated for a
Under Delaware law, unless director position unless that person
otherwise provided in the certificate is nominated by or at the direction of
of incorporation, directors serving on the board or by a stockholder who has
a classified board may only be removed given appropriate notice to FINOVA
by the stockholders for cause. In Group's Secretary during the periods
addition, FINOVA Group's certificate noted below prior to the meeting.
of incorporation and bylaws provide Similarly, stockholders may not bring
that directors may be removed only for business before an annual meeting
cause and only upon the affirmative unless the stockholder has given
vote of holders of at least 80% of the FINOVA Group's Secretary appropriate
voting power of all the then notice of their or its intention to
outstanding shares of stock entitled bring that business before the
to vote generally in the election of meeting. FINOVA Group's Secretary must
directors, voting together as a single receive the nomination or proposal
class. between 70 and 90 days before the
first anniversary of the prior year's
Stockholder Action by Written annual meeting. If FINOVA Group's
Consent; Special Meetings. annual meeting date is advanced by
Stockholders of FINOVA Group must act more than 20 days or delayed by more
only through an annual or special than 70 days from that anniversary
meeting. Stockholders cannot act by date, then we must receive the notice
written consent in lieu of a meeting. between 90 days before the meeting and
Only the Chairman or a majority of the the later of the 70th day before the
whole board of FINOVA Group may call a meeting or 10 days after the meeting
special meeting. Stockholders of date is first publicly announced.
FINOVA Group are not able to call a
special meeting to require that the If the board increases the number
board do so. At a special meeting, of directors and if we have not
stockholders may consider only the publicly announced nominees for each
business specified in the notice of open position within 80 days before
meeting given by FINOVA Group. the first anniversary of the prior
Preferred stockholders may be given year's annual meeting, stockholders
different rights from those noted may nominate directors for the new
above. position, but only those newly created
positions, if FINOVA Group's Secretary
receives the notice no later than
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10 days following public announcement stockholder nominations for the
of that change. election of directors or proposals for
action, these procedures may preclude
Stockholders may nominate directors a contest for the election of
only at a special meeting by sending directors or the consideration of
appropriate notice for receipt by our stockholder proposals if the proper
Secretary between the 90th day before procedures are not followed, and of
the meeting and the later of the 70th discouraging or deterring a third
day before the meeting or the 10th day party from conducting a solicitation
after the first public announcement of of proxies to elect its own slate of
the meeting date. directors or to approve its own
proposal, without regard to whether
A stockholder's notice proposing to consideration of such nominees or
nominate a person for election as a proposals might be harmful or
director must contain certain beneficial to FINOVA Group and its
information, including, without stockholders.
limitation, the identity and address
of the nominating stockholder, the Preferred Stock. FINOVA Group's
class and number of shares of stock of certificate of incorporation
FINOVA Group beneficially owned by the authorizes the board to establish one
stockholder and all information or more series of preferred stock and
regarding the proposed nominee that to determine, with respect to any
would be required to be included in a series of preferred stock, the terms
proxy statement soliciting proxies for and rights of such series, including
the proposed nominee. A stockholder's (i) the designation of the series,
notice relating to the conduct of (ii) the number of shares of the
business other than the nomination of series, which the board may (except
directors must contain certain where otherwise provided by the terms
information about that business and of such series) increase or decrease
about the proposing stockholder, (but not below the number of shares
including, without limitation, a brief thereof then outstanding), (iii)
description of the business the whether dividends, if any, will be
stockholder proposes to bring before cumulative or noncumulative and the
the meeting, the reasons for dividend rate of the series, if any,
conducting that business at such (iv) the dates at which dividends, if
meeting, the name and address of such any, will be payable, (v) the
stockholder, the class and number of redemption rights and price or prices,
shares of stock of FINOVA Group if any, for shares of the series, (vi)
beneficially owned by that stockholder the terms and amounts of any sinking
and any material interest of the fund provided for the purchase or
stockholder in the business so redemption of shares of the series,
proposed. If the Chairman or other (vii) the amounts payable on shares of
officer presiding at a meeting the series in the event of any
determines that a person was not voluntary or involuntary liquidation,
nominated, or other business was not dissolution or winding up of the
brought before the meeting, in FINOVA Group's affairs, (viii) whether
accordance with these procedures, the the shares of the series will be
person will not be eligible for convertible into shares of any other
election as a director, or the class or series, or any other
business will not be conducted at the security, of FINOVA Group or any other
meeting, as appropriate. corporation, and, if so, the
specification of another class or
Advance notice of nominations or series or another security, the
proposed business by stockholders conversion price or prices or rate or
gives the board time to consider the rates, any adjustments to the prices
qualifications of the proposed or rates, the date or dates as of
nominees, the merits of the proposals which the shares shall be convertible
and, to the extent deemed necessary or and all other terms and conditions
desirable by the board, to inform upon which the conversion may be made,
stockholders about those matters. The (ix) restrictions on the issuance of
board also may recommend positions shares of the same series or of any
regarding those nominees or proposals, other class or series and (x) the
so that stockholders can better decide voting rights, if any, of the holders
whether to attend the meeting or to of shares of the series.
grant a proxy regarding the nominee or
that business. FINOVA Group believes that the
ability of the board to issue one or
Although the bylaws do not give the more series of preferred stock will
board any power to approve or provide FINOVA Group with flexibility
disapprove in structuring possible future
financings and acquisitions, and in
meeting
18
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other corporate needs which might board, the certificate of
arise. The authorized shares of incorporation of a corporation. In
preferred stock, as well as shares of addition, a corporation's board may
common stock, will be available for adopt, amend or repeal the bylaws if
issuance without further action by allowed by the certificate of
FINOVA Group's stockholders, unless incorporation. FINOVA Group's
approval is required by applicable law certificate of incorporation requires
or the rules of any stock exchange or a vote of (i) at least 80% of the
automated quotation system on which outstanding shares of voting stock,
FINOVA Group's securities are listed voting together as a single class, to
or traded. The NYSE currently requires amend provisions of the certificate of
stockholder approval in several incorporation relating to the
instances, including where the present prohibition of stockholder action
or potential issuance of shares could without a meeting; the number,
result in an increase in the number of election and term of FINOVA Group's
shares of common stock, or in the directors; and the removal of
amount of voting securities, directors; (ii) at least 66 2/3% of
outstanding of at least 20%, subject the outstanding shares of voting
to certain exceptions. If the approval stock, voting together as a single
of FINOVA Group's stockholders is not class, to amend the provisions of the
required for the issuance of shares of certificate of incorporation relating
preferred stock or common stock, the to approval of certain business
board may determine not to seek combinations; and (iii) at least a
stockholder approval. majority of the outstanding shares of
voting stock, voting together as a
Although the board has no intention single class, to amend all other
at the present time of doing so, it provisions of the certificate of
could issue a series of preferred incorporation. FINOVA Group's
stock that could, depending on its certificate of incorporation further
terms, impede a merger, tender offer provides that the bylaws may be
or other takeover attempt. The board amended by the board or by the
will make any determination to issue affirmative vote of the holders of at
shares with those terms based on its least 80% of the voting power of the
judgment as to the best interests of outstanding shares of voting stock,
FINOVA Group and its stockholders. The voting together as a single class.
board, in so acting, could issue These supermajority voting
preferred stock having terms that requirements make the amendment by
could discourage an acquisition stockholders of the bylaws or of any
attempt in which an acquiror would of the provisions of the certificate
change the composition of the board, of incorporation described above more
including a tender offer or other difficult, even if a majority of
transaction. An acquisition attempt FINOVA Group's stockholders believe
could be discouraged in this manner that amendment would be in their best
even if some, or a majority, of FINOVA interests.
Group's stockholders might believe it
to be in their best interests or in Antitakeover Legislation. Subject
which stockholders might receive a to certain exceptions, Delaware law
premium for their stock over the then does not allow a corporation to engage
current market price of the stock. in a business combination with any
"interested stockholder" for a
Merger/Sale of Assets. FINOVA three-year period following the date
Group's certificate of incorporation that the stockholder becomes an
provides that certain "business interested stockholder, unless (i)
combinations" must be approved by the prior to that date, the board approved
holders of at least 66 2/3% of the either the business combination or the
voting power of the shares not owned transaction which resulted in the
by an "interested shareholder", unless stockholder becoming an interested
the business combinations are approved stockholder, (ii) on that date, the
by the "Continuing Directors" or meet interested stockholder owned at least
certain requirements regarding price 85% of the voting stock of the
and procedure. The terms quoted in corporation outstanding at the time
this paragraph are defined in the the transaction commenced (excluding
certificate of incorporation. certain shares) or (iii) on or
subsequent to that date, the board and
Amendment of Certain Provisions of 66 2/3% of the outstanding voting
the Certificate of Incorporation and stock not owned by the interested
Bylaws. Under Delaware law, stockholder approved the business
stockholders may adopt, amend or combination. Except as specified by
repeal the bylaws and, with approval Delaware law, an interested
of the stockholder includes (x) any person
that is the owner of 15% or more of
the outstanding voting stock of the
corporation, or is an affiliate or
associate of the corporation and was
the owner of 15% or more of the
outstanding voting stock
19
<PAGE>
of the corporation, at any time within bylaws do not exclude FINOVA Group
three years immediately prior to the from the restrictions imposed under
relevant date, and (y) the affiliates Delaware law. These provisions of
and associates of that person. Delaware law may encourage companies
interested in acquiring FINOVA Group
Under certain circumstances, to negotiate in advance with the
Delaware law makes it more difficult board, since the stockholder approval
for an "interested stockholder" to requirement would be avoided if a
enter into various business majority of the board approves either
combinations with a corporation for a the business combination or the
three-year period, although transaction which results in the
stockholders may adopt an amendment to stockholder becoming an interested
a corporation's certificate of stockholder.
incorporation or bylaws excluding the
corporation from those restrictions.
However, FINOVA Group's certificate of
incorporation and
DESCRIPTION OF DEPOSITARY SHARES
The following summary of certain Agreement. Individuals purchasing the
provisions of the Deposit Agreement, fractional interests in shares of the
the depositary shares and depositary related series of preferred stock will
receipts is not complete. You should receive depositary receipts according
refer to the forms of Deposit to the terms of the offering described
Agreement and depositary receipts in the supplement.
relating to each series of preferred
stock that will be filed with the SEC. Dividends and Other Distributions
To obtain copies of these documents,
see "Where You Can Find More The depositary will distribute all
Information" on page 2. cash dividends or other cash
distributions received for the
General preferred stock to the record holders
of depositary shares representing the
We may offer fractional interests preferred stock in proportion to the
in shares of preferred stock, instead number of depositary shares owned by
of shares of preferred stock. If we those holders on the relevant record
do, we will have a depositary issue to date. The depositary will distribute
the public receipts for depositary only the amount that can be
shares, each of which will represent distributed without attributing to any
fractional interests of a particular holder of depositary shares a fraction
series of preferred stock. of one cent. The undistributed balance
will be added to and treated as part
We will deposit shares of any of the next amount received by the
series of preferred stock underlying depositary for distribution to record
the depositary shares under a separate holders of depositary shares.
Deposit Agreement (the "Deposit
Agreement") between us and a bank or If there is a distribution other
trust company selected by us having than in cash, the depositary will
its principal office in the U.S. and distribute property received by it to
having a combined capital and surplus the record holders of depositary
of at least $50 million. Subject to shares, in proportion, if possible, to
the terms of the Deposit Agreement, the number of depositary shares owned
each owner of depositary shares will by those holders, unless the
be entitled, in proportion to the depositary determines (after
applicable fractional interests in consulting with us) that it cannot
shares of preferred stock underlying make the distribution. If this occurs,
the depositary shares to all the the depositary may, with our approval,
rights and preferences of the sell the property and distribute the
preferred stock underlying the net proceeds from the sale to the
depositary shares. Those rights holders of depositary shares.
include dividend, voting, redemption,
conversion and liquidation rights. The Deposit Agreement also will
state how any subscription or similar
The depositary shares will be rights offered by us to holders of the
evidenced by depositary receipts preferred stock will be made available
issued under the Deposit to holders of depositary shares.
20
<PAGE>
Conversion and Exchange depositary how to vote the shares of
preferred stock underlying their
If any series of preferred stock depositary shares. The depositary will
underlying the depositary shares is try, if practical, to vote the number
subject to conversion or exchange, of shares of preferred stock
each record holder of depositary underlying the depositary shares
receipts may convert or exchange the according to the instructions, and we
depositary shares represented by those will agree to take all reasonable
depositary receipts. action requested by the depositary so
the depositary may follow the
Redemption of Depositary Shares instructions.
If a series of the preferred stock Amendment and Termination of
underlying the depositary shares is Depositary Agreement
subject to redemption, the depositary
will redeem the depositary shares from The form of depositary receipt and
the proceeds received by the any provision of the Deposit Agreement
depositary in the redemption, in whole may be amended by agreement between us
or in part, of the series of the and the depositary. However, any
preferred stock held by the amendment that materially and
depositary. The depositary will mail adversely alters the rights of the
notice of redemption within 30 to 60 existing holders of depositary shares
days prior to the date fixed for will not be effective unless approved
redemption to the record holders of by the record holders of at least a
the depositary shares to be redeemed majority of the depositary shares then
at their addresses appearing in the outstanding. We or the depositary may
depositary's books. The redemption only terminate the Deposit Agreement
price per depositary share will equal if (a) all related outstanding
the applicable fraction of the depositary shares have been redeemed
redemption price per share payable on or (b) there has been a final
such series of the preferred stock. distribution of the preferred stock of
Whenever we redeem shares of preferred the relevant series in connection with
stock held by the depositary, the our liquidation, dissolution or
depositary will redeem as of the same winding up and that distribution has
redemption date, the number of been distributed to the holders of the
depositary shares representing the related depositary shares.
preferred stock. The depositary shares
to be redeemed will be selected by lot Charges of Depositary
or pro rata as determined by the
depositary when less than all We will pay all transfer and other
outstanding depositary shares will be taxes and governmental charges arising
redeemed. solely from the existence of the
depositary arrangements. We will pay
After the redemption date, the associated charges of the depositary
depositary shares redeemed will no for the initial deposit of the
longer be outstanding. When this preferred stock and any redemption of
occurs, all rights of the holders will the preferred stock. Holders of
cease, except the right to receive depositary shares will pay transfer
money, securities or other property and other taxes and governmental
payable upon such redemption and any charges and any other charges stated
money, securities or other property in the Deposit Agreement to be for
that the holders of depositary shares their accounts.
were entitled to on the redemption
upon surrender to the depositary of Resignation and Removal of
the depositary receipts evidencing the Depositary
depositary shares redeemed.
The depositary may resign by
Voting the Preferred Stock delivering notice to us, and we may
remove the depositary. Resignations or
Upon receipt of notice of any removals will take effect upon the
meeting at which the holders of the appointment and acceptance of a
preferred stock are entitled to vote, successor depositary. We must appoint
the depositary will mail all relevant a successor depositary within 60 days
information to the record holders of after delivery of the notice of
the depositary shares representing the resignation or removal. The successor
preferred stock. The record holders depositary must be a bank or trust
may instruct the company having its principal office in
the
21
<PAGE>
U.S. and having a combined capital and Those obligations will be limited to
surplus of at least $50 million. performance in good faith of duties
set forth in the Deposit Agreement. We
Miscellaneous and the depositary will not be
obligated to prosecute or defend any
The depositary will send to the legal proceeding connected with any
holders of depositary shares all depositary shares or preferred stock
reports and communications from us unless satisfactory indemnity is
that we must furnish to the holders of furnished. We and the depositary may
preferred stock. rely upon written advice of counsel or
accountants, or information provided
We and the depositary will not be by persons presenting preferred stock
liable if we are prevented or delayed for deposit, holders of depositary
by law or any circumstance beyond our shares, or other persons believed to
control in performing our obligations be competent and on documents believed
under the Deposit Agreement. to be genuine.
DESCRIPTION OF WARRANTS
We may issue warrants for the warrants and will not act for or on
purchase of debt securities, preferred behalf of the holders or beneficial
stock or common stock. We may issue owners of warrants. This summary of
warrants independently or together certain provisions of the warrants is
with debt securities, common stock or not complete. You should refer to the
preferred stock or attached to or provisions of the Warrant Agreement
separate from the offered securities. that will be filed with the SEC as
We will issue each series of warrants part of the offering of any warrants.
under a separate warrant agreement (a To obtain a copy of this document, see
"Warrant Agreement") between us and a "Where You Can Find More Information"
bank or trust company, as warrant on page 2.
agent. The warrant agent will act
solely as our agent for the
PLAN OF DISTRIBUTION
FINOVA Group and FINOVA Capital may underwriters and subject to their
offer securities directly or through right to reject orders in whole or in
underwriters, dealers or agents. The part.
supplement will identify those
underwriters, dealers or agents and FINOVA Group and FINOVA Capital may
will describe the plan of sell securities to dealers, as
distribution. If we do not name a firm principals. Those dealers then may
in the supplement, that firm may not resell the securities to the public at
directly or indirectly participate in varying prices set by those dealers
any underwriting of those securities, from time to time.
although it may participate in the
distribution of securities under FINOVA Group and FINOVA Capital
circumstances entitling it to a also may offer securities through
dealer's allowance or agent's agents. Agents generally act on a
commission. "best efforts" basis during their
appointment, meaning they are not
Any underwriting agreement probably obligated to purchase securities.
will entitle the underwriters to
indemnity against certain civil Dealers and agents may be entitled
liabilities under the Federal to indemnification as underwriters by
securities laws and other laws. The us against certain liabilities under
underwriters' obligations to purchase the Federal securities laws and other
securities will be subject to certain laws.
conditions and generally will require
them to purchase all of the securities FINOVA Group and FINOVA Capital or
if any are purchased. the underwriters or agents may solicit
offers by institutions approved by us
Unless otherwise noted in the to purchase securities under contracts
supplement, the securities will be providing for future payment.
offered by the underwriters, if any, Permitted institutions include
when, as and if issued by us, commercial and savings banks,
delivered to and accepted by the insurance companies, pension funds,
investment companies, educational and
22
<PAGE>
charitable institutions and others. securities in the open market after
Certain conditions apply to those the distribution is completed to cover
purchases. short positions. Penalty bids permit
the underwriters to reclaim a selling
Any underwriter may engage in concession from a dealer when the
over-allotment, stabilizing securities originally sold by the
transactions, short covering dealer are purchased in a covering
transactions and penalty bids in transaction to cover short positions.
accordance with Regulation M under the Those activities may cause the price
Securities Exchange Act of 1934. of the securities to be higher than it
Over-allotment involves sales in would otherwise be. If commenced, the
excess of the offering size, which underwriters may discontinue those
creates a short position. Stabilizing activities at any time.
transactions permit bids to purchase
the underlying security so long as the The supplement will set forth the
stabilizing bids do not exceed a anticipated delivery date of the
specified maximum. Short covering securities being sold at that time.
transactions involve purchases of the
LEGAL MATTERS
Unless otherwise noted in a Assistant General Counsel of FINOVA
supplement, William J. Hallinan, Esq., Capital, will pass on the legality of
Senior Vice President-General Counsel the securities offered through this
of FINOVA Group and FINOVA Capital, or prospectus and any supplement. Brown &
Richard Lieberman, Esq., Vice Wood LLP will act as counsel for any
President-Assistant General Counsel of underwriters or agents, unless
FINOVA Group and otherwise noted in a supplement.
EXPERTS
Deloitte & Touche LLP, independent year ended December 31, 1996. The
auditors, have audited the financial financial statements are incorporated
statements for FINOVA Group and FINOVA into this prospectus by reference in
Capital incorporated in this reliance upon their report given upon
prospectus by reference from our their authority as experts in
Annual Reports on Form 10-K for the accounting and auditing.
23
<PAGE>
========================================== ==================================
You should rely only on the information
contained in or incorporated by reference
in this prospectus. We have authorized no
one to provide you with different
information $2,000,000,000
THE FINOVA GROUP INC.
We are not making an offer of these FINOVA CAPITAL CORPORATION
securities in any location where the offer
is not permitted.
Debt Securities, Common Stock,
Preferred Stock, Depositary Shares
You should not assume that the information and Warrants
in this prospectus, including information
incorporated by reference, is accurate as
of any date other than the date on the
front of the prospectus.
- ------------------------------------------
Table of Contents
Page
----
Where You Can Find More Information 2
The Companies 2
Selected Financial Information 5
Ratio Of Income To Total Fixed Charges 6
Ratio Of Income To Combined Fixed
Charges And Preferred Stock Dividends 6 ----------------
Special Note Regarding Forward- PROSPECTUS
Looking Statements 6 ----------------
Use Of Proceeds 7
Description Of Debt Securities 7
Description Of Capital Stock 14
Description Of Depositary Shares 20
Description Of Warrants 22
Plan Of Distribution 22
Legal Matters 23
Experts 23
__________, 1997
========================================== ==================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated amounts of the expenses of and related to the offering
are as follows:
Registration fee................................ $606,060.60
Rating agency fees*............................. $1,000,000.00
Printing fees*.................................. $100,000.00
Legal fees and expenses*........................ $50,000.00
Accounting fees and expenses*................... $275,000.00
Blue sky fees and expenses*..................... $3,000.00
New York Stock Exchange listing fees*........... $20,000.00
Trustee fees and expenses*...................... $200,000.00
Miscellaneous expenses*......................... $5,939.40
-------------
Total*........................ $2,260,000.00
-------------
- -----------
*Estimated
Item 15. Indemnification of Directors and Officers
The General Corporation Law of the State of Delaware (the "DGCL"), the
state of incorporation of each of the Registrants, and the Certificate of
Incorporation and Bylaws of each of the Registrants provide for indemnification
of directors and officers. Section 145 of the DGCL provides generally that a
person sued as a director, officer, employee or agent of a corporation may be
indemnified by the corporation for reasonable expenses, including attorneys'
fees, if, in cases other than actions brought by or in the right of the
corporation, he or she has acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation (and in the case of a criminal proceeding, had no reasonable cause
to believe that his or her conduct was unlawful). Section 145 provides that no
indemnification for any claim or matter may be made, in the case of an action
brought by or in the right of the corporation, if the person has been adjudged
to be liable, unless the Court of Chancery or other court determines that
indemnity is fair and reasonable despite the adjudication of liability.
Indemnification is mandatory in the case of a director, officer, employee or
agent who has been successful on the merits, or otherwise, in defense of a suit
against him or her.
Directors and officers of each of the Registrants are covered under
policies of directors' and officers' liability insurance with coverage
aggregating $100,000,000. The directors serving each of the Registrants are
parties to Indemnification Agreements with each respective Registrant (the
"Indemnification Agreements"). The Indemnification Agreements provide
substantially the same scope of coverage afforded by provisions in the
Certificate of Incorporation and Bylaws and are designed to provide greater
assurance to the directors that indemnification will be available because as
contracts, the Indemnification Agreements may not be unilaterally modified by
the Registrants' Boards of Directors or stockholders. The Indemnification
Agreements generally are intended to provide indemnification for any amounts a
director is legally obligated to pay because of claims arising out of the
director's service to the Registrants or any other subsidiary of the
Registrants.
<PAGE>
Item 16. Exhibits
1.1 Form of Senior Debt Securities Underwriting Agreement
4.1 Restated Certificate of Incorporation of The FINOVA Group Inc.
(incorporated by reference to Exhibit 3.A to The FINOVA Group
Inc.'s Annual Report on Form 10-K for the year ended December
31, 1994)
4.2 Amended and Restated Bylaws of The FINOVA Group Inc.
(incorporated by reference to Exhibit 3.B to The FINOVA Group
Inc.'s Annual Report on Form 10-K for the year ended December
31, 1995)
4.3 Amended and Restated Rights Agreement between The FINOVA Group
Inc. and Bank One, Arizona, N.A. (incorporated by reference to
Exhibit 4.1 to The FINOVA Group Inc.'s Current Report on Form
8-K, dated September 21, 1995)
4.4 Form of Junior Participating Preferred Share Purchase Right
(included as an exhibit to Exhibit 4.3 above)
4.5 Acceptance of Successor Trustee to Appointment under Rights
Agreement (incorporated by reference to Exhibit 4 to The
FINOVA Group Inc.'s Current Report on Form 8-K, dated November
30, 1995)
4.6 Amended and Restated Certificate of Incorporation of FINOVA
Capital Corporation (incorporated by reference to Exhibit 3.A
to FINOVA Capital Corporation's Annual Report on Form 10-K for
the year ended December 31, 1996)
4.7 Bylaws of FINOVA Capital Corporation (incorporated by
reference to Exhibit 3.B to FINOVA Capital Corporation's
Annual Report on Form 10-K for the year ended December 31,
1996)
4.8 Form of Indenture between FINOVA Capital Corporation and The
First National Bank of Chicago, as Trustee
4.9 Form of Convertible Debt Security*
4.10 Form of Preferred Stock Certificate of Designations*
4.11 Form of Fixed Rate Note
4.12 Form of Floating Rate Note
4.13 Form of Deposit Agreement*
4.14 Form of Deposit Receipt*
4.15 Form of Warrant*
4.16 Form of Warrant Agreement*
5.1 Opinion of Richard Lieberman, Esq. as to the legality of the
securities to be issued
12.1 Statement of Computation of Ratios of The FINOVA Group Inc.
12.2 Statement of Computation of Ratios of FINOVA Capital
Corporation
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Richard Lieberman, Esq.(included in Exhibit 5.1)
24.1 Power of Attorney (included on signature pages hereto)
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The First National Bank of Chicago, as Trustee
-----------------------------------------------------------------------
*To be filed with a Current Report on Form 8-K or a Post-Effective
Amendment to Registration Statement
Item 17. Undertakings
The undersigned Registrants hereby undertake:
(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 this registration statement; and
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed with or furnished to the
Commission by the Registrants pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
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 herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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.
