As filed with the Securities and Exchange Commission on March 16, 1999
Registration Nos. 333- and 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 Registrants' 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:
Richard Lieberman Paul C. Pringle
Vice President - Brown & Wood LLP
Associate General Counsel 555 California Street
The FINOVA Group Inc. San Francisco, California 94104-1715
1850 North Central Avenue (415) 772-1200
P.O. Box 2209
Phoenix, Arizona 85002-2209
(602) 207-6900
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. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================
Proposed Maximum Proposed Maximum
Title Of Securities Amount To Be Aggregate Price Per Aggregate Offering Amount Of
To Be Registered Registered(1) Unit Price(1)(2) Registration Fee(3)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities(4)
- ----------------------------
Common Stock - par value
$.01 per share(5)(6)
- ----------------------------
Preferred Stock - par value
$.01 per share(7) $3,000,000,000 (2) $3,000,000,000 $834,000
- ----------------------------
Depositary Shares(8)
- ----------------------------
Warrants(9)
- ----------------------------
============================================================================================================
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(1) In no event will the aggregate maximum offering price of all securities
issued pursuant to this Registration Statement exceed $3,000,000,000. 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>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MARCH 16, 1999
Prospectus [FINOVA Logo]
- ----------
[The FINOVA Group Inc. logo]
[FINOVA Capital Corporation logo]
By this prospectus, we may offer up to
$3,000,000,000 of our:
DEBT SECURITIES We will provide the specific terms of
COMMON STOCK (including, for The these securities in supplements to
FINOVA Group Inc., Rights to Purchase this prospectus. You should read this
Junior Participating 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 _____________, 1999
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
The FINOVA Group Inc. ("FINOVA * Annual Reports on Form 10-K of
Group") and FINOVA Capital Corporation FINOVA Group and FINOVA Capital
("FINOVA Capital") file annual, for the year ended December 31,
quarterly and current reports, proxy 1998.
and information statements and other
information with the SEC. You may read * Annual Report on Form 10-K/A of
and copy any document we file at the FINOVA Group for the year ended
SEC's public reference rooms at 450 December 31, 1998.
Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at * Portions of the Proxy Statement on
1-800-SEC-0330 for more information on Schedule 14A for FINOVA Group's
the public reference room and their Annual Meeting of Shareholders
copy charges. Our SEC filings are also held on May 13, 1999 that have
available to the public from the SEC's been incorporated by reference
web site at http://www.sec.gov, which into our 10-K.
may also be available on our web site
at http://www.finova.com. You may also * Current Reports on Form 8-K of
inspect our SEC reports and other FINOVA Group dated January 14,
information at the New York Stock 1999.
Exchange, 20 Broad Street, New York,
New York 10005. * Current Reports on Form 8-K of
FINOVA Capital dated January 15,
The SEC allows us to "incorporate 1999.
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 or any other information
those documents. Information incorporated by reference in this
incorporated by reference is part of prospectus, including exhibits. You
this prospectus. Later information may do so orally or in writing by
filed with the SEC updates and contacting us at:
supersedes this prospectus.
Treasurer
We incorporate by reference the The FINOVA Group Inc.
documents listed below and any future 1850 North Central Avenue
filings made with the SEC under P.O. Box 2209
Sections 13(a), 13(c), 14 or 15(d) of Phoenix, Arizona 85002-2209
the Securities Exchange Act of 1934 (602) 207-6900
until this offering is completed:
We will provide that information at no
charge to you.
THE COMPANIES
FINOVA Group is a financial value-added services enable us to
services holding company. Through our differentiate ourselves from our
principal subsidiary, FINOVA Capital, competitors. That expertise and
we provide a broad range of financing ability also enable us to command
and capital market products to pricing that provides a satisfactory
mid-size business. We concentrate on spread over our borrowing costs.
lending to mid-size businesses. FINOVA
Capital has been in operation since We seek to maintain a high quality
1954. portfolio and to minimize non-earning
assets and write-offs. We use clearly
We extend revolving credit defined underwriting criteria and
facilities, term loans, and equipment stringent portfolio management
and real estate financing primarily to techniques. We diversify our lending
"middle-market" businesses with activities geographically and among a
financing needs falling generally range of industries, customers and
between $500,000 and $35 million. loan products.
We operate in 18 specific industry Due to the diversity of our
or market niches under three market portfolio, we believe we are better
groups. We selected those groups able to manage competitive changes in
because our expertise in evaluating our markets and to withstand the
the creditworthiness of prospective impact of deteriorating economic
customers and our ability to provide conditions on a regional or national
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basis. There can be no assurance, transaction sizes range from
however, that competitive changes, $100,000 to $1 million and are
borrowers' performance, economic made to small and mid-size
conditions or other factors will not businesses with annual sales
result in an adverse impact on our under $10 million.
results of operations or financial
condition. * REDISCOUNT FINANCE offers
revolving credit facilities to
We generate interest, leasing, fee the independent consumer finance
and other income through charges industry including sales,
assessed on outstanding loans, loan automobile, mortgage and premium
servicing, leasing, brokerage and finance companies. Typical
other activities. Our primary expenses transaction sizes range from $1
are the costs of funding our loan and million to $35 million.
lease business, including interest
paid on debt, provisions for credit SPECIALTY FINANCE
losses, marketing expenses, salaries
and employee benefits, servicing and * COMMERCIAL EQUIPMENT FINANCE
other operating expenses and income offers equipment leases, loans
taxes. and "turnkey" financing to a
broad range of midsize
BUSINESS GROUPS companies. Specialty markets
include the corporate aircraft
We operate the following principal and emerging growth technology
lines of business under three market industries, primarily
groups: biotechnology and electronics.
Typical transaction sizes range
COMMERCIAL FINANCE from $500,000 to $15 million.
* BUSINESS CREDIT offers * COMMUNICATIONS FINANCE
collateral-oriented revolving specializes in term financing to
credit facilities and term loans advertising and subscriber-
for manufacturers, distributors, supported businesses including
wholesalers and service radio and television stations,
companies. Typical transaction cable operators, outdoor
sizes range from $500,000 to $3 advertising firms and
million. publishers. Typical transaction
sizes range from $1 million to
* COMMERCIAL SERVICES offers full $40 million.
service factoring and accounts
receivable management services * FRANCHISE FINANCE offers
for entrepreneurial and larger equipment, real estate and
firms, primarily in the textile acquisition financing for
and apparel industries. The operators of established
annual factored volume of these franchise concepts. Transaction
companies is generally between sizes generally range from
$5 million and $25 million. This $500,000 to $15 million.
line provides accounts
receivable and inventory * HEALTHCARE FINANCE offers a full
financing and loans secured by range of working capital,
equipment and real estate. equipment and real estate
financing products for the U.S.
* CORPORATE FINANCE provides a health care industry.
full range of cash flow-oriented Transaction sizes typically
and asset-based term and range from $500,000 to $25
revolving loan products for million.
manufacturers, wholesalers,
distributors, specialty * PORTFOLIO SERVICES provides
retailers and commercial and customized receivable servicing
consumer service businesses. and collections for time-share
Typical transaction sizes range developers and other generators
from $2 million to $35 million. of consumer receivables.
* DISTRIBUTION & CHANNEL FINANCE * PUBLIC FINANCE provides
provides inbound and outbound tax-exempt term financing to
inventory financing, combined state and local governments,
inventory/accounts receivable non-profit corporations and
lines of credit and purchase entities using industrial
order financing for equipment revenue or development bonds.
distributors, value-added Typical transaction sizes range
resellers and dealers from $100,000 to $5 million.
nationwide. Transaction sizes
generally range from $500,000 to * RESORT FINANCE focuses on
$30 million. construction, acquisition and
receivables financing of
* GROWTH FINANCE provides timeshare resorts worldwide as
collateral-based working capital well as term financing for
financing primarily secured by established golf resort hotels
accounts receivable. Typical and receivables funding for
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developers of second home * LOAN ADMINISTRATION provides
communities. Typical transaction in-house servicing for
sizes range from $5 million to FINOVA's commercial loan
$35 million. products as well as servicing
and subservicing of other
* SPECIALTY REAL ESTATE FINANCE mortgage and consumer loans,
provides term financing for including residential real
hotel, anchored retail, office estate, mobile homes,
and owner-occupied properties. automobiles and other consumer
Typical transaction sizes range products.
from $5 million to $25 million.
Both FINOVA Group and FINOVA
* TRANSPORTATION FINANCE struc- Capital are Delaware corporations.
tures equipment loans, leases, FINOVA Group was incorporated in 1991
acquisition financing and to serve as the successor to The Dial
leveraged lease equity Corp's financial services businesses.
investments for commercial and Dial transferred those businesses to
cargo airlines worldwide, FINOVA Group in March 1992 in a
railroads and operators of other spin-off. Since that time, FINOVA
transportation related Group has increased its total assets
equipment. Typical transaction from $2.6 billion at December 31,
sizes range from $5 million to 1992 to $10.5 billion at December 31,
$30 million. Through FINOVA 1998. Income from continuing
Aircraft Investors LLC, FINOVA operations increased from $36.8
also seeks to use its market million in 1992 to $169.7 million in
expertise and industry presence 1998. We believe FINOVA Group ranks
to purchase, upgrade and resell among the largest independent
used commercial aircraft. commercial finance companies in the
U.S., based on total assets. The
CAPITAL MARKETS common stock of FINOVA Group is
traded on the New York Stock
* REALTY CAPITAL specializes Exchange.
in providing capital markets-
funded commercial real FINOVA Capital was incorporated in
estate financing products and 1965 and is the successor to a
commercial mortgage banking California corporation that was formed
services. Typical transaction in 1954. All of FINOVA Capital's
sizes range from $1 million to capital stock is owned by FINOVA
$5 million. Group.
* INVESTMENT ALLIANCE provides Our principal executive offices are
equity and debt financing located at 1850 North Central Avenue,
for midsize businesses in P.O. Box 2209, Phoenix, Arizona
partnership with institutional 85002-2209. Our telephone number is
investors and selected fund (602) 207-6900.
sponsors. Typical transaction
sizes range from $2 million to
$15 million.