The undersigned Registrants hereby further undertake that, for the
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrants' annual reports 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 therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrants hereby further undertake 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 Registrants 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 Registrants hereby further undertake 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 in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
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 provisions described under Item 15 of this
registration statement, or otherwise (other than insurance), the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrants of expenses incurred
or paid by a director, officer or controlling person of the Registrants 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 Registrants will, unless in the opinion of 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 such Act and will be governed by the final adjudication
of such issue.
<PAGE>
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 on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Phoenix, State of Arizona, on the 16th day of
October, 1997.
THE FINOVA GROUP INC.
By: /s/ Samuel L. Eichenfield
-------------------------------
Samuel L. Eichenfield
Chairman, President and Chief
Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of The FINOVA Group Inc.,
hereby severally constitute Samuel L. Eichenfield, Robert J. Fitzsimmons and
William J. Hallinan, and each of them singly, our true and lawful attorneys with
full power to them, and each of them singly, to sign for us and in our names in
the capacities indicated below, the Registration Statement filed herewith and
any and all amendments to said Registration Statement (including post-effective
amendments), and generally to do all such things in our name and behalf in our
capacities as officers and directors to enable The FINOVA Group Inc. to comply
with the provisions of the Securities Act of 1933, and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Samuel L. Eichenfield Director, Chairman, President and October 16, 1997
- ------------------------------------ Chief Executive Officer (Principal
Samuel L. Eichenfield Executive Officer)
/s/ Bruno A. Marszowski Senior Vice President-Controller and October 16, 1997
- ------------------------------------ Chief Financial Officer (Principal
Bruno A. Marszowski Financial and Accounting Officer)
/s/ Robert H. Clark, Jr. Director October 16, 1997
- ------------------------------------
Robert H. Clark, Jr.
/s/ G. Robert Durham Director October 16, 1997
- ------------------------------------
G. Robert Durham
/s/ James L. Johnson Director October 16, 1997
- ------------------------------------
James L. Johnson
/s/ Kenneth R. Smith Director October 16, 1997
- ------------------------------------
Kenneth R. Smith
/s/ Shoshana B. Tancer Director October 16, 1997
- ------------------------------------
Shoshana B. Tancer
/s/ John W. Teets Director October 16, 1997
- ------------------------------------
John W. Teets
</TABLE>
<PAGE>
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 on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Phoenix, State of Arizona, on the 16th day of
October, 1997.
FINOVA CAPITAL CORPORATION
By: /s/ Samuel L. Eichenfield
-------------------------------
Samuel L. Eichenfield
Chairman, President and Chief
Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of FINOVA Capital
Corporation, hereby severally constitute Samuel L. Eichenfield, Robert J.
Fitzsimmons and William J. Hallinan, and each of them singly, our true and
lawful attorneys with full power to them, and each of them singly, to sign for
us and in our names in the capacities indicated below, the Registration
Statement filed herewith and any and all amendments to said Registration
Statement (including post-effective amendments), and generally to do all such
things in our name and behalf in our capacities as officers and directors to
enable FINOVA Capital Corporation to comply with the provisions of the
Securities Act of 1933, and all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they may be signed
by our said attorneys, or any of them, to said Registration Statement and any
and all amendments thereto.
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Samuel L. Eichenfield Director, Chairman, President and October 16, 1997
- ------------------------------------ Chief Executive Officer (Principal
Samuel L. Eichenfield Executive Officer)
/s/ Bruno A. Marszowski Senior Vice President-Controller and October 16, 1997
- ------------------------------------ Chief Financial Officer (Principal
Bruno A. Marszowski Financial and Accounting Officer)
/s/ Robert J. Fitzsimmons Director October 16, 1997
- ------------------------------------
Robert J. Fitzsimmons
/s/ W. Carroll Bumpers Director October 16, 1997
- ------------------------------------
W. Carroll Bumpers
/s/ Gregory C. Smalis Director October 16, 1997
- ------------------------------------
Gregory C. Smalis
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1.1 Form of Senior Debt Securities Underwriting Agreement
4.1 Restated Certificate of Incorporation of The FINOVA Group Inc.
(incorporated by reference to Exhibit 3.A to The FINOVA Group
Inc.'s Annual Report on Form 10-K for the year ended December
31, 1994)
4.2 Amended and Restated Bylaws of The FINOVA Group Inc.
(incorporated by reference to Exhibit 3.B to The FINOVA Group
Inc.'s Annual Report on Form 10-K for the year ended December
31, 1995)
4.3 Amended and Restated Rights Agreement between The FINOVA Group
Inc. and Bank One, Arizona, N.A. (incorporated by reference to
Exhibit 4.1 to The FINOVA Group Inc.'s Current Report on Form
8-K, dated September 21, 1995)
4.4 Form of Junior Participating Preferred Share Purchase Right
(included as an exhibit to Exhibit 4.3 above)
4.5 Acceptance of Successor Trustee to Appointment under Rights
Agreement (incorporated by reference to Exhibit 4 to The
FINOVA Group Inc.'s Current Report on Form 8-K, dated November
30, 1995)
4.6 Amended and Restated Certificate of Incorporation of FINOVA
Capital Corporation (incorporated by reference to Exhibit 3.A
to FINOVA Capital Corporation's Annual Report on Form 10-K for
the year ended December 31, 1996)
4.7 Bylaws of FINOVA Capital Corporation (incorporated by
reference to Exhibit 3.B to FINOVA Capital Corporation's
Annual Report on Form 10-K for the year ended December 31,
1996)
4.8 Form of Indenture between FINOVA Capital Corporation and The
First National Bank of Chicago, as Trustee
4.9 Form of Convertible Debt Security*
4.10 Form of Preferred Stock Certificate of Designations*
4.11 Form of Fixed Rate Note
4.12 Form of Floating Rate Note
4.13 Form of Deposit Agreement*
4.14 Form of Deposit Receipt*
4.15 Form of Warrant*
4.16 Form of Warrant Agreement*
5.1 Opinion of Richard Lieberman, Esq. as to the legality of the
securities to be issued
12.1 Statement of Computation of Ratios of The FINOVA Group Inc.
12.2 Statement of Computation of Ratios of FINOVA Capital
Corporation
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Richard Lieberman, Esq.(included in Exhibit 5.1)
24.1 Power of Attorney (included on signature pages hereto)
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The First National Bank of Chicago, as Trustee
-----------------------------------------------------------------------
*To be filed with a Current Report on Form 8-K or a Post-Effective
Amendment to this Registration Statement
EXHIBIT 1.1
$-----
FINOVA CAPITAL CORPORATION
(a Delaware corporation)
[Floating Rate] [__%] Notes Due _____, __
UNDERWRITING AGREEMENT
_____, 199__
[Name of Underwriter]
[Address of Underwriter]
Dear Ladies and Gentlemen:
FINOVA Capital Corporation, a Delaware corporation (the "Company"),
confirms its agreement with __________________________________ (the
"Underwriter") with respect to the sale by the Company and the purchase by the
Underwriter of $_____ aggregate principal amount of the Company's [Floating
Rate] [__%] Notes Due _____, __ (the "Securities"). The Securities are to be
issued pursuant to an indenture dated as of October __, 1997 (the "Indenture")
between the Company and The First National Bank of Chicago, as trustee (the
"Trustee").
Prior to the purchase and public offering of the Securities by the
Underwriter, the Company and the Underwriter shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Company and the Underwriter and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Securities will be governed by this Agreement, as supplemented
by the Pricing Agreement. From and after the date of the execution and delivery
of the Pricing Agreement, this Agreement shall be deemed to incorporate the
Pricing Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") an omnibus shelf registration statement on Form S-3 (No.
333-_____) for the registration of $2,000,000,000 of its debt and other
securities, including the Securities, and the offering thereof from time to time
under the Securities Act of 1933, as amended (the "1933 Act"), has filed such
amendments thereto, if any, as may have been required to the date hereof, and
will file such additional amendments thereto and such amended prospectuses as
may hereafter be required. Such registration statement has been declared
effective by the Commission and the Indenture has been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement,
as amended, and the prospectus constituting a part thereof (including in each
case all documents, if any, incorporated or deemed to be incorporated by
reference therein pursuant to the 1933 Act, the Securities Exchange Act of 1934,
as amended (the "1934 Act"), or otherwise, and the information, if any, deemed
to be a part thereof pursuant to Rule 434 of the rules and regulations of the
Commission under the 1933 Act) are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be provided to the Underwriter by the Company for use in
connection with the offering of the Securities
<PAGE>
which differs from the Prospectus on file at the Commission at the time the
Registration Statement became effective (whether or not such revised prospectus
is required to be filed by the Company pursuant to Rule 424(b) of the rules and
regulations promulgated under the 1933 Act (the "1933 Act Regulations")), the
term "Prospectus" shall refer to such revised prospectus from and after the time
it is first provided to the Underwriter for such use. If the Company elects to
rely on Rule 434 under the 1933 Act Regulations, all references to the
Prospectus shall be deemed to include, without limitation, the form of
prospectus and the abbreviated term sheet, taken together, provided to the
Underwriter by the Company in reliance on Rule 434 under the 1933 Act
Regulations (the "Rule 434 Prospectus"). If the Company files a registration
statement to register a portion of the Securities and relies on Rule 462(b)
under the 1933 Act Regulations for such registration statement to become
effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to "Registration Statement" herein shall be
deemed to include both the registration statement referred to above (No.
333-_____) and the Rule 462 Registration Statement, as each such registration
statement may be amended pursuant to the 1933 Act.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which are or are deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any documents under the 1934 Act after the date of this Agreement
which are or are deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after the
Pricing Agreement has been executed and delivered.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to the Underwriter as of the
date hereof, as of the date of the Pricing Agreement (such latter date being
hereinafter referred to as the "Representation Date") and as of the Closing Time
(as defined in Section 2) as follows:
(i) At the time the Registration Statement became effective,
at the most recent date on which the Company filed an Annual Report on Form 10-K
for a fiscal year ended prior to the date of this Agreement (the "10-K Filing
Date") and at the Representation Date, the Registration Statement did comply and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and the 1939 Act, and the rules and regulations of the
Commission promulgated thereunder (the "1939 Act Regulations") and did not 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. The Prospectus, at the Representation Date (unless the
term "Prospectus" refers to a prospectus provided to the Underwriter by the
Company for use in connection with the offering of the Securities differing from
the Prospectus on file at the Commission at the time the Registration Statement
became effective, in which case at the time it is first provided to the
Underwriter for such use) and at Closing Time referred to in Section 2 hereof,
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection (i) shall not apply
to that part of the Registration Statement which shall constitute the Statement
of Eligibility under the 1939 Act on Form T-1 of the Trustee or apply to
statements in or omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the Company in
writing by the Underwriter expressly for use in the Registration Statement or
Prospectus.
2
<PAGE>
(ii) The documents of the Company incorporated by reference in
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations thereunder (the "1934
Act Regulations"), and, when read together and with the other information in the
Prospectus, at the time the Registration Statement became, and any amendments to
the Registration Statement become, effective, and at the 10-K Filing Date, did
not 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, in the light of the circumstances under which they were or
are made, not misleading.
(iii) The accountants who certified the financial statements
included or incorporated by reference in the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) The financial statements included or incorporated by
reference in the Prospectus present fairly the respective financial position of
the Company and its consolidated subsidiaries as of the dates indicated and the
results of operations for the periods specified; and except as stated therein,
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis; the unaudited pro
forma consolidated financial statements, together with the related notes,
included or incorporated by reference in the Prospectus have been prepared on a
basis substantially consistent with the audited financial statements of the
Company set forth therein, the assumptions on which such unaudited pro forma
consolidated financial statements have been prepared are reasonable and are set
forth in the notes thereto, and such unaudited pro forma consolidated financial
statements have been prepared, and the pro forma adjustments set forth therein
have been applied, in accordance with the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations (including, without limitation,
Regulation S-X promulgated by the Commission), and such pro forma adjustments
have been properly applied to the historical amounts in the compilation of such
statements.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein or contemplated thereby, (A) there has been no material adverse
change in the condition, financial or otherwise, of the Company and its
subsidiaries considered as one enterprise or in the earnings, affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and (B)
there have been no material transactions entered into by the Company or any of
its subsidiaries other than those in the ordinary course of business.
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement;
and the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required or appropriate, except where the failure of the Company to so qualify,
in the aggregate, will not have a material adverse effect on the consolidated
financial condition or combined operations of the Company and its Subsidiaries
or of the Company and its Restricted Subsidiaries (as those terms are defined in
the Indenture).
(vii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the requisite corporate power
and authority to own, lease and operate its properties and conduct its business
as described in the Registration Statement and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required or appropriate, except where the failure of
the subsidiaries to so qualify, in the aggregate, will not have a material
adverse effect on the consolidated financial condition or combined operations of
the Company and its Subsidiaries or of the Company and its Restricted
Subsidiaries; all of the issued and outstanding capital stock of each such
subsidiary has been duly authorized and validly issued and is fully paid and
nonassessable; and all the capital stock of each such subsidiary is owned by the
Company or its
3
<PAGE>
affiliates, directly or through subsidiaries, free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity.
(viii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus and the shares of issued and
outstanding Common Stock set forth thereunder have been duly authorized and
validly issued and are fully paid and nonassessable and The FINOVA Group Inc.
("FINOVA") owns directly or indirectly all of the outstanding shares of the
Common Stock, which Common Stock constitutes all of the issued and outstanding
capital stock of the Company, free and clear of any claims, liens, encumbrances
or liabilities.
(ix) Neither the Company nor any of its subsidiaries is in
violation of its charter or in default in the performance or observance of any
obligations, agreements, covenants or conditions, which alone or in the
aggregate are material, contained in any contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments, which alone or in the aggregate
are material, to which it is a party or by which it or any of them or their
properties may be bound; and the execution, delivery and performance of this
Agreement, the Indenture and the consummation of the transactions contemplated
herein and therein have been duly authorized by all necessary corporate action
and will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to any
material contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the charter or bylaws of the
Company or, to the best of its knowledge, any law, administrative regulation or
administrative or court order or decree; and no consent, approval,
authorization, order or decree of any court or governmental agency or body is
required for the consummation by the Company of the transactions contemplated by
this Agreement, except such as may be required under the 1933 Act, the 1939 Act,
the 1933 Act Regulations or state securities or Blue Sky laws in connection with
the purchase and distribution of the Securities by the Underwriter.
(x) The Company and its subsidiaries own or possess or have
obtained, can obtain on reasonable terms or are in the process of obtaining, all
material governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease or own, as the case may be, and to operate
their respective properties and to carry on their respective businesses as
presently conducted, except such as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Securities
by the Underwriter.
(xi) The Company and its subsidiaries own or possess adequate
trademarks, service marks and trade names necessary to conduct the business now
operated by them, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any trademarks, service marks or trade names which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to materially adversely affect the conduct
of the business, operations, financial condition or income of the Company and
its subsidiaries considered as one enterprise.
(xii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or, to
the actual knowledge of the Company, threatened against or affecting, the
Company or any of its subsidiaries, which would reasonably be expected to result
in any material adverse change in the condition, financial or otherwise, of the
Company and its subsidiaries considered as one enterprise, or in the business
prospects of the Company and its subsidiaries considered as one enterprise or
might materially and adversely affect the consummation of this Agreement; and
there are no material contracts or documents of the Company or any of its
subsidiaries which are required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not been so
filed.
(xiii) No material labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company,
is imminent; and the Company is not aware of
4
<PAGE>
any existing or imminent labor disturbance by the employees of any of its
principal suppliers, manufacturers or contractors which would be expected to
result in any material adverse change in the condition, financial or otherwise,
or in the earnings, affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(xiv) The Securities have been duly authorized for issuance
and sale pursuant to this Agreement and, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the Indenture against
payment of the consideration set forth in the Pricing Agreement, the Securities
will constitute valid and legally binding obligations of the Company enforceable
in accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws relating to or affecting creditors' rights
generally or by general equity principles, including concepts of commercial
reasonableness, and will be entitled to the benefits provided by the Indenture;
the Securities and the Indenture conform in all material respects to all
statements relating thereto contained in the Registration Statement; and, after
giving effect to the sale of the Securities and the sale of any other securities
registered pursuant to the Registration Statement to be issued prior to the
delivery of the Securities, the aggregate amount of Securities which have been
issued and sold by the Company will not exceed the amount of securities
registered pursuant to the Registration Statement.
(xv) The Company and its subsidiaries have made all necessary
filings and taken all other necessary action so that, with respect to all of the
equipment and other property reflected in the consolidated balance sheets of the
Company and its consolidated subsidiaries as of _____, 199__, and with respect
to all equipment and other property acquired by the Company or a subsidiary
since then, the interest of the Company or of the appropriate subsidiary in such
equipment or other property is free and clear, in all material respects, of any
claims, liens, encumbrances or liabilities not also reflected in such
consolidated balance sheets and that the interest of the Company or of the
appropriate subsidiary has, in all material respects, been perfected so as not
to be subordinate to the claim of a purchaser in due course or any other bona
fide purchaser.
(xvi) The financing contracts reflected in the consolidated
balance sheets of the Company and its consolidated subsidiaries as of _____,
199__, and the financing contracts entered into by the Company or a subsidiary
since then are, in all material respects, legal, valid and binding obligations
of the obligors enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other laws
relating to or affecting creditors' rights generally or by general equity
principles, including concepts of commercial reasonableness; the obligors
thereunder are, in all material respects, in the good faith business judgment of
the Company and except to the extent reflected or stated in the Prospectus,
financially capable of performing their respective obligations thereunder, and
any defaults in the payments under all such contracts in the aggregate, at the
date hereof, are not of such amount that, were no more payments to be received
under the financing contracts in respect of which such defaults exist, and after
considering estimated collateral values to be recovered, the consolidated
financial condition or operations of the Company and its consolidated
subsidiaries, or of the Company and its Restricted Subsidiaries, would be
materially adversely affected thereby, excluding impairment of related reserves.
(xvii) The Indenture has been duly and validly authorized,
executed and delivered by the Company and, to the best of the Company's
knowledge, the Trustee; and the Indenture constitutes a legally valid and
binding obligation of the Company, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency or other laws relating to or
affecting creditors' rights generally or by general equity principles, including
concepts of commercial reasonableness.
(xviii) The Company is not an "investment company" nor is the
Company "controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(xix) Neither the Company nor any affiliate thereof (as
defined in Section 517.021(1), Florida Statutes) does business with the
government of Cuba or with any person or affiliate located in Cuba.
5
<PAGE>
(b) Any certificate signed by any officer of the Company and delivered
to the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by the Company to the Underwriter as to the matters
covered thereby.
Section 2. Sale and Delivery to Underwriter; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to the Underwriter and the Underwriter agrees to purchase from the Company,
at the price set forth in the Pricing Agreement, $_____ aggregate principal
amount of the Securities.
(b) Payment of the purchase price for, and delivery of the certificates
for, the Securities shall be made at the offices of the Company, 1850 North
Central Avenue, P.O. Box 2209, Phoenix, Arizona, 85002-2209 or at such other
place as shall be agreed upon by the Underwriter and the Company, at 10:00 a.m.,
New York City time, on _____, 199__, or such other time not later than ten
business days after execution of the Pricing Agreement as shall be agreed upon
by the Underwriter and the Company (such time and date of payment and delivery
being herein called the "Closing Time"). Payment shall be made to the Company by
wire transfer of immediately available funds against delivery to the Underwriter
of certificates for the Securities to be purchased by it. Certificates for the
Securities shall be in such denominations and registered in such names as the
Underwriter may request in writing at least one business day before the Closing
Time. The certificates for the Securities will be made available for examination
and packaging by the Underwriter not later than 10:00 a.m., New York City time,
on the last business day prior to the Closing Time at the offices of the
Trustee.
Section 3. Covenants of the Company. The Company covenants with the
Underwriter as follows:
(a) The Company will notify the Underwriter immediately, and confirm
the notice in writing, (i) of the effectiveness of the Registration Statement
and any amendment thereto (including any post-effective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Company will make every reasonable effort to prevent the issuance of any
such stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment. If the Company elects to rely on Rule 434 under
the 1933 Act Regulations, the Company will prepare an "abbreviated term sheet"
that complies with the requirements of Rule 434 under the 1933 Act Regulations.
If the Company elects not to rely on Rule 434, the Company will provide the
Underwriter with copies of the form of Prospectus, in such number as the
Underwriter may reasonably request, and file or transmit for filing with the
Commission such Prospectus in accordance with Rule 424(b) of the 1933 Act
Regulations by the close of business in New York on the business day immediately
succeeding the date hereof. If the Company elects to rely on Rule 434, the
Company will provide the Underwriter with copies of the form of Rule 434
Prospectus, in such number as the Underwriter may reasonably request, and file
or transmit for filing with the Commission the form of Prospectus complying with
Rule 434(c)(2) of the 1933 Act Regulations in accordance with Rule 424(b) of the
1933 Act Regulations by the close of business in New York on the business day
immediately succeeding the date hereof.
(b) The Company will give the Underwriter notice of its intention to
file or prepare any amendment to the Registration Statement (including any
post-effective amendment) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Underwriter in connection with the offering of the Securities which differs from
the prospectus on file at the Commission at the time the Registration Statement
becomes effective, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the 1933 Act Regulations, whether pursuant to
the 1933 Act, the 1934 Act or otherwise, or any abbreviated term sheet prepared
in reliance on Rule 434 of the 1933 Act Regulations), will furnish the
Underwriter with copies of any such amendment or supplement a reasonable amount
of time prior to such proposed filing or use, as the case
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<PAGE>
may be, and will not file any such amendment or supplement or use any such
prospectus to which the Underwriter or counsel for the Underwriter shall object.
(c) The Company has delivered to counsel for the Underwriter one signed
copy and will deliver to the Underwriter as many conformed copies of the
Registration Statement, as originally filed, and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) as the
Underwriter may reasonably request.
(d) The Company will furnish to the Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as the Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable rules
and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it is necessary, in
the opinion of counsel for the Underwriter, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in light of the
circumstances existing at the time it is required to be delivered to a
purchaser, the Company will forthwith amend or supplement the Prospectus (in
form and substance satisfactory to counsel for the Underwriter) so that, as so
amended or supplemented, the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time it is
required to be delivered to a purchaser, not misleading, and the Company will
furnish to the Underwriter a reasonable number of copies of such amendment or
supplement.
(f) The Company will endeavor, in cooperation with the Underwriter, to
qualify the Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions of the United States as the
Underwriter may designate; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualifications in effect for a period of not less
than one year from the effective date of this Agreement. The Company will
promptly advise the Underwriter of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any state or jurisdiction or the initiating or
threatening of any proceeding for such purpose.
(g) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a twelve-month period beginning
not later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(h) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under the caption
"Use of Proceeds."
(i) Immediately following the execution of the Pricing Agreement, the
Company will prepare, and file or transmit for filing with the Commission in
accordance with Rule 424(b) of the 1933 Act Regulations, copies of a supplement
to the Prospectus containing the terms of the Securities and such other
information as the Underwriter and the Company deem appropriate.
(j) From the date of this Agreement until the Closing Time, the Company
will not, without the prior written consent of the Underwriter, directly or
indirectly, sell, offer to sell, contract to sell or otherwise dispose of, or
announce the offering of, any Securities or securities similar to the
Securities, or any securities convertible into or exchangeable or exercisable
for any Securities or any such similar securities, except for Securities sold to
the Underwriter pursuant to this Agreement.
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<PAGE>
(k) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
Section 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(a) the printing and filing of the Registration Statement as originally filed
and of each amendment thereto, (b) the printing or reproducing of this
Agreement, the Pricing Agreement and the Indenture, (c) the preparation,
issuance and delivery of the certificates for the Securities to the Underwriter,
(d) the fees and disbursements of the Company's counsel and accountants, (e) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriter in connection therewith and in
connection with the preparation of the Blue Sky Survey and any Legal Investment
Survey, (f) the printing and delivery to the Underwriter of copies of the
Registration Statement as originally filed and of each amendment thereto, of
each preliminary prospectus and of the Prospectus and any amendments or
supplements thereto, including any abbreviated term sheet delivered by the
Company pursuant to Rule 434 of the 1933 Act Regulations, (g) the printing and
delivery to the Underwriter of copies of the Blue Sky Survey and any Legal
Investment Survey, (h) any fees of any rating agency or agencies rating the
Securities, (i) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities and (j) any fees and expenses of a depositary in connection with
the holding of the Securities in book-entry form.
If this Agreement is terminated by the Underwriter in accordance with
the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriter for its out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
Section 5. Conditions of Underwriter's Obligations. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company herein contained, to the performance by the Company of
its obligations hereunder, and to the following further conditions:
(a) At the Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission. The supplement
to the Prospectus referred to in Section 3(i) of this Agreement shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period, and prior to the Closing Time the
Company shall have provided evidence satisfactory to the Underwriter of such
timely filing.
(b) At the Closing Time the Underwriter shall have received:
(i) The opinion, dated as of the Closing Time, of William J.
Hallinan, Esq., Senior Vice President-General Counsel or Richard Lieberman,
Esq., Assistant General Counsel of the Company, in form and scope satisfactory
to counsel for the Underwriter, to the effect that:
(A) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware.
(B) The Company has corporate power and corporate
authority to own, lease and operate its properties and conduct its business as
described in the Registration Statement.
(C) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, except where the failure of the Company to
so qualify, in the aggregate, will not have a material adverse effect on the
consolidated financial condition or combined operations of the Company
8
<PAGE>
and its Subsidiaries or of the Company and its Restricted Subsidiaries (as those
terms are defined in the Indenture).
(D) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the requisite corporate power
and authority to own, lease and operate its properties and conduct its business
as described in the Registration Statement, and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, except where the failure to so qualify, in
the aggregate, will not have a material adverse effect on the consolidated
financial condition or combined operations of the Company and its Subsidiaries
or of the Company and its Restricted Subsidiaries; and all of the issued and
outstanding capital stock of each such subsidiary has been duly authorized and
validly issued and is fully paid and nonassessable, and all of such capital
stock is owned by the Company or its affiliates, free and clear of any mortgage,
pledge, lien, encumbrance or claim.
(E) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus (included by
incorporation) and the shares of issued and outstanding Common Stock set forth
therein have been duly authorized and validly issued and are fully paid and
nonassessable; FINOVA owns, directly or indirectly, all of the outstanding
shares of the Common Stock, which Common Stock constitutes all of the issued and
outstanding capital stock of the Company, free and clear of any claims, liens
and encumbrances.
(F) This Agreement and the Pricing Agreement have
each been duly authorized, executed and delivered by the Company.
(G) The Indenture has been duly and validly
authorized, executed and delivered by the Company and, to such counsel's
knowledge, the Trustee; the Indenture constitutes a valid and binding agreement
of the Company, enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws relating to or
affecting creditors' rights generally or by general equity principles, including
concepts of commercial reasonableness.
(H) The Securities are in due and proper form, have
been duly and validly authorized by all necessary corporate action for issuance,
offer and sale by the Company to the Underwriter as contemplated by this
Agreement and, when executed and authenticated as specified in the Indenture and
delivered against payment of the consideration therefor in accordance with this
Agreement and the Pricing Agreement, will be valid and binding obligations of
the Company, enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws relating to or
affecting creditors' rights generally or by general equity principles, including
concepts of commercial reasonableness, and each holder of Securities will be
entitled to the benefits of the Indenture.
(I) The statements in the Prospectus under the
captions "Description of Notes" and "Description of Debt Securities," insofar as
they purport to summarize certain provisions of documents specifically referred
to therein, are accurate summaries of the subject matter thereof.
(J) The Indenture is qualified under the 1939 Act.
(K) The Registration Statement is effective under the
1933 Act and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under the 1933
Act or proceedings therefor have been initiated or threatened by the Commission.
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<PAGE>
(L) At the time the Registration Statement became
effective, at the 10-K Filing Date and at the Representation Date, the
Registration Statement (other than the financial statements, schedules and other
financial and statistical data included or incorporated by reference therein,
the Form T-1 and information relating to the Underwriter, as to which no opinion
need be rendered) complied as to form in all material respects with the
requirements of the 1933 Act, the 1939 Act and the regulations of those Acts,
and the Rule 434 Prospectus appeared on its face to be responsive as to form to
the requirements of Rule 434 of the 1933 Act Regulations in all material
respects.
(M) There are no legal or governmental proceedings
pending or to the best of such counsel's knowledge, threatened which are
required to be disclosed in the Registration Statement, other than those
disclosed therein, and all pending legal or governmental proceedings to which
the Company or any subsidiary is a party or of which any of their property is
the subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, are reasonably expected
to be, alone or in the aggregate, not material.
(N) To the best of such counsel's knowledge, there
are no contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to, or incorporated by
reference in, the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions thereof or references thereto
are correct, and no default exists by the Company in the due performance or
observance of obligations, agreements, covenants or conditions, which alone or
in the aggregate are material, contained in any contracts, indentures, loan
agreements, notes, leases or other instruments, which alone or in the aggregate
are material, so described, referred to, filed or incorporated by reference.
(O) No consent, approval, authorization or order of
any court or governmental authority or agency is required in connection with the
sale of the Securities, except such as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws; and the execution and delivery of
this Agreement and the Pricing Agreement and the Indenture and the consummation
of the transactions contemplated herein and therein did not and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument known to such counsel
and to which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, or any law, administrative
regulation or administrative or court decree known to such counsel to be
applicable to the Company of any court or governmental agency, authority or body
or any arbitrator having jurisdiction over the Company; nor will such action
result in any violation of the provisions of the charter or bylaws of the
Company.
(P) Each document, if any, filed pursuant to the 1934
Act (other than the financial statements, schedules and other financial and
statistical data included therein, as to which no opinion need be rendered) and
incorporated by reference in the Prospectus, complied when filed as to form in
all material respects with the 1934 Act and the 1934 Act Regulations thereunder.
(Q) To the best of such counsel's knowledge, the
Company and its subsidiaries own or possess or have obtained adequate
trademarks, service marks and trade names necessary to conduct the business now
operated by them, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any trademarks, service marks or trade names which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to materially adversely affect the conduct
of the business, operations, financial condition or income of the Company and
its subsidiaries considered as one enterprise.
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<PAGE>
(R) The Company is not an "investment company" nor is
it "controlled" by an "investment company" as such terms are defined in the
Investment Company Act.
In giving such opinion such counsel may rely as to all matters
of law other than the federal laws of the United States of America, the laws of
the State of Arizona and the General Corporation Law of the State of Delaware,
and as to all matters of foreign law, upon opinions of counsel satisfactory to
counsel to the Underwriter, in which case, the opinion shall state that although
such counsel has not made an independent investigation of the laws of any
jurisdiction other than the federal laws of the United States of America, the
General Corporation Law of the State of Delaware or the laws of Arizona, such
counsel believes the Underwriter and he are entitled so to rely. In giving the
opinions referred to in the foregoing clause (D), such counsel may omit
reference to a foreign subsidiary so long as (1) he shall have delivered to the
Underwriter a signed opinion of other counsel for such foreign subsidiary,
satisfactory to counsel to the Underwriter which other opinion shall give
substantially the same opinions with respect to such foreign subsidiary as
required by the foregoing clause (D), and (2) he states that such other opinion
is satisfactory to him and that although he has not made an independent
investigation of the foreign laws applicable to such foreign subsidiary, he
believes the Underwriter is entitled to rely on such other opinion.
(ii) The opinion, dated as of the Closing Time, of Brown &
Wood LLP, counsel for the Underwriter, with respect to the matters set forth in
(A) and (G) through (L), inclusive, of subsection (b)(1) of this Section.
(iii) In giving their opinions required by subsections (b)(i)
and (b)(ii), respectively, of this Section, Messrs. Hallinan or Lieberman and
Brown & Wood LLP shall each additionally state that nothing has come to their
attention that would lead such counsel to believe that the Registration
Statement (other than the financial statements, schedules and other financial
and statistical data included or incorporated therein, and the Form T-1, as to
which no statement need be made), at the time it became effective or at the 10-K
Filing Date (with respect to Messrs. Hallinan or Lieberman) or at the
Representation Date, 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 (other than the
financial statements, schedules and other financial and statistical data
included or incorporated therein, as to which no statement need be made), at the
Representation Date (unless the term "Prospectus" refers to a prospectus which
has been provided to the Underwriter by the Company for use in connection with
the offering of the Securities that differs from the Prospectus on file at the
Commission at the time the Registration Statement became effective, in which
case at the time it is first provided to the Underwriter for such use) or at the
Closing Time, included an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(c) At the Closing Time there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, of the Company and its subsidiaries considered as one enterprise, or
in the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Underwriter shall have received a
certificate of the Chairman, President and Chief Executive Officer or a Senior
Vice President or a Vice President of the Company and of the chief financial or
chief accounting officer of the Company, dated as of the Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the Closing Time and
(iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the Commission. As used in this Section 5(c), the term
"Prospectus" means the Prospectus in the form first used to confirm sales of the
Securities.
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<PAGE>
(d) At the time of execution of this Agreement, the Underwriter shall
have received from Deloitte & Touche LLP a letter dated such date, in form and
substance satisfactory to the Underwriter, and substantially in the same form as
the draft letter previously delivered to and approved by the Underwriter.
(e) At the Closing Time the Underwriter shall have received from
Deloitte & Touche LLP a letter, dated as of the Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(d) of this Section, except that the "specified date" referred to in such letter
shall be a date not more than three days prior to the Closing Time.
(f) All proceedings taken by the Company in connection with the
issuance and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Underwriter and counsel for the
Underwriter.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriter by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 hereof.
Section 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto, including the information deemed to be part of the
Registration Statement pursuant to Rule 434 of the 1933 Act Regulations, if
applicable), or any omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected with the written consent
of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Underwriter), incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under (i)
or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto), any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
12
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(b) The Underwriter agrees to indemnify and hold harmless the Company,
its directors, each of its officers who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give as promptly as reasonably
practicable notice to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so notify
an indemnifying party shall not relieve such indemnifying party from any
liability which it may have otherwise than on account of this indemnity
agreement, except to the extent of any prejudice to such indemnifying party
arising from the failure to provide such notice. An indemnifying party may
participate at its own expense in the defense of such action. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel per jurisdiction) separate from their
own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
Section 7. Contribution. To provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in Section 6
hereof is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the
Underwriter shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriter, as incurred, in such proportions
that the Underwriter is responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the initial public offering price appearing thereon and the
Company is responsible for the balance; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Furthermore, in no event shall the
Underwriter be required to contribute an amount in excess of the total
underwriting discounts received by the Underwriter in connection with the
transactions contemplated by this Agreement. For purposes of this Section, each
person, if any, who controls the Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers of
the Company submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of the
Underwriter or a controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Underwriter.
Section 9. Termination of Agreement.
(a) The Underwriter may terminate this Agreement, immediately upon
notice to the Company, at any time at or prior to the Closing Time (i) if there
has been, since the date of this Agreement or since the respective dates as of
which information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any outbreak or escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the United
States is such as to make it, in the reasonable
13
<PAGE>
judgment of the Underwriter, impracticable to market the Securities or enforce
contracts for the sale of the Securities, or (iii) if trading in any securities
of the Company has been suspended by the Commission or a national securities
exchange, or if trading generally on either the American Stock Exchange or the
New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by federal
or New York authorities, or (iv) if the rating assigned by any nationally
recognized statistical rating organization to any debt securities of the Company
shall have been lowered or if any such rating agency shall have publicly
announced subsequent to the date of this agreement that it has placed any debt
securities of the Company on what is commonly termed a "watch list" for possible
downgrading. As used in this Section 9(a), the term "Prospectus" means the
Prospectus in the form first used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to
_________________________________, Attention: _______________, facsimile: (___)
________; and notices to the Company shall be directed to FINOVA Capital
Corporation, 1850 North Central Avenue, P.O. Box 2209, Phoenix, Arizona
85002-2209, Attention: Robert J. Fitzsimmons, Senior Vice President-Treasurer,
facsimile: (602) 207-5543.
Section 11. Parties. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Underwriter and the Company
and their respective successors. Nothing expressed or mentioned in this
Agreement or the Pricing Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriter and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 hereof and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or the Pricing Agreement or any provision herein or
therein contained. This Agreement and the Pricing Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Underwriter and the Company and their respective successors and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from the Underwriter shall be deemed to be a successor
merely by reason of such purchase.
Section 12. Governing Law and Time. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Except where otherwise provided, specified times of day refer to New York
City time.
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Company in accordance with its terms.
Very truly yours,
FINOVA CAPITAL CORPORATION
By: _________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[NAME OF UNDERWRITER]
By: _________________________
Name:
Title:
<PAGE>
EXHIBIT A
$-----
FINOVA CAPITAL CORPORATION
(a Delaware corporation)
[Floating Rate] [__%] Notes Due _____, __
PRICING AGREEMENT
_____, 199__
[Name of Underwriter]
[Address of Underwriter]
Dear Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated _____, 199__
(the "Underwriting Agreement"), relating to the purchase by
_______________________________ (the "Underwriter") of $_____ aggregate
principal amount of [Floating Rate] [__%] Notes Due __, __ (the "Securities") of
FINOVA Capital Corporation (the "Company").
Pursuant to Section 2 of the Underwriting Agreement, the Company agrees
with the Underwriter as follows:
1. The initial public offering price of the Securities shall be __% of
the principal amount thereof.
2. The purchase price of the Securities to be paid by the Underwriter
shall be __% of the principal amount thereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Company in accordance with its terms.
Very truly yours,
FINOVA CAPITAL CORPORATION
By: _________________________
Name:
Title:
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
[NAME OF UNDERWRITER]
By: _________________________
Name:
Title:
EXHIBIT 4.8
================================================================================
FINOVA CAPITAL CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
-----------------------
Indenture
Dated as of _____________
-----------------------
Providing for the Issuance of
Debt Securities
================================================================================
<PAGE>
This Cross Reference Sheet, showing the location in the Indenture of the
provisions inserted pursuant to Section 310-318(a), inclusive, of the Trust
Indenture Act of 1939, is not to be considered a part of the Indenture.
TRUST INDENTURE ACT CROSS REFERENCE SHEET
Sections of Trust Sections of
Indenture Act Indenture
------------- ---------
310(a)(1).................................................. 10.06
310(a)(2).................................................. 10.06
310(a)(3).................................................. Not applicable
310(a)(4).................................................. Not applicable
310(b)..................................................... 10.07
311........................................................ 10.03
312........................................................ 9.02
313........................................................ 9.03
314(a)..................................................... 9.04
314(b)..................................................... Not applicable
314(c)..................................................... 14.03
314(d)..................................................... Not applicable
314(e)..................................................... 14.03
315(a)..................................................... 10.01
315(b)..................................................... 10.11
315(c)..................................................... 10.01
315(d)..................................................... 10.01
315(e)..................................................... 6.08
316(a)..................................................... 6.06 and 7.03
316(b)..................................................... 6.07
317(a)..................................................... 6.03 and 6.04
317(b)..................................................... 5.03
318(a)..................................................... 14.05
<PAGE>
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TABLE OF CONTENTS*
Page
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<S> <C>
PARTIES....................................................................................................... 1
RECITALS...................................................................................................... 1
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Terms ..................................................................................... 2
SECTION 1.02. Definitions.................................................................................... 2
ARTICLE TWO
FORM, EXECUTION, DELIVERY, TRANSFER AND
EXCHANGE OF SECURITIES
SECTION 2.01. Forms Generally; Record Dates; Place of Payment, Denominations and
Numbering of Securities.............................................................. 8
SECTION 2.02. Terms of Series................................................................................ 9
SECTION 2.03. Certificate of Authentication Necessary to Make Securities Valid............................... 11
SECTION 2.04. Form of Certificate of Authentication.......................................................... 11
SECTION 2.05. Registration, Transfer and Exchange of Securities.............................................. 12
SECTION 2.06. Replacing Securities Mutilated, Destroyed, Lost or Stolen...................................... 15
SECTION 2.07. Rights to Interest............................................................................. 15
SECTION 2.08. Temporary Securities........................................................................... 16
ARTICLE THREE
ISSUE OF SECURITIES
SECTION 3.01. Authentication, Delivery and Dating............................................................ 16
- --------
* The Table of Contents is not part of the Indenture.
</TABLE>
i
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ARTICLE FOUR
REDEMPTION OF SECURITIES; SINKING FUND
SECTION 4.01. Applicability of Right of Redemption........................................................... 18
SECTION 4.02. Notice of Redemption........................................................................... 18
SECTION 4.03. Securities of Any Series to be Canceled and Discharged on Specific Conditions.................. 20
SECTION 4.04. Applicability of Sinking Fund.................................................................. 20
SECTION 4.05. Mandatory Sinking Fund Obligation.............................................................. 20
SECTION 4.06. Optional Redemption at Sinking Fund Redemption Price........................................... 20
SECTION 4.07. Application of Sinking Fund Payments........................................................... 21
ARTICLE FIVE
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.01. To Pay Principal, Premium, if any, and Interest................................................ 22
SECTION 5.02. To Maintain Office or Agency in New York....................................................... 22
SECTION 5.03. The Company, or Paying Agent, to Hold in Trust Moneys for Payment of Principal,
Premium, if any, and Interest........................................................ 23
SECTION 5.04. Restrictions Upon Liens Upon Property of the Company and Restricted Subsidiaries............... 24
SECTION 5.05. Maintenance of Corporate Existence............................................................. 26
SECTION 5.06. Restrictions on Consolidation, Merger, Sale, Et................................................ 26
SECTION 5.07. Annual Statement Concerning Compliance with Covenants.......................................... 27
SECTION 5.08. Compliance with Covenants and Conditions May Be Waived by Holders of Securities................ 27
ARTICLE SIX
REMEDIES OF TRUSTEE AND SECURITYHOLDERS
SECTION 6.01. Events of Default.............................................................................. 27
SECTION 6.02. Acceleration of Maturity of Principal on Default............................................... 29
SECTION 6.03. The Company, Failing for 30 Days to Pay Any Installment of Interest or Sinking Fund
Payment or Failing to Pay Principal When Due, Will Pay to Trustee at its Request
Whole Amount Due..................................................................... 30
SECTION 6.04. Trustee Appointed Attorney-in-Fact for Securityholders to File Claims.......................... 30
SECTION 6.05. Application of Moneys Collected by Trustee..................................................... 31
</TABLE>
ii
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SECTION 6.06. Securityholders May Direct Proceedings and Waive Defaults...................................... 32
SECTION 6.07. Limitations on Rights of Securityholders to Institute Proceedings.............................. 32
SECTION 6.08. Assessment of Costs and Attorneys' Fees in Legal Proceedings................................... 33
SECTION 6.09. Remedies Cumulative............................................................................ 33
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Evidence of Action by Securityholders.......................................................... 34
SECTION 7.02. Proof of Execution of Instruments and of Holding of Securities................................. 34
SECTION 7.03. Securities Owned by the Company or Other Obligor on the Securities to be Disregarded in
Certain Cases........................................................................ 34
SECTION 7.04. Revocation by Securityholders of Consents to Action............................................ 35
ARTICLE EIGHT
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings........................................................................... 35
SECTION 8.02. Call of Meetings by Trustee.................................................................... 36
SECTION 8.03. Call of Meetings by Company or Securityholders................................................. 36
SECTION 8.04. Qualifications for Voting...................................................................... 36
SECTION 8.05. Regulation of Meetings......................................................................... 36
SECTION 8.06. Voting ..................................................................................... 37
SECTION 8.07. No Delay of Rights by Meeting.................................................................. 37
ARTICLE NINE
REPORTS BY THE COMPANY AND THE TRUSTEE
AND SECURITYHOLDERS' LISTS
SECTION 9.01. Company to Furnish Trustee Names and Address of Holders........................................ 38
SECTION 9.02. Preservation of Information; Communications to Holders......................................... 38
SECTION 9.03. Reports by Trustee............................................................................. 38
SECTION 9.04. Reports by Company............................................................................. 39
ARTICLE TEN
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iii
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CONCERNING THE TRUSTEE
SECTION 10.01. Certain Rights of Trustee..................................................................... 39
SECTION 10.02. Not Responsible for Recitals or Issuance of Securities........................................ 40
SECTION 10.03. May Hold Securities........................................................................... 41
SECTION 10.04. Money Held in Trust........................................................................... 41
SECTION 10.05. Compensation and Reimbursement................................................................ 41
SECTION 10.06. Corporate Trustee Required; Eligibility....................................................... 42
SECTION 10.07. Resignation and Removal; Appointment of Successor............................................. 42
SECTION 10.08. Acceptance of Appointment by Successor........................................................ 43
SECTION 10.09. Merger, Conversion, Consolidation or Succession to Business................................... 45
SECTION 10.10. Appointment of Authenticating Agent........................................................... 45
SECTION 10.11. Notice of Defaults............................................................................ 46
ARTICLE ELEVEN
DEFEASANCE
SECTION 11.01. Discharge of Indenture Upon Payment of Securities............................................. 47
SECTION 11.02. Discharge of Securities of Any Series Upon Deposit of Moneys.................................. 47
SECTION 11.03. Interest on Moneys Deposited.................................................................. 47
ARTICLE TWELVE
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS, DIRECTORS AND EMPLOYEES
SECTION 12.01. Liability Solely Corporate.................................................................... 48
ARTICLE THIRTEEN
SUPPLEMENTAL INDENTURES
SECTION 13.01. Without Consent of Securityholders, the Company and Trustee May Enter Into Supplemental
Indentures for Specified Purposes.................................................... 49
SECTION 13.02. Modification of Indenture by Supplemental Indenture With Consent of Securityholders........... 50
SECTION 13.03. Upon Request of the Company, Trustee to Join in Execution of Supplemental Indenture........... 51
</TABLE>
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SECTION 13.04. Effect of Supplemental Indenture.............................................................. 52
SECTION 13.05. Matters Provided for in Supplemental Indenture May Be Noted on Securities, or New
Securities Appropriately Modified May Be Issued in Exchange for Outstanding
Securities........................................................................... 52
SECTION 13.06. Supplemental Indentures to Conform to Trust Indenture Act of 1939............................. 52
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
SECTION 14.01. Consolidation, Merger, Sale or Lease.......................................................... 52
SECTION 14.02. Rights Under Indenture Confined to Parties and Holders of Securities.......................... 53
SECTION 14.03. Evidence of Compliance........................................................................ 53
SECTION 14.04. Cancellation of Securities.................................................................... 54
SECTION 14.05. Provisions Required by Trust Indenture Act of 1939 to Control................................. 54
SECTION 14.06. Action of Authorized Committee Deemed to be Action of Board of Directors...................... 54
SECTION 14.07. Notices ..................................................................................... 55
SECTION 14.08. Act of Holders................................................................................ 55
SECTION 14.09. Payments Due on Non-Business Days............................................................. 56
SECTION 14.10. Execution in Counterparts..................................................................... 56
SECTION 14.11. Indenture Deemed a New York Contract.......................................................... 57
TESTIMONIUM................................................................................................... 58
SIGNATURES AND SEALS.......................................................................................... 58
ACKNOWLEDGEMENTS.............................................................................................. 58
</TABLE>
v
<PAGE>
INDENTURE, dated as of ________________, between FINOVA CAPITAL
CORPORATION, a corporation organized and existing under the laws of the State of
Delaware (hereinafter called the "Company"), party of the first part, and THE
FIRST NATIONAL BANK OF CHICAGO, a national banking association, as trustee
(hereinafter called the "Trustee"), party of the second part.
RECITALS
The Company is authorized and empowered to borrow money for its
corporate purposes and to issue its bonds, debentures, notes and other
obligations for money so borrowed.
The Company has duly authorized the issue, in one or more series as in
this Indenture provided, from time to time of its debt securities (hereinafter
called the "Securities") and, to provide the general terms and conditions upon
which the Securities are to be authenticated, issued and delivered, the Company
has duly authorized the execution and delivery of this Indenture.
The Trustee has power to enter into this Indenture and to accept and
execute the trusts herein created.
The Company represents that all acts and things necessary to make the
Securities, when executed by the Company and authenticated and delivered by the
Trustee as in this Indenture provided and issued, the valid, binding and legal
obligations of the Company, will, at the time of such execution, authentication
and delivery, have been done and performed; that all acts and things necessary
to constitute these presents a valid indenture and agreement according to its
terms have been done and performed; that the execution of this Indenture has in
all respects been duly authorized and the issue hereunder of the Securities
will, at the time of the issue thereof, have in all respects been duly
authorized; and that the Company, in the exercise of each and every legal right
and power in it vested, executes this Indenture and proposes to make, execute,
issue and deliver the Securities.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That, in consideration of the premises and of the acceptance and
purchase of the Securities by the holders thereof, the Company covenants and
agrees with the Trustee, for the equal benefit of all the holders from time to
time of the Securities, without preference, priority or distinction of any
thereof over any other thereof by reason of priority in time of issuance or
negotiation, or otherwise, as follows:
<PAGE>
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Terms. Unless otherwise defined in this Indenture or the
context otherwise requires, all terms used herein shall have the meanings
assigned to them in the Trust Indenture Act of 1939.