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<PAGE>
RECENT DEVELOPMENTS
In October 1998, FINOVA Capital (excluding conversion of options).
acquired United Credit Corporation, a Sirrom is a specialty finance company
New York-based provider of commercial headquartered in Nashville, Tennessee.
financing to small and mid-size Sirrom provides secured loans to
businesses, and its Patriot Funding small, fast growing companies in the
Division. The addition formed a new U.S. and Canada with revenues between
division named FINOVA Growth Finance, $5 million and $50 million, for
which provides collateral-based expansions, acquisitions, buyouts and
working capital financing primarily other strategic ventures. Sirrom
secured by accounts receivable. The recently announced its 1998 year-end
new division provides financing financial results, which included a
ranging from $100,000 to $1 million to net decrease in stockholder's equity
small and mid-size businesses with of $65.1 million during the fourth
annual sales under $10 million. This quarter of 1998. The decrease was
new division is serving a market anticipated by us after our
segment of smaller, growth-oriented examination of their loan portfolio.
customers earlier in their maturation The decrease is not expected to impair
cycle. the progress of the proposed merger.
The transaction must be approved by
In October 1998, FINOVA Capital Sirrom's shareholders and is subject
acquired Electronic Payment Systems, to other conditions and regulatory
Inc., a commercial receivables approvals. We anticipate that the
servicing business headquartered in transaction will be completed in the
Salt Lake City, Utah, to support the first half of 1999.
activities of our Realty Capital
business. In February 1999, FINOVA Group
acquired Preferred Business Credit
In January 1999, FINOVA Group Inc., a west coast provider of
reached a definitive agreement to commercial financing to small and
acquire Sirrom Capital Corporation mid-size businesses.
("Sirrom") for approximately $343
million in FINOVA Group common stock
5
<PAGE>
SELECTED FINANCIAL INFORMATION
The following information was are part of our Annual Reports on Form
derived from FINOVA Group's financial 10-K or FINOVA Group's Annual Report
statements. The information is only a on Form 10-K/A. You should read our
summary and does not provide all of financial statements and other
the information contained in our information that we have filed with
financial statements, including the the SEC. We have reclassified earlier
related notes, and Management's information to conform to the 1998
Discussion and Analysis. Those items presentation.
<TABLE>
<CAPTION>
As of and for the Year Ended December 31,
--------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Income earned from
financing transactions $ 1,021,977 $ 897,996 $ 769,346 $ 680,912 $ 463,404
Interest margins earned 472,536 408,914 340,517 287,880 216,667
Volume-based fees 77,723 46,728 28,588 21,204 10,796
Provision for credit losse 82,200 69,200 41,751 37,568 10,439
Gains on disposal of assets 55,024 30,261 12,949 10,889 3,877
Income from continuing
operations 169,737 139,098 116,493 93,798 73,770
Net income 169,737 139,098 117,000 97,629 74,313
Basic earnings from
continuing operations
per share $ 3.03 $ 2.56 $ 2.14 $ 1.72 $ 1.48
Basic earnings per share $ 3.03 $ 2.56 $ 2.15 $ 1.79 $ 1.49
Basic adjusted weighted
average outstanding
shares(1) 55,946,000 54,405,000 54,508,000 54,633,000 49,765,000
Diluted earnings from
continuing operations
per share $ 2.86 $ 2.42 $ 2.08 $ 1.69 $ 1.46
Diluted earnings per share $ 2.86 $ 2.42 $ 2.09 $ 1.76 $ 1.47
Diluted adjusted weighted
average shares(1) 60,705,000 59,161,000 56,051,000 55,469,000 50,436,000
Dividends declared per
common share $ 0.60 $ 0.52 $ 0.46 $ 0.42 $ 0.37
FINANCIAL POSITION:
Investment in financing
transactions 10,011,536 8,399,456 7,298,759 6,348,079 5,342,979
Nonaccruing assets 205,233 187,356 155,505 143,127 149,046
Reserve for credit losses 207,618 177,088 148,693 129,077 110,903
Total assets 10,450,314 8,719,840 7,526,734 7,036,514 5,821,343
Total debt 8,394,578 6,764,581 5,850,223 5,649,368 4,573,354
Company-obligated
mandatory redeemable
convertible preferred
securities of subsidiary
trust solely holding con-
vertible debentures of
FINOVA Group
("TOPrS") 111,550 111,550 111,550 -- --
Shareowners' equity 1,177,345 1,090,454 929,591 825,184 770,252
</TABLE>
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(1) Adjusted to reflect a 2-for-1 stock split on October 1, 1997.
RATIO OF INCOME TO TOTAL FIXED CHARGES
Year Ended December 31,
------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
FINOVA Group 1.58x 1.54x 1.50x 1.44x 1.58x
FINOVA Capital 1.58x 1.54x 1.50x 1.44x 1.58x
RATIO OF INCOME TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Year Ended December 31,
-------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
FINOVA Group 1.56x 1.52x 1.50x 1.44x 1.58x
FINOVA Capital 1.58x 1.54x 1.50x 1.44x 1.58x
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<PAGE>
Variations in interest rates generally computing the above ratios, consists
do not have a substantial impact on of income from continuing operations
the ratio because fixed-rate and before income taxes plus fixed
floating-rate assets are generally charges. Fixed charges consist of
matched with liabilities of similar interest and related debt expense, and
rate and term. Income available for a portion of rental expense determined
fixed charges, for purposes of to be representative of interest.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this competitive without sacrificing
prospectus and any supplements are prudent lending standards. Doing
"forward-looking," in that they do not business under those standards
discuss historical fact but instead becomes more difficult, however,
note future expectations, projections, when competitors offer financing
intentions or other items relating to with less stringent criteria. We
the future. These forward-looking seek to maintain credit quality
statements include those made in at the risk of growth in assets,
documents incorporated in this if necessary.
prospectus by reference.
* The cost of our capital. That
Forward-looking statements are cost depends on many factors,
subject to known and unknown risks, some of which are beyond our
uncertainties and other factors that control, such as our portfolio
may cause our actual results or quality, ratings, prospects and
performance to differ materially from outlook.
those contemplated by the
forward-looking statements. Many of * Changes in government
those factors are noted in conjunction regulations, tax rates and
with the forward-looking statements similar matters. For example,
in the text. Other important factors government regulations could
that could cause actual results to significantly increase the cost
differ include: of doing business or could
eliminate certain tax advantages
* The results of our efforts to of some of our financing
implement our business strategy. products.
Failure to fully implement our
business strategy might result * Necessary technological changes,
in decreased market penetration, including those addressing "Year
adverse effects on results of 2000" data systems issues, may be
operations and other adverse more difficult, expensive or time
results. consuming than anticipated.
* The effect of economic * Costs or difficulties related to
conditions and the performance integration of acquisitions.
of our borrowers. Economic
conditions in general or in * Other risks detailed in our
particular market segments could other SEC reports or filings.
impact the ability of our
borrowers to operate or expand We do not intend to update
their businesses, which might forward-looking information to reflect
result in decreased performance actual results or changes in
for repayment of their assumptions or other factors that
obligations or reduce demand for could affect those statements. We
additional financing needs. cannot predict the risk from reliance
on forward-looking statements in
* Actions of our competitors and light of the many factors that could
our ability to respond to those affect their accuracy.
actions. We seek to remain
USE OF PROCEEDS
We intend to use the net proceeds working capital, investment in
from the sale of the securities for financing transactions and capital
general corporate purposes. Those expenditures. We will describe in the
purposes include the repayment or supplement any proposed use of
refinancing of debt, acquisitions in proceeds other than for general
the ordinary course of business, corporate purposes.
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<PAGE>
DESCRIPTION OF DEBT SECURITIES
DEBT SECURITIES * FINOVA Capital may discharge the
debt issued in any series at any
The following summary applies only time by depositing sufficient
to the debt securities of FINOVA funds with the Trustee to pay
Capital. If we issue debt securities the obligations when due. All
of FINOVA Group, we will describe amounts due to you on the debt
those securities and the indenture would be paid by the Trustee
under which they are issued in the from the deposited funds.
applicable supplement.
* If FINOVA Capital fails to meet
The debt securities of FINOVA its obligations on the debt, it
Capital will be issued under an will be in default. Defaults for
indenture (the "Indenture") between senior debt securities are
FINOVA Capital and one or more U.S. described on pages 12-13 of this
banking institutions (a "Trustee"). pospectus.
The Indenture may but need not have
separate Trustees for senior and GENERAL
subordinated debt. We will list the
Trustee for each series of securities The debt securities of FINOVA Group
in the applicable supplement. and FINOVA Capital offered by this
prospectus will be limited to $3.0
The following summary of certain billion principal amount. The
provisions of the Indenture is not Indenture does not limit the amount of
complete. You should look at the debt securities FINOVA Capital could
Indenture that is filed as an exhibit offer under it. FINOVA Capital can
to the Registration Statement. To issue debt securities in one or more
obtain a copy of the Indenture, see series, in each case as authorized by
"Where You Can Find More Information" us from time to time. Each series may
on page 2. differ as to its terms. The debt
securities will be FINOVA Capital's
All capitalized terms have the unsecured general obligations and may
meanings specified in the Indenture. or may not be subordinated to FINOVA
Capital's other general indebtedness.
GENERAL INDENTURE PROVISIONS THAT Those that are not subordinated are
APPLY TO SENIOR AND SUBORDINATED DEBT called "senior debt securities." The
others are "subordinated debt
* The Indenture does not limit the securities."
amount of debt that FINOVA
Capital may issue nor provide The supplement will address the
holders any protection should following terms of the debt
there be a highly leveraged securities:
transaction involving our
company. We may issue additional * Their title.
debt securities without your
consent. * Any limits on the principal
amounts to be issued.
* If FINOVA Capital redeems debt
which is convertible into its * The dates on which the principal
capital stock or other is payable.
securities, your right to
convert that debt into capital * The rates (which may be fixed or
stock or other securities will variable) at which they shall
expire on the redemption date. bear interest, or the method for
determining rates.
* The Indenture allows FINOVA
Capital to merge or to * The dates from which the
consolidate with another interest will accrue and will be
company, or sell all or payable, or the method of
substantially all of its assets determining those dates, and any
to another company. If these record dates for the payments
events occur, the other company due.
will be required to assume
FINOVA Capital's * Any provisions for redemption,
responsibilities on the debt, conversion or exchange, at our
and FINOVA Capital will be option or otherwise, including
released from all liabilities the periods, prices and terms of
and obligations. redemption or conversion.
* The Indenture provides that * Any sinking fund or similar
holders of a majority of the provisions, whether mandatory or
total principal amount of the at the holder's option, along
debt outstanding in any series
may vote to change our
obligations or your rights
concerning that series of debt.
But to change the payment of
principal or interest, every
holder in that series must
consent.
8
<PAGE>
with the periods, prices and OWNERSHIP OF THE GLOBAL SECURITIES;
terms of redemption, purchase or BENEFICIAL OWNERSHIP. So long as the
repayment. depositary or its nominee is the
registered owner of a global security,
* The amount or percentage payable that entity will be the sole holder of
if we accelerate their maturity, the debt securities represented by
if other than the principal that instrument. The Trustee and we
amount. are only required to treat the
depositary or its nominee as the legal
* Any changes to the events of owner of those securities for all
default or covenants set forth purposes under the Indenture.
in the Indenture.
Each actual purchaser of debt
* The terms of subordination, if securities represented by a global
any. security (a "beneficial owner") will
not be entitled to receive physical
* Whether the series can be delivery of certificated securities,
reopened. will not be considered the holder of
those securities for any purpose under
* Any other terms consistent with the Indenture, and will not be able to
the Indenture. transfer or exchange the global
securities, unless this prospectus or
We may authorize and determine the the supplement provide to the
terms of a series of debt securities contrary. As a result, each beneficial
by resolution of our board of owner must rely on the procedures of
directors or one of its committees or the depositary to exercise any rights
through a supplemental Indenture. of a holder under the Indenture. In
addition, if the beneficial owner is
FORM OF DEBT SECURITIES not a direct or indirect participant
in the depositary (each a
The debt securities will be issued "participant") the beneficial owner
in registered form. Unless the must rely on the procedures of the
supplement otherwise provides, debt participant through which it owns its
securities will be issued as one or beneficial interest in the global
more global securities. This means security.
that we will not issue certificates to
each holder. We generally will issue The laws of some jurisdictions
global securities in the total require that certain purchasers of
principal amount of the debt securities take physical delivery of
securities distributed in that series. the securities in certificated form.
We will issue debt securities only in Those laws and the above conditions
denominations of $1,000 or integral may impair the ability to transfer
multiples of that amount, unless the beneficial interests in the global
supplement states otherwise. securities.
GLOBAL SECURITIES THE DEPOSITORY TRUST COMPANY
IN GENERAL. Debt securities in The following is based on
global form will be deposited with or information furnished by DTC and
on behalf of a depositary. Global applies to the extent it is the
securities are represented by one or depositary, unless otherwise stated in
more global certificates for the a supplement:
series registered in the name of the
depositary or its nominee. Debt REGISTERED OWNER. The debt
securities in global form may not be securities will be issued as fully
transferred except as a whole among registered securities in the name of
the depositary, a nominee of or a Cede & Co. (DTC's partnership
successor to the depositary and any nominee). One fully registered global
nominee of that successor. Unless security generally will be issued for
otherwise identified in the each $200 million principal amount of
supplement, the depositary will be The debt securities. The Trustee will
Depository Trust Company ("DTC"). deposit the global securities with the
depositary. The deposit of the global
NO DEPOSITARY OR GLOBAL SECURITIES. securities with DTC and its
If a depositary for a series is registration in the name of Cede & Co.
unwilling or unable to continue as will not change the beneficial
depositary, and a successor is not ownership of the securities.
appointed by us within 90 days, we
will issue debt securities of that DTC ORGANIZATION. DTC is a
series in definitive form in exchange limited-purpose trust company
for the global security or securities organized under the New York Banking
of that series. We also may determine Law, a "banking organization" within
at any time in our discretion not to the meaning of that law, a member of
use global securities for any series. the Federal Reserve System, a
In that event, we will issue debt "clearing corporation" within the
securities in definitive form.
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meaning of the New York Uniform NOTICES AMONG THE DEPOSITARY,
Commercial Code and a "clearing PARTICIPANTS AND BENEFICIAL OWNERS.
agency" registered under the Notices and other communications by
provisions of Section 17A of the the depositary, its participants and
Securities Exchange Act of 1934, as the beneficial owners will be governed
amended. by arrangements among them, subject to
any legal requirements in effect.
DTC is owned by a number of its
direct participants and by the New VOTING PROCEDURES. Neither DTC nor
York Stock Exchange, Inc., the Cede & Co. will give consents for or
American Stock Exchange, Inc. and the vote the global securities. The
National Association of Securities depositary generally mails an omnibus
Dealers, Inc. Direct participants proxy to us just after the applicable
include securities brokers and record date. That proxy assigns Cede &
dealers, banks, trust companies, Co.'s consenting or voting rights to
clearing corporations and certain the direct participants to whose
other organizations who directly accounts the securities are credited
participate in DTC (each a "direct at that time.
participant"). Other entities
("indirect participants") may access PAYMENTS. Principal and interest
DTC's system by clearing transactions payments made by us will be delivered
through or maintaining a custodial to the depositary. DTC's practice is
relationship with direct participants, to credit direct participants'
either directly or indirectly. The accounts on the applicable payment
rules applicable to DTC and its date unless it has reason to believe
participants are on file with the SEC. it will not receive payment on that
date. Payments by participants to
DTC ACTIVITIES. DTC holds beneficial owners will be governed by
securities that its participants standing instructions and customary
deposit with it. DTC also facilitates practices, as is the case with
the settlement among participants of securities held for customers in
securities transactions, such as bearer form or registered in "street
transfers and pledges, in deposited name." Those payments will be the
securities through electronic responsibility of that participant,
computerized book-entry changes in not the depositary, the Trustee or us,
participant's accounts. Doing so subject to any legal requirements in
eliminates the need for physical effect at that time.
movement of securities certificates.
We are responsible for payment of
PARTICIPANTS' RECORDS. Except as principal, interest and premium, if
otherwise provided in this prospectus any, to the Trustee, who is
or a supplement, purchases of the debt responsible to pay it to the
securities must be made by or through depositary. The depositary is
direct participants, which will responsible for disbursing those
receive a credit for the securities on payments to direct participants. The
the depositary's records. The participants are responsible for
beneficial owner's ownership interest disbursing payments to the beneficial
is in turn to be recorded on the owners.
direct and indirect participants'
records. Beneficial owners will not TRANSFER OR EXCHANGE OF SECURITIES
receive written confirmations from the
depositary of their purchase, but they You may transfer or exchange the
are expected to receive them, along debt securities (other than a global
with periodic statements of their security) without service charge at
holdings, from the direct or indirect our office designated for that purpose
participants through whom they entered or at the office of any transfer agent
into the transaction. or security registrar identified under
the Indenture. You must execute a
Transfers of interests in the proper form of transfer and pay any
global securities will be made on the taxes and other governmental charges
books of the participants on behalf of resulting from that action. You may
the beneficial owners. Certificates transfer or exchange the debt
representing the interest of the securities (other than a global
beneficial owners in the securities security) initially at our offices at
will not be issued unless the use of 1850 North Central Avenue, P.O. Box
global securities is suspended, as 2209, Phoenix, Arizona 85002-2209 or
provided above. at our office or agency established
for that purpose in New York, New
The depositary has no knowledge of York.
the actual beneficial owners of the
global securities. Its records only Debt securities in the several
reflect the identity of the direct denominations will be interchangeable
participants as owners of the without service charge, but we may
securities. Those participants may or require payment to cover taxes and
may not be the beneficial owners.
Participants are responsible for
keeping account of their holdings on
behalf of their customers.
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other governmental charges. The exclude any portion of long-term debt
Trustee initially will act as maturing within one year of that date
authenticating agent under the of determination, all as reflected on
Indenture. the consolidated balance sheet of
FINOVA Capital and its consolidated
SAME-DAY SETTLEMENT AND PAYMENT subsidiaries.
Unless the supplement otherwise "LIEN" means any lien, charge,
provides, the debt securities will be claim, security interest, pledge,
settled in immediately available hypothecation, right of another under
funds. We will make payments of any conditional sale or other title
principal and interest in immediately retention agreement or any other
available funds. encumbrance affecting title to
property. Lien includes any lease
PAYMENT AND PAYING AGENT under a sale and leaseback
arrangement.
If the debt securities are not held
in global form, we will make payment "SUBSIDIARY" means any corporation
of principal and premium, if any, a majority of the Voting Stock of
against surrender of the debt which is owned, directly or
securities at the principal office of indirectly, by FINOVA Capital or by
the Trustee in New York, New York. We one or more Subsidiaries or by FINOVA
will pay any installment of interest Capital and one or more Subsidiaries.
on debt securities to the record
holder on the record date for that "RESTRICTED SUBSIDIARY" is any
interest. We can make those payments Subsidiary a majority of the Voting
through the Trustee, as noted above, Stock of which is owned directly by
by check mailed by first class mail to FINOVA Capital or by one or more
the registered holders at their Restricted Subsidiaries, or by FINOVA
registered address or by wire transfer Capital and one or more Restricted
to an eligible account of the Subsidiaries and which is designated
registered holder. as a Restricted Subsidiary by
resolution of FINOVA Capital's board
If any payments of principal, of directors.
premium or interest are not claimed
within three years of the date the "UNRESTRICTED SUBSIDIARY" means any
payment became due, those funds are to Subsidiary other than a Restricted
be repaid to us. The beneficial owners Subsidiary.
of those interests thereafter will
look only to us for payment for those "VOTING STOCK" means stock of any
amounts. class or classes (however designated)
having ordinary voting power for the
CERTAIN INDENTURE PROVISIONS election of a majority of the members
of the board of directors (or any
CERTAIN DEFINITIONS. The following governing body) of that corporation,
is a summary of some of the terms other than stock having that power
defined in the Indenture and only by reason of the happening of a
applicable only to senior debt contingency.