SECTION 1.02. Definitions. Unless the context otherwise requires, the
terms defined in this Section 1.02 shall for all purposes of this Indenture have
the meanings hereinafter set forth, the following definitions to be equally
applicable to both the singular and the plural forms of any of the terms herein
defined:
Act:
- ----
The term "Act," when used with respect to any holders, has the meaning
specified in Section 14.08.
Authenticating Agent:
- ---------------------
The term "Authenticating Agent" means the Trustee and/or the
authenticating agent, if any, appointed by the Trustee and acting pursuant to
Section 10.10.
Board Resolution:
- -----------------
The term "Board Resolution" means a copy of a resolution or resolutions
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors or any committee of the Board of
Directors (or committee of officers or other representatives of the Company, to
the extent that any such committee or committees have been authorized by the
Board of Directors to establish or approve the matters contemplated by Section
2.02 or any other provision hereof) and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
Business day:
- -------------
The term "Business day" shall mean a day which in The City of New York
is not a day on which banking institutions are authorized or obligated by law or
executive order to close.
Commission:
- -----------
The term "Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of 1934
or, if at any time after the execution of this Indenture 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.
2
<PAGE>
Company:
- --------
The term "Company" shall mean FINOVA Capital Corporation and, subject
to the provisions of Section 14.01, shall also include its successors and
assigns.
Consolidated Net Tangible Assets:
- ---------------------------------
The term "Consolidated Net Tangible Assets" means the total of all
assets reflected on a consolidated balance sheet of the Company and its
consolidated Subsidiaries, prepared in accordance with generally accepted
accounting principles, at their net book values (after deducting related
depreciation, depletion, amortization and all other valuation reserves which, in
accordance with such principles, should be set aside in connection with the
business conducted), but excluding goodwill, unamortized debt discount and all
other like intangible assets, all as determined in accordance with such
principles, less the aggregate of the current liabilities of the Company and its
consolidated Subsidiaries reflected on such balance sheet, all as determined in
accordance with such principles. For purposes of this definition, "current
liabilities" include all indebtedness for money borrowed, incurred, issued,
assumed or guaranteed by the Company and its consolidated Subsidiaries, and
other payables and accruals, in each case payable on demand or due within one
year of the date of determination of Consolidated Net Tangible Assets, but shall
exclude any portion of long-term debt maturing within one year of the date of
such determination, all as reflected on such consolidated balance sheet of the
Company and its consolidated Subsidiaries, prepared in accordance with generally
accepted accounting principles.
Depositary:
- -----------
With respect to the Securities of any series issuable or issued in
whole or in part in global form, the Person designated as Depositary by the
Company pursuant to Section 2.02 until a successor Depositary shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder, and if at any time there is more than one such Person, "Depositary"
as used with respect to the Securities of any such series shall mean the
"Depositary" with respect to the Securities of that series.
Event of default:
- -----------------
The term "event of default" shall have the meaning specified in Section
6.01.
Indenture:
- ----------
The term "Indenture" or "this Indenture" shall mean this instrument and
all indentures supplemental hereto.
3
<PAGE>
Interest Payment Date:
- ----------------------
The term "Interest Payment Date" when used with respect to any Security
shall mean the Stated Maturity of an instalment of interest on such Security.
Lien:
- -----
The term "Lien" means any lien, charge, claim, security interest,
pledge, hypothecation, right of another under any conditional sale or other
title retention agreement, or any other encumbrance affecting title to property.
Without limiting the generality of the foregoing, the sale of property used or
useful in the business of the seller with the intention of retaining the use
thereof under a lease, or any other comparable arrangement commonly referred to
as a "sale and leaseback," shall be deemed to create a Lien on such property.
Mandatory Sinking Fund Payment:
- -------------------------------
The term "Mandatory Sinking Fund Payment" shall have the meaning
specified in Section 4.04.
Maturity:
- ---------
The term "Maturity," with respect to any Security, shall mean the date
on which the principal of such Security shall become due and payable as therein
and herein provided, whether by declaration, call for redemption or otherwise.
Officers' Certificate:
- ----------------------
The term "Officers' Certificate," when used with respect to the
Company, shall mean a certificate signed by the Chairman of the Board of
Directors, the President or any Vice President and by the Treasurer, any
Assistant Treasurer, the Controller, any Assistant Controller, the Secretary or
any Assistant Secretary of the Company.
Opinion of Counsel:
- -------------------
The term "Opinion of Counsel" shall mean an opinion in writing signed
by legal counsel, who may be counsel for the Company.
Optional Sinking Fund Payment:
- ------------------------------
The term "Optional Sinking Fund Payment" shall have the meaning
specified in Section 4.04.
4
<PAGE>
Outstanding:
- ------------
The term "outstanding," when used as of any particular time with
reference to Securities, shall mean, as of the date of determination and subject
to Section 7.03, all Securities theretofore authenticated and delivered by the
Trustee under this Indenture, except
(a) Securities or portions thereof for which (i) funds, or as
provided in Section 11.02 hereof, direct obligations of the United
States of America, sufficient to pay the principal thereof, premium, if
any, thereon and all unpaid interest thereon to Maturity or to the date
fixed for the redemption thereof shall have been deposited in trust for
such purpose as provided herein with the Trustee or with any paying
agent (other than the Company) or shall have been set aside and
segregated in trust by the Company (if the Company shall act as its own
paying agent), and (ii) in case of redemption, notice of redemption
thereof shall have been duly given or provision satisfactory to the
Trustee for the giving of such notice shall have been made;
(b) Securities which shall have been cancelled or surrendered
to the Trustee for cancellation; and
(c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to
Section 2.05 or 2.06;
provided, however, that in determining whether the holders of the requisite
principal amount of outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, 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 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 pledged in good faith may
be regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
affiliate of the Company or of such other obligor.
Paying agent:
- -------------
The term "paying agent" means any Person authorized by the Company to
pay the principal of, or any premium or interest on, or any Additional Amounts
with respect to, any Security or any Coupon on behalf of the Company.
5
<PAGE>
Person:
- -------
The term "Person" shall mean an individual, a corporation, a
partnership, a joint venture, an association, a joint stock company, a trust, an
unincorporated organization or a government or an agency or political
subdivision thereof.
Principal Office of the Trustee:
- --------------------------------
The term "Principal Office of the Trustee," or other similar term,
shall mean the principal corporate trust office of the Trustee at which its
principal trust business is administered. As of the date hereof, the Principal
Office of the Trustee is located at One First National Plaza #0126, Chicago, IL
60670 (telephone: (312) 407-2199; telecopier: (312) 407- 1708).
Record Date:
- ------------
The term "Record Date" shall mean, with respect to any interest payable
on any Security on any Interest Payment Date, the close of business on the date
specified in such Security or, in the case of defaulted interest, the close of
business on any subsequent record date established as provided in Section 2.01
(in each case whether or not such day is a business day).
Redemption Date:
- ----------------
The term "Redemption Date" when used with respect to any Security to be
redeemed, in whole or in part, shall mean the date fixed for such redemption by
or pursuant to this Indenture and the terms of such Security.
Redemption Price:
- -----------------
The term "Redemption Price" when used with respect to any Security to
be redeemed shall mean the price (exclusive of accrued interest) at which it is
to be redeemed pursuant to this Indenture and the terms of such Security.
Responsible Officers:
- ---------------------
"Responsible Officers" of the Trustee hereunder shall mean and include
the chairman and any vice chairman of the board of directors, the president, the
chairman and any vice chairman of the executive committee of the board of
directors, or any officer in the corporate trust department of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of, and familiarity with, a
particular subject.
Restricted Subsidiary:
- ----------------------
The term "Restricted Subsidiary" means any Subsidiary which is
designated as such by Board Resolution and at least a majority of the shares of
Voting Stock of which shall at the time be owned, directly, by the Company or by
one or more Restricted Subsidiaries or by the Company and one or more Restricted
Subsidiaries.
6
<PAGE>
Security:
- ---------
The term "Security" shall mean any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, 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 any such Person, shall mean Securities
authenticated and delivered under this Indenture, exclusive, however, of
Securities of any series as to which such Person is not Trustee.
Security Co-Registrar:
- ----------------------
The term "Security Co-Registrar" has the meaning specified in Section
2.05.
Security Register; Security Registrar:
- --------------------------------------
The terms "Security Register" and "Security Registrar" have the
respective meanings specified in Section 2.05.
Securityholder; holder of Securities; holder; registered holder:
- ----------------------------------------------------------------
The term "Securityholder" or "holder of Securities" or "holder" or
"registered holder," with respect to a Security, shall mean the Person in whose
name such Security or Securities shall be registered in the register kept for
that purpose hereunder.
Stated Maturity:
- ----------------
The term "Stated Maturity" when used with respect to any Security or
any instalment of interest thereon shall mean the date specified in such
Security as the fixed date on which the principal (or any portion thereof) of or
premium, if any, on such Security or such instalment of interest is due and
payable.
Subsidiary:
- -----------
The term "Subsidiary" shall mean any corporation at least a majority of
the Voting Stock of which shall at the time be owned, directly or indirectly, by
the Company, or one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
Trust Indenture Act of 1939 or Trust Indenture Act:
- ---------------------------------------------------
The term "Trust Indenture Act of 1939" or "Trust Indenture Act" shall
mean such Act as amended from time to time except as provided in Section 13.06
or otherwise required by law.
7
<PAGE>
Trustee:
- --------
The term "Trustee" shall mean the trustee hereunder for the time being,
whether original or successor, and if at any time there is more than one such
trustee, "Trustee" as used with respect to the Securities of any series shall
mean the trustee with respect to Securities of that series.
Unrestricted Subsidiary:
- ------------------------
The term "Unrestricted Subsidiary" shall mean any Subsidiary other than
a Restricted Subsidiary.
Voting Stock:
- -------------
The term "Voting Stock" means stock of any class or classes (however
designated) having ordinary voting power for the election of a majority of the
members of the board of directors (or any governing body) of such corporation,
other than stock having such power only by reason of the happening of a
contingency.
Certain other terms, relating principally to provisions included in
this Indenture in compliance with the Trust Indenture Act of 1939, are defined
in Article Ten.
ARTICLE TWO
FORM, EXECUTION, DELIVERY, TRANSFER AND
EXCHANGE OF SECURITIES
SECTION 2.01. Forms Generally; Record Dates; Place of Payment,
Denominations and Numbering of Securities. The Securities of each series shall
be issuable in registered form and shall be in substantially such form as shall
be established by or pursuant to a Board Resolution or in 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
or designation and such legends or endorsements printed, lithographed or
engraved thereon as the officers of the Company executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Securities may be
listed, or to conform to usage. The Securities shall be issued, except as
otherwise provided with respect to any series of Securities pursuant to Section
2.02, in the denomination of $1,000 and any larger denomination which is an
integral multiple of $1,000 approved by the Company, such approval to be
evidenced by the execution thereof.
8
<PAGE>
If Securities of a series are issuable in whole or in part in global
form, any such Security may provide that it shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon and may also
provide that the aggregate amount of outstanding Securities represented thereby
may from time to time be reduced to reflect exchanges or increased to reflect
the issuance of additional Securities. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, of
outstanding Securities represented thereby shall be made in such manner and by
such Person or Persons, as shall be specified therein or in the Company order of
authentication delivered to the Trustee pursuant to Section 2.04.
The Person in whose name any Security is registered at the close of
business on any Record Date with respect to any Interest Payment Date shall be
entitled to receive the interest payable on such Interest Payment Date
notwithstanding the cancellation of such Security upon any transfer or exchange
thereof subsequent to such Record Date and prior to such Interest Payment Date;
provided, however, that, if and to the extent the Company shall default in the
payment of the interest due on such Interest Payment Date, the defaulted
interest shall be paid to the Persons in whose names the outstanding Securities
are registered on a subsequent record date, such record date to be not less than
5 days prior to the date of payment of such defaulted interest, established by
notice given by mail by or on behalf of the Company to the holders of Securities
not less than 15 days preceding such subsequent record date.
The principal of and interest and premium, if any, on the Securities
shall be payable at each office or agency of the Company designated pursuant to
Section 5.02 for such purpose; provided, however, that interest may at the
option of the Company be paid by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register
(including the records of any Security Co-Registrar). Such payments will be made
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts.
SECTION 2.02. Terms of 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 by or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series:
(a) the title of the Securities of the series (which shall
distinguish the Securities of the series from the Securities of all
other series, except to the extent that additional Securities of an
existing series are being issued);
(b) any limit upon the aggregate principal amount of the
Securities of the series which may be outstanding under this Indenture
(except as otherwise provided in Section 2.06, 2.08, 4.02 or 13.05);
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(c) the date or dates on which the principal of the Securities
of the series is payable;
(d) the rate or rates 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, or the method by which such date or dates shall be determined,
the interest payment dates on which such interest shall be payable and
the record dates for the determination of holders to whom interest is
payable;
(e) the place or places where the principal of, premium, if
any, and interest on Securities of the series shall be payable;
(f) the price or prices at which, the period or periods within
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, if
the Company is to have that option;
(g) the obligation, if any, of the Company to redeem, purchase
or repay Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof and the price
or prices at which the period or periods within which and the terms and
conditions upon which Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation;
(h) if other than denominations of $1,000 or any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(i) if other than the principal amount thereof, the portion of
the principal amount of the Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 6.02;
(j) the issuance of the Securities of such series in whole or
in part in global form and, if so, the identity of the Depositary for
such Securities in global form, and the terms and conditions, if any,
upon which interests in such Securities in global form may be
exchanged, in whole or in part, for the individual Securities
represented thereby;
(k) any deletions from, modifications of or additions to the
events of default or covenants of the Company with respect to any of
such Securities, whether or not such events of default or covenants are
consistent with the events of default or covenants set forth herein;
(l) the terms and conditions, if any, upon which the payment
of Securities of such series shall be subordinated to other
indebtedness of the Company (including, without limitation, the
indebtedness which ranks senior to such Securities; restrictions on
payments to holders of such Securities while a default with respect to
such senior indebtedness is continuing; restrictions, if any, on
payments to the holders of such securities following an event of
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default; and any requirements for holders of such Securities to remit
certain payments to the holders of such senior indebtedness);
(m) if there is more than one Trustee, the identity of the
Trustee and, if not the Trustee, the identity of each Security
Registrar, paying agent or Authenticating Agent with respect to such
Securities; and
(n) any other terms of the Securities of the series (which
terms shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided by or pursuant
to such Board Resolution, and set forth in such Officers' Certificate, or in any
such indenture supplemental hereto. If any of the terms of a series of
Securities are established by action taken pursuant to a Board Resolution, a
copy of such Board Resolution shall be delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of such
series. All Securities of any one series need not be issued at the same time
and, unless otherwise so provided by the Company, a series may be reopened for
issuances of additional Securities of such series or to establish additional
terms of such series of Securities.
SECTION 2.03. Certificate of Authentication Necessary to Make
Securities Valid. The Securities shall be signed in the name and on behalf of
the Company by the manual or facsimile signature of its Chairman of the Board of
Directors, its President or one of its Vice Presidents and by its Secretary or
an Assistant Secretary. The Securities shall then be delivered to the Trustee or
the Authenticating Agent for authentication by it, and thereupon, as provided
herein, the Trustee or the Authenticating Agent shall authenticate and deliver
such Securities. In case any officer of the Company who shall have signed any of
the Securities shall cease to be such officer of the Company before the
Securities so signed shall have been actually authenticated and delivered by the
Trustee or the Authenticating Agent, such Securities may nevertheless be issued,
authenticated and delivered as though the person who signed such Securities had
not ceased to be such officer of the Company; and also any of the Securities may
be signed on behalf of the Company by any person who at the time of the
execution of such Securities shall be the proper officer of the Company, even
though at the date of the execution of this Indenture such person may not have
been such officer of the Company.
SECTION 2.04. Form of Certificate of Authentication. Only such of the
Securities as shall bear thereon a certificate substantially in the form of the
Trustee's certificate of authentication hereinafter recited, executed by the
Trustee or the Authenticating Agent, shall be valid or become obligatory for any
purpose or entitle the holder thereof to any right or benefit under this
Indenture, and the certificate of authentication by the Trustee or the
Authenticating Agent upon any such Security executed on behalf of the Company as
aforesaid shall be conclusive evidence, and the only evidence, that the Security
so authenticated has been duly authenticated and delivered hereunder and that
the holder thereof is entitled to the benefits of this Indenture.
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The Trustee's certificate of authentication on all Securities shall be
in substantially the following form:
This is one of the Securities issued under the Indenture described
herein.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:
--------------------------------
Authorized Signatory
or (if an Authenticating Agent is appointed pursuant to Section 10.10)
By: (Name of Agent)
as Authenticating Agent
By:
----------------------------------------
Authorized Signatory
SECTION 2.05. Registration, Transfer and Exchange of Securities. The
Company shall cause to be kept a register (herein sometimes referred to as 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. Unless and until otherwise determined by the Company,
by Board Resolution, the Security Register initially shall be kept at the
Principal Office of the Trustee. The Trustee is hereby appointed "Security
Registrar" for the purpose of registering Securities and transfers of Securities
as herein provided. The Company may appoint one or more "Security Co-Registrars"
for such purpose. The Security Registrar and any Security Co-Registrars are
herein sometimes referred to, and are appointed as, the "Security Registrar."
Upon surrender for registration of transfer of any Security of any
series at any office or agency of the Company designated pursuant to Section
5.02 for such purpose or at the office of any Security Co-Registrar, the Company
shall execute and the Trustee or the Authenticating Agent shall authenticate and
deliver a Security or Securities of such series for a like aggregate principal
amount, in such authorized denomination or denominations and registered in such
name or names as may be requested. The transfer of any security shall not be
valid as against the Company or the Trustee unless registered at such offices or
agency by the registered holder, or by his attorney duly authorized in writing.
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Securities of any series in their several authorized denominations are
exchangeable for a Security or Securities of such series in authorized
denominations and of a like aggregate principal amount. Securities to be
exchanged as aforesaid shall be surrendered for that purpose by the registered
holder thereof at such offices or agency, and the Company shall execute and the
Trustee or the Authenticating Agent shall authenticate and deliver in exchange
therefor the Security or Securities in such authorized denomination or
denominations as the Securityholder making the exchange shall have requested and
shall be entitled to receive. The Company shall not be required to make any
exchange or effect registration of transfer of (i) any Security which shall have
been designated for redemption in whole or in part except, in the case of any
Security to be redeemed in part, the portion thereof not so to be redeemed, or
(ii) any Security for a period of 15 days next preceding any selection of
Securities for redemption.
Notwithstanding any other provision of this Section, unless and until
it is exchanged in whole or in part for the individual Securities represented
thereby, in definitive form, a Security in global form representing all or a
portion of the Securities of a series may not be transferred except as a whole
by the Depositary for such series to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
for such series or a nominee of such successor Depositary.
All Securities presented or surrendered for registration of transfer,
exchange or payment shall (if so required by the Company or the Trustee or any
Security Registrar or Security Co-Registrar or any Authenticating Agent) be duly
endorsed by, or accompanied by a written instrument or instruments of transfer
(in form satisfactory to the Company and the Security Registrar or any Security
Co-Registrar) duly executed by, the registered holder or by his attorney duly
authorized in writing.
If at any time the Depositary for the Securities of a series
represented by one or more Securities in global form notifies the Company that
it is unwilling or unable to continue as Depositary for the Securities of such
series or if at any time the Depositary for the Securities of such series shall
no longer be eligible under Section 2.01, the Company shall appoint a successor
Depositary with respect to the Securities of such series. If a successor
Depositary for the Securities of such series is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company's election pursuant to Section 2.02 that such
Securities be represented by one or more Securities in global form shall no
longer be effective with respect to the Securities of such series and the
Company will execute, and the Trustee, upon receipt of a Company order for the
authentication and delivery of definitive Securities of such series, will
authenticate and deliver, Securities of such series in definitive form, in
authorized denominations, in an aggregate principal amount and like terms and
tenor equal to the principal amount of the Security or Securities in global form
representing such series in exchange for such Security or Securities in global
form.
The Company may at any time and in its sole discretion determine that
individual Securities of any series issued in global form shall no longer be
represented by such Security or Securities in global form. In such event the
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Company will execute, and the Trustee, upon receipt of a Company order for the
authentication and delivery of definitive Securities of such series and of the
same terms and tenor, will authenticate and deliver Securities of such series in
definitive form, in authorized denominations, and in aggregate principal amount
equal to the principal amount of the Security or Securities in global form
representing such series in exchange for such Security or Securities in global
form.
If specified by the Company pursuant to Section 2.02 with respect to a
series of Securities issued in global form, the Depositary for such series of
Securities may surrender a Security in global form for such series of Securities
in exchange in whole or in part for Securities of such series in definitive form
and of like terms and tenor on such terms as are acceptable to the Company and
such Depositary. Thereupon, the Company shall execute, and the Trustee upon
receipt of a Company order for the authentication and delivery of definitive
Securities of such series, shall authenticate and deliver, without service
charge to the holders:
(a) to each Person specified by such Depositary a new
definitive Security or Securities of the same series and of the same
tenor, in authorized denominations, in aggregate principal amount equal
to and in exchange for such Person's beneficial interest in the
Security in global form; and
(b) to such Depositary a new Security in global form in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Security in global form and the aggregate
principal amount of the definitive Securities delivered to holders
pursuant to clause (a) above.
Upon the exchange of a Security in global form for Securities in
definitive form, such Security in global form shall be cancelled by the Trustee
or an agent of the Company or the Trustee. Securities issued in definitive form
in exchange for a Security in global form pursuant to this Section 2.05 shall be
registered in such names and in such authorized denominations as the Depositary
for such Security in global form, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee or an agent of
the Company or the Trustee in writing. The Trustee or such agent shall deliver
such Securities to or as directed by the Persons in whose names such Securities
are so registered or to the Depositary.
Whenever any securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the holder making the exchange is entitled to receive.
No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
applicable tax or other governmental charge payable in connection therewith.
The Company and the Trustee, and the agents of either, may deem and
treat the Person in whose name any Security is registered as the absolute owner
of such Security (whether or not such Security shall be overdue and
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notwithstanding any notation of ownership or other writing thereon) for all
purposes whatsoever (subject to the provisions set forth herein relating to
Record Dates and record dates for the payment of any defaulted interest), and
the Company and the Trustee, and the agents of either, shall not be affected by
any notice to the contrary.
None of the Company, the Trustee, any Authenticating Agent, any paying
agent or the Security Registrar 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 Security in global form or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interest and each
of them may act or refrain from acting without liability on any information
relating to such records provided by the Depositary.
SECTION 2.06. Replacing Securities Mutilated, Destroyed, Lost or
Stolen. In case any temporary or definitive Security of a particular series
shall become mutilated or be destroyed, lost or stolen, then upon the conditions
hereinafter set forth the Company in its discretion may execute, and thereupon
the Trustee or the Authenticating Agent shall authenticate and deliver, a new
Security of the same series of like tenor and principal amount and bearing a
different number, in exchange and substitution for and upon cancellation of the
mutilated Security or in lieu of and substitution for the Security so destroyed,
lost or stolen; provided, however, that if any such mutilated, destroyed, lost
or stolen Security shall have become payable upon the maturity thereof, the
Company may, instead of issuing a substitute Security, pay such Security without
requiring the surrender thereof. The applicant for any substitute Security or
for payment of any such mutilated, destroyed, lost or stolen Security shall
furnish to the Company and to the Trustee evidence satisfactory to them, in
their discretion, of the ownership of and the destruction, loss or theft of such
Security and shall furnish to the Company and to the Trustee indemnity
satisfactory to them, in their discretion, and, if required, shall reimburse the
Company and the Trustee for all expenses (including counsel fees and any tax or
other governmental charge that may be imposed in relation thereto) in connection
with the preparation, issue and authentication of such substitute Security or
the payment of such mutilated, destroyed, lost or stolen Security, and shall
comply with such other reasonable regulations as the Company and the Trustee, or
either of them, may prescribe. Any such new Security delivered pursuant to this
Section 2.06 shall constitute an additional contractual obligation on the part
of the Company, whether or not the allegedly destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be equally and
proportionately entitled to the benefit of this Indenture with all other
Securities of the same series issued hereunder. All Securities shall be held and
owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities and shall preclude any and all
other rights or remedies.
SECTION 2.07. Rights to Interest. Subject to the provisions set forth
herein relating to Record Dates and record dates for the payment of any
defaulted interest, each Security delivered pursuant to any provision of this
Indenture in exchange or substitution for, or upon registration of transfer of,
any other Security shall carry all the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Security.
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SECTION 2.08. Temporary Securities. Pending the preparation of
definitive Securities of any series the Company may execute and the Trustee or
the Authenticating Agent shall authenticate and deliver temporary Securities of
such series (printed or lithographed). Temporary Securities shall be issuable in
any authorized denomination, and substantially in the form of the definitive
Securities but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Company.