securities. Those terms are determined
in accordance with generally accepted LIMITATION ON LIENS. The Indenture
accounting principles, unless provides that FINOVA Capital will not
specifically stated otherwise. create, assume, incur or allow to be
created, assumed or incurred or to
"CONSOLIDATED NET TANGIBLE ASSETS" exist any Lien on any of its
means the total of all assets properties unless FINOVA Capital
reflected on the most recent quarterly secures the senior debt securities
or annual consolidated balance sheet equally and ratably with any other
of FINOVA Capital and its consolidated obligation secured in that manner. The
subsidiaries, at their net book values Indenture contains the following
(after deducting related depreciation, exceptions to that prohibition:
depletion, amortization and all other
valuation reserves), less the * Leases of property in the
aggregate of its current liabilities ordinary course of business or
and those of its consolidated if the property is not needed in
Subsidiaries reflected on that balance the operation of our business.
sheet. We exclude from assets
goodwill, unamortized debt discount * Purchase money security
and all other like intangible assets. interests that are non-recourse
For purposes of this definition, to FINOVA Capital or its
"current liabilities" include all Restricted Subsidiaries except
indebtedness for money borrowed, to the extent of the property so
incurred, issued, assumed or acquired or any proceeds from
guaranteed by FINOVA Capital and its that property, or both.
consolidated subsidiaries, and other
payables and accruals, in each case * Governmental deposits or
payable on demand or due within one security as a condition to the
year of the date of determination, but transaction of business or the
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exercise of a privilege, or to MERGER, CONSOLIDATION AND SALE OF
maintain self-insurance, or to ASSETS. FINOVA Capital cannot merge
participate in any fund in with or into, consolidate with, sell
connection with worker's or lease all or substantially all of
compensation, unemployment its assets to or purchase all or
insurance, pensions, social substantially all the assets of
security or for appeal bonds. another corporation unless it will be
the surviving corporation or the
* Liens for taxes or assessments successor is incorporated in the U.S.
not yet due or which are payable and assumes all of FINOVA Capital's
without a penalty or are being obligations under the debt securities
contested in good faith and with and the Indenture, provided, and if
adequate reserves, so long as immediately after that transaction, no
foreclosure or similar default will exist. A purchase by a
proceedings are not commenced. Subsidiary of all or substantially all
of the assets of another corporation
* Judgment Liens that have not will not be a purchase of those assets
remained undischarged or by FINOVA Capital. If, however, any of
unstayed for more than six the transactions noted in this
months. paragraph occurs and results in a Lien
on any of FINOVA Capital's properties
* Incidental or undetermined (except as permitted above), FINOVA
construction, mechanics or Capital must simultaneously secure the
similar Liens arising in the senior debt securities equally and
ordinary course of business ratably with the debt secured by that
relating to obligations not Lien.
overdue or which are being
contested by FINOVA Capital or a MODIFICATION OF THE INDENTURE. The
Restricted Subsidiary in good Trustee and FINOVA Capital may amend
faith and deposits for releases the Indenture without consent of the
of such Liens. holders of debt securities to do
certain things, such as establishing
* Zoning restrictions, licenses, the form and terms of any series of
easements and similar debt securities. FINOVA Capital must
encumbrances or defects if obtain consent of holders of at least
immaterial. two-thirds of the outstanding debt
securities affected by a change to
* Other Liens immaterial in the amend the terms of the Indenture or
aggregate incidental to FINOVA any supplemental indenture or the
Capital's or the Restricted rights of the holders of those debt
Subsidiary's business or securities.
property, other than for
indebtedness. Unanimous consent is required for
changes to extend the fixed maturity
* Banker's liens and set off of any debt securities, reduce the
rights in the ordinary course of principal, redemption premium or rate
business. of interest, extend the time of
payment of interest, change the form
* Leasehold or purchase rights, of currency, limit the right to sue
exercisable for fair for payment on or after maturity of
consideration, arising in the the debt securities, adversely affect
ordinary course of business. the right, if any, to convert or
exchange the debt securities or
* Liens on property or securities adversely affect the subordination
existing when an entity becomes provisions, if any. Unanimous consent
a Restricted Subsidiary or is also required to reduce the level
merges with FINOVA Capital or a of consents needed to approve any of
Restricted Subsidiary, provided those changes. The Trustee must
they are not incurred in consent to changes modifying its
anticipation of those events. rights, duties or immunities.
* Liens on property or securities DEFAULTS. Events of default under
existing at the time of the Indenture for any series are:
acquisition.
* Failure for 30 days to pay
* Liens in a total amount less interest on any debt securities
than $25 million, excluding of that series.
Liens covered by the exceptions
noted above. * Failure to pay principal (other
than sinking fund redemptions)
* Liens securing indebtedness of or premium, if any, on debt
FINOVA Capital or a Restricted securities of that series.
Subsidiary provided those and
similar Liens on indebtedness do * Failure for 30 days to pay any
not exceed 10% of Consolidated sinking fund installment on that
Net Tangible Assets, excluding series.
certain preexisting indebtedness
and those Liens permitted above.
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* Violation of a covenant under series before maturity. It may do so
the Indenture pertaining to that by depositing with the Trustee, in
series that persists for at trust for the benefit of the holders,
least 90 days after FINOVA either enough funds to pay, or direct
Capital is notified by the U.S. government obligations that,
Trustee or the holders of 25% of together with the income of those
the series. obligations (without considering any
reinvestment), will be sufficient to
* Default in other instruments or pay, the obligation of that series,
under any other series of debt including principal, premium, if any,
securities resulting in and interest. Certain other conditions
acceleration of indebtedness must be met before it may do so.
over $15 million, unless that FINOVA Capital must deliver an opinion
default is rescinded or of counsel that the holders of that
discharged within 10 days after series will have no Federal income tax
written notice by the Trustee or consequences as a result of that
the holders of 10% of that deposit.
series.
SUBORDINATION
* Bankruptcy, insolvency or
similar event. The terms and conditions of any
subordination of subordinated debt
* Any other event of default with securities to other indebtedness of
respect to the debt securities FINOVA Capital will be described in
of that series. the supplement relating to the
subordinated debt securities. The
If an event of default occurs and terms will include a description of
continues, the Trustee or the holders the indebtedness ranking senior to the
of at least 25% of the series may subordinated debt securities, the
declare those debt securities due and restrictions on payments to the
payable. FINOVA Capital is required to holders of the subordinated debt
certify to the Trustee annually as to securities while a default exists with
its compliance with the Indenture. A respect to senior indebtedness, any
default under one series does not restrictions on payments to the
necessarily mean that a default or an holders of the subordinated debt
event of default will have occurred securities following an event of
under another series under the default and provisions requiring
Indenture. holders of the subordinated debt
securities to remit certain payments
Holders of a majority of the to holders of senior indebtedness.
principal of a series may control
certain actions of the Trustee and may Because of the subordination, if
waive past defaults for that series. FINOVA Capital becomes insolvent,
Except as provided in the Indenture, holders of the subordinated debt
the Trustee will not be under any securities may recover less, ratably,
obligation to exercise any of the than other creditors of FINOVA
rights or powers vested in it by the Capital, including holders of senior
Indenture at the request, order or indebtedness.
direction of any holder unless one or
more of them shall have offered CONVERSION
reasonable indemnity to the Trustee.
Debt securities may be convertible
If an event of default occurs and into or exchangeable for common stock,
is continuing, the Trustee may preferred stock, other debt
reimburse itself for its reasonable securities, warrants or other
compensation and expenses incurred out securities of FINOVA Capital, or
of any sums held or received by it securities of any other issuer or
before making any payments to the obligor. The supplement will describe
holders of the debt securities of the the terms of any conversion rights.
defaulted series.
CONCERNING THE TRUSTEE
The right of any holders of debt
securities of a series to commence an The Trustee may, but need not be,
action for any remedy is subject to one of the banks in one of FINOVA
certain conditions, including the Capital's credit agreements and from
requirement that the holders of at time to time may perform other
least 25% of that series request that banking, trust or related services or
the Trustee take such action, and investment banking services on behalf
offer reasonable indemnity to the of FINOVA Group, FINOVA Capital or our
Trustee against its liabilities customers.
incurred in doing so.
DEFEASANCE
FINOVA Capital may defease the debt
securities of a series, meaning it
would satisfy its duties under that
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DESCRIPTION OF CAPITAL STOCK
The following summary of certain PREFERRED STOCK
provisions of the common stock, the
preferred stock, the junior Under FINOVA Group's certificate of
participating preferred stock (the incorporation, the board is
"Junior Preferred Stock") and the authorized, without stockholder
rights to purchase the Junior action, to issue preferred stock in
Preferred Stock (the "Rights") of one or more series, with the
FINOVA Group is not complete. You designations, powers, preferences,
should refer to the certificate of rights, qualifications, limitations
incorporation and bylaws of FINOVA and restrictions as the board
Group, as amended, FINOVA Group's determines. Thus, the board, without
certificate of designations for the stockholder approval, could authorize
Junior Preferred Stock and the Rights the issuance of preferred stock with
Agreement dated as of February 15, voting, conversion and other rights
1992, as amended and restated as of that could adversely affect the voting
September 14, 1995 (the "Rights power and other rights of the holders
Agreement"), between FINOVA Group and of the common stock or that could make
Harris Trust & Savings Bank, as it more difficult for another company
successor Rights Agent. To obtain to enter into certain business
copies of those documents, see "Where combinations with FINOVA Group. See
You Can Find More Information" on page "-- Certain Other Provisions of the
2. If we issue capital stock of FINOVA Certificate of Incorporation, the
Capital, we will describe those Bylaws and Delaware Law -- Preferred
securities in the applicable Stock" below.
supplement.
SHAREHOLDER RIGHTS PLAN
FINOVA Group is authorized by its
certificate of incorporation to issue In 1992, FINOVA Group issued one
105,000,000 shares of capital stock, Right for each outstanding share of
consisting of 5,000,000 shares of common stock. FINOVA Group has and
preferred stock, par value $.01 per will continue to issue one Right with
share, and 100,000,000 shares of each newly issued share of its common
common stock, par value $.01 per stock (including stock issued on
share. As of March 12, 1999, there conversion of preferred securities).
were 56,071,608 shares of common stock The obligation to continue to issue
outstanding (excluding 2,483,067 the Rights, however, will terminate on
treasury shares held by FINOVA Group) the expiration, exchange or redemption
and no shares of preferred stock of the Rights.
outstanding. However, FINOVA Group has
authorized 600,000 shares of Junior Each Right entitles the registered
Preferred Stock which have been holder to purchase from FINOVA Group
reserved for issuance on the exercise 1/200th of a share of the Junior
of the Rights. Preferred Stock. The purchase price is
$67.50 per 1/200th of a share, subject
At the 1999 Annual Shareholders' to adjustment under certain
Meeting, FINOVA Group's shareowners circumstances.
will consider an amendment to its
certificate of incorporation to The Rights will trade only with the
increase the number of authorized common stock and FINOVA Group will not
shares. If approved, the proposal issue separate certificates for the
will increase the number of common Rights until the "Rights Distribution
shares from 100 million to 400 Date." That date occurs on the first
million and of preferred shares from to occur of the following events:
5 million to 20 million. The
directors have unanimously * 10 days after a public
recommended voting in favor of the announcement (the "Share
amendment. Acquisition Date") that a person
or group of persons acting
COMMON STOCK together has become the
beneficial owner of at least 20%
The holders of the common stock are or more of FINOVA Group's common
entitled to one vote per share. FINOVA stock, directly or indirectly
Group's certificate of incorporation (becoming an "Acquiring
does not provide for cumulative voting Person"), or
in the election of directors. The
board may declare dividends on the * 10 business days after the start
common stock in its discretion, if or announcement of an intention
funds are legally available for those to make a tender offer or
purposes. On liquidation, common exchange offer that would result
stockholders are entitled to receive in a person or group acting
pro rata any remaining assets of together beneficially owning 20%
FINOVA Group, after we satisfy or or more of FINOVA Group's common
provide for the satisfaction of all stock, directly or indirectly.
liabilities as well as obligations on The board, however, may extend
our preferred stock, if any. The that 10 business day deadline
holders of common stock do not have prior to the time the person or
preemptive rights to subscribe for or group becomes an Acquiring
purchase any shares of capital stock Person.
or other securities of FINOVA Group.
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<PAGE>
The Rights may not be exercised may pay the redemption price in cash,
until the Rights Distribution Date. common stock or any other method
The Rights will expire on February 28, selected by the board. Upon
2002 unless we extend that date or, redemption, the right to exercise the
unless we redeem or exchange the Rights will terminate and the holders
Rights before then. will only have the right to receive
the redemption price.
The value of each 1/200th interest
in a share of Junior Preferred Stock NO RIGHTS AS A STOCKHOLDER. Rights
is intended to approximate the value holders, as Rights holders, have no
of one share of FINOVA Group common independent rights as stockholders of
stock, due to the dividend, FINOVA Group, including the right to
liquidation and voting rights of the vote or to receive dividends, until
Junior Preferred Stock, although there the Rights are exercised.
can be no assurance the value will be
the same. ANTITAKEOVER EFFECTS. The Rights
have certain antitakeover effects. The
HOW THE RIGHTS WORK. If a person or Rights will substantially dilute the
group becomes an Acquiring Person, ownership interest in our shares of
their Rights become void. The other any Acquiring Person. That dilution
Rights holders will have the right to would impair the ability of the
exercise their Rights, at the then Acquiring Person to change the
current exercise price, for FINOVA composition of our board. It also
Group common stock having a market would impact its ability to acquire
value of two times the exercise price FINOVA Group on terms not approved by
of the Right. That right to purchase, our board, including through a tender
however, will not exist if the Rights offer at a premium to the market
Distribution Date is due to a tender price, other than through an offer
or exchange offer for all of FINOVA conditioned on a substantial number of
Group's common stock and the Rights being acquired. The Rights
independent members of our board should not interfere with any merger
determine that the offer is at a fair or business combination approved by
price, on fair terms and is otherwise the board, since we may redeem the
in the best interests of FINOVA Group Rights before they become exercisable.
and its stockholders.
JUNIOR PREFERRED STOCK NOT
The other Rights holders also will REGISTERED. The Junior Preferred Stock
have the same exercise rights is not registered with the SEC or any
described above if, after a person or other securities administrator. If the
group becomes an Acquiring Person, Rights become exercisable, we intend
FINOVA Group is acquired in a merger to register with the SEC the Junior
or business combination or at least Preferred Stock exchangeable for the
half of our total assets and earning Rights.
power are sold. The exception is the
same as the one noted in the above CERTAIN OTHER PROVISIONS OF THE
paragraph, provided that the price CERTIFICATE OF INCORPORATION, THE
offered to the shareholders for each BYLAWS AND DELAWARE LAW
share of common stock is not less than
that paid in the tender or exchange FINOVA Group's certificate of
offer, and the consideration is in the incorporation and bylaws contain
same form as that paid in the tender certain provisions that could make
or exchange offer. If the requirements more difficult our acquisition by
of this exception are met, then the means of a tender offer, a proxy
Rights will expire. contest or otherwise. This description
is only a summary and does not provide
EXCHANGE OF RIGHTS. After a person all the information contained in
or group becomes an Acquiring Person FINOVA Group's certificate of
but before the Acquiring Person incorporation and bylaws. To obtain
acquires at least half of the copies of these documents, see "Where
outstanding common stock, our board You Can Find More Information" on page
may exchange all or some of the Rights 2.
at an exchange ratio of one share of
common stock for 1/200th of a share of Delaware law permits a corporation
Junior Preferred Stock per Right, to eliminate or limit the personal
subject to adjustment. liability of its directors to the
corporation or to any of its
REDEMPTION OF RIGHTS. We may redeem stockholders for monetary damages for
all the Rights, but not some of them, a breach of fiduciary duty as a
for $.005 per Right at any time before director, except (i) for breach of the
the earlier of 15 days after the Share director's duty of loyalty, (ii) for
Acquisition Date or the expiration acts or omissions not in good faith or
date noted above. The board may which involve intentional misconduct
determine the conditions, terms and or a knowing violation of law, (iii)
effective date for the redemption. We for certain unlawful dividends and
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<PAGE>
stock purchases and redemptions or NUMBER OF DIRECTORS; REMOVAL;
(iv) for any transaction from which FILLING VACANCIES. FINOVA Group's
the director derived an improper certificate of incorporation provides
personal benefit. FINOVA Group's that, subject to any rights of
certificate of incorporation provides preferred stockholders to elect
that no director will be personally additional directors under specified
liable to FINOVA Group or its circumstances, the number of directors
stockholders for monetary damages for will be fixed in the manner provided
any breach of his or her fiduciary in the bylaws. FINOVA Group's bylaws
duty as a director, except as provided provide that, subject to any rights of
by Delaware law. holders of preferred stock to elect
directors under specified
BOARD OF DIRECTORS. FINOVA Group's circumstances, the number of directors
certificate of incorporation and will be fixed from time to time
bylaws divide the board into three exclusively by directors constituting
classes of directors, with the classes a majority of the total number of
to be as nearly equal in number as directors that FINOVA Group would have
possible. The stockholders elect one if there were no vacancies on the
class of directors each year for a board, but must consist of between 3
three-year term. and 17 directors.
The classification of directors In addition, FINOVA Group's bylaws
makes it more difficult for provide that, subject to any rights of
stockholders to change the composition preferred stockholders, and unless the
of the board. At least two annual board otherwise determines, any
meetings of stockholders, instead of vacancies will be filled only by the
one, generally will be required to affirmative vote of a majority of the
change a majority of the board. That remaining directors, though less than
delay may help ensure that FINOVA a quorum. Accordingly, absent an
Group's directors, if confronted by a amendment to the bylaws, the board
proxy contest, tender or exchange could prevent any stockholder from
offer or extraordinary corporate enlarging the board and filling the
transaction, would have sufficient new directorships with that
time to review the proposal as well as stockholder's own nominees.
any available alternatives to the
proposal and to act in what they Under Delaware law, unless
believe to be the best interest of the otherwise provided in the certificate
stockholders. The classification of incorporation, directors serving on
provisions apply to every election of a classified board may only be removed
directors, regardless of whether a by the stockholders for cause. In
change in the composition of the board addition, FINOVA Group's certificate
would be beneficial to FINOVA Group of incorporation and bylaws provide
and its stockholders and whether or that directors may be removed only for
not a majority of the stockholders cause and only upon the affirmative
believe that such a change is vote of holders of at least 80% of the
desirable. voting power of all the then
outstanding shares of stock entitled
The classification provisions also to vote generally in the election of
could discourage a third party from directors, voting together as a single
initiating a proxy contest, tender class.
offer or other attempt to obtain
control of FINOVA Group, even though STOCKHOLDER ACTION BY WRITTEN
an attempt might be beneficial to CONSENT; SPECIAL MEETINGS.
FINOVA Group and its stockholders. The Stockholders of FINOVA Group must act
classification of the board thus only through an annual or special
increases the likelihood that meeting. Stockholders cannot act by
incumbent directors will retain their written consent in lieu of a meeting.
positions. In addition, because the Only the Chairman or a majority of the
classification provisions may whole board of FINOVA Group may call a
discourage accumulations of large special meeting. Stockholders of
blocks of FINOVA Group's stock by FINOVA Group are not able to call a
purchasers whose objective is to take special meeting to require that the
control of FINOVA Group and remove a board do so. At a special meeting,
majority of the board, the stockholders may consider only the
classification of the board could business specified in the notice of
reduce the likelihood of fluctuations meeting given by FINOVA Group.
in the market price of the common Preferred stockholders may be given
stock that might result from different rights from those noted
accumulations of large blocks. above.