In the case of Securities of any series, such temporary Securities may be in
global form, representing all of the outstanding Securities of such series and
tenor. Every such temporary Security of a particular series shall be
authenticated by the Trustee or the Authenticating Agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Securities of such series. Without unreasonable delay, and except
in the case of temporary Securities in global form which shall be exchanged in
accordance with the provisions thereof, the Company will execute and deliver to
the Trustee definitive Securities of such series and thereupon any or all
temporary Securities of such series may be surrendered in exchange for
definitive Securities of the same series, at the principal corporate trust
office of the Trustee or any office or agency of the Company designated pursuant
to Section 5.02 for such purpose or at the office of any Security Co- Registrar,
and the Trustee or the Authenticating Agent shall authenticate and deliver in
exchange for such temporary Securities an equal aggregate principal amount of
definitive Securities of the same series. Such exchange shall be made by the
Company at its own expense and without any charge therefor except that the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto. Until so exchanged,
the temporary Securities of a particular series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
the same series authenticated and delivered hereunder.
ARTICLE THREE
ISSUE OF SECURITIES
SECTION 3.01. Authentication, Delivery and Dating. 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 or the
Authenticating Agent for authentication. The Trustee or the Authenticating Agent
shall thereupon authenticate and deliver such Securities to or upon the written
order of the Company, signed by its Chairman of the Board of Directors, its
President or a Vice President, without any further action by the Company. 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 315 of the Trust Indenture Act)
shall be fully protected in relying upon:
(a) a Board Resolution relating thereto and, if applicable, an
appropriate record of any action taken pursuant to such resolution,
certified by the Secretary or an Assistant Secretary of the Company;
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(b) an executed supplemental indenture, if any;
(c) an Officers' Certificate; and
(d) an Opinion of Counsel prepared in accordance with Section
14.03, which shall state
(1) that the form and terms of such Securities have
been established by or pursuant to one or more Board
Resolutions, by a supplemental indenture as permitted by
Section 13.01(g), or by both such resolution or resolutions
and such supplemental indenture, in conformity with the
provisions of this Indenture;
(2) that the supplemental indenture, if any, when
executed and delivered by the Company and the Trustee, will
constitute a valid and legally binding obligation of the
Company;
(3) that such Securities, when authenticated and
delivered by the Trustee or the Authenticating Agent 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 in accordance with their terms, and will
be entitled to the benefits of this Indenture;
(4) that the Company has the corporate power to issue
such Securities, and has duly taken all necessary corporate
action with respect to such issuance;
(5) that the issuance of such Securities will not
contravene the charter or by-laws 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 by
which the Company is bound and under which long-term debt of
the Company as reflected in its latest financial statements on
file with the Securities and Exchange Commission is
outstanding; and
(6) that all requirements of this Indenture
applicable to the Company in respect of the execution and
delivery by the Company of such Securities and of such
supplemental indenture, if any, have been complied with and
that, assuming (a) all requisite corporate authorization on
the part of the Trustee, (b) continued compliance by the
Trustee with the terms of the Indenture specifically
applicable to the Trustee, and (c) due authentication and
delivery of such Securities by the Trustee or the
Authenticating Agent, the execution and delivery of such
supplemental indenture, if any, will not violate the terms of
this Indenture, and that, other than compliance with federal
and state securities laws, no authorization, approval or
consent by any regulatory or statutory or other public
authority is required in connection with the execution and
delivery of such supplemental indenture or for the creation,
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issuance, authentication and delivery of the Securities
pursuant to this Indenture.
If the Company shall establish pursuant to Section 2.02 that Securities
of a series may be issued in whole or in part in global form, then the Company
shall execute and the Trustee shall, in accordance with this Section and the
Company order of authentication with respect to such series, authenticate and
deliver one or more Securities in global form that (i) shall represent and shall
be denominated in an aggregate amount equal to the aggregate principal amount of
the outstanding Securities of such series and tenor to be represented by one or
more Securities in global form, (ii) shall be registered, in the name of the
Depositary for such Security or Securities in global form or the nominee of such
Depositary, (iii) shall be delivered to such Depositary or pursuant to such
Depositary's instruction, and (iv) shall bear a legend substantially to the
following effect: "Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC")
to Issuer or its agent for transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein." Each Depositary designated pursuant
to Section 2.02 for a Security in global form must, at the time of its
designation and at all times while it serves as Depositary, be a clearing agency
registered under the Securities Exchange Act of 1934 and any other applicable
statute or regulation.
The Trustee shall have the right to decline to authenticate and deliver
any Securities under this Section 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.
ARTICLE FOUR
REDEMPTION OF SECURITIES; SINKING FUND
SECTION 4.01. Applicability of Right of Redemption. Redemption of
Securities (other than pursuant to a sinking fund or analogous provision)
permitted by the terms of any series of Securities shall be made in accordance
with such terms and Sections 4.02 and 4.03; provided, however, that if any such
terms of a series of Securities shall conflict with any provision of this
Article, the terms of such series shall govern.
SECTION 4.02. Notice of Redemption. The election of the Company to
redeem any Securities of any series shall be evidenced by or pursuant to a Board
Resolution. If the Company shall elect to redeem the Securities of any series in
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whole or in part as aforesaid, it shall fix a date for redemption and give
notice of its election so to redeem by mailing or causing to be mailed written
notice, postage prepaid, at least 30 days prior to the redemption date, to all
holders of Securities to be redeemed as a whole or in part, addressed to them at
their respective addresses as the same shall then appear on the Security
Register of the Company. Any notice which shall be mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder shall receive such notice. Failure to mail such notice, or any defect
in the notice mailed, to the holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
Each notice of redemption shall state such election on the part of the
Company, the Redemption Date and place of payment of the Securities to be
redeemed and the Redemption Price and that the Securities designated in such
notice for redemption are required to be presented on or after such Redemption
Date and at such place for payment and that interest to the Redemption Date on
the Securities and portions of Securities called for redemption will be paid as
specified in said notice and shall cease to accrue thereon on such date. If less
than all the outstanding Securities of a series are to be redeemed, the notice
shall also designate the Securities or portions of Securities that are to be
redeemed. If any Security is to be redeemed in part only, the notice shall also
state that upon presentation of such Security on or after the redemption date at
said place, such Security will be canceled and a new Security or Securities of
the same series, in an aggregate principal amount equal to the unredeemed
portion of such Security will be issued and delivered without charge to the
holder.
Notice having been so given, the Securities and portions of Securities
to be redeemed shall on the Redemption Date specified in such notice become due
and payable at the applicable Redemption Price, together with interest accrued
thereon to the Redemption Date, and from and after the Redemption Date so
specified (unless the Company shall default in the payment of the Redemption
Price of such Securities or any such accrued interest) interest on such
Securities and portions of Securities shall cease to accrue, and upon
presentation of such Securities at said place of payment and redemption in
accordance with said notice, such Securities and portions of Securities shall be
paid by the Company at the applicable Redemption Price, together with interest
accrued to the Redemption Date (except that, if the Redemption Date shall be an
Interest Payment Date, the interest payable on such date shall be paid to the
registered holders of such Securities at the close of business on the applicable
Record Date, subject to the provisions of Section 2.01).
If the Company shall at any time elect to redeem less than all the
Securities of a series then outstanding, it shall at least 45 days prior to the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee)
notify the Trustee of the principal amount of Securities to be redeemed, and
thereupon the Trustee shall select, in such manner as the Trustee shall deem
appropriate and fair, the Securities (or portions thereof) of such series to be
redeemed. No Security of a denomination of $1,000 shall be redeemed in part and
Securities may be redeemed in part only in integral multiples of $1,000. The
Trustee shall promptly notify the Company in writing of the Securities and
portions of Securities so selected.
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SECTION 4.03. Securities of Any Series to be Canceled and Discharged on
Specific Conditions. If Securities of any Series at the time outstanding are to
be redeemed under circumstances to which Section 11.02 is applicable, the
Company shall deliver to the Trustee (1) proof satisfactory to the Trustee that
notice of redemption thereof on a specified redemption date has been given as
hereinbefore provided, or (2) proof satisfactory to the Trustee that
arrangements have been made insuring to the satisfaction of the Trustee that
such notice will be so given, or (3) a written instrument in form and substance
satisfactory to the Trustee executed by the Company, and expressed to be
irrevocable, authorizing the Trustee to give such notice for and on behalf of
the Company.
SECTION 4.04. Applicability of Sinking Fund. Redemption of Securities
permitted or required pursuant to a sinking fund for the retirement of
Securities of a series by the terms of such series of Securities shall be made
in accordance with such terms of such series of Securities and this Article;
provided, however, that if any such terms of a series of Securities shall
conflict with any provision of this Article, the terms of such series shall
govern.
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 Mandatory Sinking Fund Payment may be subject to
reduction as provided in Section 4.05.
SECTION 4.05. Mandatory Sinking Fund Obligation. The Company may, at
its option, satisfy any Mandatory Sinking Fund Payment obligation, in whole or
in part, with respect to a particular series of Securities by (1) delivering to
the Trustee outstanding Securities of such series in transferable form
theretofore purchased or otherwise acquired by the Company or redeemed at the
election of the Company pursuant to Section 4.01 or (2) receiving credit for
Securities of such series (not previously so credited) acquired by the Company
and theretofore delivered to the Trustee. The Trustee shall credit such
Mandatory Sinking Fund Payment obligation with an amount equal to the redemption
price specified in such Securities for redemption through operation of the
sinking fund and the amount of such Mandatory Sinking Fund Payment shall be
reduced accordingly. If the Company shall elect so to satisfy any Mandatory
Sinking Fund Payment obligation, it shall deliver to the Trustee not less than
45 days prior to the relevant sinking fund payment date a written notice signed
on behalf of the Company by its Chairman of the Board of Directors, its
President, one of its Vice Presidents, its Treasurer or one of its Assistant
Treasurers, which shall designate the Securities (and portions thereof, if any)
to be so delivered or credited and which shall be accompanied by such Securities
(to the extent not theretofore delivered) in transferable form. In case of the
failure of the Company, at or before the time so required, to give such notice
and deliver such Securities, the Mandatory Sinking Fund Payment obligation shall
be paid entirely in funds.
SECTION 4.06. Optional Redemption at Sinking Fund Redemption Price. In
addition to the sinking fund requirements of Section 4.05, to the extent, if
any, provided for by the terms of a particular series of Securities, the Company
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may, at its option, make an Optional Sinking Fund Payment with respect to such
Securities. Unless otherwise provided by such terms, (a) to the extent that the
right of the Company to make such Optional Sinking Fund Payment shall not be
exercised in any year, it shall not be cumulative or carried forward to any
subsequent year, and (b) such optional payment shall operate to reduce the
amount of any Mandatory Sinking Fund Payment obligation as to Securities of the
same series. If the Company intends to exercise its right to make such optional
payment in any year it shall deliver to the Trustee not less than 45 days prior
to the relevant sinking fund payment date a certificate signed by its Chairman
of the Board of Directors, its President, one of its Vice Presidents, its
Treasurer or one of its Assistant Treasurers stating that the Company will
exercise such optional right, and specifying the amount which the Company will
pay on or before the next succeeding sinking fund payment date. Such certificate
shall also state that no event of default has occurred and is continuing.
SECTION 4.07. Application of Sinking Fund Payments. If the sinking fund
payment or payments made in funds pursuant to either Section 4.05 or 4.06 with
respect to a particular series of Securities plus any unused balance of any
preceding sinking fund payments made in funds with respect to such series shall
exceed $50,000 (or a lesser sum if the Company shall so request), it shall be
applied by the Trustee on the sinking fund payment date next following the date
of such payment, unless the date of such payment shall be a sinking fund payment
date, in which case such payment shall be applied on such sinking fund payment
date, to the redemption of Securities of such series at the redemption price
specified pursuant to Section 4.04. The Trustee shall select in the manner
provided in Section 4.02, for redemption on such sinking fund payment date, a
sufficient principal amount of Securities of such sinking fund payment date, a
sufficient principal amount of Securities of such series to absorb said funds,
as nearly as may be, and shall, at the expense and in the name of the Company,
thereupon cause notice of redemption of the Securities to be given in
substantially the manner provided in Section 4.02 for the redemption of
Securities in part at the option of the Company, except that the notice of
redemption shall also state that the Securities are being redeemed for the
sinking fund. Any sinking fund moneys not so applied by the Trustee to the
redemption of Securities of such series shall be added to the next sinking fund
payment received in funds by the Trustee and, together with such payment, shall
be applied in accordance with the provisions of this Section 4.07. Any and all
sinking fund moneys held by the Trustee on the last sinking fund payment date
with respect to Securities of such series, and not held for the payment or
redemption of particular Securities of such series, shall be applied by the
Trustee to the payment of the principal of the Securities of such series at
maturity.
On or prior to each sinking fund payment date, the Company shall pay to
the Trustee a sum equal to all interest accrued to the date fixed for redemption
on Securities to be redeemed on such sinking fund payment date pursuant to this
Section 4.07.
The Trustee shall not redeem any Securities of a series with sinking
fund moneys or mail any notice of redemption of Securities of such series by
operation of the sinking fund during the continuance of a default in payment of
interest on any Securities of such series or of any event of default (other than
an event of default occurring as a consequence of this paragraph) of which the
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Trustee has actual knowledge, except that if the notice of redemption of any
Securities of such series shall theretofore have been mailed in accordance with
the provisions hereof, the Trustee shall redeem such Securities if funds
sufficient for that purpose shall be deposited with the Trustee in accordance
with the terms of this Article Four. Except as aforesaid, any moneys in the
sinking fund at the time any such default or event of default shall occur and
any moneys thereafter paid into the sinking fund shall, during the continuance
of such default or event of default, be held as security for the payment of all
the Securities of such series; provided, however, that in case such default or
event of default shall have been cured or waived as provided herein, such moneys
shall thereafter be applied on the next sinking fund payment date on which such
moneys are required to be applied pursuant to the provisions of this Section
4.07.
ARTICLE FIVE
PARTICULAR COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
SECTION 5.01. To Pay Principal, Premium, if any, and Interest. The
Company will duly and punctually pay the principal of and premium, if any, on
each of the Securities, and the interest which shall have accrued thereon, at
the date and place and in the manner provided in the Securities and in this
Indenture.
SECTION 5.02. To Maintain Office or Agency in New York. The Company
will maintain in the city in the United States in which the Company has its
principal business office and, if (a) required to comply with any law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Securities may be listed or (b) Securities of
any series are issued in definitive form, in The City of New York, and may
maintain elsewhere, an office or agency where Securities may be presented or
surrendered for payment, where Securities may be surrendered for transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities 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 any such office or agency. If at any time the Company shall fail to maintain
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 Principal Office of the Trustee. The Company hereby initially
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 may be presented or surrendered for any
or all of such purposes and may from time to time rescind such designations;
provided, however, that no such designation shall in any manner result in the
creation of a Security Register or Security Co- Registrar in addition to the
Security Register required to be kept pursuant to Section 2.05 and any Security
Co-Registrar appointed pursuant to Section 2.05. The Company will give prompt
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written notice to the Trustee of any such designation and any change in the
location of any such other office or agency.
SECTION 5.03. The Company, or Paying Agent, to Hold in Trust Moneys for
Payment of Principal, Premium, if any, and Interest. If the Company shall at any
time act as its own paying agent with respect to any series of Securities, then,
on or before the date on which the principal of and premium, if any, or interest
on any of the Securities of that series by their terms or as a result of the
calling thereof for redemption shall become payable, the Company will set apart
and segregate and hold in trust for the benefit of the holders of such
Securities a sum sufficient to pay such principal and premium, if any, or
interest which shall have so become payable and will notify the Trustee of its
failure to act in that regard and of any failure by the Company or any other
obligor upon the Securities of that series to make any such payment. If the
Company shall appoint, and at the time have, a paying agent for the payment of
the principal of and premium, if any, or interest on any series of Securities,
then, on or before the date on which the principal of and premium, if any, or
interest on any of the Securities of that series shall become payable as
aforesaid, whether by their terms or as a result of the calling thereof for
redemption, the Company will pay to such paying agent a sum sufficient to pay
such principal and premium, if any, or interest, to be held in trust for the
benefit of the holders of such Securities. If such paying agent shall be other
than the Trustee, the Company will cause such paying agent 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 5.03 and of Section
11.03, (1) that such paying agent shall hold all sums held by such paying agent
for the payment of the principal of and premium, if any, or interest on the
Securities of that series in trust for the benefit of the holders of such
Securities; (2) that such paying agent shall give to the Trustee notice of any
default by the Company or any other obligor upon the Securities of that series
in the making of any payment of the principal of and premium, if any, or
interest on the Securities of that series when the same shall have become due
and payable; and (3) that such paying agent shall, at any time during the
continuance of any such default, upon the written request of the Trustee,
deliver to the Trustee all sums so held in trust by it. The Company hereby
appoints The First National Bank of Chicago to act as its paying agent
hereunder.
Anything in this Section 5.03 to the contrary notwithstanding, the
Company may at any time, for the purpose of obtaining a release or satisfaction
of this Indenture or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust by it or by any paying agent other than the
Trustee as required by this Section 5.03, 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.
Any money deposited with the Trustee or any paying agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for three years after such
principal, premium, if any, or interest has 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
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cease; provided, however, that the Trustee or such paying agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 5.04. Restrictions Upon Liens Upon Property of the Company and
Restricted Subsidiaries. The Company will not at any time directly or
indirectly, and will not permit any Restricted Subsidiary to, create, assume,
incur or suffer to be created, assumed or incurred or to exist any Lien upon any
of the properties of any character of the Company or any Restricted Subsidiary
without making effective provision whereby the Securities then outstanding shall
be secured equally and ratably with (or prior to) any other obligation or
indebtedness so secured, so long as such other obligation or indebtedness
remains secured; except, however, that, notwithstanding the foregoing, the
Company or any Restricted Subsidiary, without so securing the Securities, may
(1) lease property to others in the ordinary course of the
business of the Company or any Restricted Subsidiary or lease or
sublease any property if the property subject thereto is not needed by
the Company or any Restricted Subsidiary in the operation of its
business;
(2) create, assume and incur such Liens or permit such Liens
to be created, assumed, incurred or to exist provided, in each case,
the Lien secures indebtedness for borrowed money, including purchase
money indebtedness, which is incurred to finance the acquisition of the
property subject to such Lien and in respect of which the creditor has
no recourse against the Company or any Restricted Subsidiary except
recourse to such property or to the proceeds of any sale or lease of
such property or both;
(3) make any deposit with or give any form of security to any
governmental agency or other body created or approved by law or
governmental regulation in order to enable the Company or such
Restricted Subsidiary to maintain self-insurance, or to participate in
any fund in connection with workmen's compensation, unemployment
insurance, old-age pensions, or other social security, or to share in
any privileges or other benefits available to corporations
participating in any such arrangement, or for any other purpose at any
time required by law or regulation promulgated by any governmental
agency or office as a condition to the transaction of any business or
the exercise of any privilege or license, or deposit assets of the
Company or such Restricted Subsidiary with any surety company or clerk
of any court, or in escrow, as collateral in connection with, or in
lieu of, any bond on appeal by the Company or such Restricted
Subsidiary from any judgment or decree against it, or in connection
with any other proceedings in actions at law or suits in equity by or
against the Company or such Restricted Subsidiary;
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(4) incur or suffer to be incurred or to exist upon any of its
property or assets (a) Liens for taxes, assessments or other
governmental charges or levies which are not yet due or are payable
without penalty or of which the amount, applicability or validity is
being contested by the Company or such Restricted Subsidiary in good
faith by appropriate proceedings and the Company or such Restricted
Subsidiary shall have set aside on its books reserves which it deems to
be adequate with respect thereto (segregated to the extent required by
generally accepted accounting principles), provided that foreclosure,
distraint, sale or similar proceedings have not been commenced, (b) the
Liens of any judgment, if such judgment shall not have remained
undischarged, or unstayed on appeal or otherwise, for more than six
months, (c) undetermined Liens or charges incident to construction, (d)
materialmen's, mechanics', workmen's, repairmen's or other like Liens
arising in the ordinary course of business in respect of obligations
which are not overdue or which are being contested by the Company or
such Restricted Subsidiary in good faith by appropriate proceedings, or
deposits to obtain the release of such Liens, or (e) any encumbrances
consisting of zoning restrictions, licenses, easements and restrictions
on the use of real property and minor defects and irregularities in the
title thereto, which do not materially impair the use of such property
by the Company or such Restricted Subsidiary in the operation of its
business or the value of such property for the purpose of such
business;
(5) create other Liens incidental to the conduct of its
business or the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the obtaining of
advances or credit, and which do not in the aggregate materially
detract from the value of its property or assets or materially impair
the use thereof in the operation of its business;
(6) create or suffer to be created or to exist in favor of any
lender of moneys or holder of commercial paper of the Company or a
Restricted Subsidiary in the ordinary course of business a banker's
lien or right of offset in the holder of such indebtedness or moneys of
the Company or a Restricted Subsidiary deposited with such lender or
holder in the ordinary course of business;
(7) create or suffer to be created or to exist with respect to
any of its property leasehold or purchase rights, exercisable for a
fair consideration, in favor of any Person which arise in transactions
entered into in the ordinary course of business;
(8) assume any Lien or permit any Lien to be assumed or exist
if any such Lien is on property or shares of stock of a corporation at
the time the corporation becomes a Restricted Subsidiary or merges into
or consolidates with the Company or a Restricted Subsidiary; provided,
however, that any such Lien may not be assumed or permitted to exist if
such Lien is incurred in anticipation of such corporation becoming a
Restricted Subsidiary or in anticipation of such merger or
consolidation;
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(9) assume any Lien or permit any Lien to be assumed or exist
if any such Lien is on property at the time the Company or a Restricted
Subsidiary acquires the property; provided, however, that any such Lien
may not extend to any other property owned by the Company or a
Restricted Subsidiary at the time such Lien is assumed;
(10) assume, create or suffer to be created or to exist, such
Liens in an amount not to exceed in the aggregate $25,000,000 at any
one time outstanding, excluding Liens covered by other provisions of
clauses (1) through (9) above; and
(11) create or suffer to be created or to exist in favor of
any lender of moneys, any Lien that secures indebtedness of the Company
or a Restricted Subsidiary; provided that the sum of the following does
not exceed 10% of Consolidated Net Tangible Assets: (a) such
indebtedness; plus (b) other indebtedness of the Company and its
Restricted Subsidiaries secured by Liens on property of the Company and
its Restricted Subsidiaries, excluding indebtedness secured by a Lien
existing as of December 31, 1991 and excluding indebtedness secured by
a Lien permitted by one of clauses (1) through (10) above.
SECTION 5.05. Maintenance of Corporate Existence. Subject to Section
5.06, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and that of each
Subsidiary and the rights and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve the
corporate existence of any Subsidiary or any such right or franchise if pursuant
to a Board Resolution, the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and the
other Subsidiaries taken as a whole and that the loss thereof is not on balance
materially disadvantageous to the holders.
SECTION 5.06. Restrictions on Consolidation, Merger, Sale, Etc. The
Company will not consolidate with any other corporation or accept a merger of
any other corporation into the Company or permit the Company to be merged into
any other corporation, or sell or lease all or substantially all its assets to
another corporation, or purchase all or substantially all the assets of another
corporation, unless (i) either the Company shall be the continuing corporation,
or the successor, transferee or lessee corporation (if other than the Company)
shall be organized under the laws of the United States or any state thereof or
the District of Columbia and shall expressly assume, by indenture supplemental
hereto, executed and delivered by such corporation prior to or simultaneously
with such consolidation, merger, sale or lease, the due and punctual payment of
the principal of and interest and premium, if any, on all the Securities,
according to their tenor, and the due and punctual performance and observance of
all the covenants and conditions of this Indenture to be performed or observed
by the Company, and (ii) immediately after such consolidation, merger, sale,
lease or purchase the Company or the successor, transferee or lessee corporation
(if other than the Company) would not be in default in the performance of any
covenant or condition of this Indenture. A purchase by a Subsidiary of all or
substantially all of the assets of another corporation shall not be deemed to be
a purchase of such assets by the Company.
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SECTION 5.07. Annual Statement Concerning Compliance with Covenants.
The Company will deliver to the Trustee, within 120 days after the end of each
fiscal year, a written statement signed by the Chairman of the Board of
Directors, the President, the Principal Financial Officer or Principal
Accounting Officer or the Treasurer or Controller of the Company, stating that
(a) a review of the activities of the Company during such year
with regard to its compliance with this Indenture has been made under
his supervision, and
(b) to the best of his knowledge, based on such review, the
Company has fulfilled all its obligations under this Indenture
throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known
to him and the nature and status thereof.
SECTION 5.08. Compliance with Covenants and Conditions May Be Waived by
Holders of Securities. Anything in this Indenture to the contrary
notwithstanding, the Company or any Restricted Subsidiary may fail or omit in
any particular instance to comply with a covenant or condition set forth in
Section 5.04 or 5.06 with respect to any series of Securities if the Company
shall have obtained and filed with the Trustee, prior to the time of such
failure or omission, evidence (as provided in Article Seven) of the consent of
the holders of at least 662/3% in aggregate principal amount of the Securities
of such series at the time outstanding, either waiving such compliance in such
instance or generally waiving compliance with such covenant or condition, but no
such waiver shall extend to or affect any obligation not waived by the terms of
such waiver or impair any right consequent thereon.
ARTICLE SIX
REMEDIES OF TRUSTEE AND SECURITYHOLDERS
SECTION 6.01. Events of Default. Except where otherwise indicated by
the context or where the term is otherwise defined for a specific purpose, the
term "event of default" as used in this Indenture with respect to Securities of
any series shall mean one of the following described events unless it is either
inapplicable to a particular series or it is specifically deleted or modified in
the supplemental indenture, if any, under which such series of Securities is
issued:
(a) the failure of the Company to pay any instalment of
interest on any Security of such series, when and as the same shall
become payable, which failure shall have continued unremedied for a
period of 30 days;
(b) the failure of the Company to pay the principal of (and
premium, if any, on) any Security of such series, when and as the same
shall become payable, whether at maturity as therein expressed, by call
for redemption (otherwise than pursuant to a sinking fund), by
declaration as authorized by this Indenture or otherwise;
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(c) the failure of the Company to pay a sinking fund
instalment, if any, when and as the same shall become payable by the
terms of a Security of such series, which failure shall have continued
unremedied for a period of 30 days;
(d) the failure of the Company, subject to the provisions of
Section 5.08, to observe and perform any other of the covenants or
agreements on the part of the Company contained in this Indenture
(other than a covenant or agreement which has been expressly included
in this Indenture solely for the benefit of a series of Securities
other than that series), which failure shall not have been remedied to
the satisfaction of the Trustee, or without provision deemed by the
Trustee to be adequate for the remedying thereof having been made, for
a period of 90 days after written notice shall have been given to the
Company by the Trustee or shall have been given to the Company and the
Trustee by holders of 25% or more in aggregate principal amount of the
Securities of such series then outstanding, specifying such failure and
requiring the Company to remedy the same;
(e) an event of default, as defined in any mortgage, indenture
or instrument, including this Indenture, under which there may be
issued, or by which there may be secured or evidenced, any indebtedness
for money borrowed of the Company, whether such indebtedness now exists
or shall hereafter be created, shall happen and shall result in such
indebtedness in an amount in excess of $15,000,000 becoming or being
declared due and payable prior to the date on which it would otherwise
become due and payable, and such acceleration shall not have been
rescinded or annulled, or such indebtedness shall not have been
discharged, within a period of 10 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 10% in principal
amount of the outstanding Securities of such series a written notice
specifying such event of default and requiring the Company to cause
such acceleration to be rescinded or annulled or to cause such
indebtedness to be discharged;
(f) the entry by a court having jurisdiction in the premises
of a decree or order for relief in respect of the Company in an
involuntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State bankruptcy,
insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Company or for substantially
all of its property, or ordering the winding-up or liquidation of its
affairs, which decree or order shall have remained unstayed and in
effect for a period of 90 consecutive days;
(g) the commencement by the Company of a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or State bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Company
to the entry of an order for relief in an involuntary case under any
such law, or the consent by the Company to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian or
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sequestrator (or similar official) of the Company or for substantially
all of its property, or the making by it of an assignment for the
benefit of its creditors; or
(h) the occurrence of any other event of default with respect
to Securities of such series as provided in an Officers' Certificate
delivered pursuant to Section 2.02 or a supplemental indenture
applicable to such series of Securities pursuant to Section 13.01(b).
SECTION 6.02. Acceleration of Maturity of Principal on Default. If any
one or more of the above-described events of default shall happen with respect
to Securities of any series at the time outstanding, then, and in each and every
such case, during the continuance of any such event of default, the Trustee or
the holders of 25% or more in principal amount of the Securities of such series
then outstanding may, and upon the written request of the holders of a majority
in principal amount of such Securities then outstanding the Trustee shall,
declare the principal of all the Securities of such series then outstanding, if
not then due and payable, to be due and payable, and upon any such declaration
the same shall become and be immediately due and payable, anything in this
Indenture or in the Securities of such series contained to the contrary
notwithstanding. This provision, however, is subject to the condition that, if
at any time after the principal of all the Securities of such series shall have
been so declared to be due and payable, all arrears of interest if any, upon all
the Securities of such series (with interest, to the extent that interest
thereon shall be legally enforceable, on any overdue instalment of interest at
the rate borne by the Securities of such series) and the reasonable charges and
expenses of the Trustee, its agents and attorneys, and all other sums payable
under this Indenture (except the principal of the Securities of such series
which would not be due and payable were it not for such declaration), shall be
paid by the Company, and every other default and event of default under this
Indenture shall have been made good to the reasonable satisfaction of the
Trustee or of the holders of a majority in principal amount of the Securities of
such series then outstanding, or provision deemed by the Trustee or by such
holders to be adequate therefor shall have been made, then and in every such
case the holders of a majority in principal amount of the Securities of such
series then outstanding may, on behalf of the holders of all the Securities of
such series, waive the event of default by reason of which the principal of the
Securities of such series shall have been so declared to be due and payable and
may rescind and annul such declaration and its consequences; but no such waiver,
rescission or annulment shall extend to or affect any subsequent default or
event of default or impair any right consequent thereon. Any declaration by the
Trustee pursuant to this Section 6.02 shall be by written notice to the Company,
and any declaration or waiver by the holders of Securities of any series
pursuant to this Section 6.02 shall be by written notice to the Company and the
Trustee.
The Company and the Trustee may, to the extent provided in Section
13.01, enter into one or more indentures supplemental hereto with respect to any
series of the Securities which may provide for additional or different events of
default with respect to such series of Securities.
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SECTION 6.03. The Company, Failing for 30 Days to Pay Any Installment
of Interest or Sinking Fund Payment or Failing to Pay Principal When Due, Will
Pay to Trustee at its Request Whole Amount Due. If the Company shall fail for a
period of 30 days to pay any instalment of interest on the Securities of any
series or shall fail to pay the principal of and premium, if any, on any of the
Securities of such series when and as the same shall become due and payable,
whether at maturity, or by call for redemption (otherwise than pursuant to the
sinking fund), by declaration as authorized by this Indenture, or otherwise, or
shall fail for a period of 30 days to make any sinking fund payment as to a
series of Securities, then, upon demand by the Trustee, the Company will pay to
the Trustee for the benefit of the holders of Securities of such series then
outstanding the whole amount which then shall have become due and payable on all
the Securities of such series, with interest on the overdue principal and
premium, if any, and (so far as the same may be legally enforceable) on the
overdue installments of interest at the rate borne by the Securities of such
series, and reasonable compensation to the Trustee, its agents and attorneys,
and any other reasonable expenses and liabilities incurred by the Trustee under
this Indenture without negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceeding at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor upon the
Securities of such series, and collect the moneys adjudged or decreed to be
payable out of the property of the Company or any other obligor upon the
Securities of such series, and collect the moneys adjudged or decreed to be
payable out of the property of the Company or any other obligor upon the
Securities of such securities, wherever situated, in the manner provided by law.
Every recovery of judgment in any such action or other proceeding, subject to
the payment of the expenses, disbursements and compensation of the Trustee, its
agents and attorneys, shall be for the ratable benefit of the holders of such
series of Securities which shall be the subject of such action or proceeding.
All rights of action upon or under any of the Securities or this Indenture may
be enforced by the Trustee without the possession of any of the Securities and
without the production of any thereof at any trial or any proceeding relative
thereto.
SECTION 6.04. Trustee Appointed Attorney-in-Fact for Securityholders to
File Claims. The Trustee is hereby appointed, and each and every holder of the
Securities, by receiving and holding the same, shall be conclusively deemed to
have appointed the Trustee, the true and lawful attorney-in-fact of such holder,
with authority to make or file (whether or not the Company shall be in default
in respect of the payment of the principal of, or interest on, any of the
Securities), in its own name and as trustee of an express trust or otherwise as
it shall deem advisable, in any receivership, insolvency, liquidation,
bankruptcy, reorganization or other judicial proceeding relative to the Company
or any other obligor upon the Securities or to their respective creditors or
property, any and all claims, proofs of claim, proofs of debt, petitions,
consents, other papers and documents and amendments of any thereof, as may be
necessary or advisable in order to have the claims of the Trustee and of the
holders of the Securities allowed in any such proceeding and to collect and
receive any moneys or other property payable or deliverable on any such claim,
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and to execute and deliver any and all other papers and documents and to do and
perform any and all other acts and things, as it may deem necessary or advisable
in order to enforce in any such proceeding any of the claims of the Trustee and
of any of such holders in respect of any of the Securities; and any receiver,
assignee, trustee, custodian or debtor in any such proceeding is hereby
authorized, and each and every holder of the Securities, by receiving and
holding the same, shall be conclusively deemed to have authorized any such
receiver, assignee, trustee, custodian or debtor, to make any such payment or
delivery only to or on the order of the Trustee, and to pay to the Trustee any
amount due if for compensation and expenses, including counsel fees, incurred by
it to the date of such payment or delivery; provided, however, that nothing
herein contained shall be deemed to authorize or empower the Trustee to consent
to or accept or adopt, on behalf of any holder of Securities, any plan of
reorganization or readjustment of the Company affecting the Securities or the
rights of any holder thereof, or to authorize or empower the Trustee to vote in
respect of the claim of any holder of any Securities in any such proceeding.
SECTION 6.05. Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee with respect to a series of Securities under this
Article Six shall be applied in the order following, at the date or dates fixed
by the Trustee for the distribution of such moneys, upon presentation of the
several Securities, and stamping thereon the payment, if only partially paid,
and upon surrender thereof if fully paid:
First: To the payment of all costs and expenses in connection
with the collection of such moneys and all amounts due to the Trustee
under Section 10.05.
Second: In case the principal of the outstanding Securities of
such series shall not have become due and be unpaid, to the payment of
interest on the Securities of such series, in the order of the maturity
of the installments of such interest, with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate borne by such Securities, such
payments to be made ratably to the Persons entitled thereto.
Third: In case the principal of the outstanding Securities of
such series shall have become due, by declaration or otherwise, to the
payment of the whole amount then owing and unpaid upon the Securities
of such series for principal and premium, if any, and interest, with
interest on the overdue principal and premium, if any, and (to the
extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the rate borne by the Securities of
such series, and in case such moneys shall be insufficient to pay in
full the whole amounts so due and unpaid upon the Securities of such
series, then to the payment of such principal and premium, if any, and
interest without preference or priority of principal and premium, if
any, over interest, or of interest over principal and premium, if any,
or of any instalment of interest over any other instalment of interest,
or of any Security of such series over any other Security of such
series, ratably to the aggregate of such principal and premium, if any,
and accrued and unpaid interest.
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Any surplus then remaining shall be paid to the Company or to such other Persons
as shall be entitled to receive it.
SECTION 6.06. Securityholders May Direct Proceedings and Waive
Defaults. The holders of a majority in principal amount of the Securities of any
series at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee hereunder, or
of exercising any trust or power hereby conferred upon the Trustee with respect
to the Securities of such series, provided, however, that, subject to the
provisions of Section 10.02, the Trustee shall have the right to decline to
follow any such direction if the Trustee being advised by counsel determines
that the action so directed may not lawfully be taken. Prior to any declaration
accelerating the maturity of the Securities of any series, the holders of a
majority in aggregate principal amount of such series of Securities at the time
outstanding may on behalf of the holders of all of the Securities of such series
waive any past default or event of default hereunder and its consequences except
a default in the payment of interest or any premium on or the principal of the
Securities of such series. Upon any such waiver the Company, the Trustee and the
holders of the Securities of such series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or event of default or impair any right
consequent thereon. Whenever any default or event of default hereunder shall
have been waived as permitted by this Section 6.06, said default or event of
default shall for all purposes of the Securities of such series and this
Indenture be deemed to have been cured and to be not continuing.
SECTION 6.07. Limitations on Rights of Securityholders to Institute
Proceedings. No holder of any Security of any series shall have any right to
institute any action, suit or proceeding at law or in equity for the execution
of any trust hereunder or for the appointment of a receiver or for any other
remedy hereunder, in each case with respect to an event of default with respect
to such series of Securities, unless such holder previously shall have given to
the Trustee written notice of the happening of one or more of the events of
default herein specified with respect to such series of Securities, and unless
also the holders of 25% in principal amount of the Securities of such series
then outstanding shall have requested the Trustee in writing to take action in
respect of the matter complained of, and unless also there shall been offered to
the Trustee security and indemnity satisfactory to it against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee, for
60 days after receipt of such notification, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding; and such notification, request and offer of indemnity are hereby
declared in every such case to be conditions precedent to any such action, suit
or proceeding by any holder of any Security of such series; it being understood
and intended that no one or more of the holders of Securities of such series
shall have any right in any manner whatsoever by his or their action to enforce
any right hereunder, except in the manner herein provided, and that every
action, suit or proceeding at law or in equity shall be instituted, had and
maintained in the manner herein provided and for the equal benefit of all
holders of the outstanding Securities of such series; provided, however, that
nothing in this Indenture or in the Securities of such series contained shall
affect or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on the
Securities of such series to the respective holders of such Securities at the
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respective due dates in such Securities stated, or affect or impair the right,
which is also absolute and unconditional, of such holders to institute suit to
enforce the payment thereof; provided, further, that in the event property or
assets are conveyed, transferred, assigned, mortgaged or pledged to the Trustee
as security for one or more series of Securities, no holder of Securities shall
be entitled to take any action or institute any suit to enforce the payment of
his Securities, whether for principal, interest or premium, if any, to the
extent that the taking of such action or the institution or prosecution of any
such suit or the entry of judgment therein would under applicable law result in
a surrender, impairment, waiver or loss of the lien of this Indenture, if any,
upon the trust estate so created by such conveyance, transfer, assignment,
mortgage or pledge, or any part thereof, as security for Securities held by any
other holder.
SECTION 6.08. Assessment of Costs and Attorneys' Fees in Legal
Proceedings. All parties to this Indenture and the holders of the Securities
agree that the court may in its discretion require, in any action, suit or
proceeding for the enforcement of any right or remedy under this Indenture, or
in any action, suit or proceeding against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such action, suit
or proceeding of an undertaking to pay the costs of such action, suit or
proceeding, and that such court may in its discretion assess reasonable costs,
including reasonably attorney's fees, against any party litigant in such action,
suit or proceeding, 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 6.08 shall not apply to any action, suit or proceeding
instituted by the Trustee, to any action, suit or proceeding instituted by any
one or more holders of Securities holding in the aggregate more than 10% in
principal amount of the Securities of any series outstanding, or to any action,
suit or proceeding instituted by any holder of Securities of any series for the
enforcement of the payment of the principal of or premium, if any, or the
interest on, any of the Securities of such series, on or after the respective
due dates expressed in such Securities.
SECTION 6.09. Remedies Cumulative. No remedy herein conferred upon or
reserved to the Trustee or to the holders of Securities of any series is
intended to be exclusive of any other remedy or remedies, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. No
delay or omission of the Trustee or of any holder of the Securities of any
series to exercise any right or power accruing upon any default or event of
default shall impair any such right or power or shall be construed to be a
waiver of any such default or event of default or an acquiescence therein, and
every power and remedy given by this Article Six to the Trustee and to the
holders of Securities of any series, respectively, may be exercised from time to
time and as often as may be deemed expedient by the Trustee or by the holders of
Securities of such series, as the case may be. In case the Trustee or any holder
of Securities of any series shall have proceeded to enforce any right under this
Indenture and the proceedings for the enforcement thereof shall have been
discontinued or abandoned because of waiver or for any other reason or shall
have been adjudicated adversely to the Trustee or to such holder of Securities,
then and in every such case the Company, the Trustee and the holders of the
Securities of such series shall severally and respectively be restored to their
former positions and rights hereunder and thereafter all rights, remedies and
powers of the Trustee and the holders of the Securities of such series shall
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continue as though no such proceedings had been taken, except as to any matters
so waived or adjudicated.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Evidence of Action by Securityholders. Whenever in this
Indenture it is provided that the holders of a specified percentage or a
majority in aggregate principal amount of the Securities or of any series of
Securities may take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any other action),
the fact that at the time of taking any such action the holders of such
specified percentage or majority have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Securityholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Securities voting in favor thereof at any meeting
of Securityholders duly called and held in accordance with the provisions of
Article Eight, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Securityholders.
SECTION 7.02. Proof of Execution of Instruments and of Holding of
Securities. Proof of the execution of any instrument by a Securityholder or his
agent or proxy and proof of the holding by any Person of any of the Securities
shall be sufficient if made in the following manner:
The fact and date of the execution by any person of any such instrument
may be proved (a) by the certificate of any notary public or other officer in
any jurisdiction who, by the laws thereof, has power to take acknowledgements or
proof of deeds to be recorded within such jurisdiction, that the person who
signed such instrument did acknowledge before such notary public or other
officer the execution thereof, or (b) by the affidavit of a witness of such
execution sworn to before any such notary or other officer. Where such execution
is by a person acting in other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
The ownership of Securities shall be proved by the Security Register of
such Securities or by a certificate of the Security Registrar thereof.
The Trustee may accept such other proof or may require such additional
proof of any matter referred to in this Section 7.02 as it shall deem
appropriate or necessary.
SECTION 7.03. Securities Owned by the Company or Other Obligor on the
Securities to be Disregarded in Certain Cases. In determining whether the
holders of the requisite principal amount of the Securities have concurred in
any direction, request, waiver or consent under this Indenture, Securities which
are owned by the Company or by any other obligor on the Securities or by any
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Person directly or indirectly controlling, or controlled by, or under direct or
indirect common control with, the Company or any such other obligor shall be
disregarded, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, request, waiver or consent,
only Securities which the Trustee knows are so owned shall be disregarded.
Securities so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section 7.03 if the pledgee shall establish
to the satisfaction of the Trustee the pledgee's right to vote such Securities
and that the pledgee is not a Person directly or indirectly controlling, or
controlled by, or under direct or indirect common control with, the Company or
any such other obligor. In case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
SECTION 7.04. Revocation by Securityholders of Consents to Action. At
any time prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Securities or of any series of Securities
specified in this Indenture in connection with such action, any holder of a
Security which is shown by the evidence to be included in the Securities the
holders of which have consented to such action may, by filing written notice
with the Trustee at its principal office and upon proof of holding as provided
in Section 7.02, revoke such action so far as concerns such Security. Except as
aforesaid, any such action taken by the holder of any Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, irrespective of whether or not any notation in regard thereto
is made upon such Security or any Security issued in exchange or substitution
therefor.
ARTICLE EIGHT
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings. A meeting of Securityholders may be
called at any time and from time to time pursuant to the provisions of this
Article Eight for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to consent to the waiving of any
default hereunder and its consequences, or to take any other action
authorized to be taken by Securityholders pursuant to any of the
provisions of Article Six;
(b) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article Ten;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 13.02; or
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(d) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of
the Securities of any one or more or all series, as the case may be,
under any other provision of this Indenture or under applicable law.
SECTION 8.02. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Securityholders of all series, that may be affected by the
action proposed to be taken, to take any action specified in Section 8.01, to be
held at such time and at such place as the Trustee shall determine. Notice of
every meeting of the Securityholders of a series, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting, shall be mailed to holders of Securities of such series at their
addresses as they shall appear on the Security Register (including the records
of any Security Co-Registrar). Such notice shall be mailed not less than 20 nor
more than 90 days prior to the date fixed for the meeting.
SECTION 8.03. Call of Meetings by Company or Securityholders. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least 10% in aggregate principal amount of the Securities of a
series then outstanding that may be affected by the action proposed to be taken,
shall have requested the Trustee to call a meeting of Securityholders of such
series, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within 20 days after receipt of such request, then the
Company or such Securityholders may determine the time and the place for such
meeting and may call such meeting to take any action authorized in Section 8.01,
by mailing notice thereof as provided in Section 8.02.
SECTION 8.04. Qualifications for Voting. To be entitled to vote at any
meeting of Securityholders a Person shall (a) be a holder of one or more
Securities of a series affected by the action proposed to be taken at the
meeting or (b) be a person appointed by an instrument in writing as proxy by a
holder of one or more such Securities. The only persons who shall be entitled to
be present or to speak at any meeting of Securityholders shall be the persons
entitled to vote at such meeting and their counsel and any representatives of
the Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 8.05. Regulation of Meetings. Notwithstanding any other
provisions of this Indenture, the Trustee may make such reasonable regulations
as it may deem advisable for any meeting of Securityholders, in regard to proof
of the holding of Securities and of the appointment of proxies, and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall think
fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
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like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 7.03, at any meeting of
Securityholders of a series each Securityholder of such series or such
Securityholder's proxy shall be entitled to one vote for each $1,000 principal
amount of Securities of such series outstanding held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Security challenged as not outstanding and ruled by the chairman
of the meeting to be not outstanding. The chairman of the meeting shall have no
right to vote other than by virtue of Securities of such series held by him or
instruments in writing as aforesaid duly designating him as the person to vote
on behalf of other Securityholders of such series. At any meeting of the
Securityholders duly called pursuant to the provisions of Section 8.02 or 8.03
the presence of persons holding or representing Securities in an aggregate
principal amount sufficient to take action upon the business for the transaction
of which such meeting was called shall be necessary to constitute a quorum, and
any such meeting may be adjourned from time to time by a majority of those
present, whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
SECTION 8.06. Voting. The vote upon any resolution submitted to any
meeting of Securityholders of a series shall be by written ballots on which
shall be subscribed the signatures of the holders of Securities of such series
or of their representatives by proxy and the principal amounts of the Securities
of such series held or represented by them. The permanent chairman of the
meeting shall appoint two inspectors of votes who shall count all votes cast at
the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 8.02. The record
shall show the principal amounts of the Securities voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 8.07. No Delay of Rights by Meeting. Nothing contained in this
Article Eight shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Securityholders of any series or any rights expressly
or impliedly conferred hereunder to make such call, any hindrance or delay in
the exercise of any right or rights conferred upon or reserved to the Trustee or
to the Securityholders of such series under any of the provisions of this
Indenture or of the Securities of such series.
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ARTICLE NINE
REPORTS BY THE COMPANY AND THE TRUSTEE
AND SECURITYHOLDERS' LISTS
SECTION 9.01. Company to Furnish Trustee Names and Address of Holders.
In accordance with Section 312(a) of the Trust Indenture Act, the Company shall
furnish or cause to be furnished to the Trustee:
(a) semi-annually with respect to Securities of each series on
January 15 and July 15 of each year or upon such other dates as are set
forth in or pursuant to the Board Resolution or indenture supplemental
hereto authorizing such series, a list, in each case, in such form as
the Trustee may reasonably require, of the names and addresses of
holders as of the applicable date; and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
provided, however, that so long as the Trustee is the Security Registrar no such
list shall be required to be furnished.
SECTION 9.02. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
Every holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company, the Trustee, any
paying agent or any Security Registrar shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
holders of Securities in accordance with Section 312 of the Trust Indenture Act,
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 Trust Indenture Act.
SECTION 9.03. Reports by Trustee. (a) Within 60 days after May 15 of
each year commencing with the first May 15 following the first issuance of
Securities, if required by Section 313(a) of the Trust Indenture Act, the
Trustee shall transmit, pursuant to Section 313(c) of the Trust Indenture Act, a
brief report dated as of such May 15 with respect to any of the events specified
in said Section 313(a) which may have occurred since the later of the
immediately preceding May 15 and the date of this Indenture.
(b) The Trustee shall transmit the reports required by Section 313(b)
of the Trust Indenture Act and Section 10.11 hereof at the times specified
therein.
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(c) Reports pursuant to this Section shall be transmitted in the manner
and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture
Act.
SECTION 9.04. Reports by Company. The Company, pursuant to Section
314(a) of the Trust Indenture Act, shall:
(a) file with the Trustee, within 15 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;
(b) 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; and
(c) transmit to the holders within 30 days after the filing
thereof with the Trustee, in the manner and to the extent provided in
Section 313(c) of the Trust Indenture Act, such summaries of any
information, documents and reports required to be filed by the Company
pursuant to paragraphs (1) and (2) of this Section as may be required
by rules and regulations prescribed from time to time by the
Commission.
ARTICLE TEN
CONCERNING THE TRUSTEE
SECTION 10.01. Certain Rights of Trustee. Subject to Sections 315(a)
through 315(d) of the Trust Indenture Act:
(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 or other paper or document
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reasonably 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 an Officers' Certificate and any
resolution of the Board of Directors or any committee thereof (or
committee of officers or other representatives of the Company, to the
extent any such committee or committees have been so authorized by 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 shall be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by or pursuant to 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, expenses and liabilities which might be incurred by it in
compliance 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 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,
personally or by agent or attorney; and
(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.