Accordingly, stockholders could be
deprived of certain opportunities to The provisions of FINOVA Group's
sell their shares of common stock at a certificate of incorporation and
higher market price than otherwise bylaws prohibiting stockholder action
might be the case. by written consent may have the effect
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<PAGE>
of delaying consideration of a Secretary between the 90th day before
stockholder proposal until the next the meeting and the later of the 70th
annual meeting, unless a special day before the meeting or the 10th day
meeting is called by the Chairman or after the first public announcement of
at the request of a majority of the the meeting date.
whole board. These provisions also
would prevent the holders of a A stockholder's notice proposing to
majority of stock from unilaterally nominate a person for election as a
using the written consent procedure to director must contain certain
take stockholder action. Moreover, a information, including, without
stockholder could not force limitation, the identity and address
stockholder consideration of a of the nominating stockholder, the
proposal over the opposition of the class and number of shares of stock of
Chairman and the board by calling a FINOVA Group beneficially owned by the
special meeting of stockholders prior stockholder and all information
to the time the Chairman or a majority regarding the proposed nominee that
of the whole board believes that would be required to be included in a
consideration to be appropriate. proxy statement soliciting proxies for
the proposed nominee. A stockholder's
ADVANCE NOTICE PROVISIONS FOR notice relating to the conduct of
STOCKHOLDER NOMINATIONS AND business other than the nomination of
STOCKHOLDER PROPOSALS. The bylaws directors must contain certain
establish an advance notice procedure information about that business and
for stockholders to nominate about the proposing stockholder,
directors, or bring other business including, without limitation, a brief
before an annual meeting of description of the business the
stockholders of FINOVA Group. stockholder proposes to bring before
the meeting, the reasons for
A person may not be nominated for a conducting that business at such
director position unless that person meeting, the name and address of such
is nominated by or at the direction of stockholder, the class and number of
the board or by a stockholder who has shares of stock of FINOVA Group
given appropriate notice to FINOVA beneficially owned by that stockholder
Group's Secretary during the periods and any material interest of the
noted below prior to the meeting. stockholder in the business so
Similarly, stockholders may not bring proposed. If the Chairman or other
business before an annual meeting officer presiding at a meeting
unless the stockholder has given determines that a person was not
FINOVA Group's Secretary appropriate nominated, or other business was not
notice of their or its intention to brought before the meeting, in
bring that business before the accordance with these procedures, the
meeting. FINOVA Group's Secretary must person will not be eligible for
receive the nomination or proposal election as a director, or the
between 70 and 90 days before the business will not be conducted at the
first anniversary of the prior year's meeting, as appropriate.
annual meeting. If FINOVA Group's
annual meeting date is advanced by Advance notice of nominations or
more than 20 days or delayed by more proposed business by stockholders
than 70 days from that anniversary gives the board time to consider the
date, then we must receive the notice qualifications of the proposed
between 90 days before the meeting and nominees, the merits of the proposals
the later of the 70th day before the and, to the extent deemed necessary or
meeting or 10 days after the meeting desirable by the board, to inform
date is first publicly announced. stockholders about those matters. The
board also may recommend positions
If the board increases the number regarding those nominees or proposals,
of directors and if we have not so that stockholders can better decide
publicly announced nominees for each whether to attend the meeting or to
open position within 80 days before grant a proxy regarding the nominee or
the first anniversary of the prior that business.
year's annual meeting, stockholders
may nominate directors for the new Although the bylaws do not give the
position, but only those newly created board any power to approve or
positions, if FINOVA Group's Secretary disapprove stockholder nominations for
receives the notice no later than 10 the election of directors or proposals
days following public announcement of for action, these procedures may
that change. preclude a contest for the election of
directors or the consideration of
Stockholders may nominate directors stockholder proposals if the proper
only at a special meeting by sending procedures are not followed, and of
appropriate notice for receipt by our discouraging or deterring a third
party from conducting a solicitation
of proxies to elect its own slate of
directors or to approve its own
17
<PAGE>
proposal, without regard to whether amount of voting securities,
consideration of such nominees or outstanding of at least 20%, subject
proposals might be harmful or to certain exceptions. If the approval
beneficial to FINOVA Group and its of FINOVA Group's stockholders is not
stockholders. required for the issuance of shares of
preferred stock or common stock, the
PREFERRED STOCK. FINOVA Group's board may determine not to seek
certificate of incorporation stockholder approval.
authorizes the board to establish one
or more series of preferred stock and Although the board has no intention
to determine, with respect to any at the present time of doing so, it
series of preferred stock, the terms could issue a series of preferred
and rights of that series, including stock that could, depending on its
(i) the designation of the series, terms, impede a merger, tender offer
(ii) the number of shares of the or other takeover attempt. The board
series, which the board may (except will make any determination to issue
where otherwise provided by the terms shares with those terms based on its
of that series) increase or decrease judgment as to the best interests of
(but not below the number of shares FINOVA Group and its stockholders. The
thereof then outstanding), (iii) board, in so acting, could issue
whether dividends, if any, will be preferred stock having terms that
cumulative or noncumulative and the could discourage an acquisition
dividend rate of the series, if any, attempt in which an acquiror would
(iv) the dates at which dividends, if change the composition of the board,
any, will be payable, (v) the including a tender offer or other
redemption rights and price or prices, transaction. An acquisition attempt
if any, for shares of the series, (vi) could be discouraged in this manner
the terms and amounts of any sinking even if some, or a majority, of FINOVA
fund provided for the purchase or Group's stockholders might believe it
redemption of shares of the series, to be in their best interests or in
(vii) the amounts payable on shares of which stockholders might receive a
the series in the event of any premium for their stock over the then
voluntary or involuntary liquidation, current market price of the stock.
dissolution or winding up of the
FINOVA Group's affairs, (viii) whether MERGER/SALE OF ASSETS. FINOVA
the shares of the series will be Group's certificate of incorporation
convertible into shares of any other provides that certain "business
class or series, or any other combinations" must be approved by the
security, of FINOVA Group or any other holders of at least 66 2/3% of the
corporation, and, if so, the voting power of the shares not owned
specification of another class or by an "interested shareholder", unless
series or another security, the the business combinations are approved
conversion price or prices or rate or by the "Continuing Directors" or meet
rates, any adjustments to the prices certain requirements regarding price
or rates, the date or dates as of and procedure. The terms quoted in
which the shares shall be convertible this paragraph are defined in the
and all other terms and conditions certificate of incorporation.
upon which the conversion may be made,
(ix) restrictions on the issuance of AMENDMENT OF CERTAIN PROVISIONS OF
shares of the same series or of any THE CERTIFICATE OF INCORPORATION AND
other class or series and (x) the BYLAWS. Under Delaware law,
voting rights, if any, of the holders stockholders may adopt, amend or
of shares of the series. repeal the bylaws and, with approval
of the board, the certificate of
FINOVA Group believes that the incorporation of a corporation. In
ability of the board to issue one or addition, a corporation's board may
more series of preferred stock will adopt, amend or repeal the bylaws if
provide FINOVA Group with flexibility allowed by the certificate of
in structuring possible future incorporation. FINOVA Group's
financings and acquisitions, and in certificate of incorporation requires
meeting other corporate needs which a vote of (i) at least 80% of the
might arise. The authorized shares of outstanding shares of voting stock,
preferred stock, as well as shares of voting together as a single class, to
common stock, will be available for amend provisions of the certificate of
issuance without further action by incorporation relating to the
FINOVA Group's stockholders, unless prohibition of stockholder action
approval is required by applicable law without a meeting; the number,
or the rules of any stock exchange or election and term of FINOVA Group's
automated quotation system on which directors; and the removal of
FINOVA Group's securities are listed directors; (ii) at least 66 2/3% of
or traded. The NYSE currently requires the outstanding shares of voting
stockholder approval in several stock, voting together as a single
instances, including where the present
or potential issuance of shares could
result in an increase in the number of
shares of common stock, or in the
18
<PAGE>
class, to amend the provisions of the subsequent to that date, the board and
certificate of incorporation relating 66 2/3% of the outstanding voting
to approval of certain business stock not owned by the interested
combinations; and (iii) at least a stockholder approved the business
majority of the outstanding shares of combination. Except as specified by
voting stock, voting together as a Delaware law, an interested
single class, to amend all other stockholder includes (x) any person
provisions of the certificate of that is the owner of 15% or more of
incorporation. FINOVA Group's the outstanding voting stock of the
certificate of incorporation further corporation, or is an affiliate or
provides that the bylaws may be associate of the corporation and was
amended by the board or by the the owner of 15% or more of the
affirmative vote of the holders of at outstanding voting stock of the
least 80% of the voting power of the corporation, at any time within three
outstanding shares of voting stock, years immediately prior to the
voting together as a single class. relevant date, and (y) the affiliates
These supermajority voting and associates of that person.
requirements make the amendment by
stockholders of the bylaws or of any Under certain circumstances,
of the provisions of the certificate Delaware law makes it more difficult
of incorporation described above more for an "interested stockholder" to
difficult, even if a majority of enter into various business
FINOVA Group's stockholders believe combinations with a corporation for a
that amendment would be in their best three-year period, although
interests. stockholders may adopt an amendment to
a corporation's certificate of
ANTITAKEOVER LEGISLATION. Subject incorporation or bylaws excluding the
to certain exceptions, Delaware law corporation from those restrictions.
does not allow a corporation to engage However, FINOVA Group's certificate of
in a business combination with any incorporation and bylaws do not
"interested stockholder" for a exclude FINOVA Group from the
three-year period following the date restrictions imposed under Delaware
that the stockholder becomes an law. These provisions of Delaware law
interested stockholder, unless (i) may encourage companies interested in
prior to that date, the board approved acquiring FINOVA Group to negotiate in
either the business combination or the advance with the board, since the
transaction which resulted in the stockholder approval requirement would
stockholder becoming an interested be avoided if a majority of the board
stockholder, (ii) on that date, the approves either the business
interested stockholder owned at least combination or the transaction which
85% of the voting stock of the results in the stockholder becoming an
corporation outstanding at the time interested stockholder.
the transaction commenced (excluding
certain shares) or (iii) on or
DESCRIPTION OF DEPOSITARY SHARES
The following summary of certain Agreement") between us and a bank or
provisions of the Deposit Agreement, trust company selected by us having
the depositary shares and depositary its principal office in the U.S. and
receipts is not complete. You should having a combined capital and surplus
refer to the forms of Deposit of at least $50 million. Subject to
Agreement and depositary receipts the terms of the Deposit Agreement,
relating to each series of preferred each owner of depositary shares will
stock that will be filed with the SEC. be entitled, in proportion to the
To obtain copies of these documents, applicable fractional interests in
see "Where You Can Find More shares of preferred stock underlying
Information" on page 2. the depositary shares to all the
rights and preferences of the
GENERAL preferred stock underlying the
depositary shares. Those rights
We may offer fractional interests include dividend, voting, redemption,
in shares of preferred stock, instead conversion and liquidation rights.
of shares of preferred stock. If we
do, we will have a depositary issue to The depositary shares will be
the public receipts for depositary evidenced by depositary receipts
shares, each of which will represent issued under the Deposit Agreement.
fractional interests of a particular Individuals purchasing the fractional
series of preferred stock. interests in shares of the related
series of preferred stock will receive
We will deposit shares of any depositary receipts according to the
series of preferred stock underlying terms of the offering described in the
the depositary shares under a separate supplement.
Deposit Agreement (the "Deposit
19
<PAGE>
DIVIDENDS AND OTHER DISTRIBUTIONS redemption date, the number of
depositary shares representing the
The depositary will distribute all preferred stock. The depositary shares
cash dividends or other cash to be redeemed will be selected by lot
distributions received for the or pro rata as determined by the
preferred stock to the record holders depositary when less than all
of depositary shares representing the outstanding depositary shares will be
preferred stock in proportion to the redeemed.
number of depositary shares owned by
those holders on the relevant record After the redemption date, the
date. The depositary will distribute depositary shares redeemed will no
only the amount that can be longer be outstanding. When this
distributed without attributing to any occurs, all rights of the holders will
holder of depositary shares a fraction cease, except the right to receive
of one cent. The undistributed balance money, securities or other property
will be added to and treated as part payable upon redemption and any money,
of the next amount received by the securities or other property that the
depositary for distribution to record holders of depositary shares were
holders of depositary shares. entitled to on the redemption upon
surrender to the depositary of the
If there is a distribution other depositary receipts evidencing the
than in cash, the depositary will depositary shares redeemed.
distribute property received by it to
the record holders of depositary VOTING THE PREFERRED STOCK
shares, in proportion, if possible, to
the number of depositary shares owned Upon receipt of notice of any
by those holders, unless the meeting at which the holders of the
depositary determines (after preferred stock are entitled to vote,
consulting with us) that it cannot the depositary will mail all relevant
make the distribution. If this occurs, information to the record holders of
the depositary may, with our approval, the depositary shares representing the
sell the property and distribute the preferred stock. The record holders
net proceeds from the sale to the may instruct the depositary how to
holders of depositary shares. vote the shares of preferred stock
underlying their depositary shares.
The Deposit Agreement also will The depositary will try, if practical,
state how any subscription or similar to vote the number of shares of
rights offered by us to holders of the preferred stock underlying the
preferred stock will be made available depositary shares according to the
to holders of depositary shares. instructions, and we will agree to
take all reasonable action requested
CONVERSION AND EXCHANGE by the depositary so the depositary
may follow the instructions.
If any series of preferred stock
underlying the depositary shares is AMENDMENT AND TERMINATION OF
subject to conversion or exchange, DEPOSITARY AGREEMENT
each record holder of depositary
receipts may convert or exchange the The form of depositary receipt and
depositary shares represented by those any provision of the Deposit Agreement
depositary receipts. may be amended by agreement between us
and the depositary. However, any
REDEMPTION OF DEPOSITARY SHARES amendment that materially and
adversely alters the rights of the
If a series of the preferred stock existing holders of depositary shares
underlying the depositary shares is will not be effective unless approved
subject to redemption, the depositary by the record holders of at least a
will redeem the depositary shares from majority of the depositary shares then
the proceeds received by the outstanding. We or the depositary may
depositary in the redemption, in whole only terminate the Deposit Agreement
or in part, of the series of the if (a) all related outstanding
preferred stock held by the depositary shares have been redeemed
depositary. The depositary will mail or (b) there has been a final
notice of redemption within 30 to 60 distribution of the preferred stock of
days prior to the date fixed for the relevant series in connection with
redemption to the record holders of our liquidation, dissolution or
the depositary shares to be redeemed winding up and that distribution has
at their addresses appearing in the been distributed to the holders of the
depositary's books. The redemption related depositary shares.
price per depositary share will equal
the applicable fraction of the
redemption price per share payable on
such series of the preferred stock.
Whenever we redeem shares of preferred
stock held by the depositary, the
depositary will redeem as of the same
20
<PAGE>
CHARGES OF DEPOSITARY MISCELLANEOUS
We will pay all transfer and other The depositary will send to the
taxes and governmental charges arising holders of depositary shares all
solely from the existence of the reports and communications from us
depositary arrangements. We will pay that we must furnish to the holders of
associated charges of the depositary preferred stock.
for the initial deposit of the
preferred stock and any redemption of We and the depositary will not be
the preferred stock. Holders of liable if we are prevented or delayed
depositary shares will pay transfer by law or any circumstance beyond our
and other taxes and governmental control in performing our obligations
charges and any other charges stated under the Deposit Agreement. Those
in the Deposit Agreement to be for obligations will be limited to
their accounts. performance in good faith of duties
set forth in the Deposit Agreement. We
RESIGNATION AND REMOVAL OF DEPOSITARY and the depositary will not be
obligated to prosecute or defend any
The depositary may resign by legal proceeding connected with any
delivering notice to us, and we may depositary shares or preferred stock
remove the depositary. Resignations or unless satisfactory indemnity is
removals will take effect upon the furnished. We and the depositary may
appointment and acceptance of a rely upon written advice of counsel or
successor depositary. We must appoint accountants, or information provided
a successor depositary within 60 days by persons presenting preferred stock
after delivery of the notice of for deposit, holders of depositary
resignation or removal. The successor shares, or other persons believed to
depositary must be a bank or trust be competent and on documents believed
company having its principal office in to be genuine.
the U.S. and having a combined capital
and surplus of at least $50 million.
DESCRIPTION OF WARRANTS
We may issue warrants for the solely as our agent for the warrants
purchase of debt securities, preferred and will not act for or on behalf of
stock or common stock. We may issue the holders or beneficial owners of
warrants independently or together warrants. This summary of certain
with debt securities, common stock or provisions of the warrants is not
preferred stock or attached to or complete. You should refer to the
separate from the offered securities. provisions of the Warrant Agreement
We will issue each series of warrants that will be filed with the SEC as
under a separate warrant agreement (a part of the offering of any warrants.
"Warrant Agreement") between us and a To obtain a copy of this document, see
bank or trust company, as warrant "Where You Can Find More Information"
agent. The warrant agent will act on page 2.
PLAN OF DISTRIBUTION
FINOVA Group and FINOVA Capital securities laws and other laws. The
may offer securities directly or underwriters' obligations to purchase
through underwriters, dealers or securities will be subject to
agents. The supplement will identify conditions and generally will require
those underwriters, dealers or agents them to purchase all of the securities
and will describe the plan of if any are purchased.
distribution, including commissions
to be paid. If we do not name a firm Unless otherwise noted in the
in the supplement, that firm may not supplement, the securities will be
directly or indirectly participate in offered by the underwriters, if any,
any underwriting of those securities, when, as and if issued by us,
although it may participate in the delivered to and accepted by the
distribution of securities under underwriters and subject to their
circumstances entitling it to a right to reject orders in whole or in
dealer's allowance or agent's part.
commission.
FINOVA Group and FINOVA Capital
Any underwriting agreement probably may sell securities to dealers, as
will entitle the underwriters to principals. Those dealers then may
indemnity against some civil
liabilities under the Federal
21
<PAGE>
resell the securities to the public at and penalty bids in accordance with
varying prices set by those dealers Regulation M under the Securities
from time to time. Exchange Act of 1934. Over-allotment
involves sales in excess of the
FINOVA Group and FINOVA Capital offering size, which creates a short
also may offer securities through position. Stabilizing transactions
agents. Agents generally act on a permit bids to purchase the underlying
"best efforts" basis during their security so long as the stabilizing
appointment, meaning they are not bids do not exceed a specified
obligated to purchase securities. maximum. Short covering transactions
involve purchases of the securities in
Dealers and agents may be entitled the open market after the distribution
to indemnification as underwriters by is completed to cover short positions.
us against some liabilities under Penalty bids permit the underwriters
the Federal securities laws and other to reclaim a selling concession from a
laws. dealer when the securities originally
sold by the dealer are purchased in a
FINOVA Group and FINOVA Capital or covering transaction to cover short
the underwriters or agents may solicit positions. Those activities may cause
offers by institutions approved by us the price of the securities to be
to purchase securities under contracts higher than it would otherwise be. The
providing for future payment. underwriters may engage in some
Permitted institutions include activities on any exchange or other
commercial and savings banks, market in which the securities may be
insurance companies, pension funds, traded. If commenced, the underwriters
investment companies, educational and may discontinue those activities at
charitable institutions and others. any time.
Conditions apply to those purchases.
The supplement or pricing
Any underwriter may engage in supplement, as applicable, will set
over-allotment, stabilizing trans- forth the anticipated delivery date of
actions, short covering transactions the securities being sold at that
time.
LEGAL MATTERS
Unless otherwise noted in a Counsel of FINOVA Group and FINOVA
supplement, William J. Hallinan, Esq., Capital, respectively, will pass
Senior Vice President-General Counsel on the legality of the securities
of FINOVA Group and FINOVA Capital, or offered through this prospectus and
Richard Lieberman, Esq., Vice any supplement. Brown & Wood LLP will
President-Associate/Assistant General act as counsel for any underwriters or
agents, unless otherwise noted in a
supplement.
EXPERTS
Deloitte & Touche LLP, independent 10-K, respectively, for the year ended
auditors, have audited the financial December 31, 1998. The financial
statements of FINOVA Group and FINOVA statements are incorporated into this
Capital incorporated in this prospectus by reference in reliance
prospectus by reference from our upon their report given upon their
Annual Reports on Form 10-K/A and authority as experts in accounting and
auditing.
22
<PAGE>
YOU SHOULD RELY ONLY ON THE
INFORMATION CONTAINED OR $3,000,000,000
INCORPORATED BY REFERENCE IN THIS
PROSPECTUS. WE HAVE AUTHORIZED NO ONE
TO PROVIDE YOU WITH DIFFERENT
INFORMATION.
WE ARE NOT MAKING AN OFFER OF THESE
SECURITIES IN ANY LOCATION WHERE THE
OFFER IS NOT PERMITTED.
YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS PROSPECTUS, THE FINOVA GROUP INC.