SECTION 10.02. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except those referring or
relating to the Trustee or any of its agents, and except for the Trustee's
certificate 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, except that the Trustee
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represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Securities and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility and Qualification on Forms
T-1 supplied to the Company are and will be true and accurate, subject to the
qualifications set forth therein. Neither the Trustee nor any Authenticating
Agent shall be accountable for the use or application by the Company of the
Securities or the proceeds thereof.
SECTION 10.03. May Hold Securities. The Trustee, any Authenticating
Agent, any Security Registrar or any other Person that may be an agent of the
Trustee or the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities or Coupons and, subject to Sections 310(b) and
311 of the Trust Indenture Act, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Security
Registrar or such other Person.
SECTION 10.04. 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, subject to Section 11.02 hereof, may be invested in direct
obligations of the United States of America in such amounts and with such
maturities that will ensure that the principal of such obligations, together
with the income thereon (without consideration of any reinvestment thereof),
will be sufficient to pay all sums due for principal of, premium, if any, and
interest on the Securities, as they become due from time to time. The Trustee
shall be under no liability for interest on any money received by it or for
losses on any investments made by it pursuant to this Section 10.04 except as
otherwise agreed with the Company.
SECTION 10.05. Compensation and Reimbursement. The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by the Trustee hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including
the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to the Trustee's negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold
them harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part (excluding, for so long as no
event of default hereunder has occurred and is continuing, any
settlement that has not been approved by the Company in writing prior
to any such settlement) 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, except to the extent that any
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such loss, liability or expense was due to the Trustee's negligence or
bad faith.
The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture.
SECTION 10.06. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder that is a corporation permitted by the Trust
Indenture Act to act as trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$25,000,000. 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.
SECTION 10.07. 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 pursuant to Section 10.08.
(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. If the
instrument of acceptance by a successor Trustee required by Section 10.08 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to 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 the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the obligations
imposed upon it under Section 310(b) of the Trust Indenture Act with
respect to Securities of any series after written request therefor by
the Company or any holder of a Security of such series who has been a
bona fide holder of a Security of such series for at least six months;
or
(2) the Trustee shall cease to be eligible under Section 10.06
and shall fail to resign after written request therefor by the Company
or 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
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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 or pursuant to a Board Resolution,
may remove the Trustee with respect to all Securities or the Securities of such
series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any holder
of a Security 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 removal of the Trustee with
respect to all Securities of such series and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series which shall occur only with the
express prior written consent of the Company, the Company, by or pursuant to 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 10.08. 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
10.08, 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 of Securities and
accepted appointment in the manner required by Section 10.08, any holder of a
Security 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.
(f) 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 notice of such event by first-class mail, postage prepaid, to the
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 10.08. Acceptance of Appointment by Successor. (a) Upon the
appointment hereunder of any successor Trustee with respect to all Securities,
such successor Trustee so appointed shall execute, acknowledge and deliver to
the Company and 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
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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 such
successor Trustee, such retiring Trustee, upon payment of its charges, shall
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and, subject to Section 5.03,
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder, subject nevertheless to its
claim, if any, provided for in Section 10.05.
(b) Upon the appointment hereunder of any successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and such successor Trustee 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, such 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, 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 that no
Trustee shall be responsible for any notice given to, or received by, or any act
or failure to act on the part of any other Trustee hereunder, 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, such retiring Trustee shall have no further responsibility for the
exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates other than as hereinafter expressly set forth, and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates; but, on request of the Company or such
successor Trustee, such retiring Trustee, upon payment of its charges with
respect to the Securities of that or those series to which the appointment of
such successor relates and subject to Section 5.03 shall duly assign, transfer
and deliver to such successor Trustee, to the extent contemplated by such
supplemental indenture, the 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.
(c) Upon request of any Person appointed hereunder as a 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,
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powers and trusts referred to in paragraph (a) or (b) of this Section, as the
case may be.
(d) No Person shall accept its appointment hereunder as a successor
Trustee unless at the time of such acceptance such successor Person shall be
qualified and eligible under this Article.
SECTION 10.09. 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 of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
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.
SECTION 10.10. Appointment of Authenticating Agent. The Trustee may
appoint one or more Authenticating Agents acceptable to the Company with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of that or those series issued upon
original issue, exchange, registration of transfer, partial redemption or
pursuant to Section 2.06, 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,
except as provided in or pursuant to this Indenture, shall at all times be a
corporation that would be permitted by the Trust Indenture Act to act as trustee
under an indenture qualified under the Trust Indenture Act, is authorized under
applicable law and by its charter to act as an Authenticating Agent and has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $5,000,000. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it 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 be the successor of
such Authenticating Agent hereunder, 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.
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and 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 the Company. Upon receiving such a notice of
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 (i) 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 shall
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 provisions of Sections 2.05, 10.02 and 10.03 shall be applicable to
each Authenticating Agent.
If all of the Securities of any series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not be
accompanied by or contained in an Officers' Certificate by the Company), shall
appoint in accordance with this Section an Authenticating Agent having an office
in a Place of Payment designated by the Company with respect to such series of
Securities.
The Trustee hereby appoints The First National Bank of Chicago, to act
as Authenticating Agent hereunder.
SECTION 10.11. Notice of Defaults. The Trustee shall, within ninety
days after the occurrence of a default with respect to the Securities of any
series, mail to all holders of Securities of that series entitled to receive
reports pursuant to Section 9.03, notice of all defaults with respect to that
series known to the Trustee, unless such defaults shall have been cured before
the giving of such notice; provided, however, that, except in the case of
default in the payment of the principal of, premium, if any, or interest on any
of the Securities of such series or in the making of any sinking fund payment
with respect to such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors or trustees, the executive
committee, or a trust committee of directors or trustees or Responsible Officers
of the Trustee in good faith determines that the withholding of such notice is
in the interests of the holders of Securities of such series. 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 hereunder.
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ARTICLE ELEVEN
DEFEASANCE
SECTION 11.01. Discharge of Indenture Upon Payment of Securities. If
and when the principal of, and the premium, if any, and the interest on, all the
Securities outstanding hereunder and all other sums due hereunder shall have
been well and truly paid at the times and in the manner therein and herein
expressed, this Indenture shall cease and determine, and, at the written request
of the Company, accompanied by the Officers' Certificate and Opinion of Counsel
required by Section 14.03, and upon proof being given to the reasonable
satisfaction of the Trustee that all the Securities have been paid or satisfied
and upon payment of the costs, charges and expenses incurred or to be incurred
by the Trustee in relation thereto or in carrying out the provisions of this
Indenture, the Trustee shall cancel this Indenture and execute and deliver to
the company such instruments as shall be requisite to evidence the satisfaction
hereof.
SECTION 11.02. Discharge of Securities of Any Series Upon Deposit of
Moneys. If, at any time after the date hereof, the Company shall deposit with
the Trustee, in trust for the benefit of the holders thereof, (i) funds
sufficient to pay, or (ii) such amount of direct obligations of the United
States of America as will or will together with the income thereon without
consideration of any reinvestment thereof be sufficient to pay, all sums due for
principal of, premium, if any, and interest on the Securities of a particular
series, as they shall become due from time to time, and shall pay all costs,
charges and expenses incurred or to be incurred by the Trustee in relation
thereto or in carrying out the provisions of this Indenture in relation thereto,
this Indenture shall cease to be of further effect with respect to Securities of
such series (except as to (i) rights of registration of transfer, substitution
and exchange of Securities of such series, (ii) rights of holders to receive
payments of principal of, premium, if any, and interest on the Securities of
such series as they shall become due from time to time and other rights, duties
and obligations of Securityholders as beneficiaries hereof with respect to the
amounts so deposited with the Trustee, and (iii) the rights, obligations and
immunities of the Trustee hereunder (for which purposes the Securities of such
series shall be deemed outstanding)), and the Trustee, on the written request of
the Company, accompanied by the Officers' Certificate and Opinion of Counsel
required by Section 14.03, and 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 the Company's action under this
Section 11.02 and will be subject to Federal income tax in the same amount, in
the same manner and at the same times as would have been the case if such action
had not been taken, shall execute and deliver to the Company such instruments as
shall be requisite to evidence the satisfaction thereof with respect to
Securities of such series. The Trustee shall apply the moneys so deposited
solely to the payment to the holders of the Securities of such series of all
sums due thereon for principal, premium, if any, and interest, and the Trustee
shall have no claim for itself, for fees, expenses or otherwise, to such moneys
so deposited.
SECTION 11.03. Interest on Moneys Deposited. Neither the Trustee nor
any other paying agent shall be required to pay interest on any moneys deposited
pursuant to the provisions of this Indenture, except such as it shall agree with
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the Company to pay thereon. Any moneys so deposited for the payment of the
principal of, premium, if any, of interest on the Securities of any series and
remaining unclaimed for three years after the date of the maturity of the
Securities of such series or the date fixed for the redemption of all the
Securities of such series at the time outstanding, as the case may be, shall be
repaid by the Trustee or such other paying agent to the Company upon its written
request and thereafter, anything in this Indenture to the contrary
notwithstanding, any rights of the holders of Securities of such series in
respect of which such moneys shall have been deposited shall be enforceable only
against the Company, and all liability of the Trustee or such other paying agent
with respect to such moneys shall thereafter cease.
Subject to the provisions of the foregoing paragraph, any moneys which
at any time shall be deposited by the Company or on its behalf with the Trustee
or any other paying agent for the purpose of paying the principal of, premium,
if any, and interest on any of the Securities shall be and are hereby assigned,
transferred and set over to the Trustee or such other paying agent in trust for
the respective holders of the Securities for the purpose for which such moneys
shall have been deposited; but such moneys need not be segregated from other
funds except to the extent required by law.
ARTICLE TWELVE
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS, DIRECTORS AND EMPLOYEES
SECTION 12.01. Liability Solely Corporate. No recourse shall be had for
the paying of the principal of, or the premium, if any, or interest on, any
Security or for any claim based thereon or otherwise in respect thereof or of
the indebtedness represented thereby, or upon any obligation, covenant or
agreement of this Indenture, against any incorporator, stockholder, officer,
director or employee, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitutional provision, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Indenture and the Securities are
solely corporate obligations, and that no personal liability whatsoever shall
attach to, or be incurred by, any incorporator, stockholder, officer, director
or employee, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, because of the incurring of the indebtedness hereby authorized or
under or by reason of any of the obligations, covenants, promises or agreements
contained in this Indenture or in any of the Securities or to be implied
herefrom or therefrom, and that all liability, if any, of that character against
every such incorporator, stockholder, officer, director and employee is, by the
acceptance of the Securities and as a condition of, and as part of the
consideration for, the execution of this Indenture and the issue of the
Securities expressly waived and released.
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ARTICLE THIRTEEN
SUPPLEMENTAL INDENTURES
SECTION 13.01. Without Consent of Securityholders, the Company and
Trustee May Enter Into Supplemental Indentures for Specified Purposes. The
Company (when authorized by resolution of its Board of Directors) 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 one
or more of the following purposes:
(a) to add to the covenants and agreements of the Company, to
be observed thereafter and during the period, if any, in such
supplemental indenture or indentures expressed, to surrender any right
or power hereunder conferred upon the Company, and to add events of
default, in each case for the protection or benefit of the holders of
all or any series of the Securities (and if such covenants, agreements,
surrender of rights or powers and events of default are to be for the
benefit of fewer than all series of Securities, stating that such
covenants, agreements, surrender of rights or powers and events of
default are expressly being included for the benefit of such series as
shall be identified therein);
(b) to change or eliminate any provisions of the Indenture
with respect to all or any series of the Securities not then
outstanding (and, if such change is applicable to fewer than all such
series of the Securities, specifying the series to which such change is
applicable), and to specify the rights and remedies of the Trustee and
the holders of such Securities in connection therewith;
(c) to evidence the succession of another corporation to the
Company, the Trustee, or successive successions, and the assumption by
a successor, transferee or lessee corporation of the covenants and
obligations of the Company or Trustee, as the case may be, contained in
the Securities of one or more series or in this Indenture;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any indenture supplemental hereto
which may be defective or inconsistent with any other provision
contained herein or in any supplemental indenture, or to make any other
provision in regard to matters or questions arising under this
Indenture which the Board of Directors of the Company may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of the Securities;
(e) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities any property or assets which the
Company may be required to convey, transfer, assign, mortgage or pledge
in accordance with the provisions of Section 5.04;
(f) to prohibit the authentication and delivery of additional
series of Securities;
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(g) 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;
(h) to establish the form and terms of the Securities of any
series as permitted in Sections 2.01 and 2.02, or to authorize the
issuance of additional Securities of a series previously authorized or
to add to the conditions, limitations or restrictions on the authorized
amount, terms or purposes of issue, authentication or delivery of the
Securities of any series, as herein set forth, or other conditions,
limitations or restrictions thereafter to be observed; and
(i) to modify, alter, amend or supplement this Indenture in
any other respect which is not materially adverse to the holders, so
long as such change does not require the consent of the holders
pursuant to any other provision of this Indenture and is not
inconsistent with any other provisions of this Indenture and which, in
the judgment of the Trustee, is not to the prejudice of the Trustee and
maintains adequate protection to the Trustee when the same becomes
operative.
Subject to the provisions of Section 13.03, the Trustee is authorized
to join with the Company in the execution of any such supplemental indenture, to
make the further agreements and stipulations which may be therein contained and
to accept the conveyance, transfer, assignment, mortgage or pledge of any
property or assets thereunder.
Any supplemental indenture authorized by the provisions of this Section
13.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Securities at the time outstanding, notwithstanding any of
the provisions of Section 13.02.
SECTION 13.02. Modification of Indenture by Supplemental Indenture With
Consent of Securityholders. With the consent (evidenced as provided in Article
Seven) of the holders of not less than 662/3% in aggregate principal amount of
the Securities at the time outstanding which are affected by such indenture
supplemental hereto, the Company, when authorized by a resolution of its Board
of Directors, and the Trustee may from time to time and at any time 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 the
Securities of any series to be affected; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Securities, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
amount of the principal thereof, or reduce any premium payable upon the
redemption thereof, or make the principal thereof or interest or premium thereon
payable in any coin or currency other than that provided in the Securities, or
impair the right to institute suit for the enforcement of any such payment on or
after the maturity thereof as provided in Section 6.07, without the consent of
the holder of each Security so affected, or (ii) reduce the aforesaid percentage
of Securities of any series, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of all the
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Securities then outstanding, or (iii) modify, without the written consent of the
Trustee, the rights, duties or immunities of the Trustee.
A supplemental indenture which changes or eliminates any 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 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 the consent of the Securityholders under
this Section 13.02 to approve the particular form of any proposed supplemental
Indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 13.02, the
Company shall mail a notice, setting forth in general terms the substance of
such supplemental indenture, to the holders of Securities affected by such
supplemental indenture at their addresses as the same shall then appear in the
register of the Company. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 13.03. Upon Request of the Company, Trustee to Join in
Execution of Supplemental Indenture. Upon the request of the Company,
accompanied by the Officers' Certificate and Opinion of Counsel required by
Section 14.03 and by
(a) a supplemental indenture duly executed on behalf of the
Company,
(b) a copy of a resolution of the Board of Directors of the
Company, certified by the Secretary or an Assistant Secretary of the
Company, authorizing the execution of said supplemental indenture,
(c) an Opinion of Counsel, stating that said supplemental
indenture complies with, and that the execution thereof is authorized
or permitted by, the provisions of this Indenture, and
(d) if said supplemental indenture shall be executed pursuant
to Section 13.02, evidence (as provided in Article Seven) of the
consent thereto of the Securityholders required to consent thereto as
in Section 13.02 provided,
the Trustee shall join with the Company in the execution of said supplemental
indenture unless said supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion but shall not be obligated to, enter into said
supplemental indenture.
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SECTION 13.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article Thirteen,
this Indenture shall be and be deemed to be modified and amended in accordance
therewith and, except as herein otherwise expressly provided, the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of all of the Securities
or of the Securities of any series affected, as the case may be, shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 13.05. Matters Provided for in Supplemental Indenture May Be
Noted on Securities, or New Securities Appropriately Modified May Be Issued in
Exchange for Outstanding Securities. Securities authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article Thirteen may bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Board of Directors of the Company, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared by the Company, authenticated by the Trustee and delivered in
exchange for the securities then outstanding in equal aggregate principal
amounts, and such exchange shall be made without cost to the holders of the
Securities.
SECTION 13.06. Supplemental Indentures to Conform to Trust Indenture
Act of 1939. Every supplemental indenture executed pursuant to the provisions of
this Article Thirteen shall conform to the requirements of the Trust Indenture
Act of 1939 as then in effect.
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
SECTION 14.01. Consolidation, Merger, Sale or Lease. Subject to the
provisions of Section 5.06, nothing contained in this Indenture or in the
Securities shall be deemed to prevent the consolidation or merger of the Company
with or into any other corporation, or the merger into the Company of any other
corporation, or the sale or lease by the Company of its property and assets as,
or substantially as, an entirety, or otherwise.
Upon any consolidation or merger, or any sale other than for cash or
lease of all or substantially all of the assets of the Company in accordance
with the provisions of Section 5.06, the corporation formed by such
consolidation or into which the Company shall have been merged or to which such
sale or lease shall have been made shall succeed to and be substituted for the
Company with the same effect as if it had been named herein as a party hereto,
and thereafter from time to time such corporation may exercise each and every
right and power of the Company under this Indenture, in the name of the Company
or in its own name; and any act or proceeding by any provision of this Indenture
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required or permitted to be done by the Board of Directors or any officer of the
Company may be done with like force and effect by the like board or officer of
any corporation that shall at the time be the successor of the Company
hereunder. In the event of any such sale or conveyance, but not any such lease,
the Company (or any successor corporation which shall theretofore have become
such in the manner described in Section 5.06) shall be discharged from all
obligations and covenants under this Indenture and the Securities and may
thereupon be dissolved and liquidated.
Anything in this Section 14.01 to the contrary notwithstanding, no such
consolidation or merger shall be entered into, and no such conveyance or
transfer shall be made, by the Company with or to another corporation or Person
which has outstanding any obligations secured by a Lien if as a result thereof,
any of the properties of any character owned by the Company immediately prior
thereto would be subject to such Lien, unless simultaneously therewith or prior
thereto effective provision shall be made to secure all of the Securities
equally and ratably with (or prior to) such other secured obligations.
SECTION 14.02. Rights Under Indenture Confined to Parties and Holders
of Securities. Nothing in this Indenture expressed and nothing that may be
implied from any of the provisions hereof is intended, or shall be construed, to
confer upon, or to give to, any Person other than the parties hereto and their
successors and the holders of the Securities any right, remedy or claim under or
by reason of this Indenture or any covenant, condition, stipulation, promise or
agreement hereof, and all covenants, conditions, stipulations, promises and
agreements in this Indenture contained shall be for the sole and exclusive
benefit of the parties hereto and their successors and of the holders of the
Securities.
SECTION 14.03. Evidence of Compliance. As evidence of compliance with
the conditions precedent provided for in this Indenture (including any covenants
compliance with which constitutes a condition precedent) which relate to the
authentication and delivery of the Securities, to the satisfaction and discharge
of this Indenture or to any other action to be taken by the Trustee at the
request or upon the application of the Company, the Company will furnish to the
Trustee an Officers' Certificate, stating that such conditions precedent have
been complied with and an Opinion of Counsel stating that in the opinion of such
Counsel such conditions precedent have been complied with. Such Opinion of
counsel may be in the form and contain such assumptions, qualifications and
limitations as customarily appear in legal opinions issued in the jurisdiction
in which any such opinion of counsel is rendered.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include (1) a statement that
the person making such certificate or opinion has read such condition or
covenant; (2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
person, such examination or investigation as is necessary to enable the
expression of an informed opinion as to whether or not such condition or
covenant has been complied with has been made; and (4) a statement as to whether
53
<PAGE>
or not, in the opinion of such person, such condition or covenant has been
complied with.
Notwithstanding any provision of this Indenture authorizing the Trustee
conclusively to rely upon any certificates or opinions, the Trustee, before
granting any application by the Company or taking or refraining from taking any
other action in reliance thereon, may require any further evidence or make any
further investigation as to the facts or matters stated therein which it may, in
good faith, deem reasonable in the circumstances, and in connection therewith
the Trustee may examine or cause to be examined the pertinent books, records and
premises of the Company or of any Subsidiary; and the Trustee shall, in any such
case, require such further evidence or make such further investigation as may be
requested by the holders of a majority in principal amount of the Securities
then outstanding, provided that, if payment to the Trustee of the costs,
expenses and liabilities likely to be incurred by it in making such
investigation is not reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture, the Trustee before making such
investigation may require reasonable indemnity against such costs, expenses and
liabilities. Any further evidence which may be requested by the Trustee pursuant
to any of the provisions of this paragraph shall be furnished by the Company at
its own expense; and any cost, expenses and liabilities incurred by the Trustee
pursuant to any of the provisions of this paragraph shall be paid by the
Company, or, if paid by the Trustee, shall be repaid by the Company, upon
demand, with interest at the highest rate borne by the Securities, and, until
such repayment, shall be secured by a lien on any moneys held by the Trustee
hereunder prior to any rights therein of the holders of Securities.
SECTION 14.04. Cancellation of Securities. All Securities paid,
redeemed, exchanged, surrendered for registration of transfer or retired
pursuant to the sinking fund or otherwise shall, if surrendered to the Company
or to any paying agent, be delivered to the Trustee for cancellation and shall
be cancelled by it or, if surrendered to the Trustee, shall be cancelled by it,
and, except as otherwise provided in Sections 2.04, 2.05, 2.07, 4.02, 4.07 and
13.05, no Securities shall be issued under the Indenture in lieu thereof The
Trustee shall make appropriate notations in its records in respect of all such
Securities and shall destroy such Securities and deliver a certificate of such
destruction to the Company. If the Company shall acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation.
SECTION 14.05. Provisions Required by Trust Indenture Act of 1939 to
Control. If any provision of this Indenture limits, qualifies or conflicts with
any duties under any required provision of the Trust Indenture Act imposed
hereon by Section 318(c) thereof, such required provision shall control.
SECTION 14.06. Action of Authorized Committee Deemed to be Action of
Board of Directors. Whenever action is required by this Indenture by the Board
of Directors of the Company and there is at the time constituted a committee of
the Board of Directors duly authorized to take such action, such action by said
committee shall be deemed to be the action of the Board of Directors and shall
54
<PAGE>
be sufficient for all purposes of this Indenture where action by the Board of
Directors is specified.
SECTION 14.07. Notices. Any notice or demand authorized by this
Indenture to be given to the Company shall be sufficiently given for all
purposes, if it shall be given or made in writing, by hand, telecopier (with
confirmation of receipt) or certified or registered mail (confirmation of
receipt requested) to the Company addressed to it at P.O. Box 2209, 1850 N.
Central Avenue, Phoenix, Arizona 85002-2209 (telephone: (602) 207-4900;
telecopier: (602) 207-5543) to the attention of its General Counsel or at such
other address as may have been furnished in writing to the Trustee by the
Company. Any notice, direction, request or demand to or upon the Trustee shall
be sufficiently given, for all purposes, if it shall be given or made in
writing, by hand, telecopier (with confirmation of receipt) or certified or
registered mail (confirmation of receipt requested) to The First National Bank
of Chicago, One First National Plaza #0126, Chicago, IL 60670 (telephone: (312)
407-2199; telecopier: (312) 407- 1708) to the attention of its Corporate Trust
Office, or at such other address as may have been furnished in writing to the
Company by the Trustee. Any notice required or permitted to be given to
Securityholders shall be sufficiently given if given by first class mail,
postage prepaid, to such holders, at their addresses as the same shall appear on
the Security Register. A failure to give notice with respect to any particular
holder or any defect therein shall not affect the sufficiency of notice given to
any other holder. Notice may be waived in writing by the Person entitled to
receive such notice either before or after such event and such waiver shall be
the equivalent of receipt of such notice.
SECTION 14.08. Act of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by or pursuant to
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
in person or by an agent duly appointed in writing. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments and
any such record (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, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture and (subject to Section 315 of
the Trust Indenture Act) 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 this Section, unless otherwise
provided in or pursuant to this Indenture, 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 in or pursuant to
this Indenture to be made, given or taken by holders, and a Depositary that is a
holder of a global Security may provide for the beneficial owners of interests
in any such global Security to direct such Depositary in taking such action
through such Depositary's standing instructions and customary practices. The
55
<PAGE>
Depositary shall report only one result of its solicitation of proxies to the
Trustee.
(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
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(c) The ownership, principal amount and serial numbers of Securities
held by any Person, and the date of the commencement and the date of the
termination of holding the same, shall be proved by the Security Register.
(d) If the Company shall solicit from the holders of any Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company shall, by Board Resolution, fix in advance a record date for the
determination of holders of Securities entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act. Such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the holders of Securities of
record at the close of business on such record date shall be deemed to be
holders for the purpose of determining whether holders of the requisite
proportion of outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
the holders of Securities shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six months
after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by 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 or suffered to be done by the Trustee, any Security
Registrar or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
SECTION 14.09. Payments Due on Non-Business Days. In any case where the
date of maturity of interest on or principal of the Securities or the date fixed
for redemption of any Securities shall not be a business day, then payment of
interest, principal and premium, if any, may be made on the next succeeding
business day with the same force and effect as if made on the date of maturity
and no interest shall accrue for the period after such date.
SECTION 14.10. Execution in Counterparts. This Indenture 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.
56
<PAGE>
SECTION 14.11. Indenture Deemed a New York Contract. This Indenture and
each Security shall be deemed to be a contract made under the law of the State
of New York, and for all purposes shall be construed in accordance with the law
of said State.
57
<PAGE>
IN WITNESS WHEREOF, FINOVA CAPITAL CORPORATION has caused this
Indenture to be executed in its corporate name by one of its officers thereunto
duly authorized and to be attested by its Secretary or one of its Assistant
Secretaries, and The First National Bank of Chicago, has caused this Indenture
to be executed in its corporate name by one of its authorized officers thereunto
duly authorized, all as of _______________.
FINOVA CAPITAL CORPORATION
By:
--------------------------------
Attest:
- ------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
--------------------------------
Attest:
- ------------------------------------
58
EXHIBIT 4.11
FORM OF
FIXED RATE GLOBAL NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
REGISTERED REGISTERED
No. ___ PRINCIPAL AMOUNT
$______________
CUSIP No. __________
FINOVA CAPITAL CORPORATION
____% NOTES DUE ______, ____
FINOVA CAPITAL CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (the "Company" or the "Issuer," which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to CEDE & CO., or its registered
assigns, the principal sum of ________________________________ ($___________)
DOLLARS on ______, ____ (the "Maturity Date") and to pay interest thereon at the
rate per annum described below until the principal hereof is paid or duly made
available for payment. This Note will bear interest from ______, 199_, at ____%
per annum, payable semi-annually on ______ 1 and ________ 1 in each year,
commencing on ______ 1, 199_ (each, an "Interest Payment Date"), to Holders of
record on the preceding __________ and __________, respectively (each, a "Record
Date"). Interest will be calculated on the basis of a 360-day year of twelve
30-day months. If any Interest Payment Date would otherwise be a day that is not
a Business Day, such Interest Payment Date will be postponed to the next day
that is a Business Day, and such interest payment will have the same force and
effect as if made on such Maturity Date or Interest Payment Date, as the case
may be, and no interest shall accrue with respect to such payment for the period
from and after such Maturity Date or Interest Payment Date. As used herein,
"Business Day" means any day that is not a Saturday or Sunday, and that, in the
City of New York, is not a day on which banking institutions are generally
authorized or obligated by law to close. The interest payment at maturity will
include interest accrued to but excluding the Maturity Date and will be payable
to the person to whom principal is payable.
The interest so payable and punctually paid or duly provided for on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Note is registered at the close of business on the Record
Date for such Interest Payment Date; provided, however, that, if and to the
extent the Company shall default in the payment of the interest due on such
Interest Payment Date, the defaulted interest shall be paid to the Person in
whose name this Note is registered on a subsequent record date, such record date
to be not less than five days prior to the date of payment of such defaulted
interest, established by notice given by mail by or on behalf of the Company to
the Holder of this Note not less than 15 days preceding such subsequent record
date.
Payment of the principal of or interest on this Note will be made at
the office or agency of the Company maintained for such purpose in the City of
New York and in such place or places as the
<PAGE>
Company may from time to time designate by written notice to the Trustee, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, provided that payment
of interest on any Interest Payment Date may at the option of the Company be
made by check mailed first-class to the address of the Person entitled thereto
as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Note is one of a separate series of Securities designated under
the Indenture as "_____% Notes Due _______, ____" (the "Notes").
Unless the certificate of authentication hereon has been executed by
the Trustee under the Indenture by the manual signature of one of its authorized
signatories, this Note shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
Dated:
FINOVA CAPITAL CORPORATION
[SEAL]
By: __________________________________
[Name]
Attest:
By: ___________________________
[Name]
[Secretary or Assistant Secretary]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities issued
under the Indenture described herein.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: _________________________
Authorized Signatory
<PAGE>
REVERSE OF FIXED RATE NOTE
FINOVA CAPITAL CORPORATION
____% NOTES DUE ______, ____
This Note is one of a duly authorized series of Securities of the
Company (hereinafter called the "Securities"), issued and to be issued under an
indenture, dated as of October __, 1997 (the "Indenture"), between the Company
and The First National Bank of Chicago, as Trustee (the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, duties and immunities thereunder of the Company, the Trustee
and the holders of the Notes (the "Holders") and the Securities and the terms
upon which the Notes and the Securities are to be authenticated and delivered.
Except as otherwise provided in the Indenture, the Notes will be issued
in global form only registered in the name of The Depository Trust Company (the
"Depositary") or its nominee. The Notes will not be issued in definitive form,
except as otherwise provided in the Indenture, and ownership of the Notes shall
be maintained in book-entry form by the Depositary for the accounts of
participating organizations of the Depositary.
This Note will not be subject to a sinking fund and is not redeemable
at the option of the Company prior to the Maturity Date stated above. The
Indenture provides for the defeasance of the Notes in certain circumstances.
If an event of default with respect to this Note shall occur and be
continuing, the principal of this Note may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than 66 2/3% in aggregate principal amount of
the Securities at the time outstanding which are affected thereby. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Note will have the right to institute any proceeding with respect
to the Indenture or for any remedy thereunder unless: (a) such Holder shall have
previously given to the Trustee written notice of a continuing event of default
with respect to the Notes; (b) the Holders of 25% or more in principal amount of
outstanding Notes shall have made written request and offered reasonable
indemnity and security satisfactory to the Trustee to institute such proceeding;
and (c) the Trustee shall have failed to institute such proceeding within 60
days of receiving such notice, request and offer; provided that such limitations
do not apply to a suit instituted by the Holder hereof for the enforcement of
payment of the principal of or interest on this Note on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no provisions of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, places and rate, and in the coin or currency herein or in the
Indenture prescribed.
<PAGE>
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Security Register
of the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York or such other place or places as the Company may designate by written
notice to the Trustee, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of the same series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of different
authorized denominations, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charges payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Trustee, the Security Registrar nor any such agent shall be affected by notice
to the contrary.
All terms used in this Note which are defined in the Indenture and are
not otherwise defined herein, shall have the meanings assigned to them in the
Indenture.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
________________________________________________ attorney to transfer such Note
on the books of the Company, with full power of substitution in the premises.
Dated: ______________ ________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within Note in
every particular, without alteration or
enlargement or any change whatsoever.
EXHIBIT 4.12
FORM OF
FLOATING RATE GLOBAL NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
REGISTERED REGISTERED
No. ___ PRINCIPAL AMOUNT
$______________
CUSIP No. __________
FINOVA CAPITAL CORPORATION
FLOATING RATE NOTES DUE ______, ____
FINOVA CAPITAL CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (the "Company" or the "Issuer," which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to CEDE & CO., or its registered
assigns, the principal sum of _____ ($___________) DOLLARS on _______, ____ (the
"Maturity Date") and to pay interest thereon at the rate per annum described
below until the principal hereof is paid or duly made available for payment.
This Note will bear interest from _______, 199_, payable quarterly in arrears on
_______, ______, _______ and ________ of each year, commencing on _______, 199_
(each, an "Interest Payment Date"). If any Interest Payment Date would otherwise
be a day that is not a Business Day, such Interest Payment Date will be
postponed to the next day that is a Business Day, and such interest payment will
have the same force and effect as if made on such Maturity Date or Interest
Payment Date, as the case may be, and no interest shall accrue with respect to
such payment for the period from and after such Maturity Date or Interest
Payment Date. As used herein, "Business Day" means any day that is not a
Saturday or Sunday, and that, in the City of New York, is not a day on which
banking institutions are generally authorized or obligated by law to close.
Interest on this Note will be computed on the basis of the actual number of days
in the applicable Interest Period divided by 360. As used herein, "Interest
Period" means the period from and including __________, 199_ to, but excluding,
______, 199_, and thereafter each successive period from, and including an
Interest Payment Date to, but excluding, the next Interest Payment Date. The
interest payment at maturity will include interest accrued to but excluding the
Maturity Date and will be payable to the person to whom principal is payable.
The rate of interest for each Interest Period shall be:
[Insert Appropriate Payment Terms]
The "Calculation Agent" shall be __________. The Calculation Agent will
notify the Company of each determination of the interest rate applicable to this
Note promptly after such determination is made. The Trustee under the Indenture
will, upon the request of the Holder of the Note, provide the interest rate then
in effect and, if different, the interest rate which will become effective as of
the Interest Reset Date as a result of a determination made with respect to the
most recent Interest Determination Date. As used
<PAGE>
herein "London Business Day" shall mean a day on which dealings in deposits in
U.S. dollars are transacted in the London interbank market; the "Interest
Determination Date" pertaining to the beginning of an Interest Period will be
the second London Business Day preceding the related Interest Reset Date; and
the "Interest Reset Date" with respect to any Interest Period shall mean the
first day of such Interest Period.
The record date shall be the date 15 calendar days (whether or not a
Business Day) prior to the applicable Interest Payment Date (each, a "Record
Date").
The interest so payable and punctually paid or duly provided for on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Note is registered at the close of business on the Record
Date for such Interest Payment Date; provided, however, that, if and to the
extent the Company shall default in the payment of the interest due on such
Interest Payment Date, the defaulted interest shall be paid to the Person in
whose name this Note is registered on a subsequent record date, such record date
to be not less than five days prior to the date of payment of such defaulted
interest, established by notice given by mail by or on behalf of the Company to
the Holder of this Note not less than 15 days preceding such subsequent record
date.
Payment of the principal of or interest on this Note will be made at
the office or agency of the Company maintained for such purpose in the City of
New York and in such place or places as the Company may from time to time
designate by written notice to the Trustee, in such coin or currency of the
United Sates of America as at the time of payment is legal tender for payment of
public and private debts, provided that payment of interest on any Interest
Payment Date may at the option of the Company be made by check mailed
first-class to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Note is one of a separate series of Securities designated under
the Indenture as "Floating Rate Notes Due _________, ____" (the "Notes").
Unless the certificate of authentication hereon has been executed by
the Trustee under the Indenture by the manual signature of one of its authorized
signatories, this Note shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
Dated:
FINOVA CAPITAL CORPORATION
[SEAL]
By: __________________________________
[Name]
Attest:
By: ___________________________
[Name]
[Secretary or Assistant Secretary]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities issued
under the Indenture described herein.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: _________________________
Authorized Signatory
<PAGE>
REVERSE OF FLOATING RATE NOTE
FINOVA CAPITAL CORPORATION
FLOATING RATE NOTES DUE _______, ____
This Note is one of a duly authorized series of Securities of the
Company (hereinafter called the "Securities"), issued and to be issued under an
indenture, dated as of October __, 1997 (the "Indenture"), between the Company
and The First National Bank of Chicago, as Trustee (the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, duties and immunities thereunder of the Company, the Trustee
and the holders of the Notes (the "Holders") and the Securities and the terms
upon which the Notes and the Securities are to be authenticated and delivered.
Except as otherwise provided in the Indenture, the Notes will be issued
in global form only registered in the name of The Depository Trust Company (the
"Depositary") or its nominee. The Notes will not be issued in definitive form,
except as otherwise provided in the Indenture, and ownership of the Notes shall
be maintained in book-entry form by the Depositary for the accounts of
participating organizations of the Depositary.
This Note will not be subject to a sinking fund and is not redeemable
at the option of the Company prior to the Maturity Date stated above. The
Indenture provides for the defeasance of the Notes in certain circumstances.
If an event of default with respect to this Note shall occur and be
continuing, the principal of this Note may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than 66 2/3% in aggregate principal amount of
the Securities at the time outstanding which are affected thereby. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Note will have the right to institute any proceeding with respect
to the Indenture or for any remedy thereunder unless: (a) such Holder shall have
previously given to the Trustee written notice of a continuing event of default
with respect to the Notes; (b) the Holders of 25% or more in principal amount of
outstanding Notes shall have made written request and offered reasonable
indemnity and security satisfactory to the Trustee to institute such proceeding;
and (c) the Trustee shall have failed to institute such proceeding within 60
days of receiving such notice, request and offer; provided that such limitations
do not apply to a suit instituted by the Holder hereof for the enforcement of
payment of the principal of or interest on this Note on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no provisions of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, places and rate, and in the coin or currency herein or in the
Indenture prescribed.
<PAGE>
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Security Register
of the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York or such other place or places as the Company may designate by written
notice to the Trustee, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of the same series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of different
authorized denominations, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charges payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Trustee, the Security Registrar nor any such agent shall be affected by notice
to the contrary.
All terms used in this Note which are defined in the Indenture and are
not otherwise defined herein, shall have the meanings assigned to them in the
Indenture.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
________________________________________________ attorney to transfer such Note
on the books of the Company, with full power of substitution in the premises.
Dated: ______________ ________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within Note in
every particular, without alteration or
enlargement or any change whatsoever.
EXHIBIT 5.1
[Letterhead of FINOVA]
October 17, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The FINOVA Group Inc. and FINOVA Capital Corporation - Registration
Statement on Form S-3
Dear Ladies and Gentlemen:
In my capacity as Vice President-Assistant General Counsel of The
FINOVA Group Inc., a Delaware corporation ("FINOVA Group"), and as Assistant
General Counsel of FINOVA Capital Corporation, a Delaware corporation and a
wholly owned subsidiary of FINOVA Group ("FINOVA Capital"), I have formed the
following opinion in connection with the Registration Statement on Form S-3 (the
"Registration Statement") of FINOVA Group and FINOVA Capital, filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1993, as amended (the "Securities Act"), for registration of the sale by
FINOVA Group and FINOVA Capital from time to time of up to $2,000,000,000
maximum aggregate initial offering price of (i) debt securities of FINOVA Group
and FINOVA Capital (together, the "Debt Securities"), (ii) shares of common
stock, par value $.01 per share, of FINOVA Group and of common stock, par value
$1.00 per share, of FINOVA Capital (together, the "Common Stock"), (iii) shares
of preferred stock, of FINOVA Group and of preferred stock, of FINOVA Capital
(together, the "Preferred Stock"), (iv) depositary shares of FINOVA Group and
FINOVA Capital (together, the "Depositary Shares") or (v) warrants of FINOVA
Group and FINOVA Capital to purchase Debt Securities, Preferred Stock or Common
Stock (together, the "Warrants"). The Debt Securities , Common Stock, Preferred
Stock, Depositary Shares and Warrants are herein collectively referred to as the
"Securities." I understand that the Registration Statement provides that the
Debt Securities and Preferred Stock may be convertible into Common Stock,
Preferred Stock or other securities or rights. Unless otherwise defined herein,
the definition of the terms used in this opinion shall be the same as those in
the Registration Statement to which this opinion has been attached as an
exhibit.
I have examined such corporate records and other documents and have
made such examinations of law as I have deemed relevant. Based on the above, and
subject to the assumptions, exceptions, qualifications and limitations contained
herein, it is my opinion that:
(i) When FINOVA Group and/or FINOVA Capital and a Trustee execute and
deliver an Indenture and the specific terms of a particular Debt Security have
been duly authorized and established in accordance with such Indenture, and such
Debt Security has been duly authorized, executed, authenticated, issued and
delivered in accordance with such Indenture, against payment therefor or upon
exchange in accordance with the applicable underwriting or other agreement, such
Debt Security will constitute the valid and binding obligation of the applicable
issuer, except as such binding nature may be limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium and other similar laws affecting the
rights of creditors generally and by general principles of equity and commercial
reasonableness.
(ii) FINOVA Group has the authority, pursuant to its charter, to issue
up to 100,000,000 shares of Common Stock. FINOVA Capital has the authority,
pursuant to its charter, to issue up to 100,000 shares of Common Stock. Upon
adoption by the Board of Directors of the applicable issuer of
<PAGE>
shares of Common Stock 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 and/or the applicable
Prospectus Supplement and by such resolution, such shares of Common Stock will
be validly issued, fully paid and nonassessable.
(iii) FINOVA Group has the authority, pursuant to its charter, to issue
up to 5,000,000 shares of Preferred Stock. FINOVA Capital has the authority,
pursuant to its charter, to issue up to 5,000 shares of Preferred Stock. When a
series of Preferred Stock has been duly established in accordance with the
issuer's charter and applicable law, and upon adoption by the Board of Directors
of the applicable issuer of such Preferred Stock 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
and/or the applicable Prospectus Supplement and by such resolution, such shares
of Preferred Stock will be validly issued, fully paid and nonassessable.
(iv) When the Depositary Shares, as evidenced by the Depositary
Receipts, shall have been issued and sold as described in the Registration
Statement and in a manner contemplated in the Registration Statement and/or the
applicable Prospectus Supplement relating to any Depositary Shares, such
Depositary Shares will constitute the valid and binding obligations of the
issuer of such Depositary Shares.
(v) When the Warrants shall have been issued and sold as described in
the Registration Statement, and if in an underwritten offering, in accordance
with the terms and conditions of the applicable underwriting agreement, and in a
manner contemplated in the Registration Statement and/or the applicable
Prospectus Supplement relating to any Warrants, such Warrants will constitute
the valid and binding obligations of the issuer of such Warrants.
The foregoing opinion relates only to matters of the laws of the State
of Arizona and the General Corporation Law of the State of Delaware, in either
case without reference to conflict of laws, and to the Federal laws of the
United States. I do not express any opinions on laws of any other jurisdiction
or otherwise than as expressly set forth above.
I hereby consent to the use of the foregoing opinion as an exhibit to
the Registration Statement and to the use of my name and title in such
Registration Statement and related Prospectus, under the heading "Legal
Matters."
Very truly yours,
/s/ Richard Lieberman
Richard Lieberman
Vice President-Assistant General Counsel
EXHIBIT 12.1
THE FINOVA GROUP INC.
COMPUTATION OF RATIO OF INCOME TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30, As of and for the Year Ended December 31,
-------- -----------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing
operations before income
taxes $107,361 $ 89,912 $185,822 $150,834 $122,863 $ 66,422 $ 50,593
Add fixed charges
Interest expense 199,055 177,942 366,543 337,814 210,001 123,853 136,107
One-third of rent expense 1,341 1,141 2,368 2,084 2,053 1,387 1,498
-------- -------- -------- -------- -------- -------- --------
Total fixed charges 200,396 179,083 368,911 339,898 212,054 125,240 137,605
-------- -------- -------- -------- -------- -------- --------
Income as adjusted $307,757 $268,995 $554,733 $490,732 $334,917 $191,662 $188,198
-------- -------- -------- -------- -------- -------- --------
Ratio of income to fixed
charges 1.54 1.50 1.50 1.44 1.58 1.53 1.37
======== ======== ======== ======== ======== ======== ========
Preferred stock dividends
on a pre-tax basis $ 3,514 -- -- -- -- $ 2,139 $ 2,826
Total combined fixed
charges and preferred
stock dividends $203,910 $179,083 $368,911 $339,898 $212,054 $127,379 $140,431
-------- -------- -------- -------- -------- -------- --------
Ratio of income to
combined fixed charges and
preferred stock dividends
1.51 1.50 1.50 1.44 1.58 1.50 1.34
======== ======== ======== ======== ======== ======== ========
</TABLE>
EXHIBIT 12.2
FINOVA CAPITAL CORPORATION
COMPUTATION OF RATIO OF INCOME TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30, As of and for the Year Ended December 31,
-------- -----------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing
operations before income
taxes $107,361 $ 89,912 $185,822 $150,834 $122,847 $ 64,123 $ 50,593
Add fixed charges
Interest expense 199,055 177,942 366,543 337,814 210,730 126,152 136,107
One-third of rent expense 1,341 1,141 2,368 2,084 2,053 1,387 1,498
-------- -------- -------- -------- -------- -------- --------
Total fixed charges 200,396 179,083 368,911 339,898 212,783 127,539 137,605
-------- -------- -------- -------- -------- -------- --------
Income as adjusted $307,757 $268,995 $554,733 $490,732 $335,630 $191,662 $188,198
-------- -------- -------- -------- -------- -------- --------
Ratio of income to fixed
charges 1.54 1.50 1.50 1.44 1.58 1.50 1.37
======== ======== ======== ======== ======== ======== ========
Preferred stock dividends
on a pre-tax basis -- -- -- -- -- $ 3,682 $ 2,826
Total combined fixed
charges and preferred
stock dividends $200,396 $179,083 $368,911 $339,898 $212,783 $131,221 $140,431
-------- -------- -------- -------- -------- -------- --------
Ratio of income to
combined fixed charges and
preferred stock dividends
1.54 1.50 1.50 1.44 1.58 1.46 1.34
======== ======== ======== ======== ======== ======== ========
</TABLE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of The FINOVA Group Inc. and FINOVA Capital Corporation on Form S-3 of
our reports dated February 12, 1997, appearing in the Annual Report on Form 10-K
of The FINOVA Group Inc. and FINOVA Capital Corporation for the year ended
December 31, 1996, and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Phoenix, Arizona
October 14, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
FINOVA CAPITAL CORPORATION
(Exact name of obligor as specified in its charter)
_____________
Delaware 94-1278569
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal
Deposit Insurance Corporation, Washington, D.C.,
The Board of Governors of the Federal Reserve
System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee
to exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of
the trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 14th day of
October, 1997.
The First National Bank of Chicago,
Trustee
By /s/ Richard D. Manella
Richard D. Manella
Vice President and Senior Counsel
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica Inc. filed with the Securities and Exchange Commission on October 25,
1996 (Registration No. 333-14201).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
October 14, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Finova Capital
Corporation and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Richard D. Manella
Richard D. Manella
Vice President and Senior Counsel
4
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
C400
Dollar Amounts in ------------
Thousands RCFD BIL MIL THOU
--------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)............. 0081 4,415,563 1.a.
b. Interest-bearing balances(2)...................................... 0071 7.049,275 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)......... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)...... 1773 4,455,173 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 4,604,233 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)................................................................ RCFD 2122 24,185,099 4.a.
b. LESS: Allowance for loan and lease losses......................... RCFD 3123 423,419 4.b.
c. LESS: Allocated transfer risk reserve............................. RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).............................. 2125 23,761,680 4.d.
5. Trading assets (from Schedule RD-D).................................. 3545 6.930.216 5.
6. Premises and fixed assets (including capitalized leases)............. 2145 705,704 6.
7. Other real estate owned (from Schedule RC-M)......................... 2150 7,960 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)....................................... 2130 64,504 8.
9. Customers' liability to this bank on acceptances outstanding......... 2155 562,251 9.
10. Intangible assets (from Schedule RC-M)............................... 2143 283,716 10.
11. Other assets (from Schedule RC-F).................................... 2160 1,997,778 11.
12. Total assets (sum of items 1 through 11)............................. 2170 54,837,423 12.
</TABLE>
- ---------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE>
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
--------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)................................... RCON 2200 21,852,164 13.a
(1) Noninterest-bearing(1).................................... RCON 6631 9,474,510 13.a.1
(2) Interest-bearing.......................................... RCON 6636 12,377,654 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................ RCFN 2200 13,756,280 13.b.
(1) Noninterest bearing....................................... RCFN 6631 330,030 13.b.1
(2) Interest-bearing.......................................... RCFN 6636 13,426,250 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 3.827,159 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 40,307 15.a
b. Trading Liabilities(from Schedule RC-D)....................... RCFD 3548 4,985,577 15.b
16. Other borrowed money:
a. With original maturity of one year or less.................... RCFD 2332 2,337,018 16.a
b. With original maturity of than one year through three years.. A547 265,393 16.b
. c. With a remaining maturity of more than three years .......... A548 322,175 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.......... RCFD 2920 562,251 18
19. Subordinated notes and debentures (2)............................ RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G)........................... RCFD 2930 929,875 20
21. Total liabilities (sum of items 13 through 20)................... RCFD 2948 50,618,199 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.................... RCFD 3838 0 23
24. Common stock..................................................... RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock)......... RCFD 3839 2,948,616 25
26. a. Undivided profits and capital reserves........................ RCFD 3632 1,059,214 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities.................................................... RCFD 8434 12,788 26.b.
27. Cumulative foreign currency translation adjustments.............. RCFD 3284 (2,252) 27
28. Total equity capital (sum of items 23 through 27)................ RCFD 3210 4,219,224 28
29. Total liabilities and equity capital (sum of items 21 and 28).... RCFD 3300 54,837,423 29
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the most
comprehensive level of auditing work performed for the bank by independent external Number
auditors as of any date during 1996 ......................................... RCFD 6724 . ... N/A. M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits. (2) Includes limited-life preferred stock and related surplus.
6