INCLUDING INFORMATION INCORPORATED BY FINOVA CAPITAL CORPORATION
REFERENCE, IS ACCURATE AS OF ANY DATE
OTHER THAN THE DATE ON THE FRONT OF
THE PROSPECTUS. DEBT SECURITIES, COMMON STOCK,
PREFERRED STOCK, DEPOSITARY SHARES
------------- AND WARRANTS
TABLE OF CONTENTS
Page
----
Where You Can Find More
Information................... 2
The Companies................... 2
Recent Developments............. 5
Selected Financial Information.. 6 ---------------------------
Ratio Of Income To Total
Fixed Charges................. 6 PROSPECTUS
Ratio Of Income To Combined
Fixed Charges And Preferred ---------------------------
Stock Dividends............... 6
Special Note Regarding
Forward-Looking Statements.... 7
Use Of Proceeds................. 7
Description Of Debt Securities.. 8
Description Of Capital Stock.... 14
Description Of Depositary
Shares........................ 19
Description Of Warrants......... 21
Plan Of Distribution............ 21
Legal Matters................... 22
Experts......................... 22 _____________, 1999
<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................................ $834,000.00
Rating agency fees*............................. $1,500,000.00
Printing fees*.................................. $150,000.00
Legal fees and expenses*........................ $250,000.00
Accounting fees and expenses*................... $412,500.00
Blue sky fees and expenses*..................... $3,000.00
New York Stock Exchange listing fees*........... $30,000.00
Trustee fees and expenses*...................... $300,000.00
Miscellaneous expenses*......................... $20,500.00
-------------
Total*........................ $3,500,000.00
=============
- -----------
* 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.
II-1
<PAGE>
ITEM 16. EXHIBITS
1.1 Form of Senior Debt Securities Underwriting Agreement (incorporated by
reference to Exhibit 1.1 to the joint Registration Statement of The
FINOVA Group Inc. and FINOVA Capital Corporation on Form S-3, SEC File
No. 333-38171 (the "1997 S-3"))
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 for Debt Securities of FINOVA Capital Corporation
4.9 Form of Convertible Debt Security*
4.10 Form of Preferred Stock Certificate of Designations*
4.11 Form of Fixed Rate Note (incorporated by reference to Exhibit 4.11 to
the 1997 S-3)
4.12 Form of Floating Rate Note (incorporated by reference to Exhibit 4.12
to the 1997 S-3)
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 of the trustee(s) under the
Indenture**
- ----------
* To be filed with a Current Report on Form 8-K or a Post-Effective Amendment
to Registration Statement
** To be filed in accordance with Section 305(b)(2) of the Trust Indenture Act
of 1939
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
II-2
<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.
II-3
<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
March, 1999.
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, Bruno A. Marszowski, William J.
Hallinan and Richard Lieberman, 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, any and all amendments to said Registration Statement (including
post-effective amendments) and any related registration statement filed pursuant
to Rule 462(b) promulgated under the Securities Act of 1933, 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, any and
all amendments thereto and any related Rule 462(b) registration statement.
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.
Signature Title Date
--------- ----- ----
/s/ Samuel L. Eichenfield Director, Chairman, President and March 16, 1999
- --------------------------- Chief Executive Officer (Principal
Samuel L. Eichenfield Executive Officer)
/s/ Bruno A. Marszowski Senior Vice President-Controller March 16, 1999
- --------------------------- and Chief Financial Officer
Bruno A. Marszowski (Principal Financial and
Accounting Officer)
/s/ Robert H. Clark, Jr. Director March 16, 1999
- ---------------------------
Robert H. Clark, Jr.
/s/ Constance R. Curran Director March 16, 1999
- ---------------------------
Constance R. Curran
II-4
<PAGE>
/s/ G. Robert Durham Director March 16, 1999
- ---------------------------
G. Robert Durham
/s/ James L. Johnson Director March 16, 1999
- ---------------------------
James L. Johnson
/s/ Kenneth R. Smith Director March 16, 1999
- ---------------------------
Kenneth R. Smith
/s/ Shoshana B. Tancer Director March 16, 1999
- ---------------------------
Shoshana B. Tancer
/s/ John W. Teets Director March 16, 1999
- ---------------------------
John W. Teets
II-5
<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
March, 1999.
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, Bruno A. Marszowski, William
J. Hallinan and Richard Lieberman, 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, any and all amendments to said Registration Statement (including
post-effective amendments) and any related registration statement filed pursuant
to Rule 462(b) promulgated under the Securities Act of 1933, 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, any and
all amendments thereto and any related Rule 462(b) registration statement.
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.
Signature Title Date
--------- ----- ----
/s/ Samuel L. Eichenfield Director, Chairman, President and March 16, 1999
- --------------------------- Chief Executive Officer (Principal
Samuel L. Eichenfield Executive Officer)
/s/ Bruno A. Marszowski Senior Vice President-Controller March 16, 1999
- --------------------------- and Chief Financial Officer
Bruno A. Marszowski (Principal Financial and
Accounting Officer)
/s/ Meilee Smythe Director March 16, 1999
- ---------------------------
Meilee Smythe
/s/ W. Carroll Bumpers Director March 16, 1999
- ---------------------------
W. Carroll Bumpers
/s/ Gregory C. Smalis Director March 16, 1999
- ---------------------------
Gregory C. Smalis
II-6
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1.1 Form of Senior Debt Securities Underwriting Agreement (incorporated by
reference to Exhibit 1.1 to the joint Registration Statement of The
FINOVA Group Inc. and FINOVA Capital Corporation on Form S-3, SEC File
No. 333-38171 (the "1997 S-3"))
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 for Debt Securities of FINOVA Capital Corporation
4.9 Form of Convertible Debt Security*
4.10 Form of Preferred Stock Certificate of Designations*
4.11 Form of Fixed Rate Note (incorporated by reference to Exhibit 4.11 to
the 1997 S-3)
4.12 Form of Floating Rate Note (incorporated by reference to Exhibit 4.12
to the 1997 S-3)
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 of the trustee(s) under the
Indenture**
- ----------
* To be filed with a Current Report on Form 8-K or a Post-Effective Amendment
to Registration Statement
** To be filed in accordance with Section 305(b)(2) of the Trust Indenture Act
of 1939
EXHIBIT 4.8
================================================================================
FINOVA CAPITAL CORPORATION
AND
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>
TABLE OF CONTENTS*
Page
----
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.
i
<PAGE>
Page
----
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
ii
<PAGE>
Page
----
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
iii
<PAGE>
ARTICLE TEN
CONCERNING THE TRUSTEE
Page
----
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 INCORPOTORS 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
iv
<PAGE>
Page
----
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
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 ___
________________________________, a ______________________________, 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.
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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 and Securities paid pursuant to Section 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.
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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 ____________________________________________
_____ (telephone: ______________; telecopier: ________________).
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.
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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.
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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.
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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.
___________________________________
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 identify the Securities to be redeemed
(including CUSIP number) and 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 _______________________________________ 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 principal executive officer, the
principal financial officer or principal accounting officer 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 on Form 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 __________________________________, 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;
49
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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 66 2/3% 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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<PAGE>
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
52
<PAGE>
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 _______________________
_____________________________________ (telephone:______________________________;
telecopier:__________________________) to the attention of its _______________
______, 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
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<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.
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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.
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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 __________________________________, 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:
- ------------------------------------
__________________________________,
as Trustee
By:
--------------------------------
Attest:
- ------------------------------------
58
EXHIBIT 5.1
[Letterhead of FINOVA]
March 16, 1999
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-Associate General Counsel of The
FINOVA Group Inc., a Delaware corporation ("FINOVA Group"), and as Vice
President-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
$3,000,000,000 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") and (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 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-Associate General Counsel
of The FINOVA Group Inc.
Vice President-Assistant General Counsel
of FINOVA Capital Corporation
EXHIBIT 12.1
THE FINOVA GROUP INC.
COMPUTATION OF RATIO OF INCOME TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(Dollars in Thousands)
As of and for the Year Ended December 31,
----------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
Income from continuing
operations before income
taxes $282,009 $226,178 $185,822 $150,834 $122,863
Add fixed charges
Interest expense 479,360 416,093 366,543 337,814 210,001
One-third of rent expense 3,854 2,789 2,368 2,084 2,053
-------- -------- -------- -------- --------
Total fixed charges 483,214 418,882 368,911 339,898 212,054
-------- -------- -------- -------- --------
Income as adjusted $765,223 $645,060 $554,733 $490,732 $334,917
-------- -------- -------- -------- --------
Ratio of income to fixed
charges 1.58 1.54 1.50 1.44 1.58
======== ======== ======== ======== ========
Preferred stock dividends
on a pre-tax basis $ 6,325 $ 6,676 -- -- --
Total combined fixed
charges and preferred
stock dividends $489,539 $425,558 $368,911 $339,898 $212,054
-------- -------- -------- -------- --------
Ratio of income to
combined fixed charges and
preferred stock dividends
1.56 1.52 1.50 1.44 1.58
======== ======== ======== ======== ========
EXHIBIT 12.2
FINOVA CAPITAL CORPORATION
COMPUTATION OF RATIO OF INCOME TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(Dollars in Thousands)
As of and for the Year Ended December 31,
----------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
Income from continuing
operations before income
taxes $282,009 $226,178 $185,822 $150,834 $122,847
Add fixed charges
Interest expense 479,360 416,093 366,543 337,814 210,730
One-third of rent expense 3,854 2,789 2,368 2,084 2,053
-------- -------- -------- -------- --------
Total fixed charges 483,214 418,882 368,911 339,898 212,783
-------- -------- -------- -------- --------
Income as adjusted $765,223 $645,060 $554,733 $490,732 $335,630
-------- -------- -------- -------- --------
Ratio of income to fixed
charges 1.58 1.54 1.50 1.44 1.58
======== ======== ======== ======== ========
Preferred stock dividends
on a pre-tax basis -- -- -- -- --
Total combined fixed
charges and preferred
stock dividends $483,214 $418,882 $368,911 $339,898 $212,783
-------- -------- -------- -------- --------
Ratio of income to
combined fixed charges and
preferred stock dividends 1.58 1.54 1.50 1.44 1.58
======== ======== ======== ======== ========
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 10, 1999, appearing in the Annual Reports on Forms
10-K/A and 10-K of The FINOVA Group Inc. and FINOVA Capital Corporation for the
year ended December 31, 1998, 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
March 15, 1999
